In reflecting on this week’s material, I’ll shift gears and discuss something outside of the automotive industry… the clothing industry. In particular, Gap Incorporated.
I find Gap Inc. to be very effective in bringing the “four P’s” together to successfully create value for their customers. First, some quick background information about the company - Gap Incorporated includes five clothing brands: Gap, Banana Republic, Old Navy, Piperlime, and Athleta. I find their descriptions on the corporate website very helpful in clearly defining and positioning those brands:
Gap: Iconic. Inventive. American
Banana Republic: Accessible Luxury.
Old Navy: Great Fashion, Family Value.
Piperlime: A unique online boutique.
Athleta: Strength and Beauty.
As a result, the target audience for their products is very far-reaching – from the value-conscious, family-oriented consumer at Old Navy to the fashion-savvy, trendsetters at Banana Republic, and to athletic women at Athleta. Likewise, Gap Incorporated products are also far reaching – from workout clothes to suits, shoes, belts, and jewelry accessories. No matter what a potential clothing customer may be looking for, Gap Incorporated can usually fulfill the need. Gap has also expanded into the children and baby apparel market with GapKids and BabyGap.
What I find to work well at Gap Incorporated is their wide target audience, and associated strategy. To appeal to such a wide array of customers, they have a very differentiated approach to their marketing plan. Anyone who has shopped at any or all of the stores instantly recognizes that the shopping experience in each of the different stores is custom-tailored to the target audience. The atmosphere, display, organization, and service are different in an Old Navy store versus a Banana Republic retail store. Even the location (place) is key – although Banana Republic, Gap, and Old Navy are the same company, they don’t co-locate the stores together. This prevents any brand-dilution, and allows the respective stores to be placed in the most appropriate location. For example, Old Navy might be placed next to Sears in a mall and Banana Republic may be located near Nordstroms or Nieman Marcus. I would postulate that most customers don’t even know that the brands are all under the same company umbrella.
Similarly, the pricing strategy follows a congruent pathway. As described previously, the products offered are far-reaching at the various brand stores. The associated far-reaching pricing strategy allows customers to meet their needs AND their budgets. For example, a sweater may be $20 at Old Navy, $40 at Gap, and $60 at Banana Republic. The quality (or at least the perceived quality) is, of course, higher as we move up the scale. This creates value for each of the target audiences. The family-oriented, budget shopper enjoys the value created by a perceived deal, while the fashion-savvy trendsetter enjoys the value created by a high-quality product that is on the leading edge of the fashion horizon. In general, customers have the impression that they will receive a good deal at Old Navy. Likewise, the prices established at Banana Republic are associated with higher-end apparel, and their reputation follows suit.
Finally, the respective promotional aspects of Gap Incorporated are also custom-tailored to the target audience. For example, Old Navy is known for its mass-market TV commercials that seem to change with the seasons. Banana Republic bucks the aforementioned mass-marketing for targeted marketing via emails sent directly to established customers. Piperlime appeals to internet-savvy customers with no brick-and-mortar stores and promotes its continually-fresh mix of products heavily on Facebook and other internet sites. Gap attempts to appeal to the “everyman” through more generalized, wide-ranging advertisements. Finally, Athleta uses lifestyle marketing to appeal to active women through mobile ads and even a channel on Pandora that lends itself to working out.
In summary, I believe all of these aspects of the mix come together to create intense value for Gap’s customers. I will continue to watch their magical “mix” as my family and I shop at their stores.
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