Brand Analysis: The North Face

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Final project for my Brand Management class at UCLA. Fall 2010.

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  • do u have a PESTLE analysis for The North Face?
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  • I found this informative and interesting blog I think it’s very useful and knowledgeable. Thanks http://www.brandmanage.co.uk/
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  • I found all this information very helpful Since i'm doing a project for the very same brand. I'm not a marketing student but have a Marketing Module this semester. I have a question to ask to you, How does one go about getting all this information ?

    My marketing plan is to introduce a new product ( Brand Extension) into the company.
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Brand Analysis: The North Face

  1. 1. The North Face - Brand Analysis 1
  2. 2. The North Face - Brand AnalysisI. Executive Summary ---------------------------------------------------------------------------------------- 4II. Brand (Description) Company Description & Brief History ------------------------------------------------------------------- 4 Brands Owned & Managed -------------------------------------------------------------------------------- 8 o Outerwear ----------------------------------------------------------------------------------------------- 8 o Footwear ------------------------------------------------------------------------------------------------- 9 o Equipment ----------------------------------------------------------------------------------------------- 10 o TNF Sustainable Journey ----------------------------------------------------------------------------- 10 Company Business Model ---------------------------------------------------------------------------------- 11 Sales ------------------------------------------------------------------------------------------------------------ 13 o Market Share ------------------------------------------------------------------------------------------- 14 Advertising & Customer Support ------------------------------------------------------------------------- 14 Brand Management & Structure ------------------------------------------------------------------------- 15 o Brand Management Conclusions ------------------------------------------------------------------ 18III. Internal Brand Environment Introduction ---------------------------------------------------------------------------------------------------- 18 Key Company Accomplishments (Internal & Community) ------------------------------------------ 19 Sustainability Partners -------------------------------------------------------------------------------------- 20 o Partnership Analysis ---------------------------------------------------------------------------------- 21 Employee Training & Moral -------------------------------------------------------------------------------- 21 Visit to North Face Retail Store (Part I) ----------------------------------------------------------------- 22 o Employee Interview ---------------------------------------------------------------------------------- 22 SWOT Analysis & Summary -------------------------------------------------------------------------------- 23 Research & Development ---------------------------------------------------------------------------------- 25 o Research, Design & Development Process ----------------------------------------------------- 25 o Product Technology ---------------------------------------------------------------------------------- 26 o Customer Surveys ------------------------------------------------------------------------------------ 28 o R&D Conclusion --------------------------------------------------------------------------------------- 30IV. External Brand Environment State of the Economy ---------------------------------------------------------------------------------------- 30 Selling Place ---------------------------------------------------------------------------------------------------- 31 o Retail Store Environment ---------------------------------------------------------------------------- 31 o The North Face Official Website ------------------------------------------------------------------- 33 o Third Party Retailers ---------------------------------------------------------------------------------- 34 o Expansion ------------------------------------------------------------------------------------------------ 35 Category Analysis --------------------------------------------------------------------------------------------- 36 Competitive Analysis ----------------------------------------------------------------------------------------- 36 o Patagonia ------------------------------------------------------------------------------------------------ 36 o Columbia Sportswear --------------------------------------------------------------------------------- 39 o Nike ------------------------------------------------------------------------------------------------------- 41 o SWOT Analysis ------------------------------------------------------------------------------------------ 44 o SWOT Summary ---------------------------------------------------------------------------------------- 44 2
  3. 3. The North Face - Brand AnalysisV. Identity Interrogative Prospect -- Customer Behavioral Groups ---------------------------------------------------------------- 45 o Demographics ------------------------------------------------------------------------------------------- 46 o Geographic Profile -------------------------------------------------------------------------------------- 46 o Behavioral Characteristics ---------------------------------------------------------------------------- 46 o Psychographics ----------------------------------------------------------------------------------------- 47 o Internal Research: Survey ---------------------------------------------------------------------------- 47 Brand Positioning ---------------------------------------------------------------------------------------------- 53 Strategic Personality ------------------------------------------------------------------------------------------ 53 Brand Identity Summary ------------------------------------------------------------------------------------- 53 Emotional Context ---------------------------------------------------------------------------------------------53 Brand Contact Summary ------------------------------------------------------------------------------------- 53 New Product Opportunities --------------------------------------------------------------------------------- 54 Visit to the North Face Store (Part II) --------------------------------------------------------------------- 55VI. The “Brand Plan” Brand Plan Overview & Objectives ------------------------------------------------------------------------ 58 Brand Strategies - How to Position the Brand ---------------------------------------------------------- 59 Brand Tactics --------------------------------------------------------------------------------------------------- 59  Brand Identity ------------------------------------------------------------------------------------------ 59  Brand Communications ------------------------------------------------------------------------------ 59  Brand Promotions ------------------------------------------------------------------------------------- 60  E-brand program --------------------------------------------------------------------------------------- 61 Brand Research ------------------------------------------------------------------------------------------------ 61 Brand Calendar ------------------------------------------------------------------------------------------------ 65 Brand Operations --------------------------------------------------------------------------------------------- 65VII. Summary & Conclusions ------------------------------------------------------------------------------ 66VIII. Addendums, Research, & Other Data ---------------------------------------------------------- 66 3
  4. 4. The North Face - Brand Analysis I. EXCECUTIVE SUMMARYThe North Face, a subsidiary of the Vanity Fair Corporation, was founded in 1966 and openedits first retail store in 1968. Headquartered in San Leandro, California, the company offers themost technically advanced products in the market to accomplished climbers, mountaineers,extreme skiers and explorers. The companys products are sold in specialty mountaineering,backpacking, skiing retailers, premium sporting goods retailers and major outdoor specialtyretail chains.The company outfits professional and amateur athletes and enthusiasts in high-quality,technical outerwear. The North Face sponsors major events to maintain increase its publicprofile. In 2010, The North Face sponsored the Ski Challenge, the Ultra Trail du Mont Blanc inFrance and the Lavaredo Ultra Trail in the Italian Dolomite mountains.Although the company filed for bankruptcy in the late 90s, in the last quarter of 2010 its profitsrose by around 20 percent, driven by sales in Asian markets and the high visibility of The NorthFace brand during the Winter X-Games.The North Face brand delivers high performance, quality and style. It has earned a reputationas the ultimate, authentic outdoor brand. The company’s goal is to inspire outdoor enthusiaststo get outside and explore more. Its slogan,”Never Stop Exploring,” has become in the mantraof their athletes who are considered the core operating expense and leveraged across themarketing and product strategies. They have enabled this brand to be what it is today.Although The North Face Brand has achieved cult status among trendy outdoor enthusiasts,there are a few areas in which they can still improve: product technology communications,customer loyalty and expand product lines. In this company brand analysis, we will present acomprehensive brand strategy, as well as tactics, to accomplish these goals. II. THE BRAND (Description)o Company Description & Brief HistoryThe North Face is a wholly owned subsidiary of the VF Corporation, one of the worlds largestfashion apparel manufacturers, with $7 billion in sales. VF designs and produces a diverseportfolio of clothing products for both the U.S. and international markets and owns an array ofwell-known brands in several categories that are sold through a variety of retail sales channels,including department, specialty, mass-merchant and discount stores.VF is the leading maker of jeans in the United States, dominating about one-quarter of themarket with brands like Wrangler, Lee, Rustler and Riders. Approximately half of thecompanys revenues come from just the sale of jeanswear. Intimate apparel, which includesthe Vanity Fair, Lily of France, Vassarette and Bestform brands, generates about 16 percent ofsales. Another 10 percent comes from marketing occupational apparel under the Red Kap,Penn State Textile and Bulwark brands.VF also sells childrens playwear under the Healthtex and Lee brands, The North Face outdoorapparel and equipment, and JanSport and Eastpak daypacks and bookbags. Other operationsinclude a chain of about 50 VF retail outlet stores located across the United States, selling awide range of company products. More than 80 percent of company revenues are derived 4
  5. 5. The North Face - Brand Analysisdomestically; the remainder primarily generated abroad in Europe. South America and Asiacontribute to a small portion of overall sales.The company is dedicated to their retail partners because they believe in treating theirassociates, colleagues and all those who serve in the course of doing business with the highestlevels of honesty, integrity, consideration and respect. How the story of North Face begins… The North Face legend begins on the beach of San Francisco by 1966 when two hiking enthusiasts opened a small mountaineering retail store in San Francisco’s North Beach neighborhood, at an altitude of 150 feet above sea level. Since then, the company has helped explorers to reach the most unforgivable adventures to the heights of the Himalayas. The company was named “The North Face” because in the Northern Hemisphere, the north face of a mountain is generally the coldest, iciest and the most difficult face to climb. By that time, the company was positioned as a retailer of high-performance climbing and backpacking equipment. Thereafter, in 1968, the company moved its store to the other side of San Francisco Bay and began designing and manufacturing in the back of the store, its own brand of technical mountaineering apparel and equipment.F.1. Kami Sernick, 2010 USATF Ultra Runner of the Year AwardIn 1974 the Morning Glory tent was introduced, and in 1975 the Geodesic tent design replacedthe traditional A-shaped tent with introduction of the Oval Intention, which became a standardfor lightweight, high-performance tents. A sleeping bag was introduced in the same year and italso became an industry standard.In 1976, North Face began sponsoring expeditions to the most far-flung untouched corners ofthe globe. This launched a proud tradition that continues in full force today and constantlyreinforces The North Face mantra of “Never Stop Exploring. Some of the most memorableexpeditions have been the Annapurna Expedition in Nepal in which a team of 13 Americanwomen made an incredible ascent; touting the t-shirt slogan “A Woman’s Place is on Top.”Another great expedition was in 1989 when the North Face spearheaded the Outdoor IndustryConservation Alliance Trans-Antarctica Expedition. In this adventure, an international team ofcold weather hard-men made the first crossing of 4000 miles of the coldest continent duringseven months. 5
  6. 6. The North Face - Brand AnalysisBy 1992, The North Face Team begins with 8 extreme athletes who make the longest ascentsand descents in the most amazing and coldest paradises. Today, the company has a team ofmore than 60 professional global athletes from around the world, which includessnowboarders, skiers, rock climbers, mountaineers and endurance runners. The brand maintains strong links with the outdoor community through its sponsored athlete program. Athletes such as Lizzy Hawker who recently won the Ultra Trail Tour du Mont Blanc have benefited greatly from the program.F.2. Lizzy Hawker, Endurance athlete and 100km world champion.In the early 1980s, The North Face was taking exploration to the outer limits of the ski worldand added extreme skiwear to its product line. By the end of the decade, the company becamethe only supplier in the United States to offer a comprehensive collection of high-performanceouterwear, skiwear, sleeping bags, packs, and tents.The North Face entered in the sportswear market in 1996, with the launch of Tekware, aninnovative collection of high-performance sportswear. The company launched its own line oftrekking and trail running shoes in 1999.Despite the continuous growth of the brand, the company had a few stumbles a long the way;for example, by the end of the 1980s the company was acquired by a holding company that,five years later, filed for bankruptcy. It also becomes a major target for counterfeiters. Thebrand was so trendy that its popularity skyrocketed, even further outside its target market.Unfortunately, the trendiness led the company to face and alarming trend of counterfeitproducts. In March 2006, the company won a judgment of over $1 million dollars in a New Yorkcourt against a family that was selling fake North Face jackets.What ultimately saved the company was its strategy to enter the leisure apparel market inthe mid-1990s. The company’s status as a tent supplier to the U.S. Marine Corps also helpedboost its sales. It also has invested heavily in high-performance athletic events. For example,“The North Face Endurance Challenge Series,” includes four regional events and onechampionship event.Other brand building initiatives have included innovative in-store kiosks, on which customerscan watch videos of expeditions. The company also launched an online magazine called Epicthat features photography and articles appealing to the people who are passionate aboutbackcountry sports. 6
  7. 7. The North Face - Brand AnalysisToday, North Face is based in San Leandro, California. The facility is located near its corporatesibling JanSport. JanSport is the world’s largest backpack maker, and together, both companiesmanufacture nearly half of all small backpacks sold in the United States.Additional information about The North Face® can be found on the companys website,www.thenorthface.com. F.3. Online Magazine 7
  8. 8. The North Face - Brand Analysiso Brands Owned & ManagedThe North face is the world’s leader supplier of innovative an outdoor product specializing inouterwear, footwear and equipment. The outerwear and equipment lines are catered towardswilderness chic climbers, mountaineers, skiers, snowboarders, hikers, and endurance athletes. F.4. TNF Mountaineers TeamThe summit series is The North Face’s legendary mountain apparel and equipments rangeaimed to hardcore athletes, mountaineers, alpinists and climbers. It has been exhaustivelytested in extreme weather conditions and terrain, in order to deliver the highest level ofperformance, versatility, comfort and durability to its customers.The North Face is constantly driving its research and development to use advanced materialsand produce innovative designs. One example of this is the GORE-TEX outwear technology todeliver waterproof, windproof, and breathable fabrics. In Fall 2009, the line was re-launched tointroduce a higher level of quality and the next level of technical gear. The line also offers anew color palette that refreshes the series and differentiates it from other The North Faceproducts. GORE-TEX is a two-layer construction membrane that is laminated to lightweight, strong nylon textiles to produce garments that are extremely breathable, compressible, and durably waterproof. Engineered with the most rugged, most breathable, durably waterproof and windproof fabrics. This technology helps the company to meet the high demands of hardcore outdoor athletes. (http://uk.thenorthface.com/technologies/outerwear/gore-tex- outerwear-fabrics) F.5. GORE-TEX outwear technology 8
  9. 9. The North Face - Brand AnalysisSome products using this technology are the women’s Heathen jacket, men’s PrimaveraTriclimate jackets, women and men’s pants and women’s Southerland jacket.The company also offers an array line of the accessories, which includes gloves, beanies, capsand scarves designed for any activity.The North Face’s footwear products are ideal for everyday walks and high-altitude base campsalike. They are ready to be worn in the most extreme cold weather. The company offers adiversity of high-performance and innovative shoes for any weather conditions and lifestyle.The products are filtered by color, size, TNF technologies and TNF types.Most of these products are featured as durable, breathable and water-resistant, withstreamlined design and made of with the most innovative technology, such as the Snake Plateand the Vapor Wick to appeal better the needs of outdoor athletes, differentiate the productsin the market and provide competitive advantages.The Snake Plate consists of a forefoot plate that wind back and forth between the medial andlateral sides of the foot. Because it is not one solid element, it is not as uncompromisingly rigidfrom side to side and front to back. The result is a forefoot plate that allows the foot to dowhat it is physiologically designed to do: flex, bend, and contort to changing terrain. At thesame time, the Snake Plate™ delivers rigidity where and when it is still needed. The thickness,composition and size of the Snake Plate™ vary from style to style as appropriate.On the other hand, Vapor Wick moves moisture and sweat away from the skin to the outersurface of the fabric where it can readily evaporate. This process is accomplished by thecapillary action of hydrophobic fibers. Capillary action moves moisture and sweat in alldirections from where it is abundant (the users skin) and transports it to areas of lesser density(the fabrics outer surface). The removal and evaporation of sweat and excess moisture helpsto keep the skin dry and comfortable. (http://eu.thenorthface.com/technologies/footwear/snake-plate)Today, there are 10 footwear items in the market using this formidable technology. 9
  10. 10. The North Face - Brand Analysisc) Equipment The North Face has developed a sizable number of equipment that satisfies the needs of different activities such as climbing, hiking, trek and travel, running and snow sports. The brand has original and ergonomic designs classified by color family, size and TNF type and technology. The products deliver exceptional accommodation with the most innovative of technical features. The product line includes daypacks, sleeping bags, tents, Tech packs and travel bags.F.6. Mountaineer AthleteThe company develops five tech packs items using the X-Radial Suspension System, whichallows swaying motion and eliminates the additional burden of kinetic friction that packstypically induce. This system brings more support and ventilation back panels that share thesame durable, shape retaining, and comfortable characteristics utilized in the North Face EVAfootwear line. (http://eu.thenorthface.com/technologies/equipment/x-radial-suspension-system)Sustainability, innovation and high performance are the core features of the company brands.The North Face counts with an assortment of items that makes easier the customer search tosatisfy their needs. o TNF Sustainable JourneyThe North Face has been coming out with more sustainable products like the recycledpolyester Denaly jacket. The company refers to sustainability as a journey and the brandheritage. They are making products out of recycled materials or organic cotton and have verystrong sustainability initiatives and a platform to change how they people think, act andoperate.For the company, product innovation involves using technologies and fabrics that continue toprovide the high performance that not only their customers are accustomed to, but also toeliminate the use of harsh chemicals and excess materials. PrimaLoft Eco Insulation is a goodexample of the type of environmental preferred ingredients the company uses to make theirproducts. In fall 2008, they transitioned the entire line of insulated boot collection to thePrimaLoft Eco insulation that contains 50% recycled content. PrimaLoft Eco fibers are producedfrom post-consumer products and post-industrial plastic waste.In August of 2008, the company announced more green initiatives. One of them offset 100percent all North American facilities’ energy use. The company also buys renewable energycredits from Bonneville Environmental Foundation. It has also signed on with BlueSign, anorganization that helps the textile industry understand the chemical impact of the productionprocess. 10
  11. 11. The North Face - Brand AnalysisThe company is also supporting the Recreational Performance Outerwear Apparel Act, thenew legislation that supports consumers and promotes advanced U.S. textile technologies. Wewill cover more about The North Face sustainability and conservation journey in the nextsection.o Company business model The North Face business model supports the individuality of their lifestyle brands, each of which has their own management team focused on their consumers and customers. The company wants its customers to take a hike -- or take a stab at climbing Mount Everest -- as long as theyre packed with its products. F.7. The North Face USA store (the photo on the left)The brand is sold through retailers in all channels of distribution from mass to department tospecial retailers in USA and in international markets. TNF products are distributed in specialtysporting goods stores in North and South America, Europe and Asia, throughout more than 250namesake stores operated by third parties in Europe and Asia, some 50 company-ownedEuropean and US outlets and on the internet. The company sells the products directly toconsumer over the website and other online partners.Of the company’s total revenues, 30% are in international markets, primarily in Asia and 17%are direct-to-consumer through TNF-operated retail stores and e-commerce sites (whichincludes stores and internet sites in international markets). Today, 16% of the products sold are manufactured in TNF-owned facilities and 84% are products obtained from contractors, primarily in Asia. A combination of TNF- owned and contracted production from different geographic regions provides flexibility and a competitive advantage in their product sourcing. F.8. TNF channel of distribution and production plants. 11
  12. 12. The North Face - Brand AnalysisThe company will continue to manage its supply chain from a global perspective and adjust asneeded to changes in the global production environment.The North Face operates manufacturing facilities (primarily cutting, sewing and finishing)located in Mexico, Central America, Poland and the Middle East. TNF purchases raw materialsfrom numerous domestic and international suppliers to meet scheduled production needs. Insome instances, TNF contracts the sewing of VF-owned raw materials into finished productwith independent contractors in the United States, Mexico and Central America.Product obtained from contractors in the Western Hemisphere generally has a higher cost thanproduct obtained from contractors in the Far East but gives the company greater flexibility andshorter lead times and allows for lower inventory levels.All TNF-owned production facilities throughout the world, as well as all independent contractorfacilities that manufacture TNF-branded products, must comply with the companys GlobalCompliance Principles. These principles, established in 1997 and consistent with internationallabor standards, are a set of strict standards covering legal and ethical business practices,workers ages, work hours, health and safety conditions, environment sustainability orstandards, compliance with local laws and reputations.The graphic below sums up the channel of distribution of the company:F.9. TNF Channel of Distribution 12
  13. 13. The North Face - Brand Analysiso Sales information & Market ShareAs it was mentioned in the company description, The North Face is owned by the VFCorporation, which also owns the well-known brands Lee, Wrangler and Vans. VF doesntprovide sales figures for its outdoor unit, and publishes only the divisions revenues. The NorthFace’s internal company policies don’t allow them to provide their financial information. Forthe purposes of this project, the information is presented under the outdoor brand category.Historically, V.F.s revenue has largely been derived from its holdings in mass-market jeanswear(e.g. Lee, Wrangler, and Rustler jeanswear), as well as intimate apparel. But as the companysought out brands with higher growth prospects, it sold its intimate apparel unit and acquiredseveral luxury demin and sportswear lines. In addition to these higher-end brands, a significantportion of the revenue is derived from the companys outdoor apparel holdings, which includesbrands such as Reef, Vans and the North Face.For the full year of 2009, VF revenues were $7.2 million, down 6% from the total revenues of$7.6 million in 2008. Between 2008 and 2009, net income declined from $603 million in 2008to $458 million in 2009. The higher pension expense and foreign currency were the mainscauses that impacted earnings in 2009.Despite the declines of 2009, the numbers look more positive for this year. VF expects 2010revenue to rise by 3 to 4 percent as well as revenue growth in Asia to top 25 percent. Thecompany plans to increase its locations in China by 40 percent in this year.The company plans to add $35 million in investment spending behind their strongest brandsand biggest opportunities for profitable growth, bringing the total increase in investmentspending in this year to approximately $85 million. These growth investments have beentargeted toward specific opportunities, including the following:  To launch The North Face first television advertising campaign in the U.S.  To enhance thenorthface.com consumer experience to drive market share gains in Europe in order to reach new consumer segments.  To boost VF global product development and innovation platforms.In the first half of 2010s fiscal year, the Outdoor & Action Sports businesses achievedoutstanding results. Revenues grew 10% with operating income and margin each reachingrecord levels for the period. 13
  14. 14. The North Face - Brand AnalysisGlobal revenues of The North Face and Vans brands grew 9% and 20%, respectively. Totalrevenues in the Americas businesses rose 11%, while international revenues were up 8%. Totaldirect-to-consumer revenues for our Outdoor & Action Sports businesses rose 28% in the firsthalf, with double-digit growth in The North Face and Vans.(“The North Face Apparel Corporation Facts”, http://www.ehow.com/facts_7397189_north-face-apparelcorporation.html#ixzz15b9P3kYhIn the second half of 2010, The North Face turnover also increased by 12% compared to thesame period in 2009. At the same time, VF International’s Action Sport brands (The North Face,Vance & Lucy) jumped 13%. The profits raised by around 20% in the third quarter of 2010,driven by sales in Asian markets, the high visibility of the North Face brand during the X-Games,store sales gains, and new store openings.In the article, “VF raises 2010 forecast, eyes acquisition”, Chief Financial Officer Robert Shearersaid VF was looking into possible acquisitions, especially in the outdoor and action sportssegments. He also mentioned that their gross margins in 2011 would be close to levels seenthis year, and its stock closed lower, although the apparel maker raised its forecast for 2010and posted higher-than-expected quarterly profit.(Phil Wahba, http://www.reuters.com/article/idUSTRE63T3ZL20100430?pageNumber=2) o Market ShareDespite all the years of poor financial performance, The North Face brand has increased itsprofits and revenues considerably in the last two years. The market share year to date is aproof of the effective changes in its financial and marketing strategy that have helped thecompany improve the management of its economic resources. The market share has increasedconsiderably from 0.4% in 2007 to 51.6% in 2010, leaving Nike and Columbia behind. F.10. TNF Market Share results, 2010. 14
  15. 15. The North Face - Brand Analysis F.10. TNF Market Share results, 2010.According to these graphics, the outdoor apparel sales were up because of the higher prices.Retailers are less likely to discount and manufacturers are strictly enforcing minimumadvertised pricing agreements. Outdoor skirts, dresses and skorts also showed strong resultsyear-to-date.The positive results from the brand during this year have encouraged the CEO, Steve Rendell,to invest more money in the company for the next year and support new initiatives.o Advertising and Customer Support During 2009, The North Face advertising and promotion spending was 4.6% of Net Sales. The company advertises in consumer and trade publications, on national and local radio, on Internet and recently on television. It also participates in cooperative advertising on a shared cost basis with major retailers in print media, radio, internet and television. TNF sponsor various sporting, and other special events and sponsor a number of athletes and other personalities. It employs marketing sciences to optimize the impact of advertising and promotional spending and to identify the types of spending that provide the greatest return on its marketing investments.F.11. Dave Short’s Blog, TNF-sponsored athlete 15
  16. 16. The North Face - Brand AnalysisThe company also participates in various retail customer incentive programs. Incentiveprograms with retailers include discounts, allowances and cooperative advertising funds. It alsooffers sales incentive programs directly to consumers in the form of rebate and coupon offers.Sales incentives offers with retailers and, with consumers are recognized as sales discounts inarriving at reported Net Sales (except that cooperative advertising reimbursements ofdocumented retailer advertising costs are reported as Advertising Expense, and free productwith purchase offers are reported in Cost of Goods Sold).Internet websites are maintained for most of their product lines. Many of them are business-to-consumer e-commerce sites where consumers can order products directly from TNF. Otherconsumer websites provide information about its products and may direct consumers to itswholesale customers where they can purchase its products. The company also operates severalbusiness-to-business sites where its retail customers can order TNF products.TNF employs a staff of in-store marketing and merchandising coordinators located in majorcities across the United States. These individuals visit customers retail locations to ensure thatits products are properly presented on the merchandise sales floor and to inform thecustomers sales force about its products and related promotions. F.12. The Red Flag Campaign, TNF Asia 16
  17. 17. The North Face - Brand Analysiso Brand Management & StructureThe North Face has a formal brand management structure, consisting of 23 people includingvice-presidents, directors, managers, coordinators and brand analysts. In 2008, the companyannounced changes in several key management positions, which were designed to support thecompany’s turnaround strategy. Adam Ketcheson was appointed Vice President of BrandManagement, and he reports directly to the Vice President of Marketing, Aaron Carpenter.Ketcheson, along with his team of 8 people have combined the efforts of the productdevelopment and marketing departments to ensure that the company’s highly technical andexpedition-based tradition remains.The North Face’s marketing and product management team is equipped to promote growth,stability and the company’s traditional exploration-based heritage. The brand managementteam is well prepared and many of them have extensive knowledge of the outdoor retail andsportswear market. With their rich business and market knowledge, outdoor industryexperience and familiarity with The North Face’s core customers, the team has sustained thecompany’s position as the industry and market leader.The diagram of the company’s structure better illustrates the relationship between the branddirector and his subordinates.F.13. TNF Brand & Product Structure 17
  18. 18. The North Face - Brand AnalysisIn summary, the company’s operational functions are complex but they are well organized andcomplete. The brands are segmented by product and market type, including: retail, online,promotions, communications and product development. The main North Face manufacturingplants have their own brand management structure which makes it easy for the headquarterssite to communicate and implement its marketing strategies. It’s also important that thecompany standardizes the communication tools in all the sites, as well as customize itsadvertising, to better fulfill its customer needs in any location.III. INTERNAL BRAND ENVIRONMENTo Company Culture and EnvironmentAccording to The North Face’s official website, “sustainability and conservation form the core ofThe North Face pledge to advance the well-being of the planet, its citizens and those who enjoyexploring it.” The commitment to sustainability is reflected throughout all the companyoperations, everything from the product manufacturing to the employees on the sales floor—so much that it’s truly a core component of the company’s brand culture.The North Face has accomplished many successful sustainability initiatives, like reducing theircarbon emissions by installing a solar panel system in their distribution system, partnering withother organizations like stopwaste.org to reduce operational waste, implementing a 100%recycling policy and encouraging their employees to seek alternative modes oftransportation—all with the goal of creating a more sustainable environment. F.14. TNF exploring the demand of backpacking, trekking and travel.Their motto, “Never Stop Exploring” is a value deeply entrenched within the company and theemployees that work there. According to anonymous employee surveys on Glassdoor.com,almost all of the employees cited the passion for the outdoor lifestyle as one of the benefits ofworking for The North Face. 18
  19. 19. The North Face - Brand AnalysisThe relaxed working environment and contribution to the community also topped the list. TheNorth Face “aspire[s] to enrich [their] communities and the environment in every place they dobusiness.”The difference between The North Face and most companies that claim to be “sociallyresponsible,” is that The North Face actually follows through on their promise to theircommunity to be socially responsible in every aspect of their business, from their culture-infused employee programs and energy efficient operations to their strategic partnerships withorganizations that share a similar mission and values. Key Company AccomplishmentsCommunity  Established 20 partnerships with philanthropic organizations with similar environmental and social missions.  North Face employees work with local organizations to clean up beaches and community parks, restore native wetlands, plant tree and remove invasive species in appreciation for Earth Day.  Volunteers logged 700+ hours in 2008 and nearly 120 hours for the Save the Bay event in the San Francisco Bay.  Developed an employee program that inspires employees to “Never Stop Exploring.”  Implements a fair labor code of conduct throughout all company operations.Planet  EPA Green Power Partner: They offset 100% of their North American operations use with wind energy through the Bonneville Environmental Foundation’s Green-e Climate Certified Renewable Energy Credits.  Alternative Transportation Program: Developed a program that encourages employees to commute via a carpool, mass transit, walking or biking.  Adopted the Outdoor Industry Association’s Sustainable Packaging Guidelines, which allowed them to redesign their hangtags and shoeboxes, and ultimately reduced a significant amount of electricity, water and paper resources.  Installed a solar panel system at their Visalia, CA distribution center and reduced carbon emissions by an estimated 1300 metric tons per year. The system provides about 25% of the facility’s energy requirement.  Based on a Stopwaste.org audit, made a commitment to reduce corporate headquarter waste sent to landfills by 25% (in 2009) by redesigning office waste system to include mixed recycling and organic, compostable waste.  Drinking Water Initiative: The North Face banned single-serving plastic water bottles at their corporate headquarters.  Recycling: All paper and corrugated cardboard are recycled.  Commitment to use sustainable materials and recycled content 19
  20. 20. The North Face - Brand Analysis  The North Face company is a founding member of the Outdoor Industry Associations Eco-Working Group, dedicated to developing tools that evaluate product life cycles (and their impact on the environment.) Sustainability Partners Business for Innovative Climate & Energy Policy (BICEP), an organization that works with key allies in the business community and relevant members of Congress to pass energy and climate change legislation. Bonneville Environmental Foundation (BEF), a nonprofit organization and key player in the carbon offset marketing. Conservation Fund, Go Zero, a program that allows individuals, corporations and communities to measure their carbon dioxide emissions and learn helpful ways to reduce those emissions and offset the remaining by planting trees. EPA Climate Leaders, a voluntary EPA industry-government partnership that works with companies to develop complete climate change strategies. Recurrent Energy, a leading solar power developer, and The North Face are working together to increase the amount of solar energy The North Face uses in the future. Suntech Energy Solutions, one of California’s fastest-growing providers of commercial and utility-scale solar power systems. Stopwaste.org, an organization that provides waste audits for corporations in Alameda County. BD, help The North Face reduce the environmental emissions. 20
  21. 21. The North Face - Brand Analysis o Partnership AnalysisThe North Face’s strategic partnership with a variety of socially responsible partners, focusedon the environment and sustainability, contributes to their overall brand character. They trulyfollow through on their promise to the environment, and that integrity is something theircustomer’s value. Without these partnerships and initiatives, The North Face is just another“cause-washing,” “green washing” corporation.Furthermore, it is rare to find a company so dedicated to their brand culture that they developprograms to infuse the company culture within their employees and throughout all aspects oftheir operations. The North Face has done an incredible job of developing a strong brandculture through their employee volunteer and alternative transportation programs. Employee Training and Morale F.15. Employee AthletesAccording to Glassdoor.com, employees enjoy the fringe benefits of working at North Face, the50% employee discount, community involvement, the company commitment to sustainability,and the pride of selling products for a market leader. Most employees enjoy working with theircolleagues, the relaxed teamwork-oriented atmosphere, and the outdoor lifestyle the companypromotes.While all of the employees that left a review approve of company president Steve Rendall’sleadership, most of them did not approve of the senior management and believe that thereshould be a better system in place to evaluate senior management performance. A fewemployees felt that great performance should be rewarded and would like more upwardmobility within the company.The overall company culture is strong. It appears that most of the employees that left a reviewbelieve in the company’s mission and values. Employees value the active outdoor lifestyle thatthe North Face brand represents and their commitment to sustainability. Employees generallyenjoy working with their colleagues. It’s also a huge plus for employees to be working for amarket leader, a company that focuses on product quality and product innovation at its core. 21
  22. 22. The North Face - Brand AnalysisThere seems to be a huge opportunity on the side of the senior management to really work onimproving communication from the top down, help contribute to the growth of theiremployees, give credit where credit is due and share accountability for performance.Employee morale is never high when employees are forced to work with incompetentmanagers. Visit to North Face Store (Beverly Hills) F.16. Beverly Hills StoreOur team visited the North Face retail store in Beverly Hills (on Beverly Dr.) and we chattedwith the assistant manager at that location. Here’s what we found out about the internalculture: Q. “What do you like most about working at The North Face?” A. “Employees really like working here because we have the best products (quality wise); we love the lifestyle, and the company culture. It’s really laid back and we all share a love for the outdoors.” Q. "What are the companys biggest strengths? And what are some things you would like to improve?" A. “We have a great marketing team and huge brand building efforts. One thing I would like to see us push more would be to develop a more formal community outreach program. Nike right down the street organizes weekly runs and their programs have been really successful. And also Lululemon down the street organizes runs, yoga sessions, and other weekly workouts. The North Face hasn’t really pushed the community outreach that much, especially here in Beverly Hills where retail sales are mostly a result of tourism activity.” 22
  23. 23. The North Face - Brand AnalysisOur primary research confirmed our original findings that The North Face employees love thecompany culture, its products and the lifestyle the company promotes. The North Face islargely a lifestyle brand and its employees and customers love that their products reflect thelove for the outdoors and the environment. SWOT AnalysisStrengths Opportunities Strong brand (well known, especially with  Improve internal culture the outdoor community)  Improve employee morale by giving more Strong company culture feedback, welcoming contributions of Huge focus on product technology (huge ideas from stuff (e.g. help to make component of marketing/branding processes more efficient) strategy)  More training for senior management (& Store experience (innovative kiosks, improve accountability) friendly employees)  Provide professional development for Commitment to sustainability & the employees community (The North Face Explore Fund)  Increase community involvement and – embedded throughout company outreach projects  Expand product offerings (e.g. cycling) and sponsor athletes in those sportsWeaknesses Threats Employee morale is low (both at the retail  Competitors, like Patagonia, have a much level and at the corporate level) stronger company culture, better benefits Employees do not have high opinion of (i.e. in a way that can attract higher management quality talent) Products perceived as “too expensive” to  Other competition, like Columbia many people Sportswear is perceived as “more Difficulty communicating technological affordable” and “better value” innovation  Knockoffs rampant in Asia (& also theft of Community outreach efforts not as products) which impacts the brand successful as other active lifestyle brands  Involved in a frivolous lawsuit with “The like Nike (e.g. running club) South Butt”  SWOT SummaryStrengthsThe North Face’s biggest strength by far is a strong brand that resonates with the outdoorcommunity and their company culture, which is deeply rooted in a commitment to theenvironment and sustainability. Another huge strength is their investment in research anddevelopment in order to make the most high tech gear available. 23
  24. 24. The North Face - Brand AnalysisTheir investment paid off because according to our independent customer survey, most of therespondents believed that The North Face offers the highest quality products. The storeexperience is another plus. The environment inspires any visitor to go out in the world andexplore. It allows people to aspire for that lifestyle.WeaknessesOn the outside looking in, The North Face seems like a powerful force to be reckoned with.They are adventurous, rugged, and powerful. However, according to recent employee surveysand our own independent customer surveys, there are a few issues to address. One of theirbiggest weaknesses, according to Glassdoor.com, employee morale is low—both at the retaillevel and at the corporate level—and employees generally do not have a high opinion of thesenior management. Another problem that the company faces is that there’s a disconnect between their perceptionof their own product and customers perception of their products. Their customers oftenperceive their products as too expensive. Also, while most people think “quality” when theythink of The North Face brand, they don’t think “innovation” or “technology.” It could be thatthere’s difficulty communicating these aspects of the brand to their customers or it could meanthat product technology might not be as important to their customers as other productattributes like comfort and durability.Lastly, community outreach efforts have been largely unorganized and unsuccessful. Theassistant manager at the North Face store in Beverly Hills lamented that community outreachefforts at their store were not as successful as other active lifestyle brand, like Nike. Nike inBeverly Hills has a very popular and successful running club.OpportunitiesThere are plenty of opportunities to improve internal company culture. For example,management can improve employee morale by giving more feedback to their employees andwelcome contributions to, for example, make processes more efficient. They could alsoimplement a 360-performance review, where a manager directs reports as well as peers,review their performance. This way, managers are held more accountable to act withtransparency.Other opportunities for The North Face include increasing local community involvement likerunning clubs, hiking clubs, excursions and activities. Each retail store could also be encouragedto develop its own regional volunteer programs. Lastly, since many of their current customers(as indicated in the results of our customer survey) also participate in cycling or running, a hugeopportunity for the brand would be to expand their product offerings and sponsor the bestathletes in those sports. 24
  25. 25. The North Face - Brand AnalysisThreatsThe North Face’s biggest threats come in the form of competitors that target the same type ofcustomer. Patagonia, for example, has a much stronger company culture and they have betterbenefits (Glassdoor.com). There’s more “unity” in the Patagonia brand. Another threat wouldbe lower priced competitors like Columbia Sportswear. According to the results of our ownsurvey, companies like Columbia Sportswear have lower prices and are therefore perceived as“more affordable” and “better value” than The North Face.A potential threat to the brand is the rampant counterfeiting in Asia, in addition to producttheft. If the counterfeit problem increases, the brand image risks erosion. People will thinkless of the brand when they see it, Research and Development Research, Design and Development Process The North Face invests heavily on research and development and quality improvement. They believe in integrating consumer research with their product development. And while The North Face sponsors many top athletes, they don’t just use their athletes for marketing purposes—they use their athletes for product development, to help them test out new products and improve the quality of these products. They go through great lengths to find out what their customers want in their products. These are some of the product attributes that are examined: comfort, whether products can withstand varying weather conditions, quality, durability andF.17. Extreme mountaineering athlete product technology.The R&D process undergoes four stages: 1. Research & Design – In this phase, The North Face Athlete Team try products and provide feedback to the company, making suggestions on how to improve the products, evaluate the product performance and product quality for future improvements, and so on. 25
  26. 26. The North Face - Brand Analysis 2. Advance Material Research & Development - The North Face works with leading materials engineers in order to create the most “technically advanced fabrics” for clothing and equipment. Their athletes have extremely high standards and will expect nothing but the best. An example of a fabric they created is the GORE-TEX fabric, which is very lightweight and intended for use at high altitudes. 3. Innovative Design & Construction – In this stage, the materials engineers put the technology to the test. For example, The North Face engineers test out the resilience of their tents by placing them in the back of a C130 plane. Needless to say, their tents blow the competition away. 4. Laboratory Tested & Expedition Proven – The last step of the research and development phase of a product includes sending out products to the field and put them to a REAL test. They send the apparel and equipment on athlete expeditions to see how prototypes perform in the real world. For example, they tested one of their tents in the highest slopes on 7 different continents! After they receive feedback from their athletes, they refine each product until it meets everyone’s seal of approval. That’s real dedication to product development. F.17. Extreme mountaineering athlete o Product TechnologyF.18. TNF Product Technologies 26
  27. 27. The North Face - Brand AnalysisThe North Face provides an extensive amount of product technology on their website. Theycategorize product by benefits:  Waterproof & Breathable: Hyvent  Thermal Insulation (Goose Down Fill)  Thermal Fabrics: TKA Series, Polartec  Wind Protection: TNF Apex, Windwall  Moisture Management: VaporWick  Odor Management: Minerale, Cocona  Element Protection: Ultraviolet Protection, Durable Water Repellent  Fabric Technology: Pertex, Merino Wool, Nylon Ripstop, Pertex EcoA few product technologies more in depth…Hyvent: Hyvent is a “superior, waterproof, breathable technology utilizing a polyurethanecoating that consists of a tri-component, multi-layer formula for waterproof protection,moisture permeability and durability.” Hyvent is used in men and women’s apparel and is idealfor skiing and climbing.VaporWick – VaporWick is a type of technology, made up of “specifically engineered, high-performance fibers, yarn types, fabric constructions and finishes” that help remove moisture orsweat evaporate quickly. It is used in men and women’s apparel.Boa Lacing System: The Boa lacing system is use predominantly on their footwear and they’vealso implemented in into their daypacks. This system is made with “replaceable, ultra high-strength, stainless steel lace cables that slide easily through the patented elongated laceguide.” This technology is renowned for its performance and durability in snow, water, and iceand works like a suspension system. F.19. Product Technology 27
  28. 28. The North Face - Brand AnalysisCustomer Surveys: The North Face distributes and collects customer surveys at all retaillocations.F.20. Customer Research Survey in The North Face Store (Part I) 28
  29. 29. The North Face - Brand AnalysisF.21. Customer Research Survey in The North Face Store (Part II) 29
  30. 30. The North Face - Brand AnalysisIn summary, The North Face implements a very comprehensive and advanced R&D program,from engineering the perfect materials to creating the perfect product and from testing thoseproducts out in real expeditions with real athletes to conducting customer research surveys.The lengths they go through to develop and test their products are a testament to the kind oflifestyle the company lives by.IV. EXTERNAL BRAND ENVIRONMENTo State of the economyHigh-end brands with high profit margins are more or less insulated from dips in the economy.While the recession has impacted the overall sales of The North Face products, according tothe assistant manager at the Beverly Hills location, they have been steadily growing the pastseveral years and continue to expand worldwide.In 2009, The North Face opened eight new stores, and six more stores are scheduled to openwithin the next year. They have stores all over Asia—Hong Kong, Korea, Japan—and they havestores around South America and Europe.F.22. Vanity Fair Corporation Stock Quote (December 2000-December 2010)F.23. Dow Jones Industrial Average (December 2000-December 2010) 30
  31. 31. The North Face - Brand AnalysisComparing the trends in the Vanity Fair Corporation’s stock price versus the Dow JonesIndustrial average, we can see that while VFC stock prices tend to fluctuate with the overallmarket, they aren’t as volatile.According to the U.S. Securities Exchange and Commission (SEC) website, the Vanity FairCorporation (VF) acquired The North Face in 2000, so now The North Face is a wholly ownedsubsidiary of VF. In 2000, right at the height of the dot com boom, VF stocks hovered around$30-$40 per share. The stocks dipped a bit around September 11, 2001. However since VFCorp acquired The North Face brand, its stock has steadily risen, where the company reached alittle over $90 per share at its highest point, right before the great recession in mid-2007. Afterthe stock market crashed the stocks dipped to a pre-recession price of $50-$60, and now thestocks have almost reached a high again.While most retail stores are still reeling from the weak economy, The North Face and VanityFair Corporation have been doing really well since a low in January 2009, and they’ve beengrowing steadily since they acquired The North Face in 2000. Their steady growth andperformance are a testament to the strength of their brand, especially since retail sales forcompanies with weak brand identities have been lackluster over the past few years.o Selling Place From our primary research, via interviewing company employees, we discovered that while they do operate their own retail stores and sell directly to customers online, they do most of their business through 3rd party retailers. The North Face distributes their products to thousands of wholesalers worldwide that then turn around and sell the products directly to consumers. The North Face also operates their own retail stores. There are approximately 36 retail locations in the United StatesF.24. The North Face, Beverly Hills and dozens more worldwide. The North Face’s authorizedretailers include Sports Authority, EMS, Moosejaw Mountaineering, Urban Outfitters, HudsonTrail Outfitters, Great Outdoor Provision, Mountain Gear and REI. o Retail Store EnvironmentThe North Face retail store environment is unlike any other. As you walk into the store, youwill feel like you’re walking into a store full of possibilities for adventure. Water cascades downone side of the entrance. Each visual element of the store, from carved out entrance way, tothe rocks laid out next to the merchandise, to the setup of the tents—makes the adventurerinside of me feel right at home. Interactive kiosks are placed at the end of each aisle so thatcustomers shopping in the store can experience the great outdoors in these videos, whichtypically display extreme athletes engaging in their outdoor sports and excursions. 31
  32. 32. The North Face - Brand AnalysisF.25. More pics of The North Face store in Beverly Hills 32
  33. 33. The North Face - Brand Analysis o Official WebsiteThe North Face’s official website showcases the company’s athletes, from the snowboardersand skiers to the divers and mountaineers. Web visitors can shop by equipment type, activity,or product collection. The “Never Stop Exploring” blog features TNF athletes on theiradventures and expeditions, from big free wall free climbs around the world to the 3,000 El Capsummit in Yosemite. The athletes record videos and write blog posts about their experiences.The North Face is very much an aspirational brand. Their customers can aspire for the extremeoutdoor lifestyle that the company promotes, the “never stop exploring” lifestyle. The NorthFace athletes can serve as role models and inspiration for their millions of customers. Whilethere is a huge emphasis on technological innovation and product quality, the images ofathletes and explorers on the website demonstrate what they can do with the actual products.The hero in those stories is the athlete, not the product. The products allow them to explorethe depths of the world, and they help the athlete perform to the best of their potentialF.26. The North Face Official Web Site 33
  34. 34. The North Face - Brand Analysis F.27. “Never Stop Exploring” blog for North Face Athletes and Community o Third Party Retailers (Online and Physical Retail Locations)We conducted a quick Google search for the term “north face” and a number of 3rd partyretailers popped up in the results including: Macy’s, Zappos, REI, Backcountry.com, MooseJaw,Travel Country, Outdoor Brand Shop and dozens of others. 34
  35. 35. The North Face - Brand Analysis F.28. Authorized Retailers via Google Search F.29. Authorized Dealers and Vendors o ExpansionThe North Face is currently expanding worldwide. They are slated to open several more storesinternationally within the next year.They are also expanding their target market to include other extreme action sports. This year,they are sponsoring the Winter X-Games this upcoming snow season. 35
  36. 36. The North Face - Brand Analysis Category AnalysisThe North Face belongs in the “outdoor apparel” category. According to a recent press releasefrom the Outdoor Industry Association, outdoor product retail sales only grew slightly fromthe previous year—2.3% to be exact. They attribute the slow growth to “lingering weakness inthe economy and continued lack of consumer confidence.” In the past, outdoor retail productswere more of a luxury, than a necessity, so since the economy is still weak, customers arebuying on an “as-needed” basis versus a “want” basis.The Outdoor Industry Association does expect an increase in sales as the winter monthsapproach and when people will be engaging in more winter sports. In fact, outdoor apparelsales increased 44% between the first week of October 2010 and previous week. In theIndependent Outdoor Specialty channel, sales increased a mere 0.4% from the previous month.In contrast, the economy has not impacted The North Face in the same way the outdoorapparel industry as a whole has been affected. This is most likely due to the fact that TheNorth Face is a premium brand, targeting educated high-income individuals or youngprofessionals, ones that have not been impacted too much by the weak economy. They havebeen opening up new stores despite the recession and only have plans to grow and expand. Competitive AnalysisWe are going to compare The North Face to the following three brands: Patagonia, ColumbiaSportswear and Nike. Patagonia and Columbia are in the same category of “outdoor” lifestylebrands, whereas Nike targets a broader audience. Nike, however, has recently entered theoutdoor sportswear category with their “Nike 6.0” outerwear product line.  Patagonia Mission Statement: “Build the best product, do no unnecessary harm, use business to inspire and implement solutions to the environmental crisis.”The mountaineer Yvon Chouinard’s founded Patagonia. Patagonia, like The North Face, is acompany that is deeply committed to preserving the earth and creating sustainable products.In fact, in 1972, Yvon Chouinard developed the idea of “clean climbing” after he found that thesteel pitons Patagonia manufactured damaged rocks. He then developed aluminum chocks toreplace steel pitons. This is just one example of their deep commitment to preserving nature. 36
  37. 37. The North Face - Brand AnalysisCore Value Proposition: Fabric technology (e.g. e-fibers, Gladiodor Garmet Odor Control,Performance Baselayers); commitment to the environment and social responsibility.Target Market: Slightly older market than The North Face group, serious about outdooradventure, socially responsible and committed to preserving natureBrand Identity: “While actually a physical place, the name Patagonia also suggests an untamedwilderness that transcends any one singular experience. In this way, the brand name isaspirational for users seeking to interact with wild nature” (Patagonia Brand Analysis onSlideshare.net)Store Environment: They operate about 21 retail stores around the United States. F.30. Screenshot of Patagonia Official Website 37
  38. 38. The North Face - Brand AnalysisF.31. Patagonia Store 38
  39. 39. The North Face - Brand Analysis  Columbia Sportswear The Columbia Sportswear Company is positioned directly against The North Face and Patagonia. While the former target the extreme outdoor adventurers, Columbia Sportswear appeals more to the casual outdoor enthusiast.They believe that “the outdoors isn’t all about remote expeditions or climbing the world’shighest mountains. Anyone can enjoy the outdoors.” They are definitely catering to a broadercrowd. Columbia Sportswear is sold in over 100 countries worldwide.Core Value Proposition: Product technology, branded as the family of Omni technology,focuses on comfort. Core technologies serve the following functions: thermal comfort, waterrepellent, lightweight, advanced traction, sun protection, advanced evaporation, advancedcooling, waterproof and breathable.Target Market: The casual outdoor enthusiastBrand Identity: “Family business gone global”Store Environment: Of all the outerwear companies, Columbia Sportswear is the one that looksand feels more like a traditional department store. F.32. Columbia Sportswear Official Website 39
  40. 40. The North Face - Brand AnalysisF.33. Screenshot of Columbia Sportswear Official Website and Retail Stores 40
  41. 41. The North Face - Brand Analysis o Nike Nike is the world’s leading supplier of athletic shoes and apparel. Each product line is branded: Nike Golf, Nike Pro, Nike+, Air Jordan, Nike Skateboarding, etc. Nike sponsors top athletes from all over the world, from Tiger Woods in golf and Roger Federer in tennis, to Lance Armstrong in cycling.Nike’s marketing and branding strategy is a key component to their huge success. They arepositioned as a premium brand and their core focus is on product design. Their swoosh logo isone of the most recognizable logos in the world, and their “just do it” slogan is just asrecognizable.Nike contracts with factories in developing countries like China, Indonesia, Vietnam andMexico. They have been found to violate minimum wage laws in some of these countries.Also, because Nike manufactures product at such a large scale, their operations make anegative impact on the environment.Core Value Proposition: Footwear design, they work with athletes to design the best shoe forathletesTarget Market: Nike targets the mainstream athletic crowd. They believe that “if you have abody, you are an athlete.”Brand Identity: athleticism, driven, competitiveStore Environment: Each Niketown store is a huge multi-level wonderland of athletic apparel. F.34. Screenshot of Nike homepage on official website 41
  42. 42. The North Face - Brand Analysis F.35. Nike Union Square, San FranciscoF.36. Nike 5th Ave. New York City 42
  43. 43. The North Face - Brand AnalysisF.37. Nike ID Store, LondonF.38. Nike Downtown, London 43
  44. 44. The North Face - Brand Analysis o Competitor SWOT Diagram & Summary Strengths Weaknesses Opportunities Threats Product Product Line Communicating Competitors Technology, Expansion,The North Face product seen as “better Company Culture, Technology technology value” Trendy Branding Product Limited sales Technology, Seek channels could Company Culture, partnerships limit company Competitors Patagonia Genuine with more growth, not as more “trendy” commitment to wholesalers and accessible as environment & retailers other brands social change Product Not likely to All other Columbia Create sub- Technology, become a cult competitors are Sportswear brands family brand brand more popular Plenty of small Image problems, Can expand into Global Brand, niche brands Nike ran into troubles the outdoor Market Leader with very loyal with labor laws sportswear followingso SummaryPatagonia is the most serious threat to The North Face. Both companies target the seriousoutdoor athletes and adventure seekers. The North Face is the trendy brand of the two, hugelypopular among college students and widely available nationwide in thousands of retaillocations. Thus, The North Face has more mass-market appeal. In contrast, Patagonia onlyoperates a handful of retail locations in areas that aren’t as populated, which is part of theirdistribution strategy. Patagonia does not want to be a trendy brand.The North Face’s marketing strategy focuses on the athlete, the potential of the athlete, theathlete performing in TNF apparel and gear. In stark contrast to this strategy, Patagoniafocuses on the clothing, not the model. Patagonia places emphasis on fabric technology intheir marketing and only showcases the clothing on their website and catalogs. This is an areawhere both companies can make an improvement. Since Patagonia is a lifestyle brand, theirimages should inspire their target market and inspire them to explore the possibilities withtheir amazing product technology. 44
  45. 45. The North Face - Brand AnalysisAnd while The North Face invests heavily in research and development, their customers onlythink about comfort and durability when they think about the brand. Thus, there’s opportunityfor The North Face to ramp up their product technology marketing efforts.While TNF, Patagonia and Nike all have passionate fans, Columbia Sportswear is the companyleast likely to develop a cult following because they target such a mass audience. Their goal isto provide comfortable clothing to “anyone” which is a poor way of defining their customerprofile. The casual outdoor enthusiast is not something most people would be ferventlypassionate about, nor would anyone be jumping at the chance to identify with that customerprofile. “The extreme outdoor athlete,” “mountaineer,” “world-class athlete”—those areterms that people can get excited about.Nike recently started an outdoor apparel product line, but it has not gained the traction theirother brands have gained, so we have yet to see if this brand will be a success. While they areone of the most popular and well-known brands in the world, and although millions love thembecause they sponsor some of the top athletes in the world, the company has run into host ofimage problems. They manufacture abroad in developing countries and have been found guiltyof violating child labor laws in Vietnam, as well as contributing a large amount of damage tothe environment through their manufacturing operations. Nike has recently implemented newprograms to offset that negative impact, but people don’t perceive it as a genuine commitmentto the environment, since it was never part of their corporate culture or their company culture.It seems to be something they’re doing because it’s “trendy.”In sum, all four companies have incredibly strong company cultures and each has their own setof strengths and weaknesses, as mentioned in the SWOT analysis. TNF and Patagonia are bothextreme active lifestyle brands, deeply committed to corporate social responsibility, theenvironment and social change. Columbia Sportswear is a more family oriented company thatalso cares about the nature preservation and enjoying the outdoors. Lastly, Nike, one of themost celebrated brands in the world, is committed to designing the best shoes for athletes.V. IDENTITY INTERROGATIVE Prospect -- Customer Behavioral GroupsThe North Face wants its customers to take a hike -- or take a stab at climbing Mount Everest --as long as theyre packed with its products. The customers range from normal people whopurchase branded clothing for simple activities such as running, biking and to great athleteswho take part in Olympics and other physical activities. 45
  46. 46. The North Face - Brand Analysis F.39. Fair labor and TNF peopleDemographic ProfileThe North face customers are usuallysingle middle-middle or upper-middleclass people, whose main occupation isteaching or having part time summerjobs. They are college or professionalcustomers between 25 to 45 years old.Their income ranges between $40,000to $60,000 dollars. They are consistentusers with heavy frequency ofpurchase and conduct searches on theInternet. Geographic Profile The North Face is located in major areas like USA, London, Chile, Canada and Australia, where the weather and place conditions are optimal to practice extreme activities including hiking, mountain climbing and skiing. Customers in these locations usually live in suburbs or rural areas. They are mostly physical active and take great interest in these activities as part of their F.40. Extreme athlete in 100 running marathon life or trends.Behavioral ProfileThe North Face customers are interested inrunning in marathons and they areenvironmentally aware. They enjoy beingindependent and typically purchase highperformance products. They are always pushingthemselves to the max.F.16. Picture taken from the TNF online magazine 46
  47. 47. The North Face - Brand Analysis Psychographic Profile The company targets prospect customers who are trying to explore new locations via outdoor activities like running. They are generally people who are trying to fit in the new environment or society. A great majority of West Los Angeles residents, for example, are into fitness.F.41. Expedition in South AmericaWe conducted a customer survey for current North Face customers. The survey consisted ofseven questions and 30 people responded to the survey. The results are as follows:What kind of outdoor activities do you participate in?Almost half of the respondents practice hiking, followed by running and biking. The company issatisfying one of the activities that the market likes to do at most and its covering a little of therunning target but no the people that do biking; so this could be a good opportunity for TNF toinclude another product line to its wide assortment of products.What comes to your mind when you think of North Face?With this question we measured the positioning of the brand: “What attributes comes first tothe customer’s mind, when they think of The North Face brand?” Most of the people associatethe brand with quality, outdoor gear and durability. This means that The North Face outdoorclothing line is well positioned in the market mainly because of its quality. But it’s important tomention that 7% of the people also think the brand is expensive. We are going to consider thisinformation in the Brand Plan section to make some suggestions about how to improve theperception of the brand. 47
  48. 48. The North Face - Brand AnalysisReasons why you purchase North Face products and not other brands?41% of the respondents usually buy the North Face products because of the quality of thematerials; 23% for the style and, 20% for the versatility. Once again, quality is considered thecore value of the brand that encourages the target market to buy.What products do you buy most from North Face?Jackets, backpacks and vests are the products that the respondents buy most from the channelof distritubtion. Some of them, mentioned the winter clothing as another product that theybuy more. However, TNF clothing gear line is very extensive. For purposes of this analysis, wedisregard these responses and selected the answers that provided more detailed information. 48
  49. 49. The North Face - Brand AnalysisAccording to the assistant manager of TNF store in Bervely Hills, the outdoor gear is the linewith the highest revenues (60%); so this survey confirm our findings.How do you perceive The North Face customer service?The customer service of the company is perceived as good by 60% of the respondents. Thisresult speaks very well about the company efforts in offering the right product at the rightplace with the best service possible. Since the brand is in the category of service sensitive withheavy competition; the company has developed an efficiently marketing strategy whereachieving the customer’s needs and, finding new ways to satisfy them have become in its mainobjective. 49
  50. 50. The North Face - Brand Analysis PositioningNorth Face faces competition with stores in the same category such as Patagonia, ColumbiaSportswear and to a lesser extent, Nike. They all offer good quality, high performance productsat a premium price and high-level of comfort. The North Face has positioned itself as offeringhigh quality, durable and sustainable products—products that have proven to last longer andwithstand extreme climatic conditions.The perceptual map below shows The North Face product positioning based on itsperformance and comfort. The chart of benefits offered by brand is another good source ofinformation, illustrating how the customers perceive TNF brand compared to its maincompetitors on attributes such as affordability, durability and style.In general, the principle benefit that customers see in The North Face brand is comfortfollowed by performance. However, the brand is also perceived as unstylish and expensive.Competitors like Columbia Sportswear are better rated in performance but it does not have thesame level of comfort that TNF and they are perceived as expensive and slightly durable.Meanwhile Nike is perceived as the most durable brand with a high level of comfort, goodaffordability but lacks performance for extreme sports. Mizuno is the brand with the highestscore whose core benefits are affordability and durability.These graphics show useful information of the brand and its closest competitors. It helps us tounderstand the perception of the brand in the costumer’s mind, as well as indentify whichbenefits are the biggest opportunities of TNF. We will make some suggestions to the company,in the Brand Plan, based on all our findings in the Identity Interrogative.As customers, we feel committed to the brand and we would like to see it ahead of thecompetition in all its product lines. F.42. Product Positioning – Perceptual Map 50
  51. 51. The North Face - Brand Analysis F.43 Benefits Offered by BrandThe Target Market Discovery Grid chart shows the perception of the brand between thecompany and the target market. There are some interesting differences that might beinfluenced by the product line and the demographic and psychographic characteristics of thismarket.F.44. Target Market Discovery GridAccording to our survey, customers would buy products that o Are good quality o Supports their needs o Is a trust worthy brand o Most of them would like to be loyal customers to products that involve physical activity like running shoes, winter jackets, etc. 51

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