MARKETING
COMMUNICATIONS FALL
TERM PROJECT
Arc’teryx
By: Limitless Dreamers
November 21, 2014
Executive Summary
This report reviews the Arc’teryx Spring/Summer 2013 campaign and provides recommendations based
on the included evaluations.
Founded in North Vancouver, British Columbia, Arc’teryx is a high-tech clothing company, which was
created by Dave Lane and Jeremy Guard in 1991. The company is named after the first reptile to develop
feathers for flight. Arc’teryx has consistently been at the forefront of innovation, beginning with the
world’s first 3-D harness and has since continued to produce industry-changing apparel.
The target market for the Spring/Summer 2013 campaign was split into two sections based on the
differences of the campaign goals and product launches. Arc’teryx brand loyals are considered The
More, whereas the competitive brand loyals and brand switchers are titled The More. The Core consists
of individuals who reside primarily in high-end neighborhoods across Canada. Their interests involve
extreme sports which include skiing, mountain climbing, and ice climbing. The More group is considered
the “young up-and-comers” who have a large discretionary income. They are also athletic and enjoy
being outdoors, but do not participate in extreme sports.
Because the Spring/Summer 2013 campaign was less successful than anticipated, an opportunity for
expansion was recognized for The More market. The need for self-actualization was considered to be the
best attribute to highlight in order to influence purchases within this market. For this reason, the
Spring/Summer 2015 campaign was established to serve as the next phase in the company’s
communications strategy.
The theme of the Spring/Summer 2015 campaign will be Your Ultimate Reality. This campaign will target
The More market to encourage them to achieve their highest physical abilities. The communications
strategies used in this campaign are: advertising, public relations, digital and direct marketing, and sales
promotions. The national focused campaign will have location specific events and elements in
Vancouver, Whistler, and Toronto. This campaign will place Arc’teryx on the evoked set of The More
market as their first choice for outdoor apparel.
The objective for the Your Ultimate Reality campaign is to generate positive brand awareness. This will
be achieved by using a mix of experiential, social media, and cause-related marketing. Each tactic relies
on the self-actualization concept which is in line with The More audience.
The experiential public relations tactic is designed to place The More market in a simulated environment
where they can imagine being an Arc’teryx athlete. In a portable branded enclosure, participants are
provided with visual, auditory, and physical stimuli to create a story-laden experience. The goals of this
tactic are to position Arc’teryx products as a gateway into the target market’s potential.
Through these recommendations, Arc’teryx will improve brand awareness and will increase interaction
with the brand. This will also aid Arc’teryx in meeting its communication and marketing strategies for
the Spring/Summer 2015 campaign.
Organization Overview
Arc’teryx clothing company was founded by Dave Lane and Jeremy Guard in 1991. The company is
named after the first reptile to develop feathers for flight (Kirkland, 2012) and is based out of North
Vancouver, British Columbia. Arc’teryx originated as a climbing equipment manufacturer but has since
emerged as a leader in outdoor sporting apparel.
Product
Arc’teryx has been at the forefront of innovation beginning with the creation of the world’s first 3-D
harnesses. In 1995, it achieved another milestone and developed the first thermoformed backpacks.
Since then, it has continued to produce industry-changing apparel (Arc'teryx, Corporate & Group Sales,
2014).
The company has extended production by launching two specialized clothing lines: Arc’teryx LEAF and
Arc’teryx Veilance. The Law Enforcement and Armed Forces (LEAF) line (Appendix A,i) is constructed
using military specifications and camouflage patterns. This results in functionality, durability, and high
quality (Kirkland, 2012). Arc’teryx Veilance (Appendix A,ii) was produced to meet urban consumer
demands and was used to expand the performance menswear sector (Arc'teryx, About Arc'teryx, 2014).
Price
Arc’teryx products are priced between $300 and $700 in Canada (Arc'teryx, 2014). Due to its use of new
technologies, paradigm-shifting designs, and innovative fabric, consumers are willing to pay higher
prices (Elbaz, 2014). The advanced technology used in the production of its garments can substantially
increase its price. Some examples of these technologies include:
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WaterTight™ zippers
Micro seam technology
Radically reduced garment weights
Tri-Dex™ gloves and Warp™ Technology harnesses (Brigham, 2014).
Promotion
Many Arc’teryx product launches have promoted the unique characteristics of its clothing line. The
Spring/Summer 2013 campaign highlighted lightweight outerwear formed using GORE-TEX and Coreloft
material which protects users from the elements.
The promotion that is most frequently used by Arc’teryx is the Pro Purchase program. This program
provides organizations with substantial savings on products. Volume discounts are available to
businesses, government agencies, and other professional organizations.
Place
Arc’teryx products are available worldwide in retail stores and online. The official Canadian retail stores
are located in Vancouver, Whistler, and Toronto. Globally, official retail stores are located in Germany,
Singapore, Korea, and Japan. Products can also be found in varying retail locations including:
Atmosphere, CAN-SKI Whistler, Escape Route, Mountain Equipment Co-Op, and True Outdoors (Find a
Store, 2014).
Competitive Analysis
Arc’teryx is a leading retailer of outdoor apparel and equipment in its class. However, there are many
competitors who hold a large share of the outdoor apparel industry. Three main competitors for
Arc’teryx are Patagonia, Mountain Equipment Co-op, and The North Face. In this analysis, competitors
were classified by origin, price, and sustainability. Each company was then compared and contrasted
using advantages and disadvantages. A positioning map for the following report can be found in
Appendix B.
Patagonia
Patagonia is a manufacturer of high-end outdoor apparel that is based in Ventura, California. Founded in
1974 it originated as a small producer of utilities for rock climbers (Wang, 2010). The company quickly
expanded and began creating clothing for climbing, snowboarding, skiing, and for other outdoor
activities (B Corp, 2014). Patagonia is in direct competition with Arc’teryx as jacket prices range from
$150 to $799 dollars (Patagonia, 2014).
This company has a significant advantage over Arc’teryx. Its most recent clothing line was named one of
the most sustainable in the world. It is targeted towards a market that leads an organic and relaxed
lifestyle. The brand uses materials such as hemp, responsibly sourced wool, and numerous recycled
materials (Patagonia, 2014). Products in the new line are produced with raw, reclaimed, or alternatively
sourced materials (Shi, 2014). Patagonia is actively involved in contributing to environmental groups.
Since 1985, one percent of its sales (over $46 million) has been donated to help protect the
environment (Patagonia, 2014).
In December 2010, Patagonia was criticized by Four Paws, a German animal-rights group, for the use of
live plucking for its down. Patagonia disputed these claims, but later discovered that geese used in its
production were being force-fed to create foie gras (Patagonia, 2013). In 2014, Patagonia announced its
down is not live-plucked, force-fed, and is traceable.
Although Patagonia is a strong competitor, Arc’teryx is a highly sustainable company in this competitive
industry. It can be difficult to stand out as brands with higher awareness may become top of mind for
consumers. Arc’teryx holds an advantage over Patagonia because it is considered a high-tech outdoor
clothing company. While Patagonia targets those who lead relaxed lifestyles, Arc’teryx focuses on
extreme athletes who appreciate the high tech aspect of the brand (Arc'teryx, 2014).
Mountain Equipment Co-op
Mountain Equipment Co-op (MEC) is a British Columbia based retailer with two locations in the Lower
Mainland. The company was incorporated in 1971 and has since developed into a powerful national
sporting goods retailer with 18 locations across Canada (MEC, 2014). Product prices range from $5 to
over a $1,000 (MEC, 2014).
MEC prides itself in creating in-house products using eco-friendly resources and ethically sourced labour
(MEC, 2014). Its recent Buy Fair, Be Fair program provides factory workers in India with safe working
conditions and fair wages (3BL Media, 2014). MEC has also been a member of the 1% for the Planet
initiative since 2007. Since 1987 it has donated over $26 million to environmental causes in Canada
(MEC, 2014).
In 2010 MEC was criticized by the Canadians for Justice and Peace in the Middle East for its sourcing of
Israeli-made goods (Weinberg, 2010). However, MEC decided to continue sourcing from Israel after only
15 consumer complaints were received (Weinberg, 2010).
In comparison to Arc’teryx, MEC has positioned itself as a family focused organization (MEC, 2014).
Customers pay five dollars to become a member and are granted ownership of a small portion of the
company (MEC, 2014). In comparison, Arc’teryx is a specialized retailer which targets a niche community
in the outdoor apparel sector.
The North Face
The North Face is an American based retailer and a subsidiary of the VF Corporation which owns Vans,
Lee Jeans, and Eastpack. The company was founded in San Francisco in 1966 by two hiking enthusiasts
and has since been a staple for outdoor equipment worldwide (The North Face, 2014). Products range
from $30 to $450 and can be purchased online, through mass distributors, and in department stores. In
British Columbia, items can be purchased online, or at its retail stores in Kitsilano and downtown
Vancouver (The North Face, 2014).
The North Face practices sustainability. It is committed to reducing greenhouse gases and has
incorporated waste reduction policies into its core values (The North Face, 2014). For example,
electricity used at the location in Alameda, California is derived from solar and wind energy sources (The
North Face, 2014).
In 2012, The North Face experienced the same controversy as Patagonia regarding the unethical
sourcing of its down and live plucking. It was later determined that the geese used in its production
were being force fed to create foie gras (Beckford, 2012). The North Face released a statement shortly
after stating its partnership with a Down Task Force to determine a long-term solution (The North Face,
2012). It now requires that its suppliers certify that live plucking is not being used as a source for down
feathers (The North Face , 2013).
The North Face prides itself on pushing the limits of their products and providing consumers with the
ability to conquer any challenge (The North Face, 2014). Arc’teryx is at a disadvantage as it is positioned
in the same category. Also, the North Face provides its apparel at a more affordable price. One
advantage Arc’teryx has over The North Face in Canada is that Arc’teryx is a local brand. It can leverage
this by relating to its Canadian target market.
SWOT
The strengths, weaknesses, opportunities, and threats of Arc’teryx are evaluated in this section.
Strengths
Strengths of Arc’teryx include the financial stability received through Amer Sports and its innovative
research and development team.
Financial Stability from Amer Sports
Arc’teryx receives a great amount of financial, operational, and informational support from its parent
company Amer Sports. This allows Arc’teryx to make investments towards new equipment and
technology using the capital provided. Amer Sports’ experience with business systems, market
intelligence, and overseas dealer relationships is shared with Arc’teryx to achieve growth and expansion
within the company (Amer Sports Corporation, 2014).
Innovative Research & Development Team
Another strength that enables Arc’teryx to be successful is its innovative research and development
team. Prior to these new technologies, climbing harnesses were basic and uncomfortable (Arc'teryx,
2014). The team at Arc’teryx changed this by producing a harness that would curve with the body using
comfortable foam – an idea which was not yet present in the market (Arc'teryx, 2014).
Arc’teryx continues to create new and innovative products with an emphasis placed on its fabrics and
zippers (Arc'teryx, 2014). Numerous technologies featured in competitors’ products have originated
from the team at Arc’teryx. Bob Holding, former Arc’teryx President, has said "In essence, what's now
being sold to other people was an initial development with our company” (Sturgeon, 2007).
Weaknesses
Arc’teryx’s weaknesses include the cost of its products, its narrow target market, and its focus on
function over fashion.
Expensive Products
Although its products are high quality, Arc’teryx can be perceived as expensive to many customers.
According to its website, the majority of its jackets cost between $600 and $800 dollars (Arc'teryx,
2014). Some consumers perceive Arc’teryx as an expensive brand which is not the message that the
company aims to communicate (MacLennan, 2013). High price points emphasize the need to validate
the value of its equipment. This is especially important to those who are not athletic or those who
cannot afford its products.
Narrow Target Market
Arc’teryx products are aimed at those who are especially athletic and value high quality and high
performing products. However, it may be more difficult to communicate value to those who are not
athletic. They may not find it necessary to purchase an expensive jacket as they do not exercise in
extreme conditions (Anderson, Narus, & Rossum, 2006).
Function Over Fashion
Fitness apparel is becoming a trend in fashion. Many clothing companies have incorporated in fitness
clothing, resulting in 36 billion dollars in sales for active wear and athletic footwear (Vingan, 2014).
However, Arc’teryx continues to push functionality over fashion in its positioning. When discussing
Arc’teryx fashion products, Arc’teryx’s former President Tyler Jordan said “It’s great that they like it and
it’s great that they’re going to benefit from it, but wouldn’t it be even better if we focused on what they
are actually going to use it for?” (Business Of Fashion, 2011).
Opportunities
Current opportunities for Arc’teryx include targeting overseas markets, expanding product lines, and
investing in public relations.
Target Overseas Markets
Arc’teryx is a global brand which sells its products in more than 40 countries (Arc'teryx, 2014). However,
there is an increasing opportunity to grow Arc’teryx’s market in countries such as China, Japan, Norway,
and European cities that are close to the Alps (Amer Sports, 2014) Vincent Walters, Arc’teryx’s General
Manager and President, has stated, “When I reflect back to the last 18 months, I can say that we have
achieved a lot, but I also know that we have not yet unleashed the brand’s full potential. We are not
afraid of big goals” (Amer Sports, 2014).
Expand Product Lines
Arc’teryx has the opportunity to access the general market by providing a line of products which fit the
needs of an urban lifestyle. Currently, Arc’teryx produces collections which are targeted to different
audiences, such as its Veilance collection, which attracts those living in the city (Amer Sports, 2014).
Invest in Public Relations
Canadian consumers are increasingly concerned with sustainability and environmental issues
(Government of Canada, 2012). Research has shown that 84% of consumers find “a company’s
greenness” to be somewhat or very important when making purchase decisions (GreenBiz Group, 2012).
This provides Arc’teryx with an opportunity to further participate in this growing trend through the use
of public relations.
Threats
Threats for Arc’teryx include counterfeit products and a shortage of skilled labour.
Counterfeit Products
Counterfeits on the market can damage brand perceptions (The Counterfeit Report, 2014). Market
counterfeits pose a threat to the brand because these products are not tested nor are they fabricated
using premium materials (The Counterfeit Report, 2014). This threat also interferes with possible
revenue that the company would receive if the consumer was purchasing a legitimate product.
Shortage of Skilled Labour
Canada is currently facing a shortage of skilled labour (CBC News, 2014). Arc’teryx produces some of its
products in Canada and employs skilled workers to handcraft certain sections of its products. While
Arc’teryx does outsource its production overseas (Sustainable Is Good, 2007), the company still values
Canadian production for some of its items. While Canadian government is said to be addressing the
issue (House of Commons, 2012), the shortage of skilled employees may create difficulty in meeting the
demand for Arc’teryx products.