This is a master level report which discussing about GAP Inc. marketing positioning of its brands i.e. Gap, Banana Republic and Old Navy. Analysis should be based on Procter & Gamble case study and elements.
Attached its synopsis and its question, and case study (P&G). Basic requirements and guidance by lecturer have been written in red below the question to facilitate the writing.
Harvard referencing is needed and no other referencing methods are allow. Effective application of diagram is crucial for this report, and fair number of referencing is vital.
There are numerous companies that follow an extremely differentiated product strategy. Real Marketing gives a vignette of Procter & Gamble (Attached) and shows just how finely the market for laundry detergents can be segmented. Many consumer products companies follow this same strategy. But other types of companies follow this strategy as well. Consider the portfolio of brands owned by Gap Inc. the following is a description of each of their main brands as noted on the corporate Web site (http://gapinc.com/public/index.shtml).
? Gap: Gap offers iconic American style to customers of all ages. Since 1969, customers have looked to Gap for updated, casual clothing and accessories that help them express their own personal sense of style. Today, Gap continues to be best destination for wardrobe essentials such as T-shirts, hoodies, great-fitting pants, and denim. What began as one brand has grown to include Gap, GapKids, babyGap, GapMaternity and GapBody. Gap has become a cultural icon by offering clothing and accessories rooted in cool, confident, and casual style to customers around the world.
? Banana Republic: Banana Republic is an accessible luxury brand, offering high- quality apparel and accessories collections for men and women. Delivering elevated design and luxurious fabrications at approachable prices, Banana Republic has been credited with helping make fashion more accessible. The brand offers elevated essentials and sophisticated seasonal collections of accessories, shoes, personal care products, and intimate apparel. From work to casual occasions, Banana Republic offers covetable, uncomplicated style.
? Old Navy (may not be available here): Old Navy offers great fashion at great prices, for everyone. For more than a decade, Old Navy has been famous for bringing customers on-trend apparel and accessories, as well as updated basics, at a surprising value – all in a fun, energizing shopping environment. From Old Navy’s item of the week – a special item at a special price each week – to its much-talked-about advertising campaigns. Old Navy is still the place to go for the latest fashion at amazing prices.
1. What is Gap Inc.’s segmentation strategy? What is unique about their market segmentation strategy? (600 words)
– Explain GAP uses segmentation strategies i.e. geographic segmentation, demographic segmentation, psychographic segmentation, behavioural segmentation.
– Link 3 brands (Gap, Banana Republic and Old Navy) with Maslow hierarchy of needs and incorporated with target marketing strategies i.e. Undifferentiated, differentiated, concentrated and micromarketing.
2. How is Gap Inc. differentiating each brand? (600 words)
– What differentiation strategy that GAP uses to positioning in consumer mind.
– Positioning Mapping and value positioning.
3. Are there weaknesses in the Gap Inc. strategy? If so, what are they? (600 words)
– Threats, Opportunities, Weaknesses and Strengths
– TOWS analysis
– What is Gap weaknesses
4. Do you see any uncovered market segments? If so, what are they? How could Gap Inc. exploit this? (1200 words)
– Use Boston Consulting Group model, Ansoff model and Treacy and Wiersema model.
– Is kind of a summary for question 1,2, and 3.
– Drill down to one brand.
– For instance, Old Navy is not yet available in Malaysia market.
5. Elaborate how can you apply your understanding to the local market here in Malaysia or your home country? (1200 words)
– Use Michael Porter 5 Forces and Hofstede model (analyse cultural differences) for Malaysia markets or any other countries (choose 1 country).
– With the above analysis, we should be able to know the Malaysia market and competitors.
6. Create an IMC proposal with your recommended positioning and target customers for your local market. (1800 words)
– Use marketing communication diagram, promotion mix, understand local media, marketing management skills, Michael Porter competitive strategy, segmentation and differentiation issues.
– For instance, how should we position Old Navy in Malaysia.
– It involves creativity and a whole marketing promotion campaign.
PS: Throughout the report, diagram is very important and the relevant use of diagram is the ultimate determination of this report.
The marketing concept of Gap Inc is similar to P&G, cross referencing will be needed based P&G case study.
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Gap Inc is the largest retailer of accessories & apparels in America, which was founded in 1969 by Donald Fisher and Doris F Fisher. It is located in San Francisco, California. Gap Inc has five prime brands?Gap, Banana Republic, Old Navy, Piperlime and Athleta.
Gap Inc uses all the four types of segmentation strategies in order to segment its brands in a competitive manner. These are as follow:
 Geographic segmentation: Gap Inc uses geographic strategy to segment the market on the basis of location, city, state, region and country. Gap Inc operates in different counties like US, Canada, France, Japan and Korea.
 Demographic segmentation: Gap Inc uses segment the market on the basis of demographic variables like gender, occupation, family size, religion and race. For example, the marketing strategy of this company is to cater the unmet needs of the people of teenage in terms of apparels and accessories. Gap Inc uses this segmentation strategy to market its brands according to the taste as well as preferences of the key customers.
 Psychographic segmentation: Gap Inc uses psychographic segmentation strategy to segment the market by catering the needs & expectations of the customers on the basis of some attributes like age, income level lifestyle and personal characteristics. This segmentation strategy assists Gap Inc to select the target market according to their psychology, which further helps this company to group the customers in a more promising manner. Apart from this, segmentation of the market on the basis of psychological attribute also assists Gap Inc to develop its marketing strategy by implementing emotional appeal (Gap 2009).
 Behavioral segmentation: Gap Inc uses strategy to segment the market on the basis of the occasions, benefits and user rate. This market strategy is not used in a frequent manner by the company.
Linking of brands with Maslow’s Hierarchy
All the brands of Gap Inc fulfill the five leaves of Maslow’s hierarchy by meeting the different requirements of the different levels. Old Navy brand of the company comes in the category of first level of hierarchy, which is the basic need for example the price of this brand are set according to the income level of the medium family persons. This brand is lower priced and caters the needs of family clothing. Old Navy offers trendy and stylish clothes at the affordable price. Gap, which is another brand of this company, also meets the needs of the people by offering the clothes of latest fashion and trend at reasonable prices (Gap 2009).
Gap brand of this company comes in the second and third hierarchy of the Maslow’s theory. Gap includes casual and active clothes, which attracts the people and assists them to show their professionalism as well as flair. Gap is recognized by the customers as the most apt option for the t-shirts and denim. The designing of this brand reflects ten iconic style of America. It caters to the people of all age, which establish this brand as the lucrative brand. Next to basic needs, there is esteem need in the hierarchy, which is fulfilled by the Banyan Republic brand. The esteem need consists of self-respect and self worth, so this brand can be considered as the best option to place in this category of the Maslow’s hierarchy. This brand offers casual clothes and lofty collections of personal care, shoes and accessories (Case Study: Procter & Gamble).
Gap brand of the company uses undifferentiated strategy of marketing. The company also uses concentrated marketing strategy for its Banana republic. Gap fulfills all the requirements of the wardrobe of the customers. Banana republic gives a luxurious image to its customer by offering quality apparels. For the Gap brand, the approach of mass marketing is used by the company (David 2007).
Differentiation strategy of Gap Inc
Gap Inc uses differentiation strategy to market its brands by adopting the distinct approaches and marketing tools more effectively than its counterparts. The company offers mainly four brands like Old Navy, Banana Republic, Gap and Piperlime to meet the different needs and expectations of the people. The marketing strategy of Gap Inc is based on the psychographic segmentation, which is developed on the basis of age, gender, income and personal attributes. This marketing strategy assists the company to differentiate its brand from its competitors. The marketing strategy of the company is developed to offer different products under single brand name; for example the Gap brand of the company offers GapKids, babyGap, GapMaternity and gapbody. Gap is recognized as cultural icon by the people due to its creative attributes like style, breezy and confident appearance.
The differentiation in the products of Gap brand is made on the basis of age factor of the people, which assists it to cater the needs of different age people in a triumphant manner. Price is also a differentiation factor for the marketing strategy used by Gap Inc to market its different brands. Gap is known for its stylish look and quality clothes, which are set at the moderate price. The price of this brand falls between the price category of Old Navy and Banana Republic. Banana Republic is considered as a high quality brand, which offers luxurious apparels along with covetable style. This brand offers stylish accessories for women and men. Old Navy brand of this company is designed to cater the needs of the lower income people. The prices of this brand are less as compared to the other brands. This brand offers cloths based on latest fashion with astonishing prices. Old Navy provides a different atmosphere to its customers with fun and bracing shopping. The Piperlime brand of this company is an online shop, which offers trendy and stylish handbags and shoes to the people of all ages like men, women and kids (Gap Inc February 24, 200).
Positioning Mapping and Value Positioning
The positioning mapping and value positioning of Gap Inc is based on different brands. These are as follow:
 Gap: This brand has established its status as high a quality brand, which offers various products at the reasonable prices. This brand offers a wide collection of the apparels on the basis of the age of the target people. This brand is famous for its stylish looks among the people of all ages like men, women and kids. The price of this brand are less than Banana Republic, but higher than Old Navy.
 Banana Republic: This brand of Gap Inc has developed its image as a luxurious and high quality apparel among the customers. It caters to the needs of the customers, which belong to the high end category. The price of this brand is higher as compared to the other brands of Gap Inc. It offers products of all categories like personal care as well as women special.
 Old Navy: This brand is known as knock off edition of gap brand. It caters the people of lower income groups. This brand targets teenage and adult people, who are price conscious. The cloths offered by this brand are based on trendy & stylish designs and developed on updated fashions. The price of this brand is low as compared to other brands.
 Piperlime: This is the online store of the company, which caters to the people through the internet. This brand offers luxurious and elegant handbags and shoes to the customers. These handbags and shoes are designed according to the fashion tips of famous designers and celebrities.
Weakness of Gap Inc
Gap Inc is facing many difficulties due to its wrong selection of target customers & marketing strategy. These weaknesses are strangling the progress of Gap Inc in a massive manner. The increasing focus by the company to broaden the market is also a weak point, as it is responsible for the decreasing sale of this company. The company does not have any specific distinctiveness in the sector like other players, which reflects the weak positioning strategy of the company (Gap 2009).
In order to compete in the Retail Industry, it is customary for Gap Inc to perform a TOWS Analysis, which consist threat, opportunity, weakness and strength. These are as follows:
Strength: Gap Inc has strong position in the retail market, as it possesses various strong & compatible resources. These are as follows:
 Strong Position: Gap Inc has a broad marketing channel across the nation with around 3,500 stores in different Countries like France, Japan, USA, Korea, UK, Greece, India, Saudi Arabia, Canada and Singapore.
 Chain of Famous Brands: The Company has brand strength, as most of its brands are famous due to their stylish and updated features as well as designs in the International Market.
 Strong R&D: The R&D practices of Gap Inc are stronger as compared to other players, as it focuses on this aspect in a keen manner. The production & development of the apparels follow an effective method.
 Risk Diversity: It is another strong factor of Gap Inc, as the company manages the business strategies, which assist it to diversify its business effectively and minimize the probability of strategy failure.
 Strong Supply Chain: The Supply Chain of the company is also stronger as compared to its competitors, which assists it to face the challenges of the Global Market and attain its stated goals and objectives successfully.
Weaknesses: In spite of its strong position in the retail market, there are some loopholes in the company’s policies, which are responsible for the decreasing growth of the company. These are as follows:
 Reduced Cash Flows: The cash flows of the company are declining, which is responsible for the reduced profitability.
 Overdependence on the US Market: Gap Inc is a US based Company, which heavily relies on the US Market for its business operations as well as activities.
 Limited Market: Less availability of the market is also a weak point for the company, which hampers its growth in a significant way.
Opportunity: There are various segments, which are yet uncovered or unidentified by the company. These are as follows:
 E-commerce: Company can adopt the approaches and methods of e-commerce for the marketing of its brands across the nation.
 Expansion: As the company has broad portfolio of the products, so it can also expand its business in the uncovered market, like Old Navy is not positioning in Malaysia, so it can position this brand in Malaysia.
Threats: The increasing participation of new companies in the retail market poses various threats to Gap Inc, which further affects the business strategy in a massive way. These are as follows:
 Competition: …
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