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Brian SongWonmin HyunDoori SongSunhwa JungPyeong Cheong KoLi Fei

Situation AnalysisGap Inc. BackgroundLaunched Old NavyStarted online retailingGapBody (women)Multi shop with own brandsAcquired Banana RepublicGap kids, Baby GapMulti shopSelling Levi’s jeans concept of anti-fashion 1970s 1980s 1990s 2000s

Situation AnalysisIndustry TrendTrend2001: Apparel sales was $184.366 billion, 1.3% growth2002: Expected to grow at the same nominal rateEstimate sales: $186.77 billionStore TypeMall-Based Specialty Store: GapMass Merchant or Promotional Department Store: K-mart or TargetTraditional Department Stores: Marshall Field’s or Macy’sNational Chain Stores: J.C Penny, Sears, and Kohl’s

Situation AnalysisCompetitorsStyleClassic, BasicJ.CrewJC PennyTargetAEGapYoungerOlderOld NavyAeropostaleA&FTrendy

Situation AnalysisCompetitorsGapJ. CrewA&FAeropostaleAEJC Penny20.63.1%1.2%69.9%5.1%

Situation AnalysisBalance sheet for the Years 2000 and 2001Add 000 to all figures except earnings per share.

Situation AnalysisFour Division Sales – 2000, 20015 %Figures in billions.

Situation AnalysisGap Domestic Performance12 %

KeyIssuesKey IssuesUrgencyLMarket ShareProfitImportanceHLShort-term SalesBrand Re-PositioningH

SegmentationBaby BoomersBorn between 1946 and 1965 (37~56 years old)

Listen to the radio (21 hours per week), two hours more per weekFavorite activities: Shopping, 31% Outdoor activities 16% Contribute 50% of sales to shopping mall

SegmentationGeneration XBorn between 1965 – 1980 (22~37 years old)

Average household income: $45,498

Price is the leading motivator when shop for fashion items

SegmentationGeneration YBorn between 1977 and 1994 (8~25 years old)

One out of nine high school students have a credit card co-signed by a parent Teens have an average of $100/week disposable income 75% teenagers are on-line 93% of those ages 15-17 are computer users

Generation XBasicBaby boomerG en XGen YSecondary target:

Generation YTrendyHigh LoyaltyLow Loyalty

positioningStyleClassic, BasicGapJ.CrewJC PennyTargetAEGapYoungerOlderOld NavyAeropostaleA&FTrendy

AlternativesAlternative 1: Product line AdvertisingAlternative 2: Brand Image AdvertisingAlternative 3: Mixed Advertising

AlternativesAlternative 1: Product line Advertising

AlternativesAlternative 2: Brand Image Advertising

AlternativesAlternative 3: Mixed Advertising

ObjectivesMarketing ObjectivesShort-term To maintain last year net sales ($5.2M) and market share, acquiring new core customers (the older generation and Xers) in the customer mix by 15% in first year while re- positioning the brand as ‘all of generation’ Long-term To recover the Gap’s brand reputation of the basic casual cloth and position as market leader in five years

ObjectivesThe Ostrow ModelMedia Objectives17-22Within one year, aim to communicate the target customers with level of frequency 7Source: the Ostrow Model577

ObjectivesMedia Objectives1Within one year, aim to communicate the target customers with level of frequency 72Inform 2/3 of the “reached” customers that the Gap will bring benefits for style3Convince 2/3 of “informed” customers that the Gap is American style apparel for everyone4Stimulate desire within 2/3 the “convinced” customers for try the Gap apparel

Budget &AllocationMedia Budget Maintain market share from 2002 (Domestic) 2.90% $5.61Billion Domestic sales , $102.3 million on Advertising 1.8% of the Domestic sales2003 The Total Sales of the Industry is estimated by the same growth rate as 2002 3%  $ 189.19 billion2002 $ 5.48 Billion (Estimated Domestic sales) 1.8% of sales and 8.9% of annual advertising cost growth Estimated spend for Advertising: $106.43 million Estimated Gap Domestic sales 5.48 Billion2003 8.9%* $106.43 (Estimated spend for Advertising 2002) 115.9 Million

Budget &AllocationBudget Allocation

Budget &AllocationMedia Flow Chart

TVReason for SelectionGood Mass Market CoverageThe Gap’s Broad Target AudienceAppealing to the SensesBrand Image Advertising (The Gap’s new campaign)

TVBudgetTotal Budget for TV: $60,919,370 (52.56%)70%90%Primary TargetNational Network TV$ 42,643,559$ 54,827,43330%10%Secondary TargetCable TV$ 18,275,811$6,091,937

TVNational Network TVVehicles selected by Rating/ Target Demographics/ CostsMayMar.Aug.Jul.Nov.Oct.Dec.$ 42,643,559

TVVehicle SelectionABCCBSUPNNBCFOXMon.Prison BreakCSI: Miami$229,000$160,669Tue.America’s Next Top ModelLaw & Order$32,669$191,776CSI: NYWed.$163,000NBC Saturday Night MovieABC Movie of the WeekSat.$53,175$94,300$1,474,068 per WeekDesperateHousewivesSun.60 Minutes$439,499$109,980Source: Advertising Age FactPack

TVCable TVVehicles selected by Rating/ Target/ Vehicles characteristicsFeb.Jan.Apr.Mar.Jun.Aug.Dec.Nov.Sep.$ 18,275,811

TVVehicle Selection – for Baby boomers & Generation X(%)P.TS.TP.TS.TA.RA.RA&ECNN6.872.084.475.571.563.572.471.982.277.221.084.150.881.331.110.280.420.354.662.423.540.410.230.323.852.283.060.670.620.643.792.543.175.814.665.23BETDiscoveryAMCMSNBCLifetimeCNBCFox familyESPNFoodHistoryP.T: Primary TargetS.T: Secondary TargetA.R: Average RatesSource: Simmons Choice3

TVVehicle Selection – for Generation YP.TS.TA.R2.582.022.300.080.080.082.130.741.441.371.201.29Animal PlanetMTVFX TimeE! EntertainmentP.T: Primary TargetS.T: Secondary TargetA.R: Average RatesSource: Simmons Choice3

RadIOReason for SelectionIncreases effectiveness when using with TV Ideal for refreshing recall of product names and utilities immediately prior to purchaseBrand Image Advertising

RadIORadioVehicles selected by Rating/ Target Demographics/ Close to SalesMay.Dec.$ 8,117,087

RadIOVehicle SelectionIntensive between 7 am and 10 am. Immediately after that, between 10 am and 11.30 am, an initial wave of purchasing follows.On returning home, the audience again turns its attention to the radio between 11.30 am and 2 pm, before a second shopping wave from 2 pm to 4 pm.Source: Source: Radio advertising effectiveness, Uwe Domke and Christoph World Advertising Research Center 2005

Most population located in US states & cities: 21 states & 47 cities (268 stations)RadIOVehicle Selectionhttp://www.gaebler.com/Radio-Ad-Rates.htmhttp://www.radioandrecords.com/RRWebSite20/Members/Ratings.aspxhttp://www.arbitron.com/radio_stations/prodsched.htm

InternetReason for Selection & Budget Effective to target Generation YProduct line Advertising

InternetIAB Internet Advertising Revenue Report conducted by PricewaterhouseCoopers (PWC)

InternetKey WebsitesThe Most Commonly Used Media of Generation Y:Top 5 general web sites visited:1. eBay.com-banner2. Amazon.com-banner3. CNN-Keyword Search4. MTV-banner5. KaZaA-banner(*Source: www.volunteertoday.com/archives%202004/Aug04recruit.htm#ManagingY)Top Search Engines (Keyword Search)Google 60.94%Yahoo! 22.34%MSN 10.72%Source: Hitwise Press Releases 2006The Top 3 fashion websites

InternetKeywordYahoo, MSN, CNNPay-For-PerformancePremium Advertising; Advertising in premium listings enables you to appear on more search sites and reach 80% of active internet usersCost (bid): monthly fee min $20, Per-click through min $0.10Site match; Pay-per-click programCost (bid): $49 annual + bid cost per click($0.15~$0.30)Source: This report was compiled by TriDigital Inc. from a series of acticles appearing on SearchEngineWatch.com

InternetKeywordGoogle Adwords; premium listings program Cost (bid): activation $5, pay per $0.10Source: This report was compiled by TriDigital Inc. from a series of acticles appearing on SearchEngineWatch.com

InternetExecution – Keyword Search

InternetBudget & Execution -Banner

InternetBudget & Execution -SponsorshipSource: http://www.lovetoknow.com/top10/fashions.html

NewspaperReason for SelectionCheapest way to reach a mass audienceTiming is fastEasy to change adsHigh ReliabilityBrand Image Advertising

NewspaperNational Newspaper Two national newspapersUSA TodayNew York TimesLarge circulation

Expensive compared to local newspapersNewspaperLocal NewspaperSix local newspapers

The Atlanta Journal-Constitution

Based on the states have the largest percentage of baby boomer and Xers:

GeorgiaNewspaperLocal NewspaperSix local newspapers

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Gap Ad Media Plan and Budget

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