Running head: GAP INC.

– MARKET SEGMENTATION 1

Segmentation, Targeting, and Positioning within Gap Inc.

Iyanai Walter Chawheta

University of Zambia – Graduate School of Business

Segmentation, Targeting, and Positioning within

Gap Inc.

Gap Inc. has included in its strategy segmentation, targeting and positioning at useful

tools that it and others in the industry use to identify specific groups amongst consumers to

sell their products to and increases the attractiveness of its products to this specific segment

of the market. The clothing industry invariably finds it difficult to meet specific market

requirements let alone provide for satisfaction uniformly across all consumer markets. People

have varied affordability matrices ad rarely do they have similar need or wants. It is virtually

impossible for a single product satisfy everyone.

Gap Inc. General Segmentation

Consumer segmentation is of utmost necessity in coming up with customer focused

strategy (Camilleri, 2018). Thus, market segmentation assumes the notion that various

segments need different marketing processes specific to the target grouping. According to

Kotler and Keller (2016) segmentation or targeting decisions require detailed understanding

of consumer behaviour, and strategic thinking on the part of the marketers. From an at face

perspective, Gap Inc segmented their customers based on affordability. After identifying the

market as being composed of the low to medium market, professional and middle class, and

finally a market that is premised primarily on those who cost is irrelevant, they crafted brands

directly focused on those specific groupings. According to Evans (2016), based on a carefully

calculated/crafted structure, the company came up with three brands; namely Old Navy, Gap,

and Banana republic. As can be seen, the company’s market segmentation strategy involves

initially identifying segments of the market, splitting the broad customer base into groups of

specific consumers with similar needs, wants and purchasing power. Each segment is viewed

as being homogeneous groups that possess the same characteristics.

Targeting

By its very nature and definition, market targeting is premised on finding the most

profitable market segments and focusing on them. It is necessary that companies like Gap Inc

focus on these segments. Targeting is a natural next step that marketers need decide on after

market segmentation in order to achieve the company’s overall strategic objectives. In short,

the process of selecting a segment to aim for is what is called targeting. As shown on the map

in the video, Gap Inc focused on continents that provided them with the most value e.g.

American, European in contrast to the African market. After deciding on which customers to

focus on, clothing retailers utilize the target market characteristics to position their brands

with an image with which the targeted customers identify.

Positioning

The clothing industry that follows Gap Inc. strategy utilizes a multi-pronged approach

to market of positioning and as such they make use of multiple customer segments in order to

have a sustainable market for their three brands. Dibb and Simkin (1991) states that

positioning achieved when the product is positioned in the minds of the customers and is

given an image. The product must be perceived as having a distinct image, position and

stand-out against its competitors by target market.In this case, Old Navy focuses on

individuals focused on a lower-cost, family-oriented products that provide value for money,

Gap identifies the middle-income earner as the target market and ultimately Banana Republic

brand being most suited for style conscious the uppermost financially stable individuals. For

each of the stated brands, there is distinct variability in terms of the type of materials used for

the products, cost, discount provision, and advertisement strategy. As can be seen, Gap. Inc.

view positioning as a selection of the marketing mix that is the most attractive for the target

customer segment. Strategically, Gap Inc. established a clothing line that appeals to all
GAP INC. – MARKET SEGMENTATION 4

segments and by utilization of specific fabrics for different market segments, they were able

to differentiate themselves from competitors. It is critical in this aspect that positioning and

distinctiveness has a direct bearing on appealing to the targeted consumer.

Application of Maslow’s Hierarchy of Needs in Gap Inc.

Maslow's hierarchy of needs is a general depiction of how individuals progress as

they grow up the ladder in societal terms of social, economic and general well-being. The

theory has found applications that are normally premised on motivational theories. However,

Gap Inc. has utilized the needs theory with success in its marketing strategy by having

different brands for each niche/target market. Old Navy at the bottom of the pyramid, fills the

first level category, which is the physiological need that is price sensitive. Gap fits the gap in

between, and Banana Republic focused on persons at or near the self-actualisation stage

(Evans, 2016), Gap Inc. was successful in utilising the various levels of human needs in its

marketing strategy. As customers move up the chain in terms of the Maslow’s hierarchy of

needs, Gap Inc. moves in to fulfil the obtaining need, be it social, esteem or otherwise.

As such, the brands associated with Gap Inc cover in entirety the five steps of Maslow's

hierarchy by meeting the different requirements of the different levels.

References

Camilleri, M. A. (2018). Market Segmentation, Targeting and Positioning. In Travel

Marketing, Tourism Economics and the Airline Product (pp. 69-83). Cham, Switzerland:

Springer.

Dibb, S., & Simkin, L. (1991). Targeting, segments and positioning. International Journal of

Retail & Distribution Management, 19(3), 4-10.

Evans, E. (2016). Segmentation, Targeting, and Positioning within Gap Inc. Retrieved

from https://www.youtube.co/watch?v=IlQtjaLyW-w

Kotler, P., & Keller, K. (2016). Marketing management (15th ed.). Upper Saddle River, NJ:

Prentice Hall.