Comparison Of REI And Patagonia Outdoor Clothing And Gear’s Marketing Mix And SWOT Analysis

Product Offerings and Distribution Channels

Recreational Equipment Inc. (REI) is one of the outdoor recreation corporation and retail company based in Washington, United States(REI.com, 2017). It is also organized as one of the most popular “consumer co-operative” (REI.com, 2017). The company is responsible for the selling of camping gear, sporting goods, clothing and travel equipment. The company has over 154 retail stores in 36 states of USA (REI.com, 2017). The net income of the company was US$ 30.5 million in the year 2015 and the operating income was about US$ 137.4 million in the year 2015 (REI.com, 2017).

The major product offerings of the company include gears and clothing for the purposes ofcamp and hike, cycle, climb, paddle, run, snow, yoga, travel and others. The competitor company chosen for the purpose of study is Patagonia Outdoor Clothing and Gear. The selected product line for this assignment is Women Line, which would be compared across both the companies.

It is important to focus on the four P’s of marketing for the company. The product features, distribution, promotion and prices of REI products along with those of the Patagonia Outdoor Clothing and Gear (competitor) are discussed below-

Comparative analysis ofMarketing Mix (REI Equipment Inc Vs. Patagonia Outdoor Clothing and Gear)

The various products offered by REI are meant for outdoor events, sports and other activities (REI.com, 2017). There are several types ofclothing that are provided by the company. These kinds of products are suitable for different kinds of adventure sports such as biking, skiing, hiking and snowboarding (Larson et al., 2017). They are also the manufacturer of gears, which are useful for the outdoor activities. They have a wide variety of products for different needs of the customers and different activities of the customers (REI.com, 2017). The wide diversification of products has resulted in the high customer satisfaction.

As compared to REI, Patagonia Outdoor Clothing and Gear has limited a product range, which focuses solely on the apparel ranges for outdoor events(Armstrong Soule & Reich, 2015). There are limited outdoor recreation services provided by the organization(Patagonia.com, 2017). Hence, the company is said to cater to niche target market segments.

REI is expanding its distribution centers so that they can distribute their products more among the customers. The company has recently opened its newest distribution center, which is located in Arizona (REI.com, 2017). The distribution process of Patagonia is limited to few outlets, though the company is engaged in intensive level of expansion(Patagonia.com, 2017).

Promotion Strategies and Pricing Models

REI believes in extensive promotional campaigns for their products. They believe in extensive advertisement campaigns and sponsor a large number of events (REI.com, 2017). The brand also has a large number of campus presencesand promotes their products on different colleges as well as universities (Larson et al., 2017). The students are the primary target market of the brand and hence the company promotes itself in different educational institutions. On the other hand, the Patagonia uses storytelling to reach to the masses(Armstrong Soule & Reich, 2015). It believes in utilizing its tools to the grassroots levels so that it can channelize a large number of masses. It uses the “Tools for Grassroots Activists Conference” to inform, train and inspire people working at the local levels(Patagonia.com, 2017).

REI follows a “value-product” pricing options where there is different level of pricing on different types of products (REI.com, 2017). There are different pricing options catering to the returned items, older items, display models and the membership options (Larson et al., 2017). On the other hand, Patagonia offers reasonable pricing, which are affordable to all sections of the society(Patagonia.com, 2017).

There are several benefits of the REI products such as the underwear products are able to retain the body temperature of humans. They are successful in letting away the moisture from the skin of the humans and they provide protection from sun. The fabrics of the company are able to block the UV radiation and they also give comfort to the customers. These types of clothes are responsible for durability and breathability.

REI and Patagonia are both large scale retailers who have specialized shops. They have similar kind of products. Both the companies organize a moderate number of outdoor events which draw a huge number of general public (REI.com, 2017). Some of the top competitors of both these companies are Tsawd Inc, L.L Bean Inc and others. One of the major competitors of REI is Dick’s Sporting Goods (Larson et al., 2017). This company has more product offerings than REI and they give better customer experience(Armstrong Soule & Reich, 2015). They also have a large number of outdoor categories which cater to a large number of audiences.

SWOT analysis of two companies

REI and Patagonia have their own share of good things and bad aspects, which are important for analytical purposes.

The strengths of REI include that it provides high quality of apparel as well as outdoor gear for the general public (REI.com, 2017). They have life time warranty of the same and they have good membership program. They also have a good number of capable managerial staffs. On the other hand, the strengths of Patagonia include that it has environmentally friendly business and it has low employee turnover(Patagonia.com, 2017).

Competitors and Local Outdoor Equipment Specialists

REI has lack of branding options and there is lack of advertising initiatives adopted by the company (REI.com, 2017). The expensive prices of the products make it difficult to penetrate well in the masses.

On the other hand, Patagonia has low employee turnover and there are few customer loyalty incentives. There is less number of fashionable apparels as compared to its competitors.

REI should offer inexpensive products and there should be widespread advertising (REI.com, 2017). There are huge potentials for targeting the younger demographics. There are also opportunities for an increased online spending and there is an expansion of the target market (Kim & Mauborgne, 2014). Patagonia can expand into international markets and expand to new countries.

There are a large number of local outdoor equipment specialists who would give a tough competition to both the companies(Armstrong Soule & Reich, 2015). There is an ageing target market and there is an increased competition in the Columbia region.

Source: Created by author

There are several problems that are being faced by both the companies. There are changing preferences of the people and there is less number of outdoor activities that are being undertaken by the population(Armstrong Soule & Reich, 2015). There is also an increasing ageing population, which makes it difficult for both the companies to market its products (Oliver, Foot & Humphries, 2014). This is because of the fact that the primary products of these companies are based on the outdoor sports and if there are ageing population, then there would be less sales of the products. This would make it difficult for the marketing department of the companies to operate smoothly(Armstrong Soule & Reich, 2015).

The marketing strategies of REI have taken into consideration all the different aspects of marketing. It takes into consideration the various aspects of social marketing and there is an emergence of online pool of customers(Armstrong Soule & Reich, 2015). The marketing strategy of Patagonia not only takes into consideration the promotional tools but it also incorporates environmental aspect also(Armstrong Soule & Reich, 2015). This company has actually grown its revenues in the last few years inspite of the ongoing recession. The company uses extensive promotional campaigns to attach with the customers(Armstrong Soule & Reich, 2015). The customers have actually liked the idea of purchasing their products from an environmentally conscious company. This strategy is more effective and it has led to more number of sales.

REI should be more careful in its environmental endeavors and should take adequate steps to connect with the masses. It should try to undertake more number of CSR activities which would help the company to be popular among the masses. There should be contingency plans which would be helpful in the event of crisis situations. The company should also try to interact more with the target audience so that they can provide customized services to the target audience. They should focus on building unique selling proposition for which the customers would be attracted to their company. This would also differentiate them from other competitors. Both the companies should formulate proper marketing communications plan that should be implemented in the right manner.

Conclusion

The marketing is one of the most important jobs of an organization. The marketing mix of both the companies such as REI and Patagonia were discussed. It was observed that Patagonia gave more attention to the environmental aspects. The SWOT analysis of the two firms revealed the strengths, weakness, opportunities and threats, which should be taken into consideration. The threats should be considered well so that future course of action should be taken. The recommendations section gives thoughtful suggestion to improve the current situation.

References

Armstrong Soule, C. A., & Reich, B. J. (2015). Less is more: is a green demarketing strategy sustainable?. Journal of Marketing Management, 31(13-14), 1403-1427.

Patagonia.com(2017). Patagonia.com. Retrieved 27 July 2017, from https://www.patagonia.com

Kim, W. C., & Mauborgne, R. A. (2014). Blue ocean strategy, expanded edition: How to create uncontested market space and make the competition irrelevant. Harvard business review Press.

Larson, A., Larson, A., Meier, M., & Meier, M. (2017). REI: Sustainability Strategy and Innovation in the Outdoor Gear and Apparel Industry. Darden Business Publishing Cases, 1-22.

Oliver, D., Foot, C., & Humphries, R. (2014). Making our health and care systems fit for an ageing population. King’s Fund.

Outdoor Clothing, Gear, and Footwear from Top Brands. (2017). REI. Retrieved 27 July 2017, from https://www.rei.com

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