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Gap Case Study (Group project)

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Gap Case Study (Group project)

  1. 1. GAP<br />Marketing Communication Objectives <br />& <br />Budget Allocation <br />-2003<br />Amy<br />Ashley<br />Kristen<br />Penny<br />Regina<br />
  2. 2.
  3. 3. Company Background <br /><ul><li>The first Gap store was opened in 1969
  4. 4. In 2001, there 2,298Gap stores in the U.S, and 634 stores outside the U.S.
  5. 5. Online store opened at 1998</li></li></ul><li>Industry Overview<br /><ul><li>Apparel retailing store</li></ul>Specialty store<br />Mass merchant <br />/ Promotional department stores<br />Traditional department stores<br />National chains<br />
  6. 6. Competitive Forces<br /><ul><li>J. Crew
  7. 7. Abercrombie & Fitch
  8. 8. Aeropostale
  9. 9. American Eagle Outfitters
  10. 10. J.C. Penny</li></li></ul><li>Current Issues<br /><ul><li>Negative Sales Growth
  11. 11. An overlapping of clientele with Old Navy
  12. 12. Strong competitive forces
  13. 13. No loyal customer base
  14. 14. Marketing Communication Strategy
  15. 15. Strategy to reach boarder target customers
  16. 16. Promotion strategy (Product line versus Brand)
  17. 17. Celebrity endorsement
  18. 18. Budget allocation
  19. 19. New Positioning</li></li></ul><li>Perceptual Map<br />
  20. 20. Objective for 2003<br /><ul><li>Stop negative growth in sales
  21. 21. Reposition Gap brand
  22. 22. Strengthen brand loyalty among older generations (Baby Boomers, Generation X)
  23. 23. Build brand preference among younger generation (Generation Y)</li></li></ul><li>Objective for 2003 (cont’d)<br /><ul><li>Sales increased by 2.7%
  24. 24. Maintain 2.8% market share</li></li></ul><li>SWOT Analysis <br />
  25. 25. Strengths <br />Strong Brand Loyalty<br />Baby Boomers<br />Established its identity among Baby Boomers in 1960’s<br />They rebelled against the existing fashion standard<br />Generation Xers<br />One-stop store fos school and casual clothes<br />They grew up with Gap<br />American icon<br />2,298 stores in U.S. & 2,932 in the world in 2001<br />
  26. 26. Weaknesses<br />Weak performance of Gap brand <br />Total domestic sales in 2001 went down by 5% <br />Sales went down in comparable stores by 12%<br />Problems with young generations <br />Low attractiveness among Generation Yers<br />Products and marketing communications <br />Teenagers’ buying behavior <br />Price sensitive and fickle minded <br />No brand loyalty, stables sales, and high cash inflow<br />
  27. 27. Opportunities <br />3 brands<br />Gap Kids and Gap Baby<br />Brand synergy effects <br />Target “whole market” with different price strategies<br />International market <br />To avoid decreasing sales<br />
  28. 28. Treats <br /><ul><li>Intense competition
  29. 29. 4 Main competitors
  30. 30. Similar target market
  31. 31. Gap was rated 4th in Brand Preference in 2001
  32. 32. A&F was rated 1st and teens’ most frequent place to shop
  33. 33. Reduced apparel demand
  34. 34. Household expenditures for apparel decreased by 6%
  35. 35. Labor policies in developing countries
  36. 36. Damage brand image </li></li></ul><li>Positioning Analysis<br />Current positioning statement <br />To Generation Y Teenagers, Gap is a brand of apparelthat offers basic and up-to-date clothing with reasonable price.<br />How about other competitors? <br />
  37. 37. Perceptual Map<br />Generation Yers is…<br /> more price sensitive <br />New Position <br />
  38. 38. What is new positioning? <br />Keys<br />High familiarity among Baby Boomers & Generation Xers<br />Reaching the wider age range of target customers<br />How can we target Generation Yers? <br /> Basic and season-less product lines <br /> “ To Baby Boomers and Generation Xers and Yers, Gapis a brand of apparel that offers basic and a season-less line of clothing.”<br />
  39. 39. Adspend Across Store Brands<br />
  40. 40. Adspend for the Gap<br />Forecasting <br />Advertising Elasticity Coefficient<br />Adspend projection (2003): $128.4 million<br />
  41. 41. Media Allocation <br />2003 (2001)<br />
  42. 42. Media Allocation (cont’d) <br />Primary Media<br />TV (60%)<br />High-involvement and transformational <br /> TV is the top selection to build brand preference<br />
  43. 43. <ul><li>Catalog(5%)
  44. 44. Competitive forces (A&F, J. Crew, J.C Penney)
  45. 45. Experimental phrase of catalog
  46. 46. Online ads (1%)
  47. 47. Competitive forces (J. Crew & AE)
  48. 48. To reach Generation Y consumers
  49. 49. Outdoor ads (12%)
  50. 50. To avoid direct media competition</li></ul>Media Allocation (cont’d) <br />Secondary Media<br />Magazine (22%) <br />Detail information provided <br />(take out of newspaper because…)<br />Outdoor ads (12%)<br />Catalog(5%)<br />Online ads (1%)<br />16-18 y.o<br />
  51. 51. Reach Pattern<br />TV, Magazine, catalog and outdoor<br />Seasonal Priming Pattern<br />
  52. 52. Reach Pattern<br />Online<br />Blitz Pattern<br />
  53. 53. Media Selection<br />
  54. 54. Promotion Strategy<br />Focusing on Gap as a brand<br /><ul><li>Currently has a fragmented image due to promoting individual product lines.
  55. 55. Younger generation is image-oriented; they care about the overall idea and feel of the brand.
  56. 56. Need to create an image that encompasses the brand as a whole and resonates with all target markets.</li></li></ul><li>Promotion Strategy<br /><ul><li>Early days of Gap wearing things your own way and being your own person
  57. 57. Recognizable and timeless
  58. 58. Image of effortlessness and individuality
  59. 59. Older generations will recognize and identify with the message
  60. 60. Younger generations will care about what Gap brand means and what it portrays to others</li></li></ul><li>Promotion Strategy<br /><ul><li>Celebrity Endorsements
  61. 61. Gap is an iconic brand
  62. 62. Celebrities contribute to brand recognition
  63. 63. Competitors have not used celebrities</li></li></ul><li>Creative Briefs and Exhibits<br />Behavioral sequence model<br />Gap is Transformational & High involvement<br />Consumers are Favorable Brand Switchers (previously loyal to another company)<br />Gap consumers have positive-ending motivation<br />Consumption based on psychological significance over practical product benefits<br />Use celebrity = enhance corporate image<br />
  64. 64. Creative Briefs and Exhibits (cont’d)<br />
  65. 65. Creative Briefs and Exhibits (cont’d)<br />Action Objectives<br />Reposition Gap brand <br />Strengthen brand loyalty (Baby Boomers, Gen. Xers) <br />Building brand preference (Gen. Yers)<br />Goal: Increasing income by 6% & maintaining 2.8% market share after campaign <br />
  66. 66. Creative Briefs and Exhibits (cont’d)<br />Communication Objectives<br />Category need—Remind<br />Brand awareness—Brand recall<br />Brand preference—Increase to strong preference<br />Purchase facilitation—Seasonal sales notification with customer database <br />
  67. 67. Creative Briefs and Exhibits (cont’d)<br />Positioning Statement<br /> To multiple generations, Gap is a brand of apparel that offers basic and season-less line of clothing. Key benefit is a strong brand image which is intensely recognizable and resonated.<br />
  68. 68. Creative Briefs and Exhibits (cont’d)<br />Mandatory Content<br />We recommend reinforcing a customer care <br />service for heavy customers to increase volume of sales per customer. <br />
  69. 69. Operational Analysis <br /><ul><li>Financial Problem (‘01):</li></ul>Continues expansion when sales were decreasing <br />Operating Margin dropped:14.76% (2000) & 8.21% (2001)<br />Profit Margin down 6.42% (2001) <br /> Recommendation: Downsize & decrease Operational costs in 2003<br />
  70. 70. Alternative Suggestions<br />Highlight separate product lines<br />(Basics, classics, Gap jeans, Gap khakis)<br /> Target Audience:<br />Baby boomers<br />Generation X<br />Generation Y<br />Target Audience:<br />Baby boomers<br />Generation X<br />
  71. 71. thank you<br />

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