Canada Goose Market Analysis
Research and Development
Canada Goose Inc. uses high quality materials to manufacture its products. As such, the pricing strategies of the Company have been highly rated to match the quality. However, the product-pricing is the core strategy that is used against the Company by competitors. The importance of advertising and offering competitive prices for products while venturing into a new market is irresistible. In this regard, the Company has employed a competitive pricing strategy despite the high costs of production to penetrate successfully in the European market (Hopkins, 2017). The Company has an extensive array of competitors who also have top market share offering modish products at competitive prices. In this consideration, the Company spends more on research and development to ensure the outfoxing of the competitors. While the Company does not regard advertising its products like other companies, it relies on celebrity consumers who aid in promoting to publicize the products. To compete in the European market, the Company targets the actors, athletes, and other celebrities to wear their jackets and hence, increase awareness of Canadian goose products (Baird & Ionescu, 2016). With the high number of celebrities interested in the Company’s products, the Company spends fewer amounts in product promotion.
The iconic Canada Goose patch on the jackets is an advertising strategy used by the Company. Nonetheless, the Company uses a localized business strategy, which contributed to opening a few stores in Europe. Accordingly, the Company is set to lower the prices and adopt the premium pricing strategy once the products gain momentum in the new markets. Further, the high quality in the products plays an advertising role by themselves, alongside the recognizable logo, and hence the Company is saved on the promotion costs. Notably, while Reiss- the Company’s CEO considers maintaining a market undersupply, to avoid the attempt to diversify production, the need for extensive research and development is undermined (Hopkins, 2017). Such is because the Company considers maintaining a relatively large percentage of domestic operations, and self-effacingly scale.
Patents and Trademarks
The issue of trademarks, Patents, and intellectual property is very vital in a business. Canada Goose Holdings Inc. being an international luxury brand, the protection of its intellectual property is of paramount importance. Over the years, the Company has experienced the hijacking of its brand for warmth and fashionable jackets. As such, the Company infringed on a lawsuit in a high-profile trademark. Following such cases, the Company registered its trademark in the United States Securities and Exchange Commission on March 10, 2017, under the name Canada Goose Holdings Inc. (Emerson & Collins, 2017). The trademark was issued to protect the red warmth jackets that were being duplicated by the other companies. The Company also registered with JUSTIA on December 24, 2013, to protect goods and services such as outwear, parkas, vests, jackets, shirts, pullovers, substantially made of goose down, under the name Canada Goose Inc.
Further, Canadian Goose Inc. entered into an AMENDED AND RESTATED EMPLOYMENT AGREEMENT with the Dani Reiss (the Executive) on December 9, 2013 (Maine & Nguyen, 2017). The agreement stated the Company’s willingness to employ the Executive and the acceptance of the latter to be employed by the former. On this basis, the Company enjoys the Executive’s licensing, which acts as the president and Chief Executive Officer of the Company and its subsidiaries. On reverse, the agreement required that the company purchases and maintains the officers and directors insurance for the benefit of the Executive pursuant to the terms established in the Shareholders Agreement (Maine & Nguyen, 2017). The Executive was required to provide the full details of its intellectual property to the Company and also waive the moral rights to patents and trademarks assigned. Additionally, the Company has the right to enforce propriety rights to the Intellectual Property of the Executive.
Projected Market Growth and Market Share Objectives
Canada Goose is a high-cost luxury cold weather apparel that targets areas with cold weather and a population of high disposable income. The Company is on a steep upward growth trail and an unwavering thrust to win new brand-conscious consumers in China (Baird & Ionescu, 2016). Nonetheless, as the Company maintains its iconic niche brand strategy, it risks limiting the potential growth and development to contain the heightening competition from other companies. The Company faces a dilemma in its marketing strategy, considering that it opts to diversify products to unlock growth opportunities, then it dilutes the brand image, which is the prime strength of the Company. Accordingly, China has an increasing growth in disposable income, and with high populations in Wuhan and Shanghai of approximately 1.4 billion in total, it poses a sizeable target market for the Company. As such, Canada Goose enjoys a continuous expansion of market size for the apparel market since 2012.
The current Company’s market size is approximately US$ 300 billion. Research indicates that only a 5% of the Chinese population engage in outdoor sports. However, the popularity of outdoor sports and the tendency for daily use of outdoor apparel poses as an opportunity for the Company’s expansion. The resultant increase in outdoor wear brands recorded a rise from 400 in 2014 to 800 in 2018 (Baird & Ionescu, 2016). The increase in online marketing has also posed a growing tendency in the Company’s products. The annual revenue has also grown by 3000% in a few years. According to Hopkins (2017), the Company’s products top the market demand during the winter seasons across Asia, Europe, and North America. For instance, a 52% possession of smartphones in Chinese households eased the purchasing channels for the Canada Goose products. As a result, an increase in sales was recorded in 2017. Additionally, the Company targets high-income Chinese customers for the winter coats and jackets that sell at CAD$1000. Further, the Company eyes the world occasions held during winter seasons to seize the market share. For instance, the 2022 winter Olympics which will be held in Beijing is a potential opportunity to capture a substantial sales volume of the products (Baird & Ionescu, 2016). While the current market share stands at 25%, the Company focuses on attaining 50% by 2022 (Baird & Ionescu, 2016). The parka maker expects to grow the revenue at a range of 13% to 15%. However, the current coronavirus epidemic, which has imposed travel restrictions and lower store traffic in China, has instilled low-profit margins in 2020. The sales volume for luxury products has decreased following the epidemic and the tendency of consumers to cease from spending.