Posted: August 4th, 2023

Industry Analysis, Organization Analysis, and IMC Analysis

1.      Case Introduction and Background

 

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2. Industry Analysis, Organization Analysis, and IMC Analysis

2.1. Industry Analysis

Competitive Landscape

In 2014, the global apparel retail industry grew by 5.2% to reach a value of USD 1,196 billion after the previous few years of the economic downturn (Marketline Industry Profile, 2016b). Although the fashion industry worth billions dollars, the major challenge for the companies to survive in this industry is the shorter product life cycle resulted from the frequent change in consumer’s behavior (Rahman, Saleem, Akhtar, Ali, & Khan, 2014).

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As the US is Gap’s largest geographic market which accounted for 77.1% of the total revenue in 2014 (Marketline Company Profile, 2016), the analysis mainly focuses on US market which had a value of USD300.9 billion in 2014 and is predicted to grow at 2.8% in 2020 (Marketline Industry Profile, 2016a).The industry witnessed the emergence of fast fashion retailers and e-commerce retailers thanks to the penetration of online stores and internet payment via mobile phone and computer(Marketline Industry Profile, 2016a). By offering the fashionable clothing at affordable prices and introducing new clothing styles weekly, even daily; fast fashion retailers such as H&M, Zara, and Forever 21, made consumers feel “out of trend” quickly and encouraged them to buy as many items as possible. Therefore, the major competitors of Gap and the comparison between their net sales in 2014 are summarized as the figure 1 below.

 

 

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Figure 1. Net sales of major apparel brands in US market in 2014

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Source: Author compilation from brands’ reports (2014)

Consumer Preferences

In 2014, there is a fashion trend called “normcore” which focus on basic and neutral clothing items featuring “a more low key, cool look with a dash of athleticism and a whiny of the ‘90s” (Wong, para.2, 2014). Accordingly,Gap’s “Dress Normal” campaign was claimed to respond to this trend (Raczka, 2014) in order to attract more customers. Consumers were appealed to this trend as they feel less stress on selecting clothes and even basic clothing items can make them becomestylish or fashionable. For example, a combination of T-shirts, denim jeans and sneakers can make “normcore” already. “Normcore” was actually a fashion style used to turn the basic clothes into a trendy and stylish outfit; however, it did not make consumers turn back to trendy products and seek non-identity in their image as Gap assumed. Fashion industry is notably competitive and the need of newness in the products plays a vital role in keeping customers return to the stores (Bhardwaj &Fairhurst, 2010).

Additionally, in accordance with the blossom of fast fashion, customers tend to shift their preferences from mid-line brands to fast-fashion retailers for more trendy items at affordable prices. For wardrobe essentials which are Gap’s main products as jeans, shirts or blazers, they prefer to shop at low-end stores as Walmart or Target for discounts or lower price.

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2.2. Organization Analysis

Gap was the world’s most iconic brand of American casual style in 1990s; however, Gap has struggled in identifying its brand identity amongst a significant number of competitors. Although the company’s net sales in 2014 increased USD287 million, equivalent to 2% compared to 2013; the income was primarily from Old Navy and Athleta brand (Gap Inc., 2014). Gap brand had a decrease in net sales as well as the number of stores, mainly in North America (Appendix A).

According to the fact that Gap has shut down a number of stores in North America and Europe, it is proved that Gap has gradually lost its market share even in its previous leading market.Consequently, Gap even found it hard to compete with other brands such as Uniqloin wardrobe essentials - its core product line which made it become a giant a decade ago (Appendix B).

2.3. IMC Analysis

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With the strong brand identity and the tagline “effortless cool”, Gap was a leader in clothing retail industry in the ‘90s’. However, Gap’s reduction in number of stores and market share (Monllos, 2015) proved that it lost the brand identity and its marketing strategy was not effective. In “Dress Normal” campaign, althoughGap targeted mass market including generation X and millennial generation, it did not deliver the correct message to consumer because the lack of consumer understanding.According to the “strategic triad” of the message strategy (Belch, Belch, Kerr, & Powell, 2014), the lack in customer understanding is the critical factor that leads to the failure of a marketing message.

Gap utilized many IMC tools to promote its campaign, such as advertising, digital marketing, and sales promotion. With a series of short advertising videosand taglines “Simple clothes for you to complicate” or “Let your actions speak louder than your clothes”, Gap aimed to encourage consumers to be themselves and celebrate the confidence by dressing in their own styles(Dua, 2014). Also, Gap used Twitter and hashtag to promote “Dress Normal” campaign.

The table below presents the criteria for a persuasive communication according to Belch et.al (2014) and evaluation whether Gap fulfilled the criteria.

Criteria	Fulfill or not	Justification
Connects emotionally with the target audience	No	Clothes are considered as products that reflect the personality and status of the user (Clarke, Dodd, Baron & Houston, 2000) and millennials seek uniqueness rather than uniformity in clothes(Ordun, 2015). Hence, they considered dress normal as dress boring
May need to connect in different ways for different audiences	No	It targets two different segments (generation X and millennial generation) with the same message
Contains a key insight or big idea	Yes	Big idea is “In this chaotic and high-pressured world, authenticity and being yourself is what matters”
Distinctive	Yes
Memorable	Yes
Creative	No

3. Presentation and Discussion of Case Problem

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As mentioned above, GAP is well known as a high-quality, American casual-style brand in the world, with achievementsin business success and profit growth. However, in 2014, after launching the “Dress Normal” marketing campaign, they had to face the problem leading to heavy discounts on its fall collection as well as the decrease in salesas a proof of a failed campaign. The campaign aimed to send the message that “instructs individuals to shape their own authentic, personal style – and intentionally challenges every one of us to dress for ourselves” (Cullers, 2014). Nevertheless, it seems that the message did not transmit successfully to the customer because no one want to dress normal. Therefore, the message strategy was considered to be the crucial issue that GAP had to face in this campaign.

According to Belch, Belch, Kerr and Powell (2014), the consumer is one of three important things in the massage strategy called the strategic triad, which includes the consumer, the product and the competition, that organization should focus on.  Therefore, understanding the consumer, their insight as well as the demographics and psychographics is extremely necessary to determine what to say in the campaign. Although “Dress Normal” campaign was following the trend of normcore with the clear concept “Dress normal! You do you. Why not?”,their demographic was not the one who can understand what it was (Maheshwari, 2014). In addition, Maheshwari (2014) also mentioned that customers could like the simplicity, however, they did not want to be normal, or pay for clothes without changing their appearance. It proved the lack of understanding customer insight and the demographic in their customer before determining what to say or message strategy for the campaign. Noticeably, the message of “dress normal” could not help GAP compete to other competitors such as H&M, Uniqlo, even their other brand names of GAP Group such as Old Navy, Banana Republic (O’Reilly, 2014). In other words, the added value and personality of the products through the message they delivered to customers were not strong enough to persuade them to buy their products.

As a consequence, the brand needs a solution to bring their customers back and compete to other competitors in the fast growing market nowadays.

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REFERENCES

Belch, G. E. 1., Belch, M. A., Kerr, G., & Powell, I. (2014). Advertising: An integrated marketing communication perspective (3e. ed.). North Ryde, NSW: McGraw-Hill Education Australia.

Culler, R. (2014, August 25). Gap's New Celebrity Ads Tell Us to 'Dress Normal.' What Does That Mean, Exactly? Redefining the whole concept. Adweek. Retrieved from http://www.adweek.com/adfreak/gaps-new-celebrity-ads-tell-us-dress-normal-what-does-mean-exactly-159703

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Maheshwari, S. (2014, October 22). Gap Has A Problem: Its "Dress Normal" Campaign Is Way Too Normal. Buzzfeed News. Retrieved from https://www.buzzfeed.com/sapna/gap-has-a-problem-its-dress-normal-campaign-is-way-too-norma?utm_term=.pylLL3Y9wL#.gr0ooKkvro

O’Reilly, L. (2014, December 5). The Gap's Sales Go Into A 3-Month Slide Following Its 'Dress Normal' Ad Campaign Failure. Business Insider. Retrieved from http://www.businessinsider.com.au/gap-november-sales-down-4-percent-2014-12

 

 

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Appendix A

	2013			2014
	Number of store locations	Number of stores opened	Number of stores closed	Number of store locations	Number of stores opened	Number of stores closed
Gap North America	990	38	60	968	38	46
Gap Asia	191	40	3	228	42	4
Gap Europe	198	3	8	193	2	6
Old Navy North America	1010	27	33	1004	33	24
Old Navy Asia	1	17	0	18	25	0

Source: Author’s compilation from Gap Inc. (2014)

 

 

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Appendix B

(Factset, 2015)

 

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