Comparing REI’s Marketing Strategy with its Competitor

Recreational Equipment Inc., which is commonly regarded as REI, is an outdoor and retail recreation service company. It sells varieties of goods such as camping gear, clothing, and travel equipment. REI traces its roots back to 1938 when Lloyd Anderson with his wife and along with other 21 mountain climbers founded it as a cooperative (REI, Inc., n.d.). REI’s sales have been increasing tremendously over the years. Despite this growth in sales of this corporation, it faces stiff competition from its main rival Patagonia. The primary product of REI is the camping apparels.

Integrated Marketing Strategy on 4Ps

Product

REI hosts many brands of climbing gear. It offers such products as tents, day backpacks that are used for hiking. In most days, the backpacks’ price ranges from $29.50-$250 (REI, Inc., n.d.).They offer backpacking backpacks whose price ranges from $69-$549. Patagonia on the other side offers a number of high performing gears such as packs, sleeping bags, tents, river shells and skiwear. Patagonia seems to offer more varieties of camping apparels and REI needs to expand in this area.

Pricing

REI is in a position to compete with its rivals since it offers the best price on its goods. REI has regular priced merchandise. The pricing strategy enables REI to offer a 10% refund with other seasonal benefits (REI, Inc., n.d.). Patagonia on the other hand charges slightly higher prices. However, it has been donating ten percent of its annual profits before they are taxed to the grassroots environment groups.

Place

REI provides offers mainly mortar, brick stores, and online services. Once a customer places an order, the company provides an option to the consumer of having the product being sent to the REI store that is nearer for the purpose of in-store pickup. Patagonia has increasingly gone into content marketing to promote its products, especially in the recent past (Patagonia, Inc., n.d.). It has increased online marketing tremendously, and in last year, online marketing contributed to approximately $300 million (Patagonia, Inc., n.d.).

Promotion

Both companies seem to utilize same media platforms. REI has been using the social media such as Facebook, Twitter, and Instagram among other platforms. Similarly, Patagonia has been using similar promotional platforms (Horine & Stotlar, 2013). Additionally, these competitors have been using other media platforms such as radio, television, and newspapers.

Effect of Integrated Marketing Strategies for Economic Success of the Companies

The integrated marketing strategies of the REI are likely to lead to a better economic performance especially that based on pricing. REI has a better pricing strategy that would attract more customers than Patagonia. This is because of its ability to offer an annual refund of 10% and more benefits (Covell & Walker, 2013). Patagonia, on the other hand, is likely to have a better brand name, which will contribute to making more sales given the fact that it contributes towards environmental conservation. Therefore the sales of the two companies are likely to increase based on the various marketing strategies in place.

Opportunities that Could Improve the Economic Success of REI

REI should commit itself in creating new locations in at least 18 states that they do not operate. Such a move will create awareness to its major brands thus raising sales. REI can also try to increase children and women base to raise its revenues (Covell & Walker, 2013). Moreover, REI can increase its presence in the online marketing to gain access to more markets.

Product Strategies for REI and its Competitor

Patagonia is known for its sustainable environmental efforts, which build its product’s name. Similarly, it entails promoting used wear and offering advice to its consumers before they can buy. It also buys used wear from its customers and repairs for them their outdoor gear in addition to frequently sending out its trucks in the country on environmental campaigns. On the other hand, the product strategy for REI bases on experience and education (Horine & Stotlar, 2013). They offer products for every outdoor activity and since they have a great experience on these products, they have the ability to target all population groups, the youth, elderly, women and men, through different design of camping apparel.

Distribution Channels for REI and its Competitor

One of the distribution channels for REI is through a direct channel where it does not need the service of intermediaries. This method is appropriate since the company does not have to share its profits with many players in the distribution channel (Horine & Stotlar, 2013). Another method is through placing its products in the hypermarkets and the supermarkets. Patagonia, on the other hand, depends heavily on its 342,000 square feet distribution channel in Reno, Nevada where customers can source any product they need (Shank & Lyberger, 2014). It also makes use of different distribution stores in more than 32 states in America.

Pricing Strategy for REI and its Competitor

Patagonia has been requesting its customers to buy less to influence their buying behavior. The company is encouraging its consumers to purchase items that can last longer (Shank & Lyberger, 2014). Essentially, through this campaign, the company would offset the revenue lost from buy less campaign. REI, on the other hand, has been offering exceptional benefits packages in addition to providing discounts to its customers.

Promotional Strategies for REI and its Competitor

REI has been using advertisement through the television and through the radio to create awareness of the camping apparel. It also makes use of print media in advertising its products (Shani & Chalasani, 2013). Additionally, it has been using social platforms such as Instagram and Facebook in making advertisement Patagonia, on the other hand, is engaging in content marketing. It is significantly utilizing online marketing in particular using internet ads (Eagleman, 2013).  Patagonia also uses similar media platforms used by REI such as radio, TV and print media such as magazines and newspapers. Patagonia has a greater online presence than REI.

Conclusion

The marketing strategies of REI analyzed, explain the reason why REI has been doing well in the market. It has been able to dominate the market for sporting clothes while the market has many competitors. Nevertheless, the company still faces competition from major players such as Patagonia. REI need to utilize the opportunity that exists so that it can have a competitive advantage over its rivals. This is through increasing its locations in those states that it has not tapped. Additionally, it should also target more women and children and increase online presence.

References

Covell, D., & Walker, S. (2013). Managing Sport Organizations: responsibility for performance. Routledge.

Eagleman, A. N. (2013). Acceptance, motivations, and usage of social media as a marketing communications tool amongst employees of sport national governing bodies. Sport Management Review, 16(4), 488-497.

Horine, L., & Stotlar, D. (2013). Administration of physical education and sport programs. Waveland Press.

Patagonia, Inc. (n.d.). Outdoor clothing and gear. Retrieved November 22, 2016, from http://www.patagonia.com/home/

REI, Inc. (n.d.). Outdoor clothing, gear, and footwear. Retrieved November 22, 2016, from https://www.rei.com/

Shank, M. D., & Lyberger, M. R. (2014). Sports marketing: A strategic perspective. Routledge.

Shani, D., & Chalasani, S. (2013). Exploiting niches using relationship marketing. Journal of Services Marketing, 6(4), 43-52.

 
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