Archive for November, 2013

What the auto industry can learn from North Face

Sunday, November 17th, 2013

Yesterday’s New York Times had an interesting article on North Face, the outdoor clothing company: North Face keeps walking the tightrope between exclusivity and the mass market.

The question was: how is it that a brand like North Face maintains its perception as a premium or exclusive brand when it sells to just about everyone from kids and suburban moms to elite mountaineers, hikers, trekkers, runners, and skiers?

If you read the article you’ll see that the President of the company actually says that they don’t pay much attention to analyzing who buys their products. They don’t know the demographics of their customers and aren’t to worried about it. He acknowledges that they know where their products are sold and that their “core customers” (NYTs 11/17) are centered around four activities: “hiking, trekking and mountaineering, running and training and snow sports.”

It struck me that North Face is a good example of a company that understands that “people don’t buy what you do, they buy why you do it” (see my prior post). North Face is very clear about their brand core values. They make products for serious, elite athletes who participate in the aforementioned activities. Their products are designed to meet the rigorous conditions these core customers routinely find themselves in.

The fact that so many people are willing to pay for North Face products, despite not being elite athletes, has been great for business but hasn’t changed the North Face “why you do it” one bit. Despite being sold in Dick’s Sporting Goods and commanding a 33.5% share of market, North Face has maintained its image as serious gear for people who test the limits because they have never lost sight of their core values and continue to execute against them: “Committed athletes, meanwhile, say North Face has managed to maintain, and even improve, it’s quality control and innovation.” ( NYTs 11/17). They haven’t adjusted their “why you do it” to reflect new opportunities or potential customers, volume has come to them because they are perceived as doing something special.

The automobile industry struggles with this idea of sticking to core values. Brands are stretched to the limit to increase volume and the potential for profit.

Porsche is a great example of a brand that has stuck very close to their core values of engineering and performance. Although known for exceptional sports cars, Porsche has successfully expanded it’s line to include SUV/Crossovers and a four door sedan by making sure that every model delivers on being the “Porsche” of that particular segment (i.e. the best performing and driving vehicle). Porsche has stuck to its knitting and volumes have grown dramatically, just like North Face.

Volkswagen is trying to walk the same “tightrope,” but has chosen to do it differently. (more…)