gap inc
TRANSCRIPT
GAP
Mission and vision
• Mission: GAP is a brand-builder. “We create emotional connections with customers around the world through inspiring product design, unique store experiences and compelling marketing.” It’s goal is to simply make it easy for customers to express their personal style throughout their life.
• Vision: GAP hoped that effective Web initiative could let company to solidify its brand, improve customer relationships, serve markets that could not support a store and cut costs. Company also believed that going online would attract new customers and steal market share from competitors.
History
• In 1969, Don Fisher and his wife Doris opened the first GAP store in San Francisco. The company took name from “generation gap” and targeted the late-teen customers.
• By the end of 1970, there were six GAP stores already. Sales reach $2 million.
• In 1974 GAP introduced private label lines to pull it out of price-based competition with larger retailers. Private-label clothing lines gave GAP control over the entire supply chain.
• In 1976 GAP went public offering 1.2 million shares of stock on the New York and Pacific Stock Exchanges.
History (cont’d)
• In 1983 there were 566 GAP stores and Millard ("Mickey") Drexler joined the company as President and COO of the Gap division. Drexler improved company’s margins, promoted growth and redefined its image.
• In 1983 GAP acquired Banana Republic.• In 1986 first GAP’s GapKids launched.• In 1987 company reached $1 billion in sales.• In 1987 GAP opened a new store outside US in London, and
in 1989 in Vancouver, Canada.• In 1992 GAP becomes the second largest selling apparel
brand in the world. • In 1994 GAP introduced Old Navy brand.• Gap has 3231 stores in world wide
SWOT
Swot analysis
• Strengths• Highly recognized brand name• Gap has wide category which could cover all
customers • Gap treated as American icon • Effective inventory • Broad network of stores • Effective use of inventory program • Developed control of manufacturing process • Online store • Attractive employer brand
Weakness
• Low profitability
• Low attraction to generation Y
• Poor effects of investments
• Decreasing sales
• Decreasing margin
• Low efficiency comparing to competitors
• Competition between group brands
• Limited marketing
Opportunity
• Generation Y are not brand loyal
• Brand extension (Gap kids,gap baby)
• International market
• 92% sales from physical stores
Threats
• Rising cotton price
• Cloth design is more important than price
• Slowing U.S. economy
• Slow target growth
• Market and culture differences
• Low market entry cost
• Low customers’ switching costs
Porter’s Five Forces
Rivalry among Existing Competitors
• high
- Strong brand image
- Industry Growth Rate
- Concentration
- Differentiation
Threat of New Entrants• LOW
- Strong brand image
- strong competition in market
- Economies of scale
- First mover advantage
- Access to the channels of distribution and
relationships
- And legal barriers
Threat of substitute products& services
• Moderate
• Buyers on price
• advertising
Bargaining Power of buyers
• Moderate
• Price Sensitivity
• Relative Bargaining Power
Bargaining Power of Suppliers
• Low
• Large number of vendors around the world
Strategy used by COMPETITORS
Gap
A&F
AEQ
TJX
Nordstrom Reek
Highly promoting for ex Give films ,photo ,postcard desktop image and screen sever and select collage age sales stuff
using website , magazine and lifestyle for sales
Use promotional strategy sell its product at highly discount rate
Give top notch customer service
Industry Overview & Competitors
Finance
Strategic Marketing Plan Recommendation
Customers aged between 15 to 55.
Generation Y
Brand SwitcherPrice SensitiveFashion Sensitive
Generation X and Baby Boomers
Brand Loyal Special connection with Gap Prefer basic and classic design, esp, semi-casual
Strategic Marketing Plan Recommendation
To Gap target customers aged between 15 to 55, Gap is the brand of
apparel retailers that offers the customers the classic, fashionable and
affordable clothes that meet their different needs and exceptional value.
Advertising PlanStrategic Marketing Plan Recommendation
Advertising Objective:
Build Gap new brand image through advertising by differentiating
Gap from other competitors and avoid cannibalization internally with
Old Navy.
Recall the image of “American icon” among old generations (Baby
Boomers and Generation X) in order to win back and reinforce their
brand loyalty.
Emphasis “Classic is the new fashion” among young generations
(Generation Y), and gradually help them build brand preference with
Gap.
Advertising PlanStrategic Marketing Plan Recommendation
Message Strategies——High-involvement Transformational
Gap as a brand & Individual product lines.
By adopting affective strategies, we came out three taglines ：
“Back to Classic” ——Brand image. (version 1).
“Classic is the new fashion” Gap Basic product line.(version 2).
“Welcome back, old sport” Gap Classic product line. (version 3).
Advertising PlanStrategic Marketing Plan Recommendation
Media selection
TV
Outdoor
Online
Promotion PlanStrategic Marketing Plan Recommendation
Consumer Promotion
(1)Coupon
Free sample give-away coupon
Discount Coupon
Time-limited price-off coupon
“Birthday gift for you” VIP coupon
(2)Premium: Membership Program
VIP only free- gifts
VIP Coupons
VIP exclusive event invitations
Seasonal Gap magazine
Promotion PlanStrategic Marketing Plan Recommendation
Consumer Promotion
(3)Contests:
“Gap and I” Photo Contests
(4)Events Promotion
Gap Fashion Show
In-store VIP Appreciation Night
In-store Party
“Welcome Home Old Sport, Come to Join Us, New Dude!”
Media Allocation & Media PlanStrategic Marketing Plan Recommendation
TV-60%
Magazine-18%
Outdoor-12%
Catalog-7%
Online-3%
Sales of Gap follows a seasonal pattern, and reach its peak before holiday season
Seasonal Priming Pattern
Media Allocation
• http://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?page=1• http://www.indeed.com/cmp/Gap-Inc/reviews?start=80&lang=any• http://www.indexmundi.com/commodities/?commodity=cotton&
months=120• www.financial-dictionary.thefreedictionary.com
www.planware.org/workingcapita.com• http://www.vainteractive.com/inbusiness/editorial/finance/ibt/rati
o_analysis.html• www.beginnersinvest.about.com• www.investopedia.com• www.bizwiz.com
Thank you !