INTERNATIONAL MARKETING

PROJECT

GAP Inc.
 GAP

ABOUT THE BRAND

AND

ITS HISTORY
 History

Founded in 1969 by Donald Fisher, the name originated

from the phrase "the generation gap"

1969-1980

In 1969 Donald Fisher opened the first ever Gap store

in a theatre on Ocean Avenue near San Francisco State

University, the store's merchandise consisted of blue

jeans and records and tapes…. however, the audio

products were sold for a mere three months before

being removed from the store.

By 1969 Gap's sales had reached $2 million and a

second store was opened in San Jose, California. Along

with this second store Gap established its first

corporate headquarters in Burlingame, California,

employing only four employees. Gap continued to

expand rapidly and by 1972-73 Gap had grown to over

25 stores and had expanded to areas outside of

California and was entering the East Coast market with

its store in In 1974 Gap began to sell private label

merchandise in its stores.

1975 saw the creation of the chain of stores which

specialized in selling discounted apparel, as well as the

acquisition of "You & You" which had formerly been a

New England-based casual apparel brand.

1976 was a landmark year for Gap with the company

going public in both the New York and Pacific stock

exchanges with an initial public offering of 1.2 million

shares. With the arrival of 1977 Gap introduces the

labels "Fashion Pioneers", "Eaton Hill", and "Foxtails"

which are sold in its stores. The company also launches

two sub-brands; "Logo," based in California and

Missouri, as well as "Brands" based in New York and

New Jersey. In this year also, Gap moves its

headquarters from Burlingame, to its well known

location at 900 Cherry Avenue in San Bruno.

1980 saw the incorporation of the "Brands" and

"Pants %ff" chains into Gap's new

 Mission Statement

The mission of the Bridging The Gap Community

Transformation Project is to develop Big Stone Gap as

the "Community of Choice" to reside in, within the

region of far Southwest Virginia.

Guiding Thoughts of the Executive Committee to

Develop Mission and Priorities:

* Looked at desires of the community, as expressed

and recorded, at community meetings held in the

summer of 2006

* Listened to advice and guiding principles of Dr.

Vaughn Grisham.

* Looked with a long-term vision to the future, but

with a due respect of realities of the community, time,

and money.

* Operating on faith....

because...

"Bridging The Gap" is the right thing to do for the

community.
Our Culture
The focus at Gap Inc. is pretty simple: customers, creativity,

doing what's right, and delivering results. Together, we call it

"wearing your passion." And it's the perfect match for the kind of

people we attract — as both employees and customers.

Think: customers first

We make decisions with our customers in mind. We connect with

our stores and create the quality our customers value and expect.

Inspire: creativity

We think big, take risks and solve problems. We challenge the

status quo and always look for new ideas and ways of working.

Do: what’s right

We believe that how we do business is as important as what we do. We act

with integrity, and we give back to the communities in which we do

business.
Deliver: results

We deliver the best result possible – we're committed to taking

responsibility, setting priorities and meeting our goals.

How Our Clothes Are Made

From a design concept born in New York by our product designers to an in-

store display in one of our approximately 3,100 stores around the world,

each Gap, Banana Republic and Old Navy product goes through a multi-

stage process before reaching our customers.

At any given time, our teams are working on our merchandise assortments,

whether that's designing for the holiday season, creating production samples

of the summer collection, or merchandising and marketing for the spring

assortment. This work generally consists of five phases:

Phase I: Design and Merchandising

Great clothes often begin with a feeling, a vision, a memory ...

perhaps a song lyric or a scene from a classic movie. Always

looking for fresh ideas, our designers and merchants visit the

world's fashion and cultural capitals — New York, Paris, London,

Milan and Tokyo, for example — taking in the fashion shows,

shopping new stores and observing the everyday fashion of

people on the street. Then they translate their ideas into

drawings, patterns, swatches and color palettes.

Once concepts have been developed, it's time to turn them into

real clothes. Our merchants and designers work closely together

to translate inspiration into product assortments we believe our

customers will want to wear.

Working from designers' drawings, our patternmakers create

rough sample garments. Samples are then carefully edited into

focused product assortments for our brands and our customers

Phase 2: Planning and Sourcing

Once designs are set and an assortment has been chosen,

planning and distribution specialists help merchandisers decide

how many units of each new style to order and to which stores

those units should be sent. A plan is created for each style.

Buying plans in hand, it's now time to select the manufacturing

facilities that can fulfill our production needs — and comply with

our Code of Vendor Conduct. (Learn more about our process for

selecting and approving factories.) Buyers work with factory

owners to understand every detail of production, from materials,

quantity and price to packaging and delivery.

Phase 3: Production and Marketing

The factory makes product samples and, using mannequins and

models, we confirm the fit. Once approved, the factory begins

production.

Now our Marketing team steps in to meet with the merchants and

look at factory samples. Based on this preview, the team

develops an appropriate marketing plan to communicate the

assortment and key products to our customers. Meanwhile, the

factory puts the finishing touches on the merchandise, it's tested

to ensure it meets regulatory standards and we conduct final

quality assurance.

Phase 4: Distribution

All merchandise, samples, plans, fixtures, props and in-store

displays are packed, inspected and readied for shipment to our

distribution centers. Once the product arrives at the distribution

centers, every single box gets checked in. Cartons are counted,

quantities are confirmed and random audits are performed.

As merchandise is added to inventory, it's designated for delivery to a

specific store according to size, color and quantity. The distribution

centers then move the merchandise to the appropriate stores.

 Phase 5: Sales and Analysis

Every major seasonal delivery requires a brand new floor setup in the

stores. Merchandise is placed following the guidelines of our Visual

Merchandising team.

Finally, our sales associates sell the merchandise to our customers. As

each unit is sold, the transaction is registered for analysis by our

planners and distribution analysts. These analysts monitor weekly sales

trend reports and determine which stores need to be replenished with

which products. Replenishment shipments typically occur one to three

times per week.

At the end of each season, we assess our performance, gather customer

feedback, look for improvements and begin the cycle all over again.

Our brands have a simple, common purpose: to make it easy for people to express

their personal style. We constantly evolve each brand to better meet our customers'

needs — through innovative and inspiring design; through convenient and engaging

store experiences; and by communicating with people in a way that connects to

how they live, work and play.

More About Our Brands

Iconic American Style

Gap offers iconic American style to customers of all ages.

Accessible Luxury
Banana Republic is an accessible luxury brand.

Great Fashion, Great Prices

Old Navy offers great fashion at great prices, for everyone.

A Fresh Online Shop

Piperlime is the insider’s guide to the best shoe and handbag
brands.

Be Strong. Be Beautiful.
Designed by and for women athletes, Athleta delivers the
performance advantage for your workout and your active
lifestyle.
MARKETING

STRATEGY
 Marketing strategy

The banana republic stores try to convey a more

sophisticated image for an upscale customer, whereas

Gap stores appeal to a broader midrange of customers.

The OLD NAVY chain is designed to appeal to younger

generation of customers by emphasizing "fun, fashion,

and value" through a store experience that delivers

"energy and excitement." Although Gap, along with

other retail- store chains, has been criticized for

blandness and uniformity in its selling environments,

the firm maintains that it tailors its stores "to appeal to

unique markets" by developing multiple formats and

designs..

In some major baseball parks, a Gap ad appears on

outfield wall panels between left/right-center fields and

centerfield which is commonly termed "the gap."

STP
CUSTOMER SEGMENTATION

TARGETING

POSITIONING
 Customer segmentation

Segmenting:

Demographic/Psychographic/Geographic Segmentation

Gap

The Gap’s target age segment is males and females ranging from

seventeen to twenty-five years old. The typical family life cycle

for a Gap customer comprises of single teenagers and young

adults to young married couples. The races Gap targets consist of

many minorities such as Hispanics, Asians, and African-Americans

in addition to Caucasians. The income segment is middle to

upper-class individuals who reside in urban or suburban areas in

developed countries such as the U.S. and Japan. Common

occupations of Gap customers include: high school and college

students, entry-level college graduates, and young working,

married couples. Gap customers tend to be energetic,

work/career oriented, and active people who have significant time

to shop. In addition, their customers have a sense of style

sophistication in their wardrobe, and are confident individuals

who feel they are buying the best product available.

Banana Republic

The target age segment for Banana Republic ranges from ages

fifteen to forty-five. The family life cycle consists of teenagers,

single women and men, and career-oriented married couples.

Banana Republic targets the same races as its parent company.

The races include both minorities and Caucasians. The income

segment includes middle to upper-class individuals who reside

near urban or suburban areas in developed countries. Common

Occupations for Banana Republic customers include: high

school/college students, entry-level college graduates, and men

and women working professionals. Banana Republic customers

are people who are generally active, work/career oriented people

who have little time to shop. In addition, their customers are

sophisticated, confident people who seek not only trendy clothing,

but also the best product available.

Old Navy

The target age segment for Old Navy ranges from thirteen to

thirty-five years of age. The common family life cycle for Old

Navy patrons is young teenagers, then single women and men on

a strict budget, and most notably married couples with children.

Old Navy targets the same races as its parent company. The

races include both minorities and Caucasians. Income levels for

Old Navy patrons include all levels due to its family-oriented

approach to marketing. Patrons reside near urban or suburban

areas in developed countries. Common Occupations for Old Navy

patrons include: students, entry-level college graduates, working

men and women, and housewives. The common Old Navy patron

is an active, work/family-oriented person who has little time to

shop. The majority of Old Navy shoppers want stylish clothing,

the best value for their money, and products that are

comfortable.
Targeting:

GAP owns GAP, Old Navy and Banana Republic.

GAP stores then it is in the middle quality wise.

Old Navy is the cheaper more sporty store,

GAP is good quality but affordable and targets consumers that

want to look nice but not pay outrageous prices,

Banana Republic is for people with a little more money to spend

and business, business/casual attire

The brand appeals to its consumers by having fun commercials

and appeals to pop culture with the music/dancing.

Positioning
In comparison to the other competitors currently present in the

Indian market GAP Inc. in the long run should position itself as a

daily wear for the upper middle class,

A brand for the younger generation that sends out an image of

casual young wear for daily wear.

Age groups 15 to 30
Entry of GAP into

INDIA

Entry of GAP into INDIA

Seeing the opportunity of the brand GAP entering into the Indian

market shall be rated as a very good venture for GAP Inc.

If compared the potential of the brand and of the Indian

market, the forecasted outcome seems very profitable.

With the entry of brands like ESPRIT, FCUK, CK, TOMMY

HILFIGHER in India the willingness of the Indian customer to buy

branded clothes for his daily wear has increased.

Being a user of such brands is now like a status symbol and

has become a desire for every youngster to shop only amongst

these brands.
HOW TO ENTER

HOW TO ENTER
To enter into the Indian market is not difficult at all specially for

known brands like GAP. As there are very many willing Indian

companies ready for joint ventures with such brands.

Taking the example of ZARA and TATA CLOTHING.

Tata Clothing is bringing the brand ZARA to india.

Similarly tie up with such companies can be a good venture

for the brand.

Seeing the business model of ESPRIT, the model is very

suitable for GAP Inc. Tie up with a big known Indian company as

a joint venture and an investing partner.

Manufacturing in India, by well known garment

manufacturer and exporters like in the case of ESPRIT. All its

clothes are manufactures by Madhurai Garment P Ltd. At Panipat.

Manufacturing of product in India itself and selling through

large number of chains with company (joint venture) owned

outlets.
Initially entering in the metros but with only the main brand that

is GAP itself, later on like the ESPRIT model, bringing other

brands like BANANA REPUBLIC and OLD NAVY.

WHY GAP?

Gap is a very well known international brand even in

India, the brand has already an identity and has been

supported by many bollywood actors in Indian films

which has already made the brand known.

Alongside the products of the brand suit the Indian

youth perfectly, the products are very well priced in

accordance with its target market in India.

The brand also has an opportunity to grow in the

future.
MARKETING

MIX
 Marketing Mix

Products

Products features

Gap provides a variety of casual apparel like garments

shoes for all ages of people and gender.

Gap has sub-brands like “OLD NAVY”, “BANANA

REPUBLIC” and “PIPERLIME” are providing garments

and shoes to cater to the younger generation with the

latest trends for the casual wear.

The brand GAP is a very well known and accepted brand

in the market, for daily wear and is very desirable.

The products of the brand are very affordably priced.

Out of the various brands that GAP Inc. has, GAP,

BANANA REPUBLIC and OLD NAVY are very well known

amongst the Indian customers, so in the very initial

stages Gap should concentrate on marketing these

known brands. Success may encourage its other sub-

brands to enter the market as well

Core product

When Gap was founded in 1969, its core product was

blue jeans and white T shirt.

With all its brands GAP should keep its regular

casual wear as its core product. Its existing product

range of light cotton casual clothing for summers and

wool-sweatshirts, and jumpers for summer are good

enough for India and there is no requirement for any

adoption in product range according to geographic or

demographic
Price

The pricing strategy of Gap is determined in accordance

to its competitors and also according to geographic and

demographics. The prices may vary from place to place

like prices in United States of America, Asia, United

Kingdom

The image of the brand may be different in different

countries, for eg in the US and UK, the brand is

available since a long time and is known as a casual

daily wear brand on which an individual would spend

good amount of money as it suits his need but won’t be

ready to pay more than it’s worth

PRICING FOR INDIA

However if the BRAND is introduced in India today, it

will be a desirable brand as it is a known brand

amongst the youth in India, and they would be willing

to pay more than its actual worth “initially”.

 GAP can initially range its products higher than its

prevailing competitors in the market as the existing

brands would be considered as something old in

comparison with GAP. As GAP would be the new trend

or name in the market.

However eventually GAP has to keep its pricing to

compete with other brands in the market.

Place
Gap's main opportunity to reach its customer is through

its stores. Gap operates stores in various countries

through stores being related through-out the country in

well located areas and shopping malls.

With cities like Delhi, Mumbai, Kolkata and other

metros of India having developed shopping malls.

Having its stores in such malls is the best option for

the brand to position it along with its competitors and

also to spread the launch of the brand.

This would also help to cater exactly to the

consumers and directly reaching to its customers

quickly.

Promotion

The brand in itself is its promotion, however to

maximize sales and to increase the number of repetitiv e

buyers :
1. Outlets in malls

2. Gift Cards- all across the world

a. Gap giftcard

b. Banana republic gift card

c. Old navy gift card

3. Seasonal sales.
 SWOT Analysis

SWOT Analysis

-Strength:
Brand Image,

Risk diversity, with an Indian corporate partner

Strong supply chain,

Known and desired brand by Indian youngsters

-Weakness:

Needs time to set up distribution channel

Stores in leading malls not easily available now.

-Opportunities:

Expansion

1. Bringing its other brands like BANANA REPUBLIC and OLD

NAVY

2. In the second stage expanding in 2 tier cities of india

-Threats:

Foreign brands already exist strongly.

Market nature
Five Force

Model

Five Force Model

Competition:

The competition in this industry is high and there are big

players already existing in the market, who have established

themselves in India on a large scale, Brands like ESPRIT, TOMMY

HILFIGER, CK, FCUK and the latest entrant ZARA.

However there is still scope for more brands as each brand

markets its own identity and the brand name sells. As it is in the

apparel industry it is more about individual’s perception, loyalty,

choice and comfort with the brand.

Ease of Entry
 Entry into this industry is not at all difficult as despite the

existence of so many brands there is scope for more. And foreign

brands with high brand value and financial backing would venture

into India, known brands can easily find big corporate support

within the country. Corporate houses like, Reliance, Tata , Birla ,

Bharti Mittal group and so on are ever willing to have joint

ventures.

Alongside these big corporate and foreign brands together

have no problem whatsoever with legalities and political norms.

The Indian govt. is liberal enough to attract foreign brands

to India in the clothing industry.

Substitutes

There is no much of a threat of an alternative product.

A piece of cloth can just be replaced by a cloth itself.

 The only alternative choice is the type of clothing or the

brand. If we consider our brand GAP, as it sells western

casual clothing, the only alternative for a customer is to

either use the product of a different brand.

Or to use different style of clothing, as in he might not

prefer western clothing or casual clothing.

So as far the substitute force is concerned entering into

the Indian market is highly recommended for GAP.

Strength of suppliers
 As India is a hub for garment export all across the world and

with a countless number of manufacturers and exporters in this

trade there is no shortage of suppliers to such big brands.

Now in such a case where there are a high number of good

quality suppliers in India the strength of bargaining of the

supplier naturally goes down in comparison to that of the buyer

or the brand, as the buyer has alternative choices.

Therefore again in regard to the strength of supplier force, it is

highly recommended for GAP to enter the Indian market.

Strength of buyers
The strength of buyers or the bargaining power of suppliers, a

buyer may definitely be having alternative choices in regard to a

brand but this gives no advantage to the customer or no power to

bargain with the brand, as these brand work on fixed prices and

have nothing known as bargaining.

The user of these brands is higher middle-class and upper

class who do not bargain with these brands as to them it

sometimes may also come across as a status symbol to be

amongst the user of the brand.

 PEST ANALYSIS

PEST ANALYSIS

• Political (Legal) Aspects

 A GAP Inc. will not be able to gain success, good reputation and trust if it will not

consider legal and political sector as part of their strategy. Political and legal sectors

include the needs of the company to follow the given policies and regulations of the

government in order to be considered as legal and authorized business company. In

this manner, GAP Clothing Company should be able to consider political and legal

aspects so as to show that they value the policies and regulations of the government in

any of the business operations.

- Tax Policy – manufacturing within India , no import duties , hence favourable

- Employment Laws- no strict laws, normal laws hence favourable

- Political Stability- eversince 2005 indian govt is very stable. favourable

- Environmental Regulations

- Trade And Tariff Restrictions- manufacturing within India , no

trade tarrifs , hence favourable

Partnership with Indian corporate house makes it more favourable.

Economic Aspects

It is important that a certain company must also give enough attention to its

economic stability. The economic goal of a certain industry is like an axis in which other
objectives or goals are revolving. The economic factor involves the context in which an

industry belongs, i.e. the configuration of the competition in which a company operates

the active demand of the products, general economic condition of the nation or region,

conditions in relation with other industries, and the situation of the resource markets.

- Economic Stability – of gap inc . is very stable and jv with a corporate

house in India makes it even more stronger

- Economic Growth- of the company as well as Indian market is high

- Interest Rates – is high in India compared to the world, negative, yet

profitable

- Inflation Rates - with the recent recession , unstable

- Exchange Rates

Socio-cultural Sector

Society and culture is an important factor that must be given emphasis by any

business, specifically those who are operating in the global arena. It is important that
GAP Inc. must operate in compliance with the social systems in order to gain good

reputation and effective public image. On the other hand, cultural aspects is equally

essential, in order to understand the various needs of different individuals that belongs

to different cultures.

- Population Growth Rate – maximum in India, and increase in willingness to

buy branded clothing for daily where

- Age Distribution- enough youngsters to be targeted as customers

- Career Attitudes

- Consumer Behavior – Branded daily wear is now a status symbol amongst

customers

- Religion And Culture Itself – very different from the world but has now
adopted to the western style of clothing in metros and 2nd tier cities

Technological Aspects

The complexities of achieving business success through increased efficiency,

effectiveness and competitiveness, combined with innovative applications of modern

technology, has heightened the awareness of both technology and business managers
towards more strategically oriented approaches for planning and management of any

industry. Hence, it is important that a company must be able to give consideration to the

technological aspects.

- Distribution And Communication Channels – with presence of corporate

house as a jv partner distribution channel, very strong

- Environmental And Ecological Aspect

- Barriers To Entry—easy entry a threat for more new entrants like

Abercrombie and other foreign brands

- Production Level – nominal productions

- Outsourcing Decisions – outsourcing manufacturing as a large number of

good garment exporters are present in india located largely in panipat.
 RECCOMENDATION

RECCOMENDATION
1. Tie up with a corporate house in India such as tata clothing, reliance, birla or

any other big corporate house as it would reduce the risk factor and

restrictions of entering into the market.

2. Initially start with GAP the brand and then later on adding other brands like

BANANA REPUBLIC and OLD NAVY.

3. Outsourcing manufacturing in India at panipat.

4. Large scale entry with approximately 20 stores across India.

 CONCLUSION

CONCLUSION
On the whole it is a very advisable venture for GAP Inc. to enter into India the only

thing to be kept in mind is that GAP should enter with an Indian corporate house as

it would help the brand to grow faster and also overcome legal hassles.
ANNEXURE

ANNEXURE
http://www.themarketers.in/wp-content/uploads/2010/01/Porter_Five_Forces1.jpg

www.scribd.com/doc/5053048/Gap-Inc

www.oak.cats.ohiou.edu/~sw194599/cluster/target.doc

http://www.gapinc.com/public/About/about.shtml

http://www.gapinc.com/public/About/abt_culture.shtml

http://www.gapinc.com/public/OurBrands/brands.shtml

www.wikipedia.com