Can a consumer goods company make a profit while making a difference? We've been looking at that question all semester. We have looked at many corporations that have an interest in social responsibility and "do good" for the community around them. What we haven't seen yet (until now) is a company that actually tells you to buy less of their product. Enter Patagonia.
Patagonia is asking their customers to "Reduce What you Buy" and are "encouraging their customers to reduce, repair, reuse, and recycle their clothing and equipment." At first glance this might seem as though it would hurt their bottom line, but Patagonia is banking on it doing just the opposite.
They are partnering with eBay in this endeavor. Yes, you need to read the linked articles to understand the business plan, but once you read it I have a couple questions for you:
What are your thoughts on this? Can Patagonia make a go of this? Could other companies do the same? Does the company that tries this need to have a certain "mindset" before they could be successful at it?
I personally think that Patagonia has found a differentiation competitive advantage as a “green company”. They have been very smart. Selling high-quality apparel that will last very long time and can be fixed or sold, people will be willing to pay a premium price because they perceive better products.
ReplyDeleteI think that Patagonia will raise its revenues because they maybe sell a little bit less but a higher price. In addition, customer base will grow. Customers who make decisions based on sustainability, customers who like the idea of selling their used Patagonia apparel and customer that can buy used Patagonia apparel now, all of them will make bigger the customer base.
This idea will also have effect on Patagonia’s goodwill and customer loyalty.
To sum up, Patagonia will increase his goodwill, customer base, price and quality. This means higher profits.
I believe that other companies like fashion stores, bookstores, furniture stores, etc can also do it. But they should have to make a big effort to improve quality. Furthermore, “he, who hits first, hits twice” so if other fashion stores start doing the same, they wouldn’t be so successful.
TONY MANDARANO - This is a marketing stunt to ride the "green" wave of "sustainability". I'm sure the transportation of clothes to and from Patagonia's repair location more than offset the good done by the repair of the clothing.
ReplyDeletePatagonia is probably going even greener as a means to genuinely help the environment, and as a consequence, the company is gaining a positive outlook in terms of marketing. Through asking customers to purchase fewer items from Patagonia, consumers are seeing how sustainable and environmentally-conscious the company is; and therefore, are purchasing even more from Patagonia.
ReplyDeletePatagonia could be able to market in this potentially risky manner without losing profits by cutting costs & saving money where customers cannot see (i.e. lean manufacturing, more efficient supply chain, etc.). In any case, Patagonia is building its name even more through showing genuine care for the environment and consumption.