Look anywhere this winter and then you can find someone wearing canada goose rea, parka, or vest. The Canadian-based clothing retailer has been so successful at marketing its puffy, doughboy jackets as elite winter wear that they’re one of many season’s most popular brands. The company’s parkas, recognized by the round, two-inch patch about the left sleeve and the coyote fur-trimmed hood, once warmed arctic explorers and Canadian Rangers, but today are typically 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 have grown to be preferred among college students.
What sets Canada Goose in addition to other outerwear companies are its exorbitant prices-$745 for any women’s coat, $245 for a hat at Bloomingdales. Prices may go as high as $1,700.
But those steep prices haven’t hurt business a little. 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 at the end with this year.
Part of Canada Goose’s success might be attributed to playing up its humble founding five decades ago in a tiny warehouse in Toronto (the outerwear continues to be made in Canada). And whenever private equity firm Bain Capital acquired a majority stake within the company in 2013 for the rumored $250 million, it had to promise to keep 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 the MBA Program. Fournier invented a subfield of marketing on brand relationships and researches how companies create value through their branding.
BU Today spoke with Fournier about Canada Goose’s ultrasuccessful brand name and the ways it provides formed relationships using its customers.
BU Today: The reason why Canada Goose this kind of popular brand today?
Fournier: I don’t get their marketing plan looking at me. All I realize is the fact that their marketing arises from grassroots. They had a strong narrative, after which it started getting picked up by certain groups. People started to think about hardcore Canadians braving the cold, so it became a fad after which transitioned from a fad in to a strong brand. I do believe it’s mostly about this and keeping prices high, not going insane with sublines like making lighter fall jackets, as an example. Also protecting distribution so that they don’t show up for much less store like TJ Maxx or even an outlet. It’s that, being smart enough never to kill it.
So you’re saying that some brands damage what they have by expanding too fast?
I believe that’s the truth with a great deal of things. Burberry came back now in popularity, nevertheless they were at an increased risk for a time, and the exact same thing was true with Calvin Klein. They made their brands too available. If you’re going to be exclusive, availability-both distribution and pricing-is definitely the complete opposite of that, so you have to balance that tension really carefully.
Within a marketing campaign, there is the four Ps: product, place, price, and promotion. The pricing along with the distribution are the most important for the brand such as this. It’s growing, everyone would like it, so it’s difficult to say, “Well, we’re not intending to make it readily available for everyone,” as you always would like to serve shareholders making the biggest profit.
Is price the key barrier for accessibility?
I do believe distribution, too. Barriers to accessibility would additionally be, “Can you get a hold of it?” You will need to work a bit harder to discover it. This brand has exclusive distribution; it’s not everywhere. Those are two barriers.
There’s a great deal of hardy outerwear around-L.L. Bean, North Face, Patagonia. How have those brands convinced people that winter gear is fashionable or even a luxury item?
That’s interesting too. The North Face has exploded hundreds and countless percent over the last few years, and so they could risk blowing everything up. But folks are still into their ultra down coats, therefore they remain hanging in there. But they’re sort of at that close edge.
Eventually, several of these brands were only located in small communities, like L.L. Bean was once for fishermen and hikers, then again they broadened. I do believe that’s the first step; you start to shift the category frame that you think of this as. It’s not difficult-core expedition wear, it’s about outer fashion. Outerwear remains to be outerwear, however, you don’t have to go with an arctic expedition anymore.
The initial step is transitioning the brand to fashion. Remember Swatch? The innovation in Swatch was that watches was previously about timekeeping, and then they made it about fashion. They told customers that if they purchased a Swatch watch, it was actually like that they had 10 watches due to interchangeable bands. Same thing with eyeglasses. You used to have one pair, now people often have several with some other designs.
Then it’s element of a trend that people are able to pay more for. Folks are paying more permanently quality things generally. Consider the iPhone being a great example. Who inside their right mind goosejacka to enjoy $800 over a phone? But we’re doing well enough as being an economy, and it’s become easier for many people.
Have you considered the backstory for companies like Canada Goose? Will it be important to make a narrative around a brand name to have success?
Within these narratives you really feel like you can know the founder as being a person. They’re adventure seekers. It’s the exact same thing with Patagonia and L.L. Bean. I believe that’s a huge factor. Maybe more in contemporary consumption, even more so in the past 10 or 2 decades, this idea of your narrative is essential. There are many brands available when you don’t have a story, plus a character inside your story, you’re behind. As in your English classes, you require a character and a plot to produce a good story.
Developing a story differentiates you and gives your brand authenticity, which happens to be crucial for brands today. Harley Davidson is a good example-they have this founder myth. The founders of Snapple were hugely essential for getting Snapple off the floor; these people were window washers. In the event you dig into a number of your top brands, they all have these mythologies. Plus they incorporate some credentials with regards 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 kind of advertising?
That’s form of what I was returning to. The sweetness the following is they don’t have got a marketing plan having a capital M, meaning traditional stuff. Instead, they’re doing cultural branding. Cultural branding means you desire your brand to naturally become portion of the culture-put simply, placing the merchandise into the audience that you would like it to gain traction.
The technique is that you make an effort to get people to take advantage of the product and focus on it because of their friends. That’s not in the hands of the marketing team; that’s in the hands of the consumers. It’s much more powerful and credible, a lot more approachable. You would like to become element of culture. If you become element of culture, then you can receive in a movie using a scene the location where the characters will be in an incredibly cold climate. Hollywood wants brands that happen to be hot simply because they convey lots of meaning, plus it keeps going. Those people who are fashion bloggers want the emblem because it’s something that keeps going. They have authenticity; it’s not planning to seem commercial, and it’s not pushing something.
Why has Canada Goose chosen to concentrate on the college market?
I don’t know the reply to that without seeing their marketing plan. I could see adolescents as a target; I don’t know if it’s just college. However you figure university students might have the ability to afford these things, and therefore it’s an effective potential audience, one that’s hip. They’re not targeting younger kids.
A BU student launched a parody patch and raised money Kickstarter to manufacture the patches. Does Canada Goose reap the benefits of parodies like this?
It depends in the parody, but eighty percent of parodies are type of good. If they’re selecting your main message, and discrediting you, that’s probably not a good idea. By way of example, Matthew McConaughey did a number of Lincoln car spots, and other people made parodies that hit a touch too near to home.
But go ahead and take case of Snuggie. Those blankets were being sold on infomercials, then your parody world got ahold of these, and plenty of parody commercials got loaded onto YouTube and that’s when that brand went nuts. A brand name wants customers to accept them within today’s cultural fabric.
Every brand desires to have this product everyone wants, therefore the challenge is to ensure that it stays cool. The test for Canada Goose will probably be springing up, and let’s see when they can ride this wave and not kill it.