By: Leandre Meldener Ariel Mullins Ben Wolff Jessica Charbonneau
Switzerland 2 Executive Summary
The North Face is an American outdoor product company specialized in clothing and equipment lines that are aimed toward wilderness, climbers, mountaineers, skiers, snowboarders, hikers, and endurance athletes. The company is present in many countries around the world such as the United States and Canada as well as France, Italy, United Kingdome and Spain in Europe to name a few. However one of the untapped markets that North Face has not exploited yet is in Switzerland. Switzerland is a very rich and prosperous market for a company like The North Face with nearly eight million inhabitants. Switzerland is a nation with many sports such as soccer, rugby, cricket, and cycling to name and few, and because of the cold and rainy weather of the mountainous terrain, it would make an ideal market for The North Face. This marketing plan will give a description of The North Face as well as the market they will be entering. The product description gives a short explanations of the history of The North Face and what product they will be selling in this new market. It also gives a description of where The North Face is already situated around the world, and how well they are doing in these particular markets. The country description section gives a brief description of the climate that the country is currently in. Statistical data is given such as number of habitants, size of the country, ethnicity, and languages spoken. All of these factors are very important when deciding on what market to enter. This section also goes in depth with the currency present in the country in order to know how to price the products relative to the dollars. Finally it covers a description of the weather climate all year long since it is a crucial part of when people wear The North Face equipment. 3 The next section describes the political climate. This section goes in depth with the relationship of the United States of America, and Switzerland. It defines some of the agreements that were signed between the two countries, and why Switzerland is a good market to penetrate due to the good relations between the two countries. The recommendations for marketing section describes some of the modifications if any needed to the products in order to enter the new market. In the case of The North Face, very little modifications will be needed due to the fact that Switzerland and the United States are similar countries. The only major change would the different in currency which will have to be adjusted. The following section is market segmentation. This is a crucial part of the project. This section describes what type of customers will be targeted in this new market. Research has been conducted in order to find what segmentation The North Face will have to target in order to succeed in this new market. Next is the competitive environment. This is also a very important aspect that will decide if you succeed in a new market. This section covers a research of these competitors, and their current market share. By researching the companies, The North Face is able to know who they will target for their products and how are the other companies succeeding in this market. Channel option covers the methods that The North Face group will be using in order to enter the market and distribute its products in the most successful manner. Finally the last two sections of the project are communications strategies and pricing strategies.
5 65% 18% 10% 1% 6% Ethnic Groups German French Italian Romansch Other Country description Switzerland is a democratic country located in Europe. It borders: France, Italy, Germany, Austria and Liechtenstein. Its population is 7,901,000. It is 15,940 square miles with a population density of 70.63 per square mile. (5 times more than the United States) It started out as The Swiss Confederation in 1291. A centralized federal government replaced the confederation in 1848 with a constitution that was later modified in 1874. Switzerland became a member of the United Nations in 2002, after years of remaining in good terms with neighboring countries. As of right now, Switzerland is still not a member of the European Nation. However it has been taking steps towards becoming a member in recent years. (CIA) Switzerland is well-known for being a neutral country. This is because they are able to maintain national security easier by pleasing the many diverse groups that call Switzerland home. (WiseGEEK) 64% 20% 7% 2% 1% 1% 1% 1% 0% 3% Languages German French Italian Serbo-Croatian Albanian Portuguese Spanish English Romansch 6 Switzerlands cool climate makes it an ideal country to open The North Face stores. It has the same four seasons as The United States. Since Switzerland has higher altitudes in most of its regions, the average temperature during the winter is 28 to 45 degrees Fahrenheit. In some cities the average maximum temperature will only be 32 degrees. A cold front in Switzerland can cause temperatures to remain below freezing for over a week at a time. The cold and snowy weather increases the need for The North Face products especially during the winter. (Jud) Even though it is not freezing and cold during the other three seasons, there will still be a need for The North Faces products. The high altitudes and mountains cause Switzerland to be rainy during most of the year. The average rainfall of Switzerland is 60.5 inches per year. Some cities see up to 106 inches of rain while others only see 24 inches. (Tampas annual precipitation is 44.77 inches) The rainy weather is favorable because of The North Faces large selection of rain coats and boots. (Jud)
7 Market Segmentation
The typical North Face customer is between 18-45 years of age with an income of $40,000-$60,000 a year and who live in suburbs or rural areas. The North Face will segment their product to people who take part in activities such as hiking, mountain climbing, and training, and other activities such as sporting events with friends. The interests of the people in this segment include running in marathons, they enjoy being independent and like the job they are currently in. Some of the opinions this segment commonly share are; always pushing themselves further, they are environmentally aware and want high performance products. As shown in the table below, customers are looking for high performance and high comfort. 8 In an interview conducted about what kind of outdoor activities people participated in, hiking almost had half of the votes. This is a good indication to The North Face to keep pushing towards hiking as more and more people are undertaking this activity. In a survey it was found that 41% of people purchase The North Face equipment because of the quality of the materials, 23% thought it was the style and 20% said the versatility. These are the number the company will think about when entering Switzerland. It wants to use the same positioning as they used in other countries in order to be successful. In the Research conducted by The North Face, it was found that repeated customer of the brand in current markets look for three main characteristics in products they buy from The North Face. The first is the performance of the product and will it keep up with what the customer desire to do. The second is durability and how the product will hold up in the long term, and finally the comfort of the overall product. The results of that research is shown in the table below: Brand Affordable Performance Durability Comfort Style The North Face YES YES YES Columbia Sportswear YES YES Nike YES YES YES Adidas YES YES YES
9 Competitive environment
The North Face has many direct and secondary competitors around the world and specifically in Switzerland, the new market they are looking to penetrate. Some of the direct competitors include; Columbia, Nike, Adidas, Asics, Brooks, Mizuno and many more. The North Face also has some secondary competitors such as Timberland and New Balance. All of the companies are potential threats to The North Face in entering a new market. It is important to make sure that to target the correction market segment in order to succeed in this new market. Below is a table showing the market share for The North Face in from 2007 to 2010:
Market Share 2007-2010
Outdoor Apparel Market Share Review $ YTD 2010 YTD 2007 % Change Units YTD 2010 YTD 2007 % Change The North Face 51.7% 48.8% 2.9% Columbia 33.3% 33.0% 0.3% Columbia 27.1% 26.4% 0.7% The North Face 28.1% 26.6% 1.5% Nike 6.9% 6.1% 0.8% Nike 8.9% 7.4% 1.5% Doufold 2.6% 2.7% -0.1% Doufold 4.8% 4.8% 0.0% Amerex 1.2% 3.4% -2.2% Meridian 4.0% 4.5% -0.5% Hot Chilly's 1.2% 1.3% -0.1% Coleman 1.7% 2.2% -0.5% Meridian 1.1% 1.2% -0.1% Polarmax 1.6% 1.2% 0.4% White Sierra 0.9% 0.6% 0.3% Hot Chilly's 1.5% 1.8% -0.3% MTN Hardwear 0.8% 0.7% 0.1% White Sierra 1.4% 1.0% 0.4% Polarmax 0.8% 0.5% 0.3% Amerex 1.2% 3.5% -2.3%
Bater, Alex. "The North Face." slideshare. (2009)
10 As shown in the table above The North Face is pretty highly ranked in the top three companies for outdoor apparel in both profit and units sold. Since Switzerland has some of the best skiing and hiking mountains in the world, The North Face is looking to position its products category towards the hikers as well as skiers and other extreme mountain sports. These people are interested in pushing themselves further and want high performance products that will allow them to do so, and The North Face will provide those products to them.
11 Communications strategy The use of Internet promotion and social media advertising is recommended as the most successful method of media communications in entering the market. According to the Internet World Stats, there were 6,430,363 Internet users in Switzerland as of July 2012, representing over 82% of the overall population. Of this group, 51% belong to at least one social network, representing potential for low cost, immediate increase in brand awareness from social media advertising (European Travel Commission). The actual nature of the media promotion will focus on the skiing and hiking sportsman, placing emphasis on having reliable and innovative gear, and the aspiring outdoorsman needing the proper tools and apparel. The ads will feature the North Face gear in effect in extreme sporting conditions in the mountains of Switzerland at a recognizable location that consumers can connect with. With the low cost of Internet promotion as the media method of choice, additional forms of communications may also be pursue to increase the timeliness of brand acceptance. The use of television promotion, specifically during sports events, would also effectively introduce the North Face to its target market, but would be more costly. TV and broadcasting is dominated by the public Swiss Broadcasting Corporation, and shares some channels with France, Germany, and Italy (BBC News). Using broadcasting promotion offers the additional advantage of reaching a greater range of consumers and targeting the specific audience of choice. With Internet as the dominant media, however, focus should first be directed towards developing effecting Internet promotion techniques. 12 Bibliography
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