Look anywhere this winter and then you can find someone wearing canada jacka, 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 one of many season’s most popular brands. The company’s parkas, identified by the round, two-inch patch around the left sleeve as well as the coyote fur-trimmed hood, once warmed arctic explorers and Canadian Rangers, but today are commonly 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 popular among university students.
What sets Canada Goose besides other outerwear companies are its exorbitant prices-$745 to get a women’s coat, $245 to get a hat at Bloomingdales. Prices may go as much as $1,700.
But those steep price tags haven’t hurt business a little. Fortune magazine reports that during the last decade, Canada Goose has seen revenues explode from $5 million to greater than $200 million, with a bit of experts predicting that figure could rise to $300 million by the end of this year.
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 produced in Canada). So when private equity firm Bain Capital acquired a majority stake from the company in 2013 for a rumored $250 million, it needed to promise to hold the manufacturing there.
Canada Goose is actually a marketer’s dream, says Susan Fournier, School of Management Questrom Professor in Management and faculty director in 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 logo and the methods it provides formed relationships having its customers.
BU Today: The reason why Canada Goose such a popular brand today?
Fournier: I don’t have their advertising campaign facing me. All I understand is their marketing emanates from grassroots. That they had a robust 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 coming from a fad into a strong brand. I think it’s mostly about this and keeping prices high, not going insane with sublines like making lighter fall jackets, for example. Also protecting distribution so that they don’t arrive at a discount store like TJ Maxx or even an outlet. It’s that, being smart enough to never kill it.
So you’re saying that some brands damage what they have by expanding too quickly?
I believe that’s the situation with a lot of things. Burberry comes back now in popularity, nonetheless they were in danger 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-may be the complete opposite of that, so you have to balance that tension really carefully.
In the advertising campaign, you have the four Ps: product, place, price, and promotion. The pricing and also the distribution are the most crucial to get a brand this way. It’s growing, everybody wants it, so it’s hard to say, “Well, we’re not going to make it accessible for everyone,” since you always want to serve shareholders and then make the most important profit.
Is price the main barrier for accessibility?
I think distribution, too. Barriers to accessibility would also be, “Can you grab it?” You must work a bit harder to discover it. This brand has exclusive distribution; it’s not everywhere. Those are two barriers.
There’s a lot of hardy outerwear available-L.L. Bean, North Face, Patagonia. How have those brands convinced people who winter gear is fashionable and even a luxury item?
That’s interesting too. The North Face has expanded hundreds and numerous percent over recent years, and so they could risk blowing everything up. But everyone is still within their ultra down coats, therefore they remain hanging within. But they’re kind of at this close edge.
Sooner or later, many of these brands were only seen in small communities, like L.L. Bean used to be for fishermen and hikers, then again they broadened. I feel that’s step one; you begin to shift the course 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 on an arctic expedition anymore.
The first task is transitioning the manufacturer to fashion. Remember Swatch? The innovation in Swatch was that watches was previously about timekeeping, and they managed to get about fashion. They told customers that when they obtained a Swatch watch, it was actually actually like that they had 10 watches as a result of interchangeable bands. Same thing with eyeglasses. You used to have one pair, and today people often times have several with assorted designs.
Then it’s component of a trend that individuals are likely to pay more for. Individuals are paying more permanently quality things generally speaking. Consider the iPhone as being a great example. Who within their right mind goosejacka to spend $800 with a phone? But we’re succeeding enough for an economy, and it’s become easier for a lot of people.
What about the backstory for companies like Canada Goose? Would it be important produce a narrative around a brand to reach your goals?
In these narratives you sense like you get to are aware of the founder as being a person. They’re adventure seekers. It’s the same with Patagonia and L.L. Bean. I believe that’s a tremendous factor. Maybe more in contemporary consumption, a lot more so in the past 10 or twenty years, this concept of your narrative is critical. There are plenty of brands on the market that when you don’t have a story, plus a character inside your story, you’re behind. Such as your English classes, you will need a character as well as a plot to create a good story.
Having a story differentiates you and also gives your brand authenticity, which can be crucial for brands today. Harley Davidson is an excellent example-they already have this founder myth. The founders of Snapple were hugely essential for getting Snapple above the ground; these people were window washers. When you dig into a few of your top brands, each one has these mythologies. Plus they incorporate some credentials with regards to authenticity.
Canada Goose doesn’t do a lot of advertising; it relies instead on product placement in movies and word-of-mouth. What’s so effective concerning this type of advertising?
That’s form of things i was getting back to. The wonder the following is they don’t use a marketing strategy having a capital M, meaning traditional stuff. Instead, they’re doing cultural branding. Cultural branding means you desire your brand to naturally become part of the culture-in other words, placing the items to the audience where you want it to gain traction.
The technique is basically that you try and get people to make use of the product and discuss it because of their friends. That’s not in the hands of the marketing team; that’s at the disposal of the consumers. It’s much more powerful and credible, far more approachable. You need to become a part of culture. If you become element of culture, then you may get in to a movie having a scene where characters are in an incredibly cold climate. Hollywood wants brands which are hot simply because they convey a lot of meaning, and it also keeps going. Those who are fashion bloggers want the brand because it’s something which keeps going. It offers authenticity; it’s not likely to seem commercial, and it’s not pushing something.
Why has Canada Goose chose to focus on the college market?
I don’t know the response to that without seeing their marketing plan. I was able to see adolescents being a target; I don’t determine if it’s just college. Nevertheless, you figure college students might have the capacity to afford these items, and therefore it’s an effective target market, one that’s hip. They’re not targeting younger kids.
A BU student made a parody patch and raised money on Kickstarter to produce the patches. Does Canada Goose make use of parodies like that?
This will depend around the parody, but eighty percent of parodies are sort of good. If they’re selecting your main message, and discrediting you, that’s probably a bad idea. For instance, Matthew McConaughey did a number of Lincoln car spots, and people made parodies that hit a little too in close proximity to home.
But consider the case of Snuggie. Those blankets were being sold on infomercials, then this parody world got ahold of them, and plenty of parody commercials got loaded onto YouTube and that’s when that brand went nuts. A product wants people to accept them included in today’s cultural fabric.
Every brand would like to have this system that everybody wants, therefore the challenge is to make it cool. The exam for Canada Goose will be springing up, and let’s see when they can ride this wave rather than kill it.