Patagonia Brand Extension Case Study
Discovering a hypothetical, potential market for Patagonia to enter; deciding how the company should enter and if this would be a profitable venture
THE CHALLENGE
Analyze the needs, desires, and current brand perceptions of Patagonia consumers to determine a potential product to create for the retail market.
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*This project is not associated with Patagonia as a company, simply as a hypothetical for a class project
MY ROLE
I served as the moderator of the focus group as well as provided statistical analysis of the survey.
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Collaborated with team in ideation process and qualitative analysis to identify potential growth points.
RESEARCH OBJECTIVES
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Understand current perceptions of the Patagonia brand and identify potential areas of expansion
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Analyze the consumers' decision-making process for the potential product to find design opportunities that fit the Patagonia brand
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Determine barriers to entry due to competition and consumer needs
Brand Overview
Patagonia is a designer of outdoor clothing and gear for the silent sports: climbing, surfing, skiing and snowboarding, fly fishing, and trail running.
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Mission: "Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis."
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From donating a portion of revenue to environmental causes, to using “Fair Trade” certified and organic materials in its products, to using solar energy at company headquarters, Patagonia lives up to its promise to reduce its environmental footprint and promote good business practices. This message has resonated with the sort of environmentally conscious and upscale consumers that Patagonia sees as its target audience.
Research Methodology
Generating a Potential Product
Our team began by diving into the current competitive landscape that Patagonia is established in. As a clothing brand, Patagonia has a strong focus on the intersection of highly functional outdoor sporting gear and high quality outdoor apparel. By analyzing the direct competition and the current offerings of Patagonia, our team decided to focus heavily on the everyday apparel aspect by conceptualizing Patagonia branded sunglasses.
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To align with Patagonia's mission and brand image, we hypothesized that including a environmental impact behind this product will resonate with the consumer audience. For this purpose, we proposed creating these sunglasses out of 100% recycled materials.
Focus Group to Understand Brand Perceptions and Desires
To build on our idea of Patagonia Sunglasses using recycled materials, our team performed a focus group to further understand users perceptions of the Patagonia brand and opinions on current sunglasses within the market. We used this focus group as an open discussion to learn about past consumer behaviors and purchases, value of price vs quality, and factors that drive the decision making process in this market.
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The focus group consisted of 5 participants. All were Ohio State University students ranging from Freshman to Seniors, all with varying perceptions and investment in the Patagonia brand.
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Insights:
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Users associated the Patagonia brand with high quality outdoorsy apparel
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While known as an outdoors brand, often worn for the style as opposed to the functionality​
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Products are often worn casually, mostly during the winter
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Compared to their main competitor, North Face, users described the products as higher quality, but at a lower price
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Participants did not have a preference towards recycled materials. While it was nice to hear, this did not increase or decrease the value when shopping
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The top style of sunglasses the users owned are Ray-ban's Wayfarers
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Aim for a casual, classic, and timeless look​
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For the sunglasses they owned at the time, prices ranged from $100 to $180
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"Patagonia products are at a great price point -- good enough quality that I honestly wouldn't mind paying a higher price."
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"Something made with recycled materials definitely is not a deal breaker for me. I wouldn't pay more for it. In fashion, I want it for the look as opposed to the sustainability."
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Surveys to Gauge Sunglass Users Preferences
We expanded on the ideas generated within the focus group by sending out an online survey. This was used to collect data regarding consumer preferences in terms of aesthetic and utility, assess perceptions of the brand, and analyze willingness to pay for sunglasses.
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The survey was shared via Facebook across the groups friends and families. There were a total of 172 respondents within this study.
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Insights:
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Appearance was the most important feature users cared about when purchasing sunglasses (61.96% of respondents)
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The second most important was the quality (16.96%) with price coming in at third (12.28%)​
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42.68% of respondents said products made from recycled materials add value to the product
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Ray-Bans were voted the highest ranking brand of sunglasses by 79% of respondents
Conclusion
Final Recommendation
From our research, we determined that Patagonia obtains their profitability through selling quality products at a premium price. Users value the name brand and are willing to pay a higher price point for their products as they are a very reputable and highly ethical company. Ray-Ban will be the highest barrier to entry as they have a very firm grasp on the market.
Aligning the company's goal of a positive environmental impact with the users' goal of purchasing high quality sunglasses with a classic, timeless look that will last 2+ years can be achieved by creating Wayfarer style sunglasses made of recycled materials. While we originally believed the style would be geared more towards performance and sportiness, our research showed that users view Patagonia as a much more casual look. Finally, while the recycled materials are not a selling point, this will add value behind the name brand and product quality that users expect from Patagonia.
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For future research, we would work on prototyping as well as conducting additional focus groups to encapsulate a wider range of consumers outside of college students and gain insight from outdoor sports athletes.