Brand Management Case Study of Gap Limited

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Environment is being more concern in China nowadays. Since the publication of the 12th Five-Year Plan, China has to eliminate the high pollution, low capacity industryies. The CPC wish to rebuild China’s producing industries in green. Then, environmental friendly development also becomes an aspect when measuring political achievement of local government officials.

Internal analysis

Product is the soul of the company, no one will buy a product that they do not want, threfore its development is very important to the enterprise. Gap’s product category involves 3 major aspects, clothes, accessories and personal care products. Actually, not all of the Gap stores are selling personal care products, some of the regions, for example Hong Kong, are not selling that kind of product. As mentioned in the previous part, clothes are mainly separated into 4 parts to meet the needs from different customers. Accessories such as shoes or socks are allocated into the relative divions. As a fast fashion retailer, there will be new arrivals every one months or even shorter. The key items of Gap store including 4 products, they are Denim, Khaki pants, Gap logo items and baby items (10-K, 2014). Beside the normal products, there would be special crossover collection, for example GQ on Mens wear (GAP, 2013)and kate spade New York and Jack Spade on Kids wear (GAP, 2014). These limited edition always drive the attention of the consumers.

[pic 4]Price for Gap is higher than other fast fashion retailers such as Zara, H&M and Uniqlo. An example of jean’s price comparison on figure 2, show that Gap;’s jeans and other products are much more expensive than the others. A higher price to the customers represent a higher expectation on quality and value they have. As the price positioning is on a higher proce, differentiation of products must be done well. Like what have been mentioned before in the introduction part, Gap is using a differntiation value-added approach.[pic 5]

Place should be carefully consider to be comfortable for the customers to come and convenient for restocking. The retail store is suggested to located on a shopping mall which is nearby high speed rail station and the main road. It wold be more easier for our customers to buy our products. Beside the tangible store, online selling is another distribution method in marketing. The company can make use of the website, http://www.gap.cn/ to do e-commerce in Nanchang.

Gap operates with many different kinds of promotions, usually every promotion will last for a weeks. Take the current Biggest Little Event as an example, if the customers buy 3, 5 or 8 baby and kids items at once, they will enjoy a 15%, 25% or 35% off discount respectively. In addition, there will be spend more get more, lucky draw and other types of promotion events (GAP, 2014). These kinds of promotion gain awareness of the customers and keep a relationship with them through the promotions.

Staff are the people who servicing the customers and persuade them to buy by providing relative information that the customers want to know. Impression of customers is positive or negative depands on the contact with the staff and can they satisify customers’ want or not. Threfore, the front line staff have to be well trained up and keeping a good mood when doing services. In addition, people should be allocated into the right job, as Jim Collins states that “got the right people on the bus, and the wrong people off the bus” (Collins, 2001). These can help the company run the business more effectively and efficiently.

The servicing process on Gap can be separated into 3 aspects, floor, fitting room and cashier. On floor, sales are helpful on finding the right size and provide sufficient information to customers or not is the key point; In fitting room, can the staff provide suitable suggestions and helps are the important parts; and when customers are paying at cashier, necessary to wait or how long to wait are the main points of the process. If the staff are well trained up with high efficient, the process could be a positive impression to the customers.

Physical evidence can reflect how your customers look the company. It may be difficult to observe, however the successful promotions push customers bring their friends to shop with them by for example, buy more items to enjoy higher discount. This can help Gap to increse its awareness by their friends.

To have a little summary, the 12th Five-Year Plan provide a great opportunity for Gap to enter Nanchang market with some of the supporting policies. In addition, the environment of Nanchang including economic and social aspect are favourable for Gap to entry. However, there are some threats that may influence the entry, the major reason would be the competitions come from other top fast fashion retailers such as ZARA and H&M. Differentiation strategy on price and product, successful promotion strategy and diversific distribution channel are the strengths of Gap, although it has some weaknesses to be improved, such as not sufficient serving process.

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Market research of the potential market

Accessibiity on entering Nanchang is not high, although there are some barries to entry. For economies of scale, this is not a huge barry for Gap because products of Gap are not producing locally, which are transfering from other cities of China or even from other countries by shipping (10-K, 2014). Capital requirement is not too high for foreign direct investment, RMB 0.1 million registered capital according to Company Law. Distribution channels may not be a barry for Gap’s entry because Nanchang has Hrgh-Speed Rail, train and relatively complete roads in the city to delivery stocks outside. On government policy, it offers a High-efficiency Certificate-transaction Guarantee to foreign investors, most of the approvel processes can be finished within five days. Therefore, accessibility of entering Nanchang marketing is not high.

Market size of Nanchang is attractive for Gap to enter, total population at the end of 2013 counted as 5.1 millions and keep a growth trend on the past few years. In addition, there is a 10.8% and 9.1% rise on per capita disposable income amd Per capita consumption expenditure respectively compare with last years (Bureau, 2014). Moreover, as mentioned aefore, Nanchang citizens are morewilling to spend on clothing. The existing and future market size are suitable for Gap.

Profitability is influenced by many factors, here are part of the reasons. Buyer power of target customers are strong, because there are some