Introduction
The case study is on the Icelandic firm 66°North, which creates, produces, and sells high-end apparel. In 2011, Helgi Skarsson and Bjarney Harardóttir acquired the business, with the intention of transforming it into Iceland’s first international consumer brand while maintaining environmental sustainability (Wilcox & Yemen, 2021). To achieve this, they appointed Matthew Woolsey as the company’s worldwide president in 2019.
66°North was a small company with a long history and established administrative, manufacturing, and sales procedures. In addition to being well-known in Iceland, the brand has expanded abroad since 2013, especially after creating direct-to-consumer channels (Wilcox & Yemen, 2021). However, its market share in more developed nations, such as the United States, remained small. The challenges included finding the brand’s target market, positioning it globally, and determining a go-to-market plan.
Company and Case Background
A legendary Icelandic business called 66°North creates, produces, and sells high-end outerwear. Bjarney Harardóttir and Helgi Skarsson acquired the business in 2011 to make it Iceland’s first international consumer brand that focuses on environmental sustainability. Due to the effectiveness of the company’s products, border patrol agents, weather forecasters, and rescue workers in Iceland all utilize them. 66°North is well-known in Iceland but remains a relatively small niche brand in more developed global markets, such as the U.S.
The company’s products have become more technologically advanced thanks to substantial technological advancements. Parkas, jackets, coats, and pants are among the product ranges. Since 2013, the company has shifted its focus toward developing direct-to-consumer channels, supporting its growth beyond the Nordic region (Wilcox & Yemen, 2021).
The dispute lies in conflict with the company’s objective to expand its market penetration in the U.S. and other international markets. The challenges are finding its global client base, defining its brand positioning, and choosing its go-to-market plan. 66°North items have low brand recognition in the United States; however, those aware of them typically hold the business in high regard (Wilcox & Yemen, 2021). There is room for expansion because of the company’s relatively high total consumer brand engagement level. Overall, a costly attempt to gain greater visibility in the U.S. market could make sense for 66° North, given the high regard for the company among those aware of it and the significant growth opportunity the U.S. market presents.
Problems
The difficulty of extending its market reach outside of Iceland, notably into the United States, is the critical issue that 66°North and its leadership are facing. Although 66°North is a well-known brand in Iceland, it is still a modest niche in more significant international markets. Since 2013, the firm has established direct-to-consumer channels and achieved substantial technological advancements, all of which have contributed to its expansion beyond the Nordic region (Wilcox & Yemen, 2021). However, it still has a small market share in the U.S.
The case context must be used to determine how to increase brand awareness and market penetration in the U.S. and other potential markets. The brand positioning and foreign client base must agree with the go-to-market strategy. The business must determine if it makes sense to invest in an expensive campaign to increase its visibility in the U.S. market and, if so, how to proceed with entrance (Bilgin, 2018). They should also consider which other nations would be a suitable fit for 66°North and whether they should focus on entering other markets rather than the U.S.
Evaluation of Issues
The biggest issue that 66°North is facing is its difficulty in broadening its market reach outside of Iceland, especially in the United States. While 66°North is a recognized brand in Iceland, it remains a relatively small niche in larger global markets. While the brand is well-regarded by people familiar with it in the United States, overall brand awareness remains low, according to the problem analysis. Most Americans familiar with the brand learned about it while traveling to Iceland or Denmark, and if they ever made a purchase, it was likely during their visit. This suggests that the company’s present distribution and marketing plans might not be sufficient for the U.S. market.
This issue has the potential to significantly impact the company’s future. It may be challenging for 66°North to become a global consumer brand if it fails to establish its brand recognition and market penetration in the U.S. and other potential markets. This may constrain the business’s long-term profitability and growth potential (Watson IV et al., 2018). The corporation must address this issue and develop effective strategies to increase brand awareness and expand market penetration in the U.S. and other prospective markets.
Possible Solutions
To raise brand awareness in the U.S., 66°North could invest in marketing and advertising efforts. This may involve traditional advertising techniques, digital marketing, social media campaigns, influencer partnerships, and other strategic approaches. Increased brand recognition and maybe higher sales in the U.S. are potential outcomes of this method. However, there is no guarantee that it will work,, and it would be costly.
Another option may be to collaborate with reputable U.S. stores to market 66°North goods (Wilcox & Yemen, 2021). Without incurring significant expenditures on marketing and advertising, this approach may help the business reach a wider audience. This solution may lead to increased sales and brand recognition in the U.S. Finding suitable retail partners and negotiating favorable conditions would be necessary.
Potential suitable markets for 66°North, considering its product offerings and brand positioning, could include Canada, Germany, Japan, Australia, and China, given their respective climates, consumer preferences, and market sizes. This might entail conducting market research to identify potential needs, followed by creating an entry plan for those markets. Increased worldwide sales and market diversification for the firm are possible results of this approach. However, doing so would need a substantial investment in market research and maybe modifying products to suit the demands of other markets.
The business may look towards developing a new hybrid market between the fashion and technical sectors (Guercini et al., 2018). This can include creating goods that meet the technical demands of outdoor enthusiasts while capturing the attention of fashion-conscious buyers. This approach may develop a distinct market niche that might spur expansion. Considering the high competition and cost of entry in the U.S., it may be beneficial for 66°North to explore market entry into countries such as Canada, Germany, Japan, Australia, and China, while taking into account factors such as consumer preferences, market size, climate, and local competition.
Recommendations
Investment in marketing and advertising efforts may significantly increase brand recognition and boost sales in the U.S., given the strong appreciation for the firm among people who are already aware of it. This could involve traditional advertising methods, online marketing, social media campaigns, influencer partnerships, and other promotional approaches. By forming partnerships with well-known U.S. retailers, 66°North could expand its audience without incurring significant marketing and advertising expenses (Wilcox & Yemen, 2021). Additionally, it could help the business better understand the U.S. market and adjust its strategies and products accordingly.
66°North might consider exploring other overseas markets that would suit their products, rather than focusing solely on the U.S. This could involve conducting market research to identify potential demand and then developing an entry strategy for those markets. 66°North might explore developing a hybrid market that bridges the technical and fashion segments, leveraging the company’s strong technological expertise and potential appeal to style-oriented customers. This approach could involve designing products that meet the functional needs of outdoor enthusiasts while also attracting fashion-conscious consumers.
Action Plan
The business should set aside a percentage of its budget for US-focused marketing and advertising initiatives. This can entail working with a US-based marketing firm familiar with the regional market and capable of developing successful campaigns. The business should also use influencer marketing and social media to target a younger audience.
To offer 66°North items, companies should seek out possible U.S. retail partners and arrange joint ventures. This can entail attending trade exhibits, networking gatherings, and contacting potential partners directly. The business should perform market research to find additional prospective markets for growth.
One option is to hire a market research company or use internet tools and resources to obtain information on consumer behavior, market trends, and competition in future markets (Dwivedi et al., 2021). The business should spend money on product development to provide goods that satisfy the technical needs of outdoor lovers while also being aesthetically pleasing to consumers who care about fashion. This can entail working with fashion designers, gathering customer data, and testing novel product concepts.
Conclusion
In conclusion, the problem facing 66°North, an Icelandic outerwear manufacturer, is growing its market reach, especially in the United States. According to the analysis, the critical issue is the U.S. market’s poor brand recognition and penetration. Some suggested remedies are investing in U.S. brand awareness efforts, working with U.S. retailers, looking into additional foreign markets, and developing a hybrid market between the technical and fashion sectors. If put into practice effectively, these techniques might aid 66°North in expanding its market reach and establishing itself as a recognized consumer brand worldwide, opening the door to a bright future.
References
Bilgin, Y. (2018). The effect of social media marketing activities on brand awareness, brand image, and brand loyalty. Business and Management Studies: An International Journal, 6(1), 128–148. Web.
Dwivedi, Y. K., Ismagilova, E., Hughes, D. L., Carlson, J., Filieri, R., Jacobson, J., & Wang, Y. (2021). Setting the future of digital and social media marketing research: Perspectives and research propositions. International Journal of Information Management, 59. Web.
Guercini, S., Bernal, P. M., & Prentice, C. (2018). New marketing in fashion e-commerce. Journal of global fashion marketing, 9(1), 1-8. Web.
Wilcox, R. T. & Yemen, G. (2021). 66° North: Made for Life. Harvard Business School Publishing.
Watson IV, G. F., Weaven, S., Perkins, H., Sardana, D., & Palmatier, R. W. (2018). International market entry strategies: Relational, digital, and hybrid approaches. Journal of International Marketing, 26(1), 30-60. Web.