The Gap
Case #4: Bridging the Gap
As customers once knew, The Gap was a popular fashion apparel store that attracted many people to it. However, this is no longer the case in the present day. So what happened? According to the case, competitors are gaining market share with cheaper and fresher fashion designs. One of the problems Gap (including other retailers) is the rising costs of raw materials. Gap said this would force them to raise their prices on items by 20 percent, but the customers would never accept that. The rising costs of raw materials can be attributed to the increasing prices of cotton and labor costs in manufacturing centers like China. However, Gap’s biggest source of decline can be directed towards its lousy fashion designs. The Gap once was a “must-have” brand during the 80s and 90s, but currently they have not been able to keep up with consumer taste. Gap completely misjudged fashion trends as it offered hip-huggers, sparkly t-shirts and other pop fashions that clearly were not in style thus driving away customers. Even the primary customers who have always relied on The Gap to buy casual wear have turned away and chose other competitors.
This unfortunate downfall the apparel company is facing can be analyzed under the Drivers of the New Business Environment found on page 34 of the text. According to this model, organizations must possess the ability to embrace change and also have the capabilities of creativity and innovation which are all critical to their success. So in this case, the marketers failing to understand current fashion trends in customers hurt Gap’s image and sales. Gap did not roll with the changes of everyone else and a result could not meet customer expectations.
Since 2005, Gap’s North American stores have shown annual decreases in sales. The company used to have very effective marketing ads that were “fun, quirky, and effective.” Gap has lost its magic and is no longer a retailer that is “different and
As customers once knew, The Gap was a popular fashion apparel store that attracted many people to it. However, this is no longer the case in the present day. So what happened? According to the case, competitors are gaining market share with cheaper and fresher fashion designs. One of the problems Gap (including other retailers) is the rising costs of raw materials. Gap said this would force them to raise their prices on items by 20 percent, but the customers would never accept that. The rising costs of raw materials can be attributed to the increasing prices of cotton and labor costs in manufacturing centers like China. However, Gap’s biggest source of decline can be directed towards its lousy fashion designs. The Gap once was a “must-have” brand during the 80s and 90s, but currently they have not been able to keep up with consumer taste. Gap completely misjudged fashion trends as it offered hip-huggers, sparkly t-shirts and other pop fashions that clearly were not in style thus driving away customers. Even the primary customers who have always relied on The Gap to buy casual wear have turned away and chose other competitors.
This unfortunate downfall the apparel company is facing can be analyzed under the Drivers of the New Business Environment found on page 34 of the text. According to this model, organizations must possess the ability to embrace change and also have the capabilities of creativity and innovation which are all critical to their success. So in this case, the marketers failing to understand current fashion trends in customers hurt Gap’s image and sales. Gap did not roll with the changes of everyone else and a result could not meet customer expectations.
Since 2005, Gap’s North American stores have shown annual decreases in sales. The company used to have very effective marketing ads that were “fun, quirky, and effective.” Gap has lost its magic and is no longer a retailer that is “different and