As mentioned earlier in the series, VF Corporation (VFC) has multiple product lines available in dozens of countries. Its customers include men, women, and children. Products are priced in the mid- to upper-mid-market segments. Due to the diversity of products, customers, and geographies, marketing campaigns are often brand-based.
Brand image is critical for fashion and apparel products. VFC’s products are available through its own stores, other retailers (wholesale customers), and its e-commerce websites. The company’s marketing dollars are designed to get the most returns from these channels through the following:
- Direct advertisements in print, television, radio, and digital media, including mobile and social media
- Promotions with other retailers in print and on television and radio on a shared-cost basis
- Point-of-sale fixtures and signage at retail outlets operated by wholesale customers
- Enhancing brand image in shop-in-shops and concessions located within outlets operated by wholesale customers
- Having its own loyalty programs and participating in loyalty programs and discounts offered by wholesale customers
- Direct discounts to customers at its retail outlets
- Sponsorship activity that’s brand-dependent and benefits local communities
- Supporting employees’ volunteering community service
- Fundraising activities
VFC spent ~$671 million by way of marketing expense in 2013, up from ~$575 million in 2012. Marketing as a percentage of revenues also increased from 5.3% in 2012, to 5.9% in 2013. The company has been increasing advertising and promotional spend in a bid to expand its brand reach.
The acquisition of Timberland in 2012 also contributed to the increase. Timberland’s expense margins are comparatively higher than the other VFC-owned brands. Around 50% of media costs incurred for Timberland pertain to the digital and social media channels.