The document summarizes Gap Inc.'s current marketing strategy and identifies flaws. It is targeting younger consumers but survey data shows older customers prefer Gap. A new strategy of retention and stimulating demand is proposed. The target becomes 30-45 year olds like Shirley. Gap will emphasize basics and bring back celebrity endorsements. Internationally Gap will continue expanding, especially in China. The document identifies a need to close the "gap" between domestic and international sales.

1. Christopher Cannon, Adam Davis, Lu Mei, Marketing 300
Daniel Montgomery & Chloe Zhang Presentation

2. Agenda
 Bridging the Gap in History
 Current Big Picture Analysis
 New Big Picture Analysis
 Questions & Discussion

3. Bridging the “Gap” in History
 1969 in San Francisco
 “The Perfect Fitting Jean”
 Levi to Gap jeans
 Foreign Expansion
Doris and Don Fisher, Gap Founders

4. Gap Stock Troubles
Gap, Inc.’s stock troubles since 2010. Source: finance.yahoo.com

5. Gap Inc.

6. What Do Consumers Think?
When you think of Gap, When I go to Gap, I
what comes to mind? buy ___________.
Men and women in 30s vs. Khakis
youthful
Blue jeans
Middleclass vs. inexpensive
Dress shirts
Boring vs. style
T-shirts
Classic vs. class Sweaters

7. Other Survey Results
Why do you shop at Gap?
• Simple, natural color, timeless clothing, only for jeans
Why don’t you shop at Gap?
• Clothes do not fit me, baggy, boring, plain, no bargains
Range: Avg. low:
Age 12-20 16
Range Range: Avg. high:
25-60 44

8. Current Big Picture
Business Entity Competence Goals
Objective
Marketing
Objective
Source of
Volume
STP Segment Target Position
Execute Product Price Place Promotion

9. Business Objective
• Gap brand, a part of Gap Inc.
Entity • Domestic Division
Core • Ability to create classic clothing
Competence
• Regain position and relevance in the
market
Goals • Reduce dependence at home and
expand internationally

10. Marketing Objective & Source of Volume
Acquisition
• Focus on minorities
• Focus on 25-30 year olds
Steal Share
• Designer jeans

11. Segmenting, Targeting & Positioning
• Males & Females
Segment • 25-35 years old
Target • Tangella Jones
• GAP is an affordable yet
Position classic clothing style

12. Meet Tangella Jones
Tangella Jones
• 27 years old
• Graduated from the University
of Michigan's Ross School of
Business
• HR personnel consultant for a
large firm
• Lives in a trendy one-bedroom
flat in downtown Chicago
• Passionate socialite

13. Current Ad Campaign
 1969 Premium Jeans Campaign
 “Start a conversation about the brand”
 Commercials: give a behind-the-scenes feel to the
design process, emphasize the brand’s Los Angeles
heritage
 Purpose: show that Gap makes cheaper alternatives
to high-end designer jeans

14. Ad Clip for 1969 Premium Jeans

15. Current 5-box Position
Gap makes Gap’s clothing is
Gap jeans are too cheaper as good as
boring to wear alternatives to clothing from a
high-end jeans designer company
When I want high- When I want jeans
end designer from a designer
clothing, I’ll buy label, I will buy
them from a ones that are just
designer company as good from
Gap

16. Execution: The 4 P’s
Product Price
• Trendy • Upper
clothing middle
class
Place Promotion
• Closing • 1969
U.S. stores Jeans

17. Summary of Current Big Picture
Business Entity Competence Goals
Objective
Marketing
Objective
Source of
Volume
STP Segment Target Position
Execute Product Price Place Promotion

18. Flaws with Acquisition
 Survey Responses
Range: Avg. low:
Age 12-20 16
Range Range: Avg. high:
25-60 44
 Instead of targeting the younger range of its 25-35
year old demographic…
 Itshould be targeting the older demographics of 30-45
year olds.

19. Flaws with Acquisition
 Attempting acquisition while closing stores
 In order to reduce dependence at home, Gap have
decided to close 21% of their domestic Gap stores
Closing Gap Stores
21%
Gap stores to close by
2013
79% Gap stores to remain open
 Should be focusing on retaining current customer base
while closing down its stores
Source: http://online.wsj.com/article/SB10001424052970204002304576628953628772370.html?mod=dist_smartbrief

20. Flaws with Steal Share
 Gap is not a designer brand
 Gap represents the “central anchor division” with “extensive
selections of classically-styled, high quality, casual apparel
at moderate price points”

21. New Marketing Strategy: R & SD
Retention Stimulate Demand
 Retain current  New ad campaign
customer base  New commercial
instead of targeting design
younger audience
 Target Change to
30-45 years

22. Changing Targets: New
Shirley Wilson
• 38 years old
• Married for 12 years
• Mother of two teenage boys
• Works part-time as a real
estate agent
• When she is not busy with her
children, enjoys spending time
with her friends
• Does not have much time to shop
but still likes to look put-together

23. New 5-box Position
Gap’s clothing is Gap offers Gap has options
affordable and
mainly for teens for my entire
essential clothing for
and young adults an adult wardrobe
wardrobe
I’m not interested When I want new
in Gap clothing clothes, I shop at
for my wardrobe Gap

24. New Ad Campaign
 Bring back what Gap is remembered as
 “Back to Basics”
 Blue jeans and white tees

25. Commercials: New Suggestions
 Gap has featured over 308 celebrities of various
stature in their campaigns
 New celebrity endorsers:
 Brad Pitt and Angelia Jolie
 Family-oriented
 Older audience

26. Foreign Market Strategy
 Continue Acquisition Strategy
 International growth seems promising
 In April 2011, Gap, Inc. decided to combine their
international operations into one division
 Plan to expand their number of Chinese stores from 6 to 45
by the end of 2012 as well as open a few stores in Italy

27. A “Gap” in the Market
Gap, Inc. Q3 (2011) sales by division Gap, Inc. Q3 (2011) Sales by Division
(United States only) (worldwide)
0%
4%
Gap 18% Gap
20%
34% 40%
Old Navy Old Navy
Banana Republic 38% Banana Republic
46%
Other Other
(Piperlime, Athleta, wholesal (Piperlime, Athleta, wholesal
e & franchise) e & franchise)
Sales in millions Sales in millions
• Gap: $819 • Gap: $1,419
• Old Navy: $1105, • Old Navy: $1,383
• Banana Republic: $495 • Banana Republic: $634
• Other: negligible • Other: $149
Source: http://www.gapinc.com/content/dam/gapincsite/documents/GPS_Quarterly_Sales.pdf

28. Summary of Current Big Picture
Business Entity Competence Goals
Objective
Marketing
Objective
Source of
Volume
STP Segment Target Position
Execute Product Price Place Promotion