Sunday, January 22, 2006

Marketing Birkenstock - from hippie to hipster

In 1971, Margot Fraser became the founder, CEO, and sole distributor of Birkenstock in the US.
Fraser used non-traditional marketing to sell Birkenstocks - she introduced the sandals to Berkeley CA, in 1966, where they were directed at the new generation, that perceived the sandals as “not affected by traditional thought.”
As a result, Birkenstocks have been associated with Woodstock participants, save-the-whale activists and tree huggers.

Over the years, Birkenstock relied on the general trend and demand for craftsmanship and renewable products to help promote their footwear.
For promotion, the company didn’t have any formal national advertisement and only also used unknown models.
Brandwise, Birkenstock was seen as “family-friendly, natural.”
As a result, their highest appeal was with the non-traditional consumers again.
This image was enforced by the “Birkenstock Green Team,” a US Birkenstock institution established in the sixties and consisting of a “small group of employees who meet voluntarily to monitor, research, and resolve environmental issues in (our) workplace, and to educate fellow employees about sound environmental practices.”

As a result, the general public saw Birkenstocks as ugly shoes for hippies, granola munchers, and environment activists.
In the late 1980s, Birkenstock got a boost from Generation X-ers and baby boomers that embraced casual wear.
In 2001 however, Birkenstock USA posted its second profitless year due to over $1 million in lost inventory and projected sales and costs for new computer equipment.
Birkenstock realized that it was time to reposition and rebrand.

It started its repositioning with producing and marketing more than 400 styles of clogs, dress shoes and other “closed-toe” footwear for men and women in colors and patent leather more suitable for fashion runways.
As Birkenstock USA CEO Matt Endriss phrased it:
The challenge is getting beyond the hippie image. There's a huge opportunity to increase our position in the marketplace.”

Birkenstock needed to rebrand itself, and be perceived as a manufacturer of glove-leather, designer footwear.
The company’s strategy was to broaden its image to edgy and fashionable footwear that shoe-obsessed, ultra-cool Carrie Bradshaw might wear strolling down Madison Avenue in HBO's Sex and the City.
Birkenstock marketing strategy also included expanding its fledgling children’s market and its “professional” shoes aimed at surgeons, chefs and others who stand for long hours.
However, sales are driven largely by hype, celebrity endorsements and big marketing campaigns.
Companies such as Nike spend five times more on marketing and PR alone than Birkenstock sells in a year.

The repositioning of Birkenstock worldwide paid off.
In 2004, Birkenstock got a sudden boost worldwide with the fashion trend for colorful sandals.
European girls were gusting over glossy colorful sandalsand even French Vogue showed a pair of shimmering silver Birkenstocks in one of its issues.
The Japanese market closely followed – in the summer of 2005, Birkenstock successfully launched its footwear to the Japanese hipster crowd.
As a result, Birkenstock also acqured soem rich and famous American fans, including Gulf War general Norman Schwarzkopf and Oscar-winning actress Gwyneth Paltrow.

For celebrity endorsement, Birkenstock invited several celebrities, including Cindy Crawford, Robin Williams and Whoopie Goldberg, to mark the 30th anniversary of its bestselling Arizona sandal to design their very own version of it.
The company also signed actress/model Heidi Klum to both model Birkenstock sandals and to develop a limited-edition Birkenstock line.

It resulted in excellent media exposure, and branded Birkenstocks as hip and trendy.
To reach the profitable exercise and fitness market, Birkenstock engaged Tony Little, America’s exercise guru and informercial pioneer, to promote its exercise sandals.

Birkenstock also changed its advertising, including full page ads at the back of NY Times magazine.
In December 2005, Birkenstock selected Duncan/Shannon as its PR agency.

Where will small, privately-owned Birkenstock succeed in the long term?
One thing is for sure: Birkenstock made a promising start.

  1. It extended its brand into athletic shoes, hiking shoes and apparel, taking on companies such as Nike (which offsets sluggish sales of athletic shoes with casual crossovers and hybrid styles), bootmaker Merrell (which pioneered sport footwear such as moccasins), Timberland (which turned to sandals), competitor Teva, and designers such as Perry Ellis (who has his own footwear line).
  2. It expanded its distribution channels, adding ecommerce to its traditional stores.
    Birkenstock are now also available online.
  3. It repositioned itself and is now perceived as fashionable, not in the least due to its rebranding.
  4. Its extended its promotion to include celebrity endorsements that branded the company as fashionable and trendy. It also used celebrity endorsements to profile itself in the different target markets, including fitness. It also got favorable coverage in blogs and testimonials.
  5. It put emphases on marketing, resulting in a clear picture of who their customers are and why some of its markets are stronger than others.
  6. It identified fashion trends, which enabled it to enter new markets, such as Japan and children's wear.
  7. It was able to maintain its image as a quality product manufacturer and is endorsed by testimonials on websites and blogs.

The full case study is available in pdf format at

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