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Current Market Situation

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Marketing Description 

      The brand Patagonia is known for protecting undomesticated lands and waters.  The products they sell address the need to use business to inspire solutions to the environmental crisis (the products do not harm already depleting resources).   They evaluate raw materials, invest in innovative technologies, rigorously police waste and use a portion of sales made to support working to make a real difference. 

Market Environment2006-2007 “Oceans”

    Micro (people actually wearing or using product)

    • Products are not harmful to environment.
    • They are not harmful because they are made of natural or recycled fibers.
    • When the products are worn they are not harmful and are not affecting those who are wearing the product or those who are in contact with it.
 

    Macro (world as whole – people, environment, resources)

    • By recycling fibers, for example, worn out Capilene base layers to make one new fiber, like polyester.
    • The environmental impact is significantly lower, making new polyester fibers from recycled garments.
    • This results in 76% energy savings and 71% Carbon Dioxide emissions (greenhouse effect) versus creating fibers from new raw materials.

Market Trends

      After expanding technology to streamline product development at its home office, Patagonia is looking to extend the application deeper into the global supply chain. The software, called product life cycle management, or PLM, is gaining favor among apparel companies seeking improved visibility into each stage of product development. A major goal is faster speed to market, but that can only happen when each department is in sync on timetables every step of the way - from design concept and costing to sourcing, production and distribution.  Many apparel companies have said that it has become clear that growth would be hindered without “some sort of technology fix”.

      In June 2006, Patagonia unveiled its first surf shop in California.  Opportunity awaits for the company in the surf market.  The new feature a range of new pieces, including unisex wet suits, rash guards (thin surf shirts), a new men's wear line and anything an ocean athlete would want to wear when not in the water, like T-shirts, shorts and pantsSurfers. Male surfers between the ages of 12 and 24 spend an average of almost $1,000 a year for clothes, shoes and accessories. Professional surfer, Dean Howard said, “Surfing needs an environmental footprint, a lot of surf products are inherently toxic -- from surfboards to your leashes [the cord from the ankle to the board] to wet suits and T-shirts. It's something that most of us don't think about.” All of the Patagonia T-shirts are organic cotton and our surfboards are probably about 75 percent less toxic. They are working toward a totally green board.

Competition plays a key role in selecting a target market group. Below are some examples of competition for Patagonia.

Direct Competitors 

The North Face, Marmot, Rei, Mountain Hardware, Arcteryx and many other high performance clothing companies. 

These companies are producing nearly identical articles of clothing used for the same activities.   

Indirect Competitors 

Under Armor – indirect competitor – Because they market to people playing sports like football, lacrosse, hockey, basketball, etc… However, these products can be used interchangeably for many of the things that the type of person who wears Patagonia would be doing.  I.e. hiking, skiing, canoeing/kayaking 
 
 

Volcom Stone – indirect competitor – they are an environmental company that uses organic cotton.  They market to an environmentally friendly crowd just like Patagonia, however, Patagonia markets toward outdoorsman.  Volcom primarily markets toward a beach/surfer customer.  Customers are similar though because they ten to be “green” aware. 
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Market Channels

      Patagonia uses multiple channels to sell their products. Using multiple methods, rather than a single channel, allows the company to get sales from a variety of different angles. Companies, like Patagonia, use multiple sales channels, combining and analyzing data from retail stores, catalog operations, and internet sales can provide marketers with complete views of the company’s customer base as well as allows the customer the ability to have multiple means of access to the actual products.

      With new technologies Patagonia as well as many other retailers can now receive “click stream” reports from a UUnet web-host service that gives them statistics of what is being viewed on their website. This capability allows marketers to see the customer’s interests, when they are viewing, as well as geographic regions that are more likely to view the website. All of these market strategies help Patagonia know where they stand with their consumers so they can make changes where they are needed and be aware of the customers they are bringing in compared to the customers they are targeting in their multiple sales channels.