Gap Marketing

The central issue of this case is that The Gap is facing challenges from discount retailers, the alienation of its target market, and the loss of focus on its marketing strategy. The Gap was faced with reducing spending and costs, improving its value chain, closing unsuccessful retail locations, expanding its presence through sibling chains and electronic commerce, and producing more compelling advertisements. The Gap does not have manufacturing plants, but it controls the design, creation, marketing, and sales of its products. Its manufacturing is outsourced to off-shore firms; however, it has very little international marketing activity.One of the social influences affecting The Gap’s segment strategy is social class. The combination of Old Navy, The Gap, and Banana Republic attempts to cover many different social classes in terms of preferences and life-styles. Celebrity spokespersons were used as a reference group to influence customers. The issue of families and households created a need to expand into baby and maternity clothing.One of the segmentation strategies was to increase the number of stores and to acquire competing brands as a basis for geographic segmentation. Demographic segmentation was used to include consumers within a certain age, income, and lifecycle stage. Psychographic segmentation targeted customers with certain lifestyles and values. Behavioral segmentation of the market catered to customers that desired certain benefits from their clothing.To attract customers from different social classes, The Gap acquired Old Navy and Banana Republic. However, The Gap’s positioning strategy limited the brand’s image to a certain trademark style, without creating enough variation between its sibling chains. This resulted in sales being taken away from The Gap by its sibling chains, who offered versions of the same styles at different price levels. This also confused consumers that noted similar items at a lower price in Old Navy stores,...