Look anywhere this winter and then chances are you can see someone wearing canada goose rea, parka, or vest. The Canadian-based clothing retailer continues to be so successful at marketing its puffy, doughboy jackets as elite winter wear that they’re among the season’s most in-demand brands. The company’s parkas, identified by the round, two-inch patch about the left sleeve and the coyote fur-trimmed hood, once warmed arctic explorers and Canadian Rangers, however nowadays are normally spotted on celebrities like Emma Stone. More recently, like North Face fleece jackets and L.L. Bean bean boots, the white goose down-filled jackets are becoming preferred among students.
What sets Canada Goose aside from other outerwear companies are its exorbitant prices-$745 for any women’s coat, $245 for a hat at Bloomingdales. Prices will go as much as $1,700.
But those steep price tags haven’t hurt business a lttle bit. Fortune magazine reports that over the past decade, Canada Goose has seen revenues explode from $5 million to greater than $200 million, with many experts predicting that figure could rise to $300 million by the end of this year.
A part of Canada Goose’s success might be associated with playing up its humble founding five decades ago in a small warehouse in Toronto (the outerwear remains to be made in Canada). And whenever private equity firm Bain Capital acquired a majority stake in the company in 2013 to get a rumored $250 million, it was required to promise to maintain the manufacturing there.
Canada Goose is actually a marketer’s dream, says Susan Fournier, School of Management Questrom Professor in Management and faculty director of your MBA Program. Fournier invented a subfield of promoting on brand relationships and researches how companies create value through their branding.
BU Today spoke with Fournier about Canada Goose’s ultrasuccessful brand and the methods it offers formed relationships having its customers.
BU Today: How come Canada Goose this kind of popular brand at this time?
Fournier: I don’t have their marketing campaign in front of me. All I understand is their marketing emanates from grassroots. They had a solid narrative, and then it started getting picked up by certain groups. People started to contemplate hardcore Canadians braving the cold, and so it was a fad after which transitioned from your fad in a strong brand. I feel it’s mostly about that and keeping prices high, not going insane with sublines like making lighter fall jackets, as an example. Also protecting distribution hence they don’t show up for much less store like TJ Maxx or even an outlet. It’s that, being smart enough to not kill it.
So you’re proclaiming that some brands damage anything they have by expanding too fast?
I do believe that’s the situation with a lot of things. Burberry came back now in popularity, nevertheless they were in peril for a while, and the same was true with Calvin Klein. They made their brands too available. If you’re gonna be exclusive, availability-both distribution and pricing-is the opposite of that, so you must balance that tension really carefully.
Inside a marketing plan, you will have the four Ps: product, place, price, and promotion. The pricing and the distribution are the main to get a brand like this. It’s growing, everybody wants it, so it’s challenging to say, “Well, we’re not intending to make it readily available for everyone,” as you always would like to serve shareholders and then make the biggest profit.
Is price the primary barrier for accessibility?
I do believe distribution, too. Barriers to accessibility would also be, “Can you get a hold of it?” You have to work just a little harder to find it. This brand has exclusive distribution; it’s not everywhere. Those are two barriers.
There’s a great deal of hardy outerwear out there-L.L. Bean, North Face, Patagonia. How have those brands convinced folks that winter gear is fashionable and even a luxury item?
That’s interesting too. The North Face has exploded hundreds and countless percent over the recent years, and so they could risk blowing everything up. But folks are still inside their ultra down coats, therefore they will still be hanging within. But they’re kind of in that close edge.
Sooner or later, many of these brands were only seen in small communities, like L.L. Bean was previously for fishermen and hikers, but they broadened. I do believe that’s step one; you start to shift the course frame that you think of this as. It’s not hard-core expedition wear, it’s about outer fashion. Outerwear continues to be outerwear, however, you don’t will need to go with an arctic expedition anymore.
The initial step is transitioning the emblem to fashion. Remember Swatch? The innovation in Swatch was that watches was once about timekeeping, and then they managed to get about fashion. They told customers that in case they obtained a Swatch watch, it absolutely was actually like that they had 10 watches as a result of interchangeable bands. Same task with eyeglasses. You used to have one pair, and today people usually have several with various designs.
Then it’s a part of a trend that folks are prepared to pay more for. Everyone is paying more for good quality things in general. Consider the iPhone as being a great example. Who in their right mind goosejacka to invest $800 over a phone? But we’re doing well enough as being an economy, and it’s become a little easier for a lot of people.
What about the backstory for businesses like Canada Goose? Is it important to create a narrative around a product to have success?
Over these narratives you sense like you can be aware of founder being a person. They’re adventure seekers. It’s the same thing with Patagonia and L.L. Bean. I do believe that’s a tremendous factor. Maybe more in contemporary consumption, a lot more so in the past 10 or 20 years, this idea of the narrative is critical. There are plenty of brands on the market that in case you don’t have got a story, as well as a character with your story, you’re behind. As in your English classes, you need a character along with a plot to generate a good story.
Using a story differentiates you and also gives your brand authenticity, which is critical for brands today. Harley Davidson is a superb example-they have this founder myth. The founders of Snapple were hugely essential for getting Snapple up and running; these folks were window washers. When you dig into a few of your top brands, they all have these mythologies. And they have some credentials when it comes to authenticity.
Canada Goose doesn’t do plenty of advertising; it relies instead on product placement in movies and word-of-mouth. What’s so effective about that type of advertising?
That’s form of the things i was getting back to. The beauty here is they don’t use a marketing campaign by using a capital M, meaning traditional stuff. Instead, they’re doing cultural branding. Cultural branding means you would like your brand to naturally become section of the culture-to put it differently, placing the products in the audience in which you would like it to gain traction.
The process is basically that you attempt to get people to use the product and discuss it with their friends. That’s not in the hands of the marketing team; that’s at the disposal of the consumers. It’s a lot more powerful and credible, much more approachable. You wish to become a part of culture. If you become component of culture, then you may get in a movie having a scene where characters are in a very cold climate. Hollywood wants brands which are hot simply because they convey a lot of meaning, and yes it keeps going. Individuals who are fashion bloggers want the brand because it’s an issue that keeps going. It has authenticity; it’s not likely to seem commercial, and it’s not pushing a product or service.
Why has Canada Goose decided to target the college market?
I don’t know the answer to that without seeing their marketing plan. I could see teenagers being a target; I don’t know if it’s just college. However, you figure college students might have the capacity to afford these items, and therefore it’s an excellent target market, one that’s hip. They’re not targeting youngsters.
A BU student created a parody patch and raised cash on Kickstarter to manufacture the patches. Does Canada Goose make use of parodies like this?
It all depends on the parody, but 80 % of parodies are form of good. If they’re going for your main message, and discrediting you, that’s probably not a good idea. For example, Matthew McConaughey did a series of Lincoln car spots, and individuals made parodies that hit a tad too close to home.
But use the case of Snuggie. Those blankets were offered on infomercials, then the parody world got ahold of them, and tons of parody commercials got loaded onto YouTube and that’s when that brand went nuts. A brand name wants men and women to accept them as part of today’s cultural fabric.
Every brand wishes to have this product that everyone wants, and so the challenge is always to make it cool. The exam for Canada Goose will probably be developing, and let’s see when they can ride this wave rather than kill it.