The major risk of employing a focused strategy for a company like canada goose is the potential for

Canada Goose marketing strategy is closely related to its advertising. This essay analyzes the luxury brand’s marketing plan and suggests some strategies regarding Canada Goose target market.

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Executive Summary

Canada Goose is a large producer of premium-class winter, autumn, and springtime clothes in Canada. Its production facilities include 8 manufacturing plants, 6 retail shops, and over 1000 employees. Its yearly revenues exceed 300 million dollars a year (Bloomberg, 2019). The company has a stable position in the Canadian and the US markets but is experiencing trouble expanding to the European market due to high competition, and to the Asia-Pacific markets due to the threat of counterfeit products.

It also has issues with the ecological community due to allegations of animal abuse and mistreatment. The company’s marketing and advertising strategies include traditional marketing, word-of-mouth advertising, and relationship establishment. The company should refocus its attention from Baby Boomers and Gen X customers and towards Millennials, who now make up for the majority of the workforce.

Company Background

Canada Goose Holdings is a Canadian company that specializes in manufacturing all kinds of winter clothes, ranging from jackets and parkas to vests, hats, gloves, and other warm apparel suited for cold weather. The company was created in 1957 by Sam Tick and specialized in selling vests, raincoats, and uniforms for snowmobile driving, as well as other apparel for outdoor activities (Bloomberg, 2019). The initial name of the company was Metro, though it was changed to Snow Goose as the company expanded its sales across Canada in 1985. The rebranding into Canada Goose happened in the 1990s when the company decided to go global, and the copyright claim for the Snow Goose name belonged to a different European company (Bloomberg, 2019).

As it stands, the company operates 6 retail stores and 8 production facilities throughout Canada (Bloomberg, 2019). Canada Goose Holdings caters to all customers in the premium outdoor apparel sector, including men, women, teens, children, and infants. The two primary methods of selling merchandise include wholesale and direct supply. Canada Goose provides its products to retail stores and distributors in 38 countries and reaches out directly to customers across the globe via the use of e-commerce (Bloomberg, 2019). Recently, Canada Goose began the exploration of the Japanese market by establishing a partner-operated retail location in Tokyo.

The company specializes in high-end outerwear, with major product lines including parkas, traveling jackets, shells, vests, knitted products, and accessories. Different products are suited for winter, spring, and autumn seasons. Canada Goose does not have a dedicated summer-wear operation. The premium class of the products is ensured by the use of expensive materials, such as duck down insulation and coyote fur, whereas economy class products utilize feather mulch, dog fur, and cat fur, which have lower status and weaker heat preservation properties.

The company has plenty of competition in the premium outwear clothing segment, the most frequently-mentioned rivals being the Parajumpers, Woolrich, and Moncler. Out of these three, the Italian Moncler is the largest and strongest competitor, with over 1,4 billion dollars in revenue, whereas Canada Goose, Parajumpers, and Woolrich stand at approximately equal footing, with circa 300 million in yearly revenues each (Bloomberg, 2019). Nevertheless, Canada Goose has a strong footing in its home country, since Parajumpers and Woolrich are US-based companies, and Moncler is a European company. To summarize, Canada Goose is a well-established brand that managed to achieve partial globalization and has steady and positive revenues but struggles to expand its reach beyond the established markets due to high competition and high risks of counterfeiting.

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Market Analysis

Segmentation and Expected Growth

The overall sales in the clothing and fashion industry seem to be down in all major markets across the world. The US clothes market, which is one of the largest and richest in terms of customer buying parity, reports a 4% decrease in overall sales (Chen, 2018). At the same time, outdoor apparel is the only segment in the industry that claims steady growth, defying the overall trends with a 2% increase in sales. Sports outwear and weather-resistant clothes segments show even higher growth, with a 3.2% increase in sales in 2018 (Chen, 2018). This bodes well for Canada Goose, as it means their respective segment of luxurious outdoor apparel is growing as well.

The size of the total market in the US alone for active apparel has been up to 48 billion dollars (Chen, 2018). Out of this number, around 12 billion dollars are held by luxury outdoor apparel, with an estimated growth to nearly 20 billion by 2026 (Transparency Market Research, 2018). Canada Goose, along with its direct competitors, such as Parajumpers, Woolrich, Moncler, and others make up the top 10 clothes producers in the West.

Trends

There are five market trends currently influencing the luxury outdoor apparel sector, which are as follows:

• Millennials as the primary market consumers. The emphasis of the market has shifted from Baby Boomers and Generation X to Millennials and Gen Z, which make up over 75% of the current workforce (Bethune, n.d.). At the same time, they are the primary consumers of outdoor clothing for all marketing segments, including the premium segment as well. They are characterized by an increased appreciation of brands, higher levels of independence, and a conscious attitude towards businesses, politics, and the environment. They are also avid users of the Internet, making significant shifts in the traditional advertising and branding strategies that most companies have been used to for the past 19 years.

• Cause-driven companies are at an advantage. This trend has a connection with millennials being the new driving consumer force in the market. Issues like equality, exploitation, ecology, and corporate social responsibility are important factors that make customers attracted to brands (Grodzki, Powers, & Burnstine, 2018). This factor has an impact on premium outdoor brands like Canada Goose, as their production is associated with the consumption of natural resources and animal materials (feathers, fur, etc.). Therefore, the companies would need to learn to balance authenticity with eco-friendliness. The issues of equality and exploitation are driving production values home, as customers become increasingly aware of unlawful and unethical practices of employing labor in 3rd-world countries to produce luxury items for the West.

• A new definition of “outdoors.” For decades, outdoor goods were largely associated with winterwear and protection from the snow. However, the advances of the 21st century made it easier for individuals to travel and explore, significantly increasing the potential for outdoor activities (Bethune, n.d.). The new definition of quality outdoor wear includes durability and versatility, along with a healthy amount of customization options to enable the wearers to express themselves. Thus, the requirements for outdoor products now include being able to weather different kinds of environments while retaining their good looks and uniqueness of design.

• Urban = Outdoors. Many producers associate the great outdoors with hiking and nature. At the same time, the majority of customers describe themselves as “soft outdoors type,” meaning that while they enjoy an occasional hiking trip outside of the city, the majority of times they will wear outdoors products while going about their daily lives in an urban environment (Bethune, n.d.). This places additional requirements for materials, appearance, and functionality of the design.

• Bloggers and Internet celebrities are the new idols. The influence of athletes, sportsmen, and regular media celebrities in the advertising industry is fading (Bethune, n.d.). Although each of the famous media personas can lend a greater amount of exposure than a hundred regular bloggers, the sheer number and influence that internet personas have on the market are much stronger. Millennials enjoy the practical application of goods, honesty, and connection they get from watching streams, subscribing to Instagram posts, and reading blogs than they do from paid celebrities doing advertisements.

SWOT Analysis

SWOT analysis is a universal technique implemented in small-scale and large-scale strategic planning, which could help identify Canada Goose’s key strengths, weaknesses, opportunities, and threats instead of a potential expansion to other markets (Phadermrod, Crowder, & Wills, 2019). It helps to specify the objectives in connection with various internal and external factors that could prove beneficial and detrimental to accomplishing corporate development and marketing goals (Kotler, Keller, Sivaramakrishnan, & Cunningham, 2013). SWOT analysis of Canada Goose is as follows:

As it is possible to see, Canada Goose has a solid home customer and production base (Brydges & Hracs, 2018). It’s positioning in the domestic market is dominant, with the company being one of the largest Canadian brands. Besides, the majority of the materials required for premium-class outerwear production can be found at home. The company has a history of healthy working relationships with several indigenous suppliers, ensuring the highest standards of material quality. All of these strengths, combined, enable Canada Goose to create a strong competitive product.

The company’s weaknesses revolve around various legal regulations on fur and skin trade and the limiting business model of selling premium-class goods. Not everyone is capable of affording a 1000$ winter coat, meaning that a large number of customers in the low and middle class are effectively barred from buying from Canada Goose by the steep price ceiling, which is the price to pay for being a premium brand (Brydges & Hracs, 2018). Lastly, the company largely serves North American and European markets, meaning that any ventures outside of the comfort zone are going to be difficult.

Canada Goose has several opportunities for increasing its revenues, brand exposure, and market share. The first potential solution is to expand into the summer clothes category and create premium products for high-humidity and temperature environments. These garments would not only attract additional market share but enable the company to expand into the markets previously inaccessible due to climatic conditions, like Africa and the Middle East. Countries of the Gulf Cooperation Council (GCC) are among some of the most high-paying markets in terms of premium and luxury items.

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Additional opportunities lie in the provision of goods to large markets in Eastern Europe and Asia, such as China and Russia, which are known for harsh weather, especially up in the Northern provinces of either country. Lastly, the globalization of commerce allows Canada Goose to expand into distant markets without having to set up brick-and-mortar shops, delivering goods to customers directly, and using e-shops to reach out to customers.

Canada Goose should be wary of threats that may diminish its presence in the market. The greatest threat is coming from counterfeit goods made in China. Since the company’s brand name relies on premium prices and quality to maintain its image, the apparition of fake, cheap lookalikes is going to reduce sales and detract customers away from the company (Brydges & Hracs, 2018). The ecological side of production is also an issue for Canada Goose, as it has a long-standing enmity with PETA due to the allegations of animal cruelty. Lastly, the company should guard against brand dilution through selling its goods in multi-brand retail stores, where the products will not stand out.

PESTLE Analysis

A PESTEL analysis is a useful external market analysis tool that allows the companies to outline and monitor macroeconomic factors that would have an impact on the organization’s market performance (Aithal, 2017). While the tool does not offer direct insights into the internal state of the organization, it allows evaluating the chances of a successful product launch when entering a foreign market (Aithal, 2017). Canada Goose would benefit from conducting a PESTEL analysis before trying to commit to brand globalization. Below is a PESTEL analysis for the company:

• Political. The company faces internal political opposition from parties against animal cruelty. Exposure of the details behind animal slaughter for the production of high-quality winter garments can force the local government to apply pressure on the company (Hu, Qiu, Wan, & Stillman, 2018). External political factors include the threats of state-protected competition in the emerging markets, such as China.

• Economic. The economic situation for Canada Goose is beneficial. The market for premium outdoor goods has been steadily growing even despite the overall decline in the clothing and fashion industry. The company maintains stable growth and has beneficial economic prospects ahead of it.

• Social. The company experiences social tension due to its aggressive acquisition of native animal farms, pushing out smaller businesses in rural communities (Hu et al., 2018). Besides, there have been several scandals revolving around the improper ways of collecting animal material for clothes.

• Technological. The technology surrounding the creation of outdoor wear is moving slowly. Although small innovations are being made, especially in the choice of materials, clothes are not different from how they were ten or twenty years ago. Nevertheless, Canada Goose can benefit from developing and utilizing materials with better insulation, thermal resistance, and tensile strength.

• Ecological. Canada Goose has major issues with its ecological imprint. The company utilizes coyote fur for its trimmings, while certain species of coyotes are endangered in Canada and the US. Its confrontation with PETA also resulted in several lawsuits, which tarnished the company’s reputation and labeled it as ecologically-unfriendly (Hu et al., 2018). Canada Goose should invest in minimizing its impact on the local ecosystem.

• Legal. The use of fur and skin in outwear products is associated with numerous legal obstacles towards the treatment and harvesting of animals. Also, the company’s standing in China is weak, as the government unofficially endorses counterfeit products.

As it is possible to see, the economic situation is the only major factor working for Canada Goose. While various negative developments are present, the company is used to working with them in the domestic market. Counterfeiting is the largest threat to the corporate brand name to date.

Existing Marketing Strategies

Marketing Objectives and Product Positioning

Current market objectives of Canada Goose include expanding to other regions, retaining its dominant position in the Canadian and US markets, as well as ensuring the authenticity of its brand in the face of tarnishing and counterfeit. The company positions its products as premium-class high-quality and high-versatility outdoor products, appealing to medium-upper class customers while featuring a highly-recognizable brand (large Arctic Initiative logo on the sleeve). Besides, the company seeks to provide Canadian and US military with winter clothes, thus pursuing government-sponsored contracts.

Marketing Mix (4Ps)

The marketing mix for Canada Goose is as follows:

• Place. The company’s main markets are Canada and the US, where the brand name is famous and the climatic conditions require robust outdoor garments (Wu & Li, 2018). It is trying to make ventures into Europe and Asia, but the progress is slow due to steep competition.

• Product. Canada Goose provides parkas, traveling jackets, shells, vests, knitted products, and accessories. Seasonal offers include winter, autumn, and spring-suited clothes and items.

• Promotion. The company has a low-key promotion strategy, mainly relying on traditional outlets (TV, radio, banners, paper advertisements) as well as the word-of-mouth to sell its items in the market.

• Price. Canada Goose is a premium brand that uses expensive materials (duck fluff, coyote fur) as materials for its items and coats. These make the goods provided by the company expensive, with the price for a single winter coat reaching over 1000 USD (Wu & Li, 2018).

Canada Goose Marketing Strategy

Canada Goose marketing strategies involve paid advertising, word of mouth, and relationship marketing. The company adheres to the traditional ways of operating a brand and seeks to enhance its relationships with the existing customer base by improving their view of the brand as premium, exclusive, and authentic (Wu & Li, 2018). By appealing to the expensive TV and radio advertisements, the company wants to show potential customers that it is rich enough to purchase these, thus creating an association between itself and wealth.

Word-of-mouth tactics, though slow, are expected to have greater efficiency, as recommendations from a friend are worth a lot more than an internet-based or a TV promotion, making it more likely for the person in question to buy Canada Goose products (Wu & Li, 2018). Although the company engages in company-to-customer deliveries and Internet marketing, it does not run any large-scale social media campaigns beyond what is generally expected from a large company in the age of smartphones.

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Canada Goose Target Market: Recommended Strategy

The recommended marketing strategy for Canada Goose should revolve around reaching a wider audience and re-establishing itself as a premium brand for millennial customers (Kotler et al., 2013). The analysis of the corporate practices so far shows that the company is still catering to the older generations, using outdated marketing approaches and appeals. Millennial customers are no longer the future, they are the present. The majority of these individuals do not own a TV set or watch it too much, as the Internet is effectively replacing cable television. Therefore, the primary emphasis should be on Internet advertising (Kotler et al., 2013). Canada Goose should utilize its site as well as large online media outlets to attract additional customers.

Promoting paid advertisements on Youtube and hiring famous bloggers to present the merchandise is a good approach. The costs would roughly equal those of TV advertisements, but project the brand name to a wider audience. It is advised to focus on quality rather than on quantity, for the brand to maintain its premium reputation (Kotler et al., 2013). It is why paid stars are preferable to a multitude of cheaper and less famous bloggers, despite the greater potential outreach. The exclusivity of the brand is supported by the price, meaning that the wider outreach program would not be effective either way.

Besides, Canada Goose needs to work on its reputation as an ecologically-friendly company. To do so, it should donate to charities and other organizations, work on humanizing the treatment of animals used to produce the materials for their outwear products and investing in items that do not use any fluff, fur, or animal skin (Naderi & Van Steenburg, 2018). The company could rebrand itself as a technologically-advanced producer that uses biodegradable and naturally replenishable materials, to attract the ecologically-minded customers while maintaining the same prices and quality that make Canada Goose a premium brand (Biçakcıoğlu, Ögel, & Ilter, 2017).

The company should utilize market penetration strategies to expand to other regions, such as China and Russia. While Canada and the US are profitable markets, Canada Goose already has an entrenched position there, which is not going to change due to market saturation with other domestic brands. Europe is an unlikely target for expansion due to it being the home turf of Moncler, which is the largest premium outwear company and a direct competitor of Canada Goose. Japan is also a likely target due to the number of its citizens packed on a relatively small territory.

Lastly, Canada Goose should invest in developing a summer collection. Not only would it enable the company to reach out to new customers within the existing markets, but it would also open additional venues in other countries, such as Egypt, South Africa, Saudi Arabia, the UAE, Qatar, and Kuwait (Kotler et al., 2013). These countries are known for their hot climate, making them excellent customers of summer clothes. All of these measures, combined, would help transform Canada Goose and give the company a big push it so desperately needs.

Conclusions

Canada Goose is one of the largest producers of premium-class outwears in North America. It has been enjoying steady growth and development during the past years due to the excellent conditions of its market segment, which showed strong percentages even while the rest of the clothes and fashion industry declined. The greatest challenge the company has to face is its lack of expansion towards promising foreign markets, poor ecologic reputation, and outdated concepts of marketing, which prevent the company from growing faster. Counterfeited products and steep competition are also a significant factor, especially in the Asia-Pacific region.

The company’s strong points include a strong brand name and a stable position in the North American markets. It has a long-standing relationship with suppliers and full supervision and control over the production process, which allows creating premium-class outwear of high quality. The analysis presented in this paper showed a dire need for the company to reinvent itself as a Millennial brand by engaging in corporate social responsibility, exploring the venues of social media advertising, and diversifying its product range to include eco-friendly and summertime clothes. Particular attention should be paid to ethical manufacturing, to avoid tarnishing the brand’s name by scandals involving PETA and other ecological organizations.

References

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Bethune, A. (n.d.). 5 consumer trends impacting outdoor marketing. Web.

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Hu, M., Qiu, P., Wan, F., & Stillman, T. (2018). Love or hate, depends on who’s saying it: How legitimacy of brand rejection alters brand preferences. Journal of Business Research, 90, 164-170.

Kotler, P., Keller, K. M., Sivaramakrishnan, S., & Cunningham, P. H. (2013). Marketing Management (14th ed.). Don Mills, Ontario: Pearson Canada.

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Wu, Y. L., & Li, E. Y. (2018). Marketing mix, customer value, and customer loyalty in social commerce: A stimulus-organism-response perspective. Internet Research, 28(1), 74-104.