In a recent article in PromoMagazine.com, although there have been several poor financial quarters for Gap Inc., the company still plans to support Product RED, its brand that gives a percentage of the product sales to The Global Fund to Fight AIDS, Tuberculosis and Malaria. Gap Inc. is five months into a five-year license for RED, which is set to expire in 2011, according to the article. With a big promotion for Valentine’s Day products and with celebrity backing, Gap has put the biggest marketing push behind the RED campaign among the five other U.S. RED licensees. According to the article, Gap has made about $103 million in RED sales, with 50 percent of the profits donated to The Global Fund.
Even though this endeavor only promotes Gap Inc.’s dedication to social responsibility, and will hopefully strengthen the brand name among costumers and other publics around the world, the company is in financial trouble and in need of a turnaround. According to the article, the sales for The Gap brand were down 8 percent, in comparison with 7 percent the previous year. Analysts are guessing that the company may be sold as a whole or in separate pieces, with each of the brands going to new owners, according to the article.
As Gap Inc.’s sales continue to decline, the future of the company and the different brands is obviously at stake. Could it be that the brand names do not carry the company as far as they used to? There are many other competitors in the market of “casual wear,” and this kind of external threat may be causing sales to decline. Regardless, Gap Inc. is committing itself as a socially responsible company by donating part of the profits it receives from the Product RED line to The Global Fund. As Gap Inc. is only five months into this licensing agreement, could this be a strategy to salvage the brand and to boost sales? Socially responsible companies are well-respected, and many costumers appreciate a company that is aware and in tune with social issues. Perhaps the sales from Product RED’s line combined with the added boost to the company’s name will help drive sales up and secure Gap’s financial situation. Are the sales and reputation-enhancement that comes with a brand such as Product RED enough for the company to survive? How important is social responsibility to a company and to its publics? How important is to a brand name? Does it really enhance a company’s reputation or boost its sales? Or does it depend on the situation?
Sunday, February 25, 2007
Sunday, February 18, 2007
President of Banana Republic named new president of Gap North America
Marka Hansen, president of Banana Republic, was announced as president of Gap North America on February 1, 2007. According to Bob Fisher, Gap Inc.’s CEO and interim president, Hansen has “demonstrated through her tenure at Banana Republic that she understands what it takes to lead an iconic apparel brand” (see article). These changes are hoping to boost the sales of the Gap chain.
Sales have been sliding in the Gap and Old Navy brands, but the Banana Republic brand has been doing better. Sales rose by 2% at stores open for at least a year during the shopping season. There have been speculations that Gap Inc. may sell off its Banana Republic brand, but nothing has been confirmed (see BusinessWeek.com article).
The main question: why are Gap and Old Navy brands declining in sales and the Banana Republic brand increasing? Although they are all very strong brand names, Banana Republic targets a different public and niche in the market when compared to Gap and Old Navy. Gap and Old Navy target similar publics, which may lead to cannibalization of their sales. Banana Republic may have a certain edge over the other brands, because it offers a specific type of casual clothing. Gap and Old Navy, on the other hand, are in a broader market of “casual wear.”
What should the strategy be to increase the sales of Gap Inc. and the struggling brands? Should Gap develop a new marketing and public relations campaign? Or position itself differently in the market? Will the new president of Gap North America be able to help the Gap brand? Right now, Gap Inc. is facing some of its internal weaknesses as well as some of the external threats of other competitors. What strengths can this company rely on to pull it through? Brand loyalty? How can Gap take advantage of opportunities in the marketplace to salvage the chain?
Sales have been sliding in the Gap and Old Navy brands, but the Banana Republic brand has been doing better. Sales rose by 2% at stores open for at least a year during the shopping season. There have been speculations that Gap Inc. may sell off its Banana Republic brand, but nothing has been confirmed (see BusinessWeek.com article).
The main question: why are Gap and Old Navy brands declining in sales and the Banana Republic brand increasing? Although they are all very strong brand names, Banana Republic targets a different public and niche in the market when compared to Gap and Old Navy. Gap and Old Navy target similar publics, which may lead to cannibalization of their sales. Banana Republic may have a certain edge over the other brands, because it offers a specific type of casual clothing. Gap and Old Navy, on the other hand, are in a broader market of “casual wear.”
What should the strategy be to increase the sales of Gap Inc. and the struggling brands? Should Gap develop a new marketing and public relations campaign? Or position itself differently in the market? Will the new president of Gap North America be able to help the Gap brand? Right now, Gap Inc. is facing some of its internal weaknesses as well as some of the external threats of other competitors. What strengths can this company rely on to pull it through? Brand loyalty? How can Gap take advantage of opportunities in the marketplace to salvage the chain?
Sunday, February 11, 2007
The Banana Republic brand expands to the United Kingdom
According to a recent announcement, Gap Inc. plans to open its first Banana Republic store in the United Kingdom in 2008. Although Banana Republic is prominent in the United States and other parts of the world, (Gap opened stores in Japan in 2006) it has not yet broken into the UK market.
“With its affinity for fashion and luxury products, the United Kingdom has the potential to be a strong market for Banana Republic, and our customers in Europe have expressed a great deal of interest in us bringing the brand here," said Stephen Sunnucks, president of Gap Europe. (http://www.ddimagazine.com/displayanddesignideas/headlines/article_display.jsp?vnu_content_id=1003538260).
In order to establish Banana Republic as a well-respected brand in the UK, Gap will need to create a campaign that differentiates the store from other already established brands. This breakout into a new market is also not without competition; according to MarketingWeek, H&M is launching a new brand in the UK named “COS,” which stands for Collection of Style. This brand is meant to be more upscale and will open in the UK next month. Banana Republic is known as an upscale but accessible luxury brand; the public relations strategies used to market this brand and communicate its message will need to explain what makes it different from its competitors.
Why is Banana Republic the better choice? What does it have to offer that other already existing stores in the UK don’t have? Will the launch of the new brand COS prove to be a problem for Gap and the Banana Republic brand? The UK market may prove to be a challenge to break into; or perhaps consumers will take an immediate liking to the brand. I am interested to see what specific market the company targets and what public relations tactics are used to establish credibility and generate interest in the brand.
For more information on this subject, visit MarketingWeek at http://www.marketingweek.co.uk/item/54837/254/260/3.
“With its affinity for fashion and luxury products, the United Kingdom has the potential to be a strong market for Banana Republic, and our customers in Europe have expressed a great deal of interest in us bringing the brand here," said Stephen Sunnucks, president of Gap Europe. (http://www.ddimagazine.com/displayanddesignideas/headlines/article_display.jsp?vnu_content_id=1003538260).
In order to establish Banana Republic as a well-respected brand in the UK, Gap will need to create a campaign that differentiates the store from other already established brands. This breakout into a new market is also not without competition; according to MarketingWeek, H&M is launching a new brand in the UK named “COS,” which stands for Collection of Style. This brand is meant to be more upscale and will open in the UK next month. Banana Republic is known as an upscale but accessible luxury brand; the public relations strategies used to market this brand and communicate its message will need to explain what makes it different from its competitors.
Why is Banana Republic the better choice? What does it have to offer that other already existing stores in the UK don’t have? Will the launch of the new brand COS prove to be a problem for Gap and the Banana Republic brand? The UK market may prove to be a challenge to break into; or perhaps consumers will take an immediate liking to the brand. I am interested to see what specific market the company targets and what public relations tactics are used to establish credibility and generate interest in the brand.
For more information on this subject, visit MarketingWeek at http://www.marketingweek.co.uk/item/54837/254/260/3.
Sunday, February 4, 2007
Brand Marketing/Brand Building
I will be blogging about brand marketing/brand building and how it relates to the public relations industry. The main client I will be posting information about is Banana Republic, a brand by Gap Inc. It is known as an "accessible luxury brand, offering high-quality apparel and accessories collections for men and women" (http://gapinc.com/public/OurBrands/brands_br.shtml). For more information on Banana Republic, visit the Web site at
http://www.bananarepublic.com.
http://www.bananarepublic.com.
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