Business Strategy of Gap Inc. (Essay Sample)

Introduction
Gap Inc. is an American clothing and accessories retailer headquartered in California, USA. The gap is a popular clothing and accessories brand spread globally. Gap Inc. provides products in its marketing mix strategy like T-shirts, jeans, jackets, etc. for use in daily life, sunglasses for everyone, shoes, jewelry, perfumes, etc. The brand remained sole focused on providing top niche clothing materials and designs to its prospective buyers and is continuously involved in designing new styles and formats to increase the larger customer base.
Business Strategy
Gap Inc. is consistently trying hard to retain its reputation as a prominent brand and fabric retailer in recent years.  Traditionally, the strong brand image of the company has been based on uniqueness and exclusive designs, the ability to deliver a competitive product and, respond effectively to market changes influenced by demographic variables and lifestyle changes. Strategic objectives and marketing processes are the main method for Gap to remain competitive and plan its future growth. The situation has changed and Gap Inc. is coming out of its traditional American style jeans and T-shirts to include new products and highlight new products and design studio to execute a new plan to adhere the more practical situations.
Proposed Marketing Plan
Keeping the existing market mix plan into consideration there seems a more strategic promotional and visibility study is required to perform to make the product more visible to the target audience therefore using a digital marketing mix in the existing marketing plan can serve the purpose better and more revenue-oriented. Proposing to have Virtual Clothing as a new inclusion in the existing marketing plan where in the new Product Line will act as a design studio where prospective customers of the target group may buy the design at a much lower cost at any given point in time through online platform.
In this virtual clothing, customers need not buy the physical product, however, they can share their body dimensions on the online platform of the company where based on most approximate dimensions of the actual clothing will reflect on the portal in the secured login at a marginal cost for a limited time subscription on subsequent renewal basis they can download the application or give access to the system based application to figure out the body dimensions and show a reflection of their appearance with the given design by the company and use these appearances across their social platforms to make their memories more fashionable and appealing for evergreen memories. It is not possible to own cloth on every occasion at every place as it has a costly affair but with this new Virtual Product range, they can transform their appearance into more existing, transferable, and economical.
Execution Strategy Summary
The given idea is transformational and much IT-dependent therefore, promoting it through digital marketing media and the social platforms can be more economical and outreaching to a larger audience instantly. Simultaneously as a revenue model this can also be promoted through existing outlets where a designated area/trial rooms can be made available at marginal cost on infrastructure to serve the walk-in customers and make them confident in their choice of design studio freely but limited to transferability concerns to make it more popular so how this Virtual Clothing business idea can work fruitful to the customers as well as to the company.
This new execution strategy will have a positive impact on revenue maximization by creating a new line of business. It is workable and has no consequential losses therefore adding this new Virtual Line of the product will be an addition to their sustainable growth prospects.
Budgeting and Share Allocation
As part of the strategic business plan, Gap shall develop a Risk-Neutral Density (RND) plan that effectively covers all the necessary expenditures on operations, strategies, and direct sales (Mothersbaugh et al. 13). Since the new plan is to have a digital approach to selling clothing designs, the proposed shall focus on the development of technology and promotions. With a budget of USD 2 million, GAP has a limited resource allocation limit that shall be carefully allocated to specific areas to make the most out of a workable strategy. Therefore, 60% of the budget shall go to technological development while 40% of the remaining resources shall be channeled to promotions as indicated below.
Recovery Plan
The gap has been in the business for over four decades now, hence, it has created a large customer base to sell from. Given the fact that the company offers a wide range of designs that are consistent in terms of quality and trendiness, the new plan should be able to benefit from this existing customer base and gain more interest from prospective customers who need expensive designs for special occasions where Virtual clothes will serve their purpose as if they own and actual clothing. With 500+ franchised stores across different countries, the company intends to use its resource of current customers to advertise on the virtual venture, with an estimated growth rate of 7.6 % in the initial public offering and a 15% absorption of both current and new clienteles within 2 years of operations.
Hence the USD 2 million shall be distributed through social media platforms (Facebook, Instagram, and Twitter), Brand Ambassadors, Operational Expenses, and Online and offline technical requirements as follows;
Social Media Sites – Facebook, Instagram, Twitter, and YouTube Ads
* USD 800, 000 shall be distributed on online technical requirements and marketing through different social media channels.
This is another way in which Gap Inc. will be able to utilize social media platforms to advertise its products across a different stretch of the world. Moreover, it will help them in gaining information about their customers’ needs and allow the company to analyze this data for further development of high-quality products for consumers. The average advertising cost for Facebook, Instagram, and Twitter are $0.90 cents, 6.2 cents, and $ 1.35, extensive posts shall be driven towards at least three posts per day on each platform during the peek-hours. As the campaign shall be geared towards an online and virtual platform, the high budget allocation on social media is intended to drive revenue to the merchandise through a longer span- therefore digital adverts are to be maintained for a longer period. The social media approach is yet another way in which Gap Inc. can reach out to its customers without having to invest any money into its advertisements or marketing strategies. Instead, they will only have to come up with an attractive proposition for the app developers to include their products in their apps.
ii) USD 250,000 shall be allocated for Brand Ambassadors.
Brand Ambassadors
Gap shall employ appropriate brand ambassadors across different demographics to ensure that the message that is being conveyed is received by their customers. Gap Inc. shall choose a variety of ambassadors to ensure that they can reach out to a large number of customers who will be interested in the products and services they offer. These ambassadors shall ensure that their marketing strategies are executed properly across different demographics to ensure optimum results. Given that the average brand ambassador is $20.92 per hour and $13.07 in the UK, a USD 250, 000 shall capture the cost for two global ambassadors for at least one and half years to two years. The company will primarily focus on younger demographics who are considered to be more technologically equipped and mobile-oriented than older ones. The brand ambassadors will go via social media platforms and web forums such as Instagram, Facebook, Snapchat, Twitter, etc., to get the word out there about their products.
iii) USD 750,000 shall be allocated for operational expenses.