1. GAPMarketing Communication Objectives & Budget Allocation -2003AmyAshleyKristenPennyRegina 3.

Company Background The first Gap store was opened in 1969In 2001, there 2,298Gap stores in the U.S, and 634 stores outside the U.S.Online store opened at 1998 4. Industry OverviewApparel retailing storeSpecialty storeMass merchant / Promotional department storesTraditional department storesNational chains 5. Competitive ForcesJ. CrewAbercrombie & FitchAeropostaleAmerican Eagle OutfittersJ.C. Penny 6. Current IssuesNegative Sales GrowthAn overlapping of clientele with Old Navy Strong competitive forcesNo loyal customer baseMarketing Communication StrategyStrategy to reach boarder target customersPromotion strategy (Product line versus Brand)Celebrity endorsementBudget allocationNew Positioning 7. Perceptual Map 8. Objective for 2003Stop negative growth in salesReposition Gap brandStrengthen brand loyalty among older generations (Baby Boomers, Generation X)Build brand preference among younger generation (Generation Y) 9. Objective for 2003 (contd)Sales increased by 2.7%Maintain 2.8% market share 10. SWOT Analysis 11. Strengths Strong Brand LoyaltyBaby BoomersEstablished its identity among Baby Boomers in 1960sThey rebelled against the existing fashion standardGeneration XersOne-stop store fos school and casual clothesThey grew up with GapAmerican icon2,298 stores in U.S. & 2,932 in the world in 2001 12. WeaknessesWeak performance of Gap brand Total domestic sales in 2001 went down by 5% Sales went down in comparable stores by 12%Problems with young generations Low attractiveness among Generation YersProducts and marketing communications Teenagers buying behavior Price sensitive and fickle minded No brand loyalty, stables sales, and high cash inflow 13. Opportunities 3 brandsGap Kids and Gap BabyBrand synergy effects Target whole market with different price strategiesInternational market To avoid decreasing sales 14. Treats Intense competition4 Main competitorsSimilar target market Gap was rated 4th in Brand Preference in 2001A&F was rated 1st and teens most frequent place to shopReduced apparel demand Household expenditures for apparel decreased by 6%Labor policies in developing countries Damage brand image 15. Positioning AnalysisCurrent positioning statement To Generation Y Teenagers, Gap is a brand of apparelthat offers basic and up-to-date clothing with reasonable price.How about other competitors?

16. Perceptual MapGeneration Yers is more price sensitive New Position 17. What is new positioning? KeysHigh familiarity among Baby Boomers & Generation XersReaching the wider age range of target customersHow can we target Generation Yers? Basic and season-less product lines To Baby Boomers and Generation Xers and Yers, Gapis a brand of apparel that offers basic and a season-less line of clothing. 18. Adspend Across Store Brands 19. Adspend for the GapForecasting Advertising Elasticity CoefficientAdspend projection (2003): $128.4 million 20. Media Allocation 2003 (2001) 21. Media Allocation (contd) Primary MediaTV (60%)High-involvement and transformational TV is the top selection to build brand preference 22. Catalog(5%)Competitive forces (A&F, J. Crew, J.C Penney)Experimental phrase of catalogOnline ads (1%)Competitive forces (J. Crew & AE)To reach Generation Y consumersOutdoor ads (12%)To avoid direct media competitionMedia Allocation (contd) Secondary MediaMagazine (22%) Detail information provided (take out of newspaper because)Outdoor ads (12%)Catalog(5%)Online ads (1%)16-18 y.o 23. Reach PatternTV, Magazine, catalog and outdoorSeasonal Priming Pattern 24. Reach PatternOnlineBlitz Pattern 25. Media Selection 26. Promotion StrategyFocusing on Gap as a brandCurrently has a fragmented image due to promoting individual product lines.Younger generation is image-oriented; they care about the overall idea and feel of the brand.Need to create an image that encompasses the brand as a whole and resonates with all target markets. 27. Promotion StrategyEarly days of Gap wearing things your own way and being your own personRecognizable and timelessImage of effortlessness and individualityOlder generations will recognize and identify with the messageYounger generations will care about what Gap brand means and what it portrays to others 28. Promotion StrategyCelebrity EndorsementsGap is an iconic brandCelebrities contribute to brand recognitionCompetitors have not used celebrities 29. Creative Briefs and ExhibitsBehavioral sequence modelGap is Transformational & High involvementConsumers are Favorable Brand Switchers (previously loyal to another company)Gap consumers have positive-ending motivationConsumption based on psychological significance over practical product benefitsUse celebrity = enhance corporate image 30. Creative Briefs and Exhibits (contd)

31. Creative Briefs and Exhibits (contd)Action ObjectivesReposition Gap brand Strengthen brand loyalty (Baby Boomers, Gen. Xers) Building brand preference (Gen. Yers)Goal: Increasing income by 6% & maintaining 2.8% market share after campaign 32. Creative Briefs and Exhibits (contd)Communication ObjectivesCategory need RemindBrand awarenessBrand recallBrand preferenceIncrease to strong preferencePurchase facilitationSeasonal sales notification with customer database 33. Creative Briefs and Exhibits (contd)Positioning Statement To multiple generations, Gap is a brand of apparel that offers basic and season-less line of clothing. Key benefit is a strong brand image which is intensely recognizable and resonated. 34. Creative Briefs and Exhibits (contd)Mandatory ContentWe recommend reinforcing a customer care service for heavy customers to increase volume of sales per customer. 35. Operational Analysis Financial Problem (01):Continues expansion when sales were decreasing Operating Margin dropped:14.76% (2000) & 8.21% (2001)Profit Margin down 6.42% (2001) Recommendation: Downsize & decrease Operational costs in 2003 36. Alternative SuggestionsHighlight separate product lines(Basics, classics, Gap jeans, Gap khakis) Target Audience:Baby boomersGeneration XGeneration YTarget Audience: Baby boomers Generation X 37. thank you