Kathmandu Holdings: Marketing strategy (Case Study)

Key strategic goals of Kathmandu as per their annual report. In nutshell, Kathmandu wants to target their loyalty club members, focus on the growth in key woman’s categories, focus on mobile e-commerce and expand in North America – B2C

Firstly, we will focus on growing the core markets of Australia and New Zealand. We see opportunities to supercharge the Summit Club loyalty programs, and continue the dramatic optimization of our store network. We are also working to diversify by growing the contribution of the Summer season, and elevating the performance of our key metro markets.

Secondly, we recognize that distinctive product will set us apart from our competitors. We will focus on extending our market leadership in key product categories, while accelerating growth in other high potential categories. At the same time, we will work to scale the the growth opportunity in key women’s categories.

Thirdly, we will continue to enhance the customer experience through digital. We aim to make it easy for customers by enhancing product information, payment options, and fulfillment solutions. Technology provides opportunities for us to leverage digital touchpoints and social channels to enhance brand and product perception. We will also focus on maximizing mobile as a key method of customer engagement.

Finally, we aim to become a global business. In particular, we see an opportunity to build the Kathmandu brand to ignite demand in North America. We will work to build strategic wholesale partnerships, leveraging Oboz relationships to establish the Kathmandu brand. Alongside wholesale growth, we have an opportunity to accelerate the North America direct to consumer business. In addition to North America, we will continue to explore other international market opportunities. All of these strategic imperatives are underpinned by a focus on inspiring and enabling our team, and a drive to demonstrate sustainability leadership.

About Kathmandu Holdings

Kathmandu Holdings Limited is a chain of retail stores that sells travel and adventure outdoor apparel and equipment. It a leading retailer of clothing and equipment for travel and adventure in New Zealand and Australia.

Headquartered in Christchurch, NZ, Kathmandu Holdings is a public company, listed on NZX (New Zealand’s Exchange) and ASX (Australian Securities Exchange).

In this report, a comprehensive analysis of the Marketing strategy of Kathmandu Holdings is carried out, and gaps if any, are identified. Kathmandu Holdings utilizes a mix of online and offline communication methods to attract customers and to project its brand image. The integrated online and offline communication channels allow the company to effectively communicate with people, including its target audience.

The other part of the report discusses a digital marketing campaign proposed for promoting Tents and Shelters. The long-term objective is to run such campaigns every month or so, focusing on different product categories, and also to improve visibility of the company.

Unique Selling Point

Kathmandu Holdings is a leading provider of travel, adventure and outdoor apparel and equipment. It has been designing gear since 1987 and is a well-established name in New Zealand and Australia.

Kathmandu Holdings has a wide range of products including Travel Gear, Adventure Gear, Outdoor Gear, Exercise Gear, Sustainability and Responsible Materials. (Cite website). These products are designed to endure different weather conditions, diverse terrains including harsh conditions.

Because its focused only in the Aus/NZ region, it understands its market well; the company sells its products through retail stores as well through its website.

The company has a strong online presence and is quite active on social media.

Current Target Audience

Kathmandu’s primary target market include outdoor, fitness and adventure loving people:

• Young, fitness conscious people in the age group 16 to 35 years
• Adventure loving people in the age group 20 to 40
• Outdoor loving people in the age group 30 to 60
• Both genders are the target market

Current Communication Strategies

Kathmandu Holdings sells its products through offline retail stores and through its website. The company uses a mix of online as well as traditional media in order to communicate and stay connected with its customers, with more focus being given to online marketing strategies.

The company believes in customer engagement and customer satisfaction, and more importantly, does business using sustainable practices (cite Sustainability report 2019).

Kathmandu has been consistently investing in, and improving its communication channels to promote its brand.

As per the FY19 Annual report, the company sales are $545,618, showing a 9.7% increase over the previous year, with Australia being the biggest market for the company. The healthy sales figures reflect the company’s multi-channel, brand led growth strategy. Summit Club members also increased by 12.4% to 2.2 million, reflecting the company’s effective promotional strategies in increasing their loyal customer base.

Online Marketing

Website

The information of the website is streamlined, allowing a visitor to quickly find the information/product they desire.

The use of green color on the website projects the company’s caring attitude towards the environment and its intention to do business in sustainable ways. The website clearly mentions what it sells, its retail locations, its business philosophy, its product returns and exchange policy, and provides contact details.

Read: Importance of a website for business

Kathmandu also manages the Summit Club membership which is its loyalty program for its repeat customers. However, besides being just a loyalty program, it provides an opportunity for like minded people to come together and get access to exclusive adventures and deals.

Another interesting feature of the website is the Summit Journey blog where you get to read interesting stories of people exploring the wild, read about the best and unexplored destinations, get expert advice on buying gear and how to use them.

More features include:

• Free delivery on orders over $100 (only New Zealand online orders).
• Free international shipping on orders over $200 (for Summit Club members).
• The company offers hassle free returns on orders provided you return within 30 days. For occasions such as Christmas, the company gives an extended return period (usually up to Feb-end)
• Kathmandu also allows one to buy e-gift cards that one can gift to their dear ones. These do not have any expiry date and can be used anytime for shopping.

Things that can be improved on the website include:

Offer product comparison table at the bottom of the product page, where the product can be compared with other similar items that the company offers, thus making it easier for the visitor to make a decision.

Social Media:

Kathmandu does a great job with its social media activities; is quite active on the various social sites (FB page has 351,502 likes) and engages the audience by frequently posting creative pictures and videos.

The FB page clearly shows the ‘Shop Now’ and ‘Send Message’ buttons; the former takes a visitor to the website where they can shop for products, the latter allows a visitor to reach out to the company, to ask queries or to request more information (Zumstein & Hundertmark, 2017).

While the FB page has decent number of likes, it can be improved further. Competitors like The North Face’s Face book page has 12-15 times more likes, so there’s a lot of scope for improvement.

The company should invest more in paid advertising, run more frequent social media campaigns highlighting different aspects of the company and of their products.

Kathmandu should also come up with more interesting, creative and viral content which will get more people to like the page. Kathmandu should also try to engage the audience by have contests, polls and offer free giveaways to boost likes to the FB page.

Kathmandu also has a YouTube channel where the company shares different kinds of videos – products reviews, how to use gear, new launches, commercials and exciting places to visit. The YouTube channel has close to 4450 subscribers.

In addition, the company also maintains Instagram, Twitter and LinkedIn accounts and is quite active on these accounts.

Kathmandu is doing a good job with its social media efforts. No changes are required to the design of these accounts, or to the type of content that are being posted on these sites.

• Read: Kathmandu’s Social Media Marketing campaign

Emails:

However, it looks as if Kathmandu is not trying to capture the emails of the visitors. It definitely makes business sense to collect emails and test how it affects conversions and sales. So, E-mail marketing is one area where the company should plan to put in some efforts.

Kathmandu can send weekly emails to those on the email list and let them know about the latest blog posts, new product reviews, and any offers / deals.

Read:

• Kathmandu’s Email-Marketing campaign
• Kathmandu’s Pay-Per-click (PPC) advertising campaign.

Offline Marketing

Kathmandu also makes use of offline communication channels to reach out to the target audience. Traditional media is used to target the audience who are not active on social media platforms. Offline communication, in general, is a medium to reach a large segment of the audience.

Television and Radio: Television advertisements are meant to reach a broader audience and usually have a better recall value. TV ads need to be concise, creative, and informative, which attract customers (Chithra & Kothai, 2014). Radio broadcasting is also commonly used for advertising as working professionals use the radio while traveling to their workplace. (Check if TV/radio applies).

Newspaper: Newspaper is the first thing that people go through at the beginning of the day. Companies can use newspaper ad to reach a much wider audience. (Look for newspaper adverts).

Flyers: Kathmandu has several retail stores in Aus/NZ, where printed colorful flyers are available at the entrance of the store. These colourful flyers list all the offers and discounts that the store is offering for the week (check for flyers).

Integrating offline and online marketing communication

It’s important for companies to utilize a mix of offline and online channels to promote their messages, and in recent times it has been observed that efforts expended in one area generally has a positive effect in the other area as well. So, a company’s digital channel can boost their traditional marketing efforts and vice versa.

For decades, nothing came close to television advertising in order to reach a wide audience. However, the growth of the internet has provided marketers with newer and more cost-effective ways to reach targeted audiences.

Every company needs to use both online and offline marketing communication, but while doing so it should ensure that there is consistency in its communication and that the same message reaches out to the customer.

Kathmandu sells its wares through their website and also through retail stores located in Aus & NZ. The company uses a mix of offline and online marketing communication channels to promote its brand and products, and to create an impact on the customers (Chiang & Lin, 2018).

However, there are still few gaps in their strategy, considering the key strategic goals that Kathmandu has listed in its 2019 annual report.

Here’s what the company wants to focus in the near term.

• Expand their loyalty club members and sell more products to them.
• Exploit the growth opportunities in key woman’s categories
• Optimize their store network.
• Improve digital experience by providing enhanced product information, offering more payment options, and fulfillment solutions.
• Use mobile for customer engagement.

Gaps in the Current Market Campaigns

Considering their existing communication strategies and the strategic directions that the company wish to take, here are a few gaps that can be seen in their current communication campaigns.

• Add more content to the product pages, add multiple images and have a demo video. The company will need to focus on SEO, check goggle analytics and see if their pages are ranking well on google, add more content to the product pages, and try to get visitors to spend more time on the website.
• Run regular paid campaigns on Google Adwords and Facebook. Paid advertising on Google can help increase sales and also allow the company to capture more email-ids. Paid Facebook ads can be used for boosting Page likes and also to promote offers and to (sell) certain products.
• Have more content and products added under woman’s categories. Run marketing campaigns specifically targeted at women.
• Build a mobile app that will allow the audience to interact with the company through their smartphone.
• Have a Chat box option on the website. This will provide the visitor with an option to interact, in case they are feeling overwhelmed with the information or unable to find the product they are looking for. A positive interaction will also make them return later to the site.
• Need to put efforts in capturing emails and on E-mail marketing. The company should also try to capture email ids / subscribers on its website, which will provide them with one more means to market their products and build relationship with the audience.
• Need to launch social media campaigns every month, focusing on various aspects of the business.
• The company also need to increase spending on offline marketing channels, such as Television and Newspaper.

New marketing campaign

The team at Kathmandu Holdings seem to have done well with their digital marketing efforts, with presence in all major social media and quite active on all those sites.

However, Kathmandu needs to spend more on its offline communication in order to build its branding and reach a wider audience. So, somewhere in their overall strategy, they will need to launch campaigns focused on offline means – television, radio, print, which of course will be shared on the online platforms as well.

For the new online campaign here’s what Kathmandu Holdings could do.

Launch a marketing campaign will focus more on promoting Tents and Shelters.

Key reasons for running a marketing campaign

• Focus on growing the core markets of Australia and New Zealand.
• Strategic push to promote Summit Club and women’s categories
• Competitor The North Face has 12-15 times more likes on its FB page

The objective of the campaign will be to create awareness about Tents and shelters and promote the best-selling products, get more people to like the FB page, improve visibility of the company, and divert some of the traffic to the website where they their email-ids will be captured. This is more of a short-term strategy.

The long-term objective for Kathmandu Holdings should be to run such campaigns every month or once in two months, where the focus of the campaign will be on promoting different categories of products and improving conversions to increase sales.

For this marketing campaign that will focus on promoting Tents and Shelters, there will be three main parts to it.

• Promotion on Social media
• Email Marketing
• Offline Marketing (depending on the budget)

Promotion on Social Media

Create a Content Calendar and Post Accordingly

Any digital campaign is much more effective if it’s done regularly, rather than sporadically. Same applies to a social media campaign as well. If you do not post on your FB page for weeks at a stretch, the audience will become less responsive to what you publish thereafter. For this campaign, Kathmandu should post five times a week for 2 weeks.

Kathmandu should also run a Facebook Paid Campaign where they offer first buyers 10% off on select tents / shelters; this will entice visitors on the FB page to make a purchase.

Instead of giving away the discount code in the FB ad, send the visitors from Facebook to a landing page on the website where they have to opt in before receiving the discount code. So basically, you ask them to subscribe to the newsletter (to capture the email-id) and send them the discount code once they have subscribed (shared their email-id).

Content for increasing Customer Engagement

Decide what type of content to publish. The content needs to a mix of how-to-se tutorials / videos, how to select tents / buying guides, related news, and funny/humorous, polls, interspersed with promotional content. The company may publish promotional content more frequently during festive seasons (such as Christmas).

The company should also use social media to share exclusive content with the audience. For example, Kathmandu should make announcements about new products or new special offers. More customers will like the page once they realize they are missing out on something. The company should also occasionally share this exclusive content on their site/blog to draw attention to the social media updates.

Offline Communication

Depending on the budget, the company may also try to promote these products via offline means, say a TVC on Kathmandu Holdings range of tents and shelters for outdoor and adventure enthusiasts. They can even place print ads, such as in local newspaper.

References

Edwin Toonen. Page speed as a ranking factor What you need to know.

Catherine Demangeot, Amanda J. Broderick (2016) Engaging customers during a website visit: a model of website customer engagement International Journal of Retail & Distribution Management.

Darius Zumstein, Sophie Hundertmark (2017) Chatbots – An Interactive Technology for Personalized Communication, Transactions and Services.

Sustainability report 2019

FY19 Final Results NZX Pack

Appendix

Kathmandu Online/Digital properties:

• Website: https://www.kathmandu.co.nz/
• FB: https://www.facebook.com/kathmandu/
• YouTube: https://www.youtube.com/Kathmandu
• LinkedIn: https://www.linkedin.com/company/kathmandu
• Instagram: https://instagram.com/KathmanduGear
• Twitter: https://twitter.com/KathmanduGear