Q 24Q 24
At Timberland, Doing Well and Doing Good Are Laced Together
Timberland's well-known name and tree logo are good clues as to how much this multinational firm cares about sustainability. The company, headquartered in Stratham, New Hampshire, started out manufacturing shoes and boots and later expanded into apparel and accessories. Today, Timberland sells through its own network of stores as well as through thousands of department and specialty stores worldwide. It also operates e-business websites in the United States, the United Kingdom, Japan, and France. The firm was so profitable that it was acquired by VF Corporation, owner of brands North Face and Wrangler, for $2.3 billion. The acquisition was the largest in the corporation's history.
Timberland's $1.5 billion in revenue comes from sales in North America, Europe, and Asia. To stay on top of fast changing trends in the world of fashion, Timberland maintains an international design center in London. It seeks to develop high-quality outdoor products to improve the lives of its customers and communities, as well as to inspire them to make a difference in the world. As a result, the company's long-term strategy for success combines a comprehensive social responsibility agenda with careful planning for the ever-changing marketing environment.
Four Pillars of Social Responsibility
Timberland's social responsibility agenda rests on the four "pillars" of energy, products, workplaces, and service. Each pillar is associated with specific short- and long-term targets that Timberland has established with the input of its stakeholders. Under the first pillar-energy-the company has reduced energy consumption, slashed harmful greenhouse gas emissions, and increased its use of power from renewable sources. It is also increasing the use of virtual meetings to cut down on employee travel, which saves energy as well as time and money.
The second pillar, earth-friendly products, is a key element in Timberland's social responsibility agenda. More than one-third of its shoes contain some recycled material.
Its Earth keepers shoes have been specially designed to incorporate a combination of organic, renewable, and recyclable materials. Some Earth keepers are not only made from old plastic bottles and other recycled content, they can be completely disassembled and the components can be reworked into new Timberland shoes. Soon, all Timberland products will be labeled to show their impact on the planet.
The third pillar relates to the workplace. Timberland sets tough standards for fair and safe working conditions at all the factories and facilities that make its shoes and clothing products. Although it owns and operates a factory in the Dominican Republic, the company buys most of its products from a global network of suppliers that employs 175,000 workers in approximately 300 factories spread across 35 countries. Timberland works with the VF Corporation's audit team to ensure that suppliers are complying with their detailed code of conduct, which forbids discrimination, child labor, and unsafe practices. Factories are audited regularly and when violations are found, Timberland follows up to be sure that the necessary workplace improvements are made. Timberland employees are encouraged to call the Integrity Line, a 24-hour hotline answered by a third party, whenever they want to report workplace concerns, submit ideas, or ask questions.
The fourth pillar, service, has long been part of Timberland's cultural fabric. Every full-time Timberland employee can take up to 40 hours, with pay, to volunteer in his or her community. In addition, Timberland's former CEO began the tradition of Serv-a-palooza in 1998 when he set aside one work day for global volunteerism. Today, employees are encouraged (but not required) to devote this annual day of service to volunteering in their communities.
Some employees use the day to clear nature trails, some pick up trash from riverbanks, and others grab their tool belts to build arts facilities or repair neighborhood schools. In more than a decade with Timberland, the former vice president of corporate culture enthusiastically laced up his Timberland boots and volunteered on three continents, doing everything from protecting the rainforest to improving the gardens around a senior center.
The Changing Marketing Environment
Because Timberland has a diverse product portfolio and is active in retailing and wholesaling as well as manufacturing, it has to keep an eye on competitors in several industries. One strong U.S.-based rival is Wolverine World Wide, which manufactures Hush Puppies, Sebago, Merrell, Patagonia Footwear, and other brands of casual and work shoes. Like Timberland, Wolverine operates company stores in the United States and the United Kingdom. The U.K.-based R. Griggs Group, maker of Doc Martens boots, shoes, and sandals, is a key competitor. Finally, particular Timberland shoe styles compete directly with footwear marketed by the world's largest athletic shoe companies.
Economic conditions can also affect Timberland's marketing situation. During the recent recession, when many consumers held back on discretionary purchases, the company's overall revenue fell. However, sales of its work boots remained flat, even as some competitors saw their sales drop. Timberland's marketing executives realized that the brand was holding its own among construction workers and other buyers who need tough, reliable footwear to use day in and day out.
Timberland's marketers have also noticed that the challenging global economic situation is influencing the way consumers think and feel about buying products such as shoes and clothing. When unemployment was low and buying power was high, consumers often used such purchases as a way to display their wealth. As the economy moved into recession, however, many cash-strapped consumers cut back on purchases of showy, expensive items, in favor of products that conveyed a more subtle message about cultural values such as concern for the environment. Today, "self worth is tied to thoughtful purchases as a way to impress your peers, instead of conspicuous consumption," states Timberland's senior director of merchandising.
In addition to its international marketing initiatives in China and Europe, Timberland sees promising opportunities for growth in India. It signed a strategic alliance with Reliance Industries, a local company known for marketing international brands. Reliance distributes shoes, boots, and clothing through Timberland-branded stores and through selected department stores in major Indian cities. Timberland's CEO says that Reliance has "a clear understanding of the Timberland brand and consumer" and, just as important, it's "as committed as we are to our ideology and passion for the outdoors."
High-Tech Shoes and Communications
Timberland is applying technological advances to improve its footwear products and to reach out to customers through digital media. For example, to satisfy customers' needs for comfort, the company has introduced patented "Smart Comfort" footbeds in its shoes. As part of its commitment to sustainability, Timberland makes Green Rubber soles from recycled rubber and is designing its new footwear products for easy disassembly and recycling at the end of their useful lives.
Moving into digital media is helping Timberland bring its marketing messages to the attention of consumers who use the Web. Through brand-specific sites, Facebook fan pages, blog entries, a Twitter feed, YouTube videos, and online games, Timberland supplements its traditional marketing activities and engages consumers who seek a deeper level of involvement with their favorite brands.
Over time, Timberland plans to add labels to show how eco-friendly each of its products really is. What are the marketing advantages and disadvantages of this move?