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A Report on Gap Corporation

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Overview

Gap Inc. was founded in 1969 by Donald and Doris Fisher in San Francisco, California, with a single store and a handful of employees. The first idea was to make it easier to find a pair of jeans and a commitment to do more. Originally, Levi’s, records and tapes (eight-track) were sold. Today, The Gap has three of the most prestigious brands within its fashion sector – Gap, Banana Republic and Old Navy – among the largest specialty retailers in the world. As of February 2019, Gap Inc. has more than 150,000 employees supporting about 3,300 company operated stores and more than 400 franchise stores in Asia, Europe, Latin America, the Middle East and Africa, as well as e-commerce sites and is still growing. In 2004, the Gap boasted fiscal revenues of $16.3 billion. Its world headquarters are located in San Francisco, product development offices in New York City and distribution operations and offices coordinating outsourcing activities are located throughout the globe. ‘Levi’s for Guys and Gals,’ was one of the company’s first slogans. In 1982, Gap started to manufacture its own private label products, and by 1991 it absolutely stopped carrying additional labels. The name comes from the gaps between children and adults, known by the hippie movement as “the generation gap”. Gap Inc. is publicly listed on the New York Stock Exchange under the ticker GPS.

Marketing

A Marketing Mix is developed to better serve certain needs than competition by identifying a target audience and recognising their consumers / organisations’ needs. Product, promotion, price, and place are the four main decisions to take into account when making a marketing mix decision. Below is the description of the Gap’s marketing mix (4Ps).

Product:

Gap Inc. is a worldwide retail apparel company with several brands. The company sells men, women and children clothes, accessories and care items. The brand has, over time, expanded its portfolio by introducing new brands. The following are the leading companies in Gap Inc’s portfolio:

  • Old Navy: Old Navy is a big brand of clothes and accessories. Its products include primarily current important American items available to everyone. The company’s democratic design and trendy, playfully ambitious, accessible and high-quality goods are acknowledged. With products ranging from t-shirts, jeans to seasonal classics, customers will always find something for their family.
  • Gap – Founded in 1969, it is one of the world’s biggest iconic apparel firms. The look of the brand is rooted in relaxed and hopeful American. It offers a range of outdated apparel with all jeans, teas, button-downs, and khakis along with trends that are required. Yet, the company also offers items under different brand labels such as Gap Kids, Baby Gap, Gap Maternities, Gap Body and Gap Fit lines for particular parts of the markets, and also accessories and clothes for adults.
  • Banana Republic – Founded in 1978 and purchased by Gap Inc. in 1983. The travel and adventure outfits were produced by a two-storage company. It is now a worldwide brand of clothes and accessories, which renders new classics. The company involves clothes, spectacles, joys, accessories, handbags and perfumes, all for people with the finest fabrics and products and at all pace of life. Domestic items in specialist stores are available to consumers worldwide.
  • Athleta – Athleta is an athletic and healthy lifestyle brand for females. Since 1998, Athleta has been popular. The brand has been developed by and for female athletes. This brand is high-quality fitness and lifestyle. In 2016, Athleta began a branch that meets the expectations of the next generation. Athlete products can be sold inside brand stores in the United States or online worldwide.
  • Intermix – the name of Intermix is a suggestion of the company. This blends fashion patterns in surprising ways and retains every style’s uniqueness. The company guards models from the most famous and renowned designers. In the USA and Canada, consumers can purchase their goods from supermarkets or from anywhere online.
  • Hill City – Launched in 2018, it’s a company that provides people with high quality apparel. It provides all kinds of outfits from weekdays to the weekend.
  • Janie and Jack – Janie and Jack is a luxury fashion retailer in the children’s market, from Gymboree Group Inc. It still markets its goods on online platforms through its 100 stores in the US. The company provides unique and creative designs, along with its high quality.

Price:

Gap is the market leader in its division in the United States. The apparel industry is highly competitive and thus, in its marketing mix, it pursues a competitive price policy. American Eagle Outfitters, Urban Outfitters Inc, and Macy’s Inc. are its main competitors. By reducing costs in order to deliver low prices for quality goods, Gap preserves its market share. The demand for GAP goods is inelastic (clothing is the basic necessity), even though the market is still cost-sensitive. Customers buy clothing that is cheaper for them. Gap has changed its focus since 2014 to a broader target market. It streamlined operations for reduced costs and lower prices. Due to several options, the supplier power in the sector is further reduced. A combination of psychological strategies and costs in the line of goods is combined with Gap’s current pricing strategy. It has done so by finding its retail inventory. Transport expenses were therefore reduced to a minimum. This thus preserves its competitive price advantage by optimising operations.

Place:

Gap has a wide distribution network that ensures a strong global presence. Items may either go to the supermarket or direct Gap stores from the product to the wholesaler, for customers to purchase. Gap Inc. itself runs more than 3700 stores. The majority of shops are open all year round. Some stores are in the US themselves. Retailers are incorporated using both online and offline networks. Gap enables its customers to shop on the same platform for various brands. Emphasis on the internet distribution channel has increased. And third parties such as Amazons are available to clients of Gap Inc. for clothing or products. In addition, customers can look for an address from the official website for the closest store to their location. One distinctive aspect is that Gap items are often returned to stores to please buyers, whether or not they are purchased online. Everywhere in the world, Gap Inc. is remembered. In most metro cities around the world, this brand is easily accessible. While the number of self-operated stores in Gap is less compared to total (only 20%), Gap’s presence in the world was facilitated by the net presence and third-party stores.

Promotion:

Gap Inc is selling its brand and goods across a number of platforms. It also conducts marketing campaigns from time to time to promote its goods and styles. Gap ran the holiday season advertisement ‘Meet me in the Gap’ in 2018. The campaign has communicated the message of goodness and progressive progress, built to get Gap fans excited. The campaign took place live and spanned TV, web, social, in-store, and digital promotional activities in November 2018. In addition to promotional ads, the company uses other collaborations and promotions to advertise and identify their collections. In November 2018, GQ’s ‘Coolest Designers on the Planet’ menswear range was also released, a campaign that honours designers from America and abroad. Old Navy also uses these services, promotions and alliances to promote its brand. It helps to encourage and increase awareness of brands. On International Women’s Day in March 2019, Old Navy launched a campaign to inspire and enliven women. Certain labels in Gap’s portfolio, such as Athleta and Intermix, often use such advertising strategies to increase brand recognition and join supporters. Gap Inc. also aims to simplify its marketing strategies by using data collection and personalization. Customer experience has become a cornerstone to effectively selling a brand. This is why businesses are increasingly focused on personalising and providing the most secure installation and online experience. In recent years, Gap Inc. has also obtained more data from its ads, so that each customer receives personalised, distinctive information.

Ethics

Labour conditions:

In 2004, Gap Inc. reported the first social responsibility, which leads to the stop of business between the San Francisco-based company and 136 factories due to problems such as the use of child labour, physical abuse, hygiene and health issues (Smith, 2004). Again in early 2018, the Gap is reported to sexually and physically abuse female workers in Asian factories with the pressure to meet fashion deadlines. In response to the report, the Gap said they would investigate the allegations to be ready to tackle the problems (Hodal, 2018). According to the Ethical Fashion Report 2018, Gap began to improve working conditions. The study discusses factors such as remuneration rates, fairness and workplace empowerment programmes. The highest score has been given to Gap for its Supplier Code of Conduct in its supplier agreements. Gap also tracks much of the supply chain and lists some vendors in the public domain. Unfortunately, Gap has only audited multiple tracked facilities over a two-year period and has limited employee empowerment programmes. For the Gap, there is always much to change.

Environmental impact:

In 2014, “Toxic Threads: Polluting Paradise” published a report saying that the Gap’s latest advertising campaign turned the Citarum River into a multi-coloured mess. Industrial waste water containing a wide range of hazardous substances from the Gap’s factories was dumped directly into the Indonesian water (Elks, 2014). In honor of Earth Day in 2019, Gap Inc. unveiled new commitments to boost the company’s use of more sustainable materials to reduce the environmental impacts from product manufacturing (WIRE, 2019). Gap is a Sustainable Apparel Coalition member who uses the greenhouse emissions protocol to direct carbon assessment and reporting. The brand has committed itself publicly to a 50% rise in its carbon emissions by 2020. It is also worth noting that Gap takes steps to conform to its Restricted Substances by 2020, but to this end, no measures have been taken to remove the environmental contamination from leather tanning processes of chromium and other chemicals.

Animal welfare:

Even though on the company website, Gap stated that it does not use real fur in any of its products, in 2015, PETA got its Intermix brand may be doing just that. And that wasn’t the first time (Adams, 2015). Gap claimed that it only uses non-mulesed sheep’s wool and that she doesn’t use angora or exotic animal fur. Unfortunately, it does not use leather without specifying its source and does not use any accreditation. This indicates that the welfare of animals or workers in the manufacturing cycle cannot be taken into consideration.

Customer relationships

Despite all the ethical issues in its business, Gap Inc. is considered to be a customer-centric organization. Gap Inc. has made it easier for consumers to shop and connect with products of the Gap Inc. online and in stores securely. In 2017, Gap Inc. began building customer support on shelves in conjunction with mobile apps. Due to the fact that consumer purchases are done by partners using mobile apps and mobile printers, consumers do not have to wait in line for credit cards, buy goods or place home delivery orders. Customers use smartphones with wall-mounted scanners for checking prices in the shops. Some of them are installed in dressing rooms, so that customers can easily search the product mark for a different size or colour in the room. Developers of Gap Inc. regularly check to help consumers explore new goods and information that are fun and easy to shop. Whilst it is important to please customers, it is also important to preserve your records. Gap Inc. thus secures its network, applications and customer information with a ‘zero-trust’ security model. Gap Inc. can isolate key servers and applications in its data centre and cloud by micro-segmentation, making it safer to process or to transfer sensitive data. It offers a fundamental safety framework. As any shopper knows, it’s a real pleasure to just find and buy the piece. Gap Inc. strives to allow it to be available seamlessly in stores or online through locations, platforms and devices. This is what the organisation is doing with its dedication to retail innovation and a digital foundation.

Bibliography

  • Adams, E., 2015. PETA’s Got Gap Inc. In Its Crosshairs Again. [online] Racked. Available at: [Accessed 13 April 2020].
  • Business-humanrights.org. 2019. [online] Available at: [Accessed 13 April 2020].
  • David, J., 2019. SWOT Analysis Of GAP (GAP Inc. SWOT Analysis) | Howandwhat. [online] howandwhat. Available at: [Accessed 13 April 2020].
  • Elks, J., 2014. Polluting Paradise: Gap, Inc Among Companies Exposed In Indonesian Toxic Water Scandal. [online] Sustainable Brands. Available at: [Accessed 13 April 2020].
  • Finance.yahoo.com. 2020. Yahoo Is Now A Part Of Verizon Media. [online] Available at: [Accessed 13 April 2020].
  • Forte, D., 2018. How Gap Inc. Reimagined Itself As A Customer-Centric Organization. [online] Multichannel Merchant. Available at: [Accessed 13 April 2020].
  • Gapinc.com. 2017. Gap Inc. Outlines Strategy For Long-Term, Balanced Growth. [online] Available at: [Accessed 13 April 2020].
  • Gapinc.com. 2018. Gap Celebrates Spreading Love With The ‘Meet Me In The Gap’ Holiday Campaign Starring Leon Bridges. [online] Available at: [Accessed 13 April 2020].
  • Gapincsustainability.com. 2020. Policies | Gap Sustainability. [online] Available at: [Accessed 13 April 2020].
  • Hodal, K., 2018. Abuse Is Daily Reality For Female Garment Workers For Gap And H&M, Says Report. [online] the Guardian. Available at: [Accessed 13 April 2020].
  • MarketingSherpa. 2005. Gap Inc’s Top 10 Rules To Create A Successful Customer Loyalty Program. [online] Available at: [Accessed 13 April 2020].
  • Rankabrand.org. 2017. Gap And Sustainability: D-Label | Buy Sustainable Brands. [online] Available at: [Accessed 13 April 2020].
  • Referenceforbusiness.com. 2020. The Gap, Inc. – Company Profile, Information, Business Description, History, Background Information On The Gap, Inc.. [online] Available at: [Accessed 13 April 2020].
  • Smith, S., 2004. Gap Inc. Admits Problems, Vows To Improve Working Conditions At Garment Factories. [online] EHS Today. Available at: [Accessed 13 April 2020].
  • Sonsev, V., 2018. How Gap Inc. Personalizes Marketing To Boost Results. [online] Forbes. Available at: [Accessed 13 April 2020].
  • WIRE, B., 2019. Banana Republic And Old Navy Announce New Goals To Accelerate Sustainable Product Offerings. [online] Businesswire.com. Available at: [Accessed 13 April 2020].

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