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GROUP MARKETING PLAN FOR COLUMBIA SPORTSWEAR
I. EXECUTIVE SUMMARY
Columbia Sportswear is a nationwide company that targets the outdoor loving consumer through
designing, marketing, producing, and distributing a wide range of quality products from
equipment and footwear to outdoor apparel and sportswear. Throughout Columbia’s growth from
a small hat company in Portland, to a global firm in over four continents, they have stayed true to
their approach of maintaining corporate responsibility companywide (Columbia, 2014).
Columbia’s focus on the durability and quality of their products is often showcased through their
advertising campaigns and head figures Gert Boyle, Chairman of the Board, and son Tim Boyle,
CEO.
Columbia’s strengths consist of seventy-five years in the industry, rapid expansion, staying upto-date with technological advances, and maintaining low costs. The strengths are used to
combat their weaknesses of dependence on outside distributors and quality assurance to
consumers. They also have amazing opportunities to expand globally, form new partnerships,
and utilize their subsidiaries for brand recognition. Common threats include counterfeit products
and increasing competition within the apparel industry.
We have chosen various marketing strategies and objectives based on Columbia’s SWOT
analysis and past performance for our marketing plan. Over the next five years, Columbia will
strive to offer more product lines and increase brand awareness across all subsidiaries while
working toward a consolidation of “good,” “better,” and “best” pricing. Columbia will also work
to achieve a high level of visibility for consumers worldwide through integrated websites. They
will implement a wide variety of promotional strategies including the initiation of a new,
innovative advertising campaign, expansive social media outlets, and maintenance and consistent
updates of promotional and public relations in regard to corporate, social, and environmental
needs.
We expect Columbia’s sales revenue, operating expense, net income, and advertising expense to
increase over the next five years due to the rapid expansion of the firm and product lines. The
strategies and objectives put in place for the next five years will be measured in various ways
such as best practice benchmarking and quarterly analysis of Columbia’s financial statements
and performance. The effectiveness of the implemented strategies will also be tracked in real
time using BMC Software to generate up-to-date audit reports.
The following sections identify Columbia’s target market, summarize a brief history, and detail
the marketing mix of the 4 P’s: product, place, promotion, and price. This marketing plan also
expands on the SWOT analysis, including strengths, weaknesses, opportunities, and threats, as
well as describes all of the resources utilized by Columbia. Last, chosen marketing and objective
strategies to be implemented over the next five years are broken down by the 4 P’s, as well as a
synopsis on how they will be measured.
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II. SITUATION ANALYSIS
A. Target Market Identification
The company’s target market includes the active, outdoor consumer. Columbia Sportswear offers
high quality products to those who spend large amounts of time outdoors. The target market is
often middle-aged, active, well-educated consumers who have disposable income to spend
exploring the outdoors. They also target brand conscious consumers who value quality at a lower
price point (Columbia, 2014).
B. Brief History
Columbia Sportswear began as a Portland based hat company started by the Boyle family in
1938 after the family fled from Nazi Germany. Now, 76 years later, the company is a global firm
run by Tim Boyle, grandson of Columbia’s founder, CEO and President of the company since
1989. The company operates out of the Pacific Northwest in Portland, Oregon, where the
employees enjoy sporting outdoors as much as their consumers.
C. Marketing Mix
Product: Provide outdoor equipment, apparel, footwear and accessories for men, women and
children to be used in activities that include but are not limited to hiking, mountaineering, skiing,
camping, hunting, fishing, water sports and adventure travel. These products include items such
as specialized boots and outerwear for extreme weather conditions, as well as light weight shoes,
sandals and clothing for casual wear or hiking. Products are offered under the names of
Columbia, Sorel, Montrail and Mountain Hardwear (Finance).
Place: Products are marketed and distributed in the United States, Latin America, the Asia
Pacific, Europe, the Middle East, Africa, and Canada. Along with its international capable
website, Columbia distributes its products through wholesale distribution channels direct to
consumer channels and independent distributors and licensees. They also operate 73 outlet
stores, 12 branded retail stores and 4 e-commerce websites in the U.S., Western Europe and
Canada. Japan and Korea is home to 131 and 261 dealer-operated, branded, outlet or shop-inshop locations respectively (Finance).
Promotion: Advertising focusses on promoting the quality and durability of all of their products.
Bring attention to the high quality materials used in the manufacturing process. Columbia is
more concerned with helping their customers become “brand aware” by sponsoring many
outdoor events including fishing contest, marathons, winter sport competitions, etc. The
relationship between Gert Boyle (Chairman of the Board) and her son, Tim Boyle (CEO) is quite
often used in promoting their products. She is portrayed as “one tough mother” putting her son to
task in all manner of conditions and situations in the outdoors. He always triumphs those
conditions and situations with the quality gear of Columbia showing that it is “Time Tested”
(Pride, Hughes and Kapoor).
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Price: In the past 18-24 months, Columbia shifted its focus on pricing their products with those
in the “good and better” categories. They are trying to avoid price matching of companies in the
“best” division in order to appeal to the consumer more. Their customers have responded and the
company has seen great gains in the market place (Dill).
D. Current Marketing Objectives and Performance
See below.
III. SWOT ANALYSIS
A. Strengths
o Over seventy-five years of experience in the industry
o Has acquired three other companies: Sorel in 2000, Mountain Hardwear in 2004, and
Montrail/Pacific Trail in 2006 (all previous competition).
o Products offered by over thirteen thousand retailers in over seventy-two countries.
o Staying up-to-date on information technology, in 2012 they updated to Vblock, which has
aided greatly with their supply chain operations.
o Manufacturing expenses are low
o Keeping up with Technology (Teamed up with a GPS app and e-commerce)
B. Weaknesses
o Due to its lower price and the fact that it’s a public company, quality is seen as lower
than top competitors
o Seasonal sales fluctuate
o Too dependent on outside producers
C. Opportunities
o Increase globally by expanding into new areas
o Use subsidiaries to establish a higher quality image
o Continue investing globally to build branding in newer markets
o Developing partnerships
D. Threats
o High levels of competition from existing and new competitors in the apparel industry
o Becoming outdated due to either technology, social media, or developments in sports
clothing industry
o Fashion, new competitors are arising and making similar products in more stylish ways
o Products are being counterfeited
E. Matching Strengths to Opportunities/Converting Weaknesses and Threats
Columbia Sportswear has tried to stay on the forefront of technological advancement. This will
help them to increase globally, as well as set them apart from numerous competitors. This
company has also acquired former competitors. They can use these subsidiaries to create a higher
quality brand and thus compete with companies like Patagonia and L.L. Bean. One major
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circumstance that Columbia Sportswear needs to watch out for is counterfeit products. Columbia
does a lot of outsourcing, which has the strength of keeping costs down, along with a weakness
of being too dependent on outside producers. This also increases the risk of lesser quality
counterfeits due to short-term contracts and foreign government's priorities. Essentially, these
counterfeits could tarnish Columbia's brand. Another great opportunity for Columbia was when
they partnered with Urban Outfitters. Partnerships such as this one aid in supporting the strength
of Columbia's distribution network.
IV. COMPANY RESOURCES
Columbia Sportswear has over 3,100 full-time employees that operate on four different
continents, among a huge e-commerce business, which supports Columbia’s global vision.
Columbia offers their employees “much more than just a paycheck”, with a full range of health
and welfare benefits, employee discounts, tuition reimbursement, and an employee volunteer
program. In 2009, Columbia Sportswear was voted in the Top 100 Most Trustworthy companies
by Forbes Magazine.
Columbia also focuses much of its energy on their social responsibility campaign, which
includes responsible sourcing, giving back to the community, and reducing environmental
impact with their products. Several employees of Columbia Sportswear’s factories have
participated in HERproject, which has educated them on health education and safety. The
company operates under a strict code of conduct which is available to all employees and the
public via their website at any time (Columbia, 2014).
V. MARKETING OBJECTIVES AND STRATEGIES
Product Objectives:
2014: Continue to produce the high quality products that customers demand from Columbia at a
reasonable price.
2015-2019: Offer more product lines to specific age groups and offer “good”, “better” and “best”
product lines for the consumers to choose from.
Product Strategies:
2014: Increase brand awareness as associated with the quality that has always been expected
from Columbia.
2015-2019: Increase brand awareness across all subsidiaries of Columbia in order to accomplish
the goals of providing the “good”, “better” and “best” product lines necessary to compete across
all facets of the outdoor apparel and equipment markets.
Place Objectives:
2014: Increase inventory in the outlets and branded retail stores, especially in areas affected by
the long and never ending winter that continues to hang on.
2015-2019: Incorporate getting all of the product lines from all subsidiaries into all outlet stores
and branded retail stores to meet demands of all customer demographics.
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Place Strategies:
2014: Maintain lower inventories in non-branded retail stores such as Kohl’s in order to
eliminate inventory death in the returns departments of those stores. Columbia will continue to
expand by opening more outlet stores and branded retail stores throughout the coming year.
2015-2019: Consolidate all distribution channels across each of the subsidiaries owned and
operated under the Columbia umbrella. This will pave the way for all of their product lines to
become visible in all aspects of the distribution process. Integrate websites so that their
customers can easily navigate and search for any of their brands from one website.
Promotion Objective:
2014: Continue to take hold of “Good” and “Better” market with the Columbia line of products
and push “Best” through the subsidiary companies.
2015-2019: Consolidate “Good, Better and Best” across all company lines.
Promotion Strategies:
2014-2019:
Advertising: Increase exposure of Gert and Tim Boyle as the “one tough pair” in their quest for
outdoor adventure by putting a variety of Columbia gear to the test of time through rigorous
usage. Begin new campaigns with younger kids and teens focusing on the quality of the gear
being used as they grow into adulthood. Develop similar advertising for the subsidiary
companies focusing on why their gear is the best.
Social Media: Dedicate an entire staff to ensure proper exposure through all social media outlets.
Use 24 hour staffers monitoring all sites and responding in real time to real people across all
facets of the social media networks.
Sales Promotion: Offer college scholarship awards to the top 50 students around the world that
come up with the best promotional video promoting any of the products under the Columbia
umbrella.
Public Relations: Continue to sponsor outdoor sporting events throughout the world and make
their presence know just as they did in the 2014 Winter Olympics.
Pricing Objectives:
2014: Continue to focus pricing for Columbia products in the “good and better” market, forcing
the competition to increase their quality or move out of the market. Step up pricing research in
the “”best” market to stay competitive while maintaining profitability.
2015-2019: Focus on ways to cut cost across all facets of the manufacturing processes and
distributing channels in all of the Columbia companies and subsidiaries. This will help to ensure
that pricing can remain competitive, but at levels where customers do not hesitate to reach for
Columbia branded products or those of their subsidiary partners.
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Pricing Strategies:
2014-2019:
Sustainability: Streamline manufacturing processes across all brands and incorporate necessary
procedures to make each factory sustainable through implementation of environmentally sound
rules and regulations. Consolidate the distribution channels across all brands, by eliminating
redundant transportation. Focus on using one system to meet the needs of all of the Columbia
companies and subsidiaries. These strategies alone will help Columbia keep prices from
increasing at the normal rates seen throughout the industry and continue to offer their products
below the cost of their competitors while continuing to uphold the quality expected from
Columbia and its subsidiaries.
VI. FINANCIAL PROJECTIONS AND BUDGETS
Year
Revenue
Total Operating Expense
Net Income
Advertising Expense
(in millions)
2013
$ 1685.00
602.90
94.30
56.20
2014
$ 1691.00
615.00
91.60
61.00
2019
$ 1711.00
789.00
95.90
68.90
Revenue: We expect to see an increase in revenue over the next 5 years due to manufacturing
innovations within the company and the introduction of new lines that consumers will want to
purchase. Although more competitors are entering the market, we can expect to see an increase
in Columbia’s revenue due to maintaining a certain price-point within the “good” and “better”
sector, along with the brand loyalty of customers.
Total Operating Expense: We will likely see an increase in operating expenses as the demand for
their products and the company’s global vision expand. There will be a need for more employees
and an increase in the cost associated with global expansion. There was a decrease in the total
operating expense between 2011 and 2012; however, this does not appear to be a trend in
Columbia’s finances. We should expect to see an increase each year in operating expenses and
an increase of about 27% over the 5 year mark.
Net Income: Columbia Sportswear is anticipating a growth in net sales in 2014 of approximately
17 percent. This will affect the net income as well, as greater sales result in greater income if the
remaining expenses are kept relatively equal.
Advertising Expense: We will see the cost of advertising expenses increase over the 5 year mark
due to the company’s increase competition with more brands such as UnderArmour, Marmot,
and Patagonia entering the market. These companies also have intense advertising campaigns
that Columbia will have to compete with, increasing their advertising and promotional expense at
a much higher rate than in previous years. It will also be expected that with the company’s
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innovative approach to clothing, that they will need more money in advertising costs to promote
the innovations in their apparel.
VII. CONTROLS AND EVALUATION
Columbia Sportswear will determine whether the strategies for years 2014-2019 achieved the
desired results by utilizing best practice benchmarking including all financial statements, cash
flows and performance, as well as making comparisons of Columbia’s financials and overall
performance against past years. Performance will be measured quarterly to ensure valid,
accurate, and current information. Performance measurements include Cost of Goods Sold
(COGS), Operating Expense, Gross Margin, Sales Revenue, and Advertising Expense. COGS,
Operating Expense, and Gross Margin will measure the overall costs associated with inventory
and operations in relation to Sales Revenue. We will expect to see a positive and increasing
Gross Margin. Columbia will also look for any correlation between advertising expense and
Sales Revenue to determine how effective the new advertising campaign is. Inventory will be
measured by analyzing Day Sales of Inventory (DSI) in comparison to Days Inventory,
Inventory Turnover, and Inventory to Revenue in each location and as a firm. The Inventory to
Revenue will measure Columbia’s current inventory to its current revenue (GuruFocus). This
will determine if low inventories are being strategically maintained in all of the flagged stores. In
addition, Columbia Sportswear will utilize its recent investment in business service management
solutions from BMC Software to analyze their results in real time. The software from BMC
allows the staff to generate audit reports within a few hours versus the average 30 hours, in order
to meet business needs. These reports will be used in real time to help maintain errors during
day-to-day operations and control the company in meeting its strict strategic plan (BMC
Software).
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VIII. SOURCES
"About Us." Columbia Sportswear. Columbia Sportswear Company. Web. 9 Apr 2014.
<http://www.columbia.com/history/About_Us_History,default,pg.html>.
BMC Software. "BMC Customer Success Story." 2010. BMC Software. 18 April 2014
<http://documents.bmc.com/products/documents/99/03/199903/199903.pdf>.
"Columbia Sportswear Campaign Raises $1mn for Social Cause." United States Of America :
Fibre2fashion, 14 Mar. 2014. Web.14 Apr. 2014.
<http://www.fibre2fashion.com/news/apparelnews/newsdetails.aspx?news_id=160921>.
"Columbia Sportswear Co." Businessweek.com. Bloomberg BusinessWeek. Web. 9
Apr 2014.<http://investing.businessweek.com/research/stocks/financials/financials.asp?t
icer=COLM>.
"Columbia Sportswear." Columbia Sportswear. ISITE Design, Spring 2014. Web. 14 Apr. 2014.
<http://www.isitedesign.com/case-study/columbia-sportswear>.
"Columbia Sportswear Energizes Business Agility with Vblock." VCE. VCE, 31 Dec. 2012.
Web. 14 Apr. 2014. <http://www.vce.com/asset/documents/columbia-casestudy.pdf>.
"Columbia Milestones." Columbia Sportswear. Columbia Sportswear, Jan. 2014. Web. 14 Apr.
2014. <http://www.columbia.com/history/About_Us_History%2Cdefault%2Cpg.html>.
Dill, Kathryn. "Columbia Sportswear Thrives, Lifting CEO Tim Boyle To Billionaire Ranks." 8
November 2013. Forbes. 17 April 2014.
Finance, Yahoo. http://finance.yahoo.com/q/pr?s=COLM. 15 April 2014. 15 April 2014.
GuruFocus. GuruFocus. 2014. 17 April 2014
<http://www.gurufocus.com/term/Gross%20Profit/COLM/Gross%2BProfit/Columbia%2
BSportswear%2BCo>.
Gustafson, Krystina. "Athletic Apparel Race Heats up with New Competitor."CNBC.com.
CNBC, 7 Mar. 2014. Web. 22 Apr. 2014. <http://www.cnbc.com/id/101475897>.
"Is Columbia Sportswear Still A Great Play On Winter Weather?" Columbia Sportswear
Company (COLM) News:. Seeking Alpha, 16 Mar. 2014. Web. 14 Apr. 2014.
<http://seekingalpha.com/article/2091353-is-columbia-sportswear-still-a-great-play-onwinter-weather>.
Parham, Ron. "Columbia Sportswear Company Reports Fourth Quarter and FY2013
Financial Results." . Columbia Sportswear, 18 Feb 2014. Web. 9 Apr 2014.
<http://files.shareholder.com/downloads/COLM/3079659245x0x726697/361d51 2-ef4b
4830-9f31-5a489678b56e/COLM_News_2014_2_18_General.pdf>.
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Pride, William M, Robert J Hughes and Jack R Kapoor. "Business." Pride, William M, Robert J
Hughes and Jack R Kapoor. Business. Mason: South-Western, Cenga ge Learning, 2012.
456.
“SWOT Analysis.” Columbia Sportswear Company SWOT Analysis (2011): 1-9. Business
Source Complete. Web. 22 Apr. 2014.
"What We Do." Columbia Sportswear. Columbia Sportswear, Jan. 2014. Web. 14 Apr. 2014.
<http://www.columbia.com/corporateresponsibility/About_Us_Corp_Responsibility%2C
default%2Cpg.html>