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Gap Strategy Analysis

GAP Strategy 10/15/2008
Gap has always been a reasonably priced merchant retail outlet store and customers have become accustomed with this. As OLD NAVY became more recognized with GAP shoppers, they began to associate OLD NAVY with the “cheap GAP”. This was only one of many problems that existed with the company. Concerns over profit –only decision making as well as lack of research into an evolving ideal clientele also hurt the company. The company status of GAP had moved into a secondary status in the retail clothing industry. The key problems with GAP are as follows:
• GAP changed their cultural direction from a company that was frantically entrepreneurial, to a company that subjected the creative process to only one motive, profit and numbers.
• Stores were not renovated, and visual perception by consumers at the retail outlets has become poor.
• The company lost sight of who their true customer was. They felt that somewhere in the range of late teen (16-18 years old) up to (30 years old) was who their target customer was, rather than the reality which was closer to (25 years old to 35 years old).
• Very low employee morale and attitude, due in part to upper level management policy changes and cutback due to profit losses.
• Geographic concentration only in metropolitan areas both in the U.S. and abroad.
As a marketing consultant, if given the choice to keep plan 0 or plan A, I would have to review both critically. Plan 0 as follows: PROS
• Cutting TV ads and advertising budget will help save costs while rebuilding image.
• Attracting movie stars will help build image.
• Association to high-end merchandise and fashion designers will increase brand equity and image.
• Targeting fashion magazines and store front windows may appeal to a more appropriate clientele.
The CONS:
• Television is still an important channel more advertising, regardless of who you are targeting and removing it may do more harm than good.
• Re-inventing an image that...