UCLA Consumer Behavior Discussion

Description

Marketing Responsibly: Patagonia Redefines What It Means to Be Transparent and Authentic?

Marketing faces challenges and criticism on many fronts. Apparel and sporting goods company Patagonia has recently been in the spotlight because of its work to change perceptions about the role of marketing. For over 40 years, Patagonia has supplied well-heeled adventurers with all the gear they need to brave hiking in the Great North Woods, the jungles of Africa, or the wilds of the suburbs!108 Products include everything from fleece jackets and sleeping bags to smoked salmon.109,110 Patagonia’s commitment to corporate social responsibility is embedded in its culture and has spawned initiatives focused on energy conservation, fair trade, recycling, and consumerism. In 2011, they even ran an ad on Black Friday saying “Don’t Buy This Jacket,” encouraging their customers to “buy less and reflect” before they made a purchase. In an effort to lower the costs of production, the company has joined many other apparel providers in moving their pro-duction offshore. A consequence of this strategy is a reduced amount of control over how the laborers who assemble their products are treated and paid. To address this issue, Patagonia helped found the Fair Labor Association, an organization that provides an objective perspective on member companies’ labor practices. Since 2007, Patagonia has worked diligently, along with Verite, a nongovernmental organization that works on labor issues to make improvements in the practices of the company’s first-tier suppliers. Through these efforts, it was able to reduce the number of first-tier suppliers from 108 to 75, which improved the company’s ability to have more control over how these companies treat workers. However, in 2011 Patagonia’s own extensive audits uncovered new supply chain problems with human trafficking, forced labor, and exploitation. They are now trying to go beyond the gains made in their previous work with the first-tier suppliers. Their new focus is on suppliers buried more subtly in the complicated apparel supply chains: mills and suppliers of raw materials. Patagonia has also asked Verite to help with additional audits. Why has a company so committed to fair labor practices had so many problems conquering this issue? A major problem is the very nature of the apparel supply chain, which is unwieldy and complicated, and spreads around the globe. Patagonia’s experience demonstrates the challenges of treating workers fairly at every step of the production process, even when a company has a very public and sincere desire to do so. Clearly, the company has a lot at stake because its branding identity is so closely tied to its leadership in social responsibility. This may be particularly true with millennials, a key part of Patagonia’s customer base and a generation that research indicates is particularly concerned about companies being good corporate citizens. Patagonia’s efforts seem to be paying off in both social good and in revenues. CEO Rose Marcario, who leads the corporate social responsibility (CSR) charge, has seen sales improve fourfold during her decade-long tenure.

Following a decision to give away all of its 2016 Black Friday sales to environmental organizations, the company signed up 24,000 new customers. According to Marcario, “Doing good work for the planet creates new markets and makes [us] more money.” In addition to its work on fair labor practices, Patagonia has pursued other CSR (corporate social responsibility) projects. The company launched an initiative focused on the reuse of clothing, in the first move into what is being called recommerce. Their Worn Wear program includes options to repair older garments or trade them in for new ones. The used clothing is also resold in the Worn Wear section of Patagonia stores and online. This program helps to meet sustainability goals and also provides a lower cost option for the brand sometimes derisively called “Patagucci.” Another initiative, Patagonia Action Works, pairs Patagonia customers with activist groups. Patagonia founder Yvon Chouinard says it is “like a dating site” to bring together individuals and grassroots environmental groups. Patagonia continues to make CSR a priority, including the difficult struggle to monitor and actively work to improve conditions throughout every level of its supply chain.

  1. Do you believe that consumers consider a brand’s supply chain ethics when they purchase apparel?
  2. Do consumers bear any responsibility for the ways in which laborers in the apparel industry are treated?
  3. Since Patagonia is a higher-priced apparel offering, should the company simply move production back to the U.S.? Would you be willing to pay a premium for clothing made in the U.S. where laborers would be protected by U.S. laws? What other factors related to Corporate Social Responsibility should Patagonia consider when it makes the onshore/offshore decision?
  4. How could the efforts of companies like Patagonia affect CSR efforts in other companies in its industry or in related industries?