Case Study: GAP Inc.
Viewpoint: Robert Fisher
Time context: 1st Qtr of 2007
I. Problem Statement
How could Gap Inc. win the Yuppies market in Metro Manila, Metro Cebu and Metro Davao? II. Objective
To win the yuppies market In Metro manila, Metro Cebu, Metro Davao in 1 year time.
III. Areas of consideration
a. Has a multi-brand category with existing market. (Gap, Banana Republic, Old Navy) b. Entered into international markets and become the second largest brand in the world. c. Earn a total of 3,131 stores around the world.
d. Brand builder.
e. 150,000 passionate talented employees around the world.
f. Strong hold of company culture and key values.
g. Expansions in personal care products, through partnership with Inter Perfumes, 3 new women’s jeans and super soft denim line; high quality Italian handbag; Old navy special edition denim and maternity apparel, and improve plus-sized offerings. h. Improve vendor relationship, optimized store fleets to quicken response time, better inventory system, improve promotions, improve store facilities, and improve on-line interactive facilities. i. With improved cash flow, Gap repurchased $2 Billion shares and doubled the dividends to 18 cents with a plan to increase at to 32 cents. j. Introduced own credit card, with Visa logo and issued by GE company. Weakness
a. Due to 2% decline in net sales, Gap close more than 100 underperforming stores.
a. Economy experience 2.9% growth.
b. GDP expected to grow at historic average.
c. Consumer spending has 6.9% gains.
d. Inflation per CPI relatively higher.
e. CPI forecast to remain moderate.
f. Baby boomers remain the biggest per capita consumers of apparel. g. Consumers are obsessed with promotional pricing.
a. Low rate of unemployment
b. Credit market fell from 105 to 90 points.
c. Apparel industry trends are affected by demographics, consumer preferences and spending patterns. d. Consumers have little regard for buying in advance, only as needed arises.
IV. Alternative course of Action
1. To introduce Direct Selling of Gap Inc Apparels in Metro Manila, Metro Cebu and Metro Davao.
a. Through direct selling, the product will find the customer, not the customer will find the product. You can directly target specific market you want. b. Consumers have the opportunity to try and test and offered products in a friendly and relaxed environment. c. After sales are guarantee because the consumer personally know the salesman. They have the right of withdrawal and return the goods right away. d. Low salary cost – salary base on commission. Only to employed coordinators or supervisors. e. Employ Job and business opportunity for all. Part time and full time. f. Job Security and unlimited income for those salesmen with huge number of networks. g. Salesman became a “walking model” of your product.
h. Products to sell are tangible as compare to Direct marketing (internet selling) i. Consumers are obsessed with promotional pricing. In this case, the products will sell at lower cost or “discounted price” due to the reduction of distribution channel like middlemen, retail store rental, Supermarket/ department store support and marketing expense. j. Delightful and satisfied direct customer will be potential direct sellers. k. Employs Word of mouth marketing which is the most cost less type of marketing.
a. May affect the product exclusivity of GAP apparel.
b. Star Up kit cost. Marketing materials must be correctly assumed with the potential consumptions. c. Training of potential direct sellers – independent salesman, dealers or distributors. d. Need for computer software update to account the demographic, consumer consumption profiles and distribution channel data.
2. To acquire existing apparel company which cater Yuppies Market. (Bench / Penshoppe / Giordano)
a. Ready market with existing loyal customer of...
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