MOUNTAIN EQUIPMENT CO-OP

SUBMITTED TO: JUSTINE PAQUETTE

SUBMITTED BY: RICHARD COLLINS
ALIYA GRASSIA
DJ MORRISON
DUE: MARCH 27, 2017
COURSE: SPRT 254 - ONB
 Table of Contents
Section Page #

Introduction ..................................................................................................................................... 1

History............................................................................................................................................. 1

Role Within Product Categories ..................................................................................................... 1

Partners ........................................................................................................................................... 2

Positioning ...................................................................................................................................... 4

Difference from Competition.......................................................................................................... 4

Corporate Social Responsibility ..................................................................................................... 6

CSR Conclusion and Potential Opportunities ................................................................................. 7

Distribution Channel ....................................................................................................................... 9

Brand and Product Evaluation ...................................................................................................... 11

Conclusion .................................................................................................................................... 14

References ..................................................................................................................................... 15

Appendix ....................................................................................................................................... 17
Introduction

The purpose of this assignment is to get an extensive understanding of a Mountain Equipment

Co-op, including their history and role in the industry as well as the distribution process for

bringing a product to market.

History

Mountain Equipment Co-Operation (MEC) is sporting goods store that specializes in outdoor

and wilderness activities. It was founded by 6 mountaineers on August 2, 1971 (Our Roots).

These members paid $5 for a share into the co-op (Our Roots). This is the same cost that is

charged today. The organization operated solely out of British Columbia from 1971-1977 until a

second store opened in Calgary. The co-op now has stores all over Canada but its headquarters

remain in Vancouver. MEC is now an extremely successful organization with sales increasing at

an average of $7.8 million dollars annually since 1999 (Shaw, 2005). Theyre mission is to be

the most viable, vibrant outdoor retail business in Canada (Mission and Vision). MEC is guided

by a vision to inspire excellence in products and services, passion for wilderness experiences,

leadership of a just world, and action for a healthy planet (Shaw, 2005). The company follows

core values that guide them throughout their business operations. These values include but arent

limited too: quality, leadership, co-operation, integrity and sustainability (Mission and Vision).

These values have helped shape the co-op into what it is today.

Role Within Product Categories

MEC distributes products within the apparel, footwear and equipment categories. The company

covers pretty much all gear and accessories necessary for most adventurous/wilderness sports as

well as more urban activities such as yoga.

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Apparel

In the apparel category, MEC offers basics such as shirts and sweaters, accessories (gloves, hats,

sunglasses), jackets, base layers and swimwear.

Footwear

Boots, socks, and climbing shoes are just a few of the products offered in the footwear division.

Equipment

The company offers an extreme variety in the equipment section. MEC sells bikes, bindings,

skis, tents, camp kitchen accessories, yoga mats, harnesses and backpacks.

Partners

Mountain Equipment Co-op is involved in many partnerships to better the community and the

world as a whole. The following chart exhibits MECs partnerships and what each partnership

entails.

Partnered Company Partnership Description

Avalanche Canada MEC donates thousands of dollars to
provide a free avalanche forecast
application
Send MEC staff members for
Avalanche skill training
Overall goal: create safer enjoyments
of winter backcountry (Partnerships)
Alpine Club of Canada (ACC) Share common goals with MEC of
inspiring Canadians to climb,
mountaineer and pursue alpine
activities (Partnerships)
Association of Canadian Mountain Guides ACMG provides youth with
(ACMG) opportunities to safely develop their
skills and experience the outdoors

2

Freshwater Alliance (CFA)
Canadian Parks and Wilderness Society
(CPAWS)
International Mountain Bicycling
Association Canada (IMBA)
Leave No Trace Canada
Parks Canada
Protect our Winters (POW)
Together they run the Adventure
Access Program that subsidizes
ACMG instructors to work with youth
in different environments
The partnership aims to build an
engaged freshwater constituency
across Canada (Partnerships)
MEC supports them in raising
awareness of issues affecting lakes,
rivers and streams amongst grassroots
groups. (Partnerships)
MEC provided core funding in order
to enhance their voice regarding
wilderness conservation (Partnerships)
MEC donates annually which supports
the IMBAs core funding
(Partnerships)
Donation also supports Take a Kid
Mountain Biking Program which
persuades people to organize and
participate in riding events
(partnerships)
Company promotes and inspires
responsible outdoor recreation
(Partnerships)
MEC provided initial funding to the
organization which helped build
infrastructure (Partnerships)
Partnered to develop Learn to Camp
initiative which aims to instill
confidence in participants wishing to
camp (Partnerships)
This organization is committed to
fighting climate change on behalf of
the winter sports community
(Partnerships)
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 They partnered together to increase
awareness on climate change and the
threat it is to winter recreation
(Partnerships)

Positioning

Mountain Equipment Co-op is quite different from most companies. Purchasing a Co-op

membership is mandatory to be a customer of the store. Since the membership is valid for life, it

creates a large sense of brand loyalty in the mind of consumers. The company prides itself on

being owned by the people who shop here which makes people feel important and included.

The quality product standard that MEC adheres too is also something that consumers appreciate.

In 2015, out of MECs total percentage of sales, only 0.925% of products were returned due to

defectiveness (Annual Report, 2015). Products are positioned as premium with a high quality

and high price.

Difference from Competition

In June 2013, MEC went through a major rebrand. The goal was to stray away from their

outdated reputation as a niche purveyor of backcountry supplies (Tang, 2013). Originally,

MEC wanted to offer gear to the athletes involved in unpopular outdoor activities. Chief

Marketing Officer Anne Donohoe stated that theyre evolving the products were offering and

broadening the activities that were supporting, (Tang, 2013) and that the rebrand reflects the

reality of the new MEC (Nguyen, 2013).

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 Before After

Figure 2 - retrieved from

Figure 1 - retrieved from http://www.canadianbusiness.com/business-
http://business.financialpost.com/news/retail- news/mountain-equipment-co-op-unveils-new-logo-
marketing/mec-logo-rebranding name-to-appeal-to-urban-customers/

The new logo (Figure 2) is without the iconic mountain that has gone unchanged since 1971

(Figure 1) to exhibit MECs geographical reach across Canada, and its increased range of

backcountry and urban activities (MEC Rebrand).

The promotional material surrounding this rebrand was focused around the phrase We are all

Outsiders. In MECs Outsiders video, it begins with the phrase We Are and flashes through

multiple words such as leaders, globe-trotters, movers and early risers showing people engaging

in a variety of outdoor activities (MECVideos). The newer sporting activities that were

showcased were cycling, running and yoga. The campaigns focus is to attempt to diversify and

win over younger urban shoppers who may be more interested in these newly offered activities

than MECs traditionally offered climbing gear.

The main difference between MEC and its competitors is that it is a co-op, not a company

available to public shareholders. The shares members own are called patronage shares (Shares

and Credit Notes). At the end of every year, MEC assesses whether it has enough for future

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operations. If it does and there is a surplus, the organization will give money back to its members

(Membership). These are called share redemptions (Shares and Credit Notes). The total

earnings are divided amongst members based on how much they have spent at MEC that year

(Shares and Credit Notes). Since 2016, there have been 15 share redemptions totaling over $33

million going back to members (Shares and Credit Notes). The co-op is also extremely engaged

in socially responsible practices. Consumers are driven to purchase from companies that they

know are ethical.

Corporate Social Responsibility

The following paragraphs explain two programs in place within Mountain Equipment Co-op

where they practice Corporate Social Responsibility.

1. Manufacturer and Production Policies and Regulations

Although MEC does produce the majority of their products in Canada (58%), they do have many

factories overseas. However, MEC is different than most sporting goods companies, Mountain

Equipment Co-ops product factories must abide by very specific guidelines to ensure their

products are made in worker friendly and safe environments. The employees work in healthy

workplaces where human and civil rights are respected and where they are treated with respect

and dignity. Along with their own Supply Team Evaluation Process (which is monitored by the

Fair Labour Association), MEC also uses third party independent audits to ensure that there is no

child and forced labour, harassment, discrimination and abuse in the factories. Furthermore, the

manufacturers must have systems which minimize the negative impacts of the manufacturing and

packaging process on the environment, to assure that the waste is disposed of properly (Shaw,

2005).

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2. Green Buildings

One of the aspects of MEC that is highly recognized by the industry is that all of the stores are

Green Buildings. However, to be considered Green by MEC, the building must be built and

sustained by resources available within its immediate area [and] it should enhance or at least not

detract from its natural environment (Shaw, 2005). Throughout the construction period, MEC is

always thinking about the 4 Rs, which are Reduce, Reuse, Recycle and Rethink. Furthermore,

Mountain Equipment Co-op has 8 buildings designed to the LEED Gold standards and their

Head Office is designed to a LEED platinum standard (Mountain Equipment Co-op).

Below is a list of Green features of many Mountain Equipment Co-op buildings:

Built in refurbished spaces (like an old auto dealership in Vancouver)

Eco-friendly Ventilation, Insulation and Heating & Cooling Systems

Motion Sensor lights

Geo-exchange systems

Solar panels on the roof

Low impact hydro and landfill gas

Rainwater collection and management with ponds

Indoor & Outdoor Gardens (plants that encourage bird and insect populations)

Composting toilets (provides fertilizer for gardens)

Countertops made with 100% post-consumer waste

(Mountain Equipment Co-op).

CSR Conclusion and Potential Opportunities

The real key difference between Mountain Equipment Co-op and the rest of the Sporting Goods

industry is simple; and what it comes down to is transparency and honesty. Its truly astonishing

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that after conducting hours of research on numerous organizations in the industry, that little to no

information at all could be found on their corporate social responsibility. If these sporting goods

organizations are practicing CSR, then why are they not willing to put that type of information

on their websites? Whats even more surprising is how simple it is to find information on

quantities of CSR categories, right on the MEC website. Mountain Equipment Co-op is willing

and is not afraid to show the public that they are actually practicing CSR. A great example of

this, is MECs Code of Conduct with their manufacturers which can be found on their website

(Appendix A). It is also evident that MEC is considerably more public with their CSR initiatives,

programs and models as even information on these subjects could be found across the internet,

not only their website. Again, there was an insufficient amount of information on these sporting

goods organizations. So many organizations claim to practice corporate social responsibility but

fail to provide any details or examples on these profound subjects.

Furthermore, there is however, potentially some room to continue to grow MECs corporate

social responsibility. As previously stated, MEC produces approximately 58% of their products

in Canada. It would ultimately be a very large investment for MEC, but they could consider

bringing more production back to Canada. More and more organizations, including those in the

sporting goods industry are bringing production back from overseas, also known as re-shoring.

Therefore, if MEC really wants to stay at the top of the industry for CSR, then they may have to

start eliminating more off-shore manufacturing to really continue to separate themselves from

their competition. This would be the best method for MEC to prove that they are more socially

and environmentally responsible and ultimately superior than the rest of the industry.

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Distribution Channel

MEC is driven to produce quality products through a diverse and transparent distribution

channel. The following research will give insight to the functions of the organizations supply

chain, and how they apply their process to two specified products; the Oasis Sleeping Bag and

the Zephyr 45 Backpack.

The materials, features and retail price MEC chose for the Zephyr Backpack and Oasis Sleeping

Bag are displayed in the chart further on in the section.

Manufacturer

MEC has an evaluation process when considering possible factories to produce their products.

The organization sends a social responsibility team to ensure the factories business is in line

with MECs expectations.

The MEC 2017 Factory disclosure list gave an insight on where the two selected products were

produced.

The Oasis Sleeping bag is manufactured in one of MECs many affiliated factories in China

The Zephyr 45 Backpack is manufactured in MECs only factory in the Philippines

(MEC, 2017 MEC Factory Disclosure List , 2017)

Supplier/Vendor

MEC is its own supplier and retailer, therefore, the organization is responsible for their products

through all aspects of development and distribution.

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Idea Generation

Mountain Equipment Co-ops main focus in their development process is to produce products

transparently with premium performance and sustainability. MEC addresses their

development/idea process as one that varies based on demand for new technology in products

and materials; for example, more breathable, packable products for distribution. MEC claims a

product will approximately take 18 months 2 years to develop from idea generation to retail

availability. MEC states on their website that MEC isnt geared toward fast fashion (MEC,

Materials and Technology, 2017) displaying that they are focused on taking the proper time to

find quality materials and manufacturers so they can effectively lab and field test their products,

prior to releasing them into the retail market.

Materials

MEC visits textile mills in a vast range of countries such as Japan, Taiwan, Turkey and Italy.

MEC is committed to using lower impact materials for example organic cottons and blue sign

approved materials. (MEC, Materials and Technology, 2017)

Lab and Field Testing

MEC claims to test 100% of their products from outdoor equipment to everyday attire, with two

different methods; lab testing and field testing. The company does hundreds of lab tests to

analyze and evaluate materials that will be used for their products. These tests help analyze

features such as breathability, water resistance, durability and more. MECs field testing consists

of prototype products being given to ambassadors and staff; with the overall goal to receive as

much feedback as possible to increase the quality and efficiency of the improvement process

(MEC, Materials and Technology, 2017).

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Store Distribution

As the Oasis Sleeping Bag and Zephyr 45 Backpack are offshore productions or direct imports,

MEC must calculate the prices of the freight shipping for the products and additional factors

such as taxes and exchange rates when processing their own Manufacture Suggested Retail

Prices (MSRP). MEC is a very unique company as the retail profit margins are being projected

and developed by the suppliers whom are designing and creating the products that will be sold in

their stores.

Retailers

Mountain Equipment Co-op offers the Zephyr 45 Backpack and the Oasis Sleeping Bag online

and in all of their 21 stores. The Zephyr 45 Backpack retails for $144 and is available in two

sizes. The Oasis Sleeping Bag is sold at a retail price range of $129 $149. The product is

available in three different sizes, price varying on each size. Both products offer free shipping in

Canada.

Brand and Product Evaluation

Two product categories that have been noticeably successful for MEC are their backpacks and

sleeping bags. MEC has successfully developed and delivered their premium products to their

target market. The backpacks and sleeping bags achieved successful status through strategic

positioning and brand loyalty efforts. The two specific products that will be examined are the

Oasis Sleeping Bag and the Zephyr 45 Backpack.

MECs Brand

Both of the products have been successful in reflecting the prestige that comes along with the

brand name that is Mountain Equipment Co-op. MEC is apart of a saturated market especially in

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retrospect to their backpacks. The companys transparency and ecological efforts help them raise

above competitors in the market; creating an associated prestige to their brand name for

consumers when wearing their products.

Brand Loyalty

Consumer brand loyalty in the retail market is developed through an organizations product

positioning. 5 key factors that companies (MEC) take into consideration for brand loyalty are

brand name, product quality, price, style and store environment (Paquette, 2017).

Store Environment

MEC is their own supplier and retailer. Therefore, large amounts of effort are put forth into their

stores to create an environment that has a positive impact on consumers decisions to purchase

the companies products. Examples of MECs notable efforts to implement and create a

welcoming environment for consumers are, larger spaces and promotion of local outdoor based

events within the community. The benefits of the efforts result in the transformation of basic

consumers into members of a community. Creating a sense of community helps to develop brand

loyalty which ultimately differentiates the organization from the competition (Mountain

Equipment Co-op).

The following chart displays detailed product descriptions and innovative features of both the

Zephyr 45 Backpack and Oasis Sleeping Bag. It also entails consumer benefits as well as how

the brand loyalty factors quality, price and style contribute to each products success.

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Product Evaluation Chart

Key Factors Oasis Sleeping Bag (Unisex) Zephyr 45 Back pack (Mens)
Main (MEC Hyperloft Eco) insulated Ideal for hiking and backpacking
Features Technology with 50% recycled travel
Highlighting content Main fabric and lining made of
Product o Great for 210-denier Nylon with water
Quality consumers looking resistant polyurethane + Rain
for eco friendly Cover
products Light weight and water resistant
Nylon Ripstop technology to for travel in all conditions
prevent rips and tears/shed Durable materials prevent rips and
moisture. tears to create a high-quality
o Durability and high product
tangible quality MEC cross wind back panel
Cotton and Polyester + other technology- keeps pack lifted of
features for management of the back for ventilation and
heat and cool temperatures (0- moisture prevention (sweat)
10 degrees Celsius) Comfortable technology for the
o Can be used for user that separates the product
multiple from competitors
temperatures Hook and loop straps for trekking
allowing consumers poles etc. Hydration sleeve and
to use the product water bottle holders
for different travel Convenient multi-use technology
needs. for the consumer. Meets the needs
Roll top stuff pack and MEC of a large population of travelers
zipper compatibility for Integrated Safety whistle
portability and use with other A sense of safety for
MEC products consumers while using the
o Allows easy travel product
use for consumers
and the ability to
pair multiple
products together
(promotes purchase

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 of multiple MEC
travel products)
Price $129.00 $149.00 varies on size
Quality product at a premium
price. Average and loyal
consumers will pay a greater
price to have premium product
Style Unisex and standard style
MEC does not limit the gender
usage on this product,
increasing amount of sales and
success
$144.00
A premium product at a mid-high
price range
Average and loyal consumers will
pay a greater price to have
premium product
Neutral colours and stylish build for
consumers who are fashion conscious

Conclusion

In conclusion, Mountain Equipment Co-op is a unique organization within the Sporting Goods

industry as they separate themselves from their competition by being the most socially and

environmentally responsible. This was shown through the history, role, corporate social

responsibility, supply chain process of products and position of the company as well as the

relationships with other organizations and how they differ.

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 References

2015 Annual Report (Rep.). (n.d.). Retrieved March 15, 2017, from MEC website:
https://www.mec.ca/media/Images/pdf/annualreport/MEC_2015_AnnualReport_rev_v2_
m56577569836610940.pdf

MEC. (2017, 01 01). 2017 MEC Factory Disclosure List . Retrieved 03 05, 2017 from
http://meccms.wpengine.com/wp-
content/uploads/2017/02/2017_MEC_Factory_List_EN.pdf

MEC. (2017). Making Our Products. Retrieved March 2, 2017 from Mountain Eqquipment Co-
op:
https://www.mec.ca/en/explore/making-our-products/

MEC. (2017). Materials and Technology. Retrieved 03 01, 2017 from MEC:
https://www.mec.ca/en/explore/materials-and-technology/

MEC rebrand. (n.d.). Retrieved March 15, 2017, from

https://www.mec.ca/en/explore/mec-rebrand press-release

Mountain Equipment Co-op. (n.d.). Shop Climbing, Cycling, Running, Yoga and More.
Retrieved March 16, 2017 from https://www.mec.ca/en/

[MECVideos]. (2013, September 17). MEC WE ARE ALL OUTSIDERS. [Video File].
Retrieved March 15, 2017, from https://www.youtube.com/watch?v=9Sl1q2Jx_Dg

Mission and values. (n.d.). Retrieved March 15, 2017, from

https://www.mec.ca/en/explore/mission-and-values/

Nguyen, L. The Canadian Press. (2013, June 18). No longer just for sandal-wearing granola
eaters:
Mountain Equipment Co-op trots out new logo in appeal to city folk. Retrieved March
15, 2017, from http://business.financialpost.com/news/retail-marketing/mec-logo-
rebranding
Our Roots. (n.d.). Retrieved March 15, 2017, from https://www.mec.ca/en/explore/our-roots/

Paquette, J. (January 30, 2017).

Partnerships. (n.d.). Retrieved March 15, 2017, from https://www.mec.ca/en/explore/partnerships

Shares and credit notes. (n.d.). Retrieved March 15, 2017, from
https://www.mec.ca/en/explore/shares-and-credit-notes/

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Shaw, R. (2005). Peak performance [mountain equipment co-op]. Alternatives Journal, 31(1),
19-20.
Retrieved from
http://ezproxy.humber.ca/login?url=http://search.proquest.com.ezproxy.humber.ca/docvie
w/218775280?accountid=11530

Tang, W.S. (2013, September 18). Mountain Equipment Co-op launches campaign with new
branding.
Retrieved March 15, 2017, from http://www.marketingmag.ca/brands/mountain-
equipment-co-op-launches-campaign-with-new-branding-89104

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Appendix

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