Common trends seen in other specialty stores include often having discounted prices. Gap is also seen as having very affordable pricing in comparison to other stores that fall within the realm of specialty stores, giving it this advantage over its competitors. Roughly 27% of all apparel sales come from specialty stores
J. Crew: catalog, website AF: websites for 3 brand. Catalog. Brand preference
Company Background <br /><ul><li>The first Gap store was opened in 1969
In 2001, there 2,298Gap stores in the U.S, and 634 stores outside the U.S.
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 />
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 />
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 />
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 />
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 />
Perceptual Map<br />Generation Yers is…<br /> more price sensitive <br />New Position <br />
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 />
Promotion Strategy<br />Focusing on Gap as a brand<br /><ul><li>Currently has a fragmented image due to promoting individual product lines.
Younger generation is image-oriented; they care about the overall idea and feel of the brand.
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
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 />
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 />
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 />
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 />
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 />
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 />
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 />