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March 2008


Pedro Rocha

Excellent point of view and great writting. But how can we trasnmit that message to the board? By presenting case studies?

Veronica Monterrubio

More risky line extensions:
Google GULP! Beta, a drink by Google that apparently "changes your brain structure" and makes you "smarter", while, of course, saving your information.


Martin Calle

Perrier never recovered it's fall from popularity by the brand or by the numbers either. Another classic example of the minds of the Nestle few trying to communicate, inefficiently, with the minds of the CONSUMER many, yet never doing the kind of product-based problem-solving positioning homework required to change rather than pace consumer habits and practices. Just easier to go with the flow, down the flat sales drain pipe. When will they realize it's not about fashion mandates, it's about consumer perception and mediating consumer perception with positioning ideas to win the battle for consumer minds? Why do they leave it like a restaurant? I like that fashion entree, I don't like that one?
Martin Calle


This is a great article that clearly states the path to success for Gap Inc. I think you can't judge Glenn Murphy as strictly a numbers guy. He has stated repeatedly and publicly that he believes in strengthening brand identity and focusing more tightly on a target market for each brand. It just takes ime to make those changes.

And no, Gap Inc does not own Hot Topic.


Arun / Laura - it happens again & again because companies focus on making the numbers from quarter to quarter to quarter, most don't have any brand measures visible to senior management & the majority of the senior people are never in the market talking to consumers first hand (& I am not talking a token gesture "market visit", I'm talking Burton style 125 days a year snowboarding & talking directly to his team riders & consumers). When you work for a company that doesn't have any brand measures on the simplest of things e.g. Market Share Value & Price Premium you get a whole of of dynamics that are wrong. People get rewarded based on hitting an arbitary number (a budget or forecast & Wall Street rewards that too) that may mean a Market Share loss. So on the ground they're loosing ground to competitors but everyone is happy with the "great" job they're doing. Or alternatively they could be driving the price through the floor causing a price war but keeping revenue (for the short term) & screwing the business long term, but everyone is happy with the "great" job they're doing. The stars of your business meanwhile who might be taking the tough assignments & actually winning on the ground (inc. market share & price premiums) but loosing in the numbers because of a declining market for instance get crap & eventually leave...it's a viscous cycle. Because in most businesses Senior Management, HR & Finance are totally detached from the world of consumers & brands many big companies fall over time & time again as they put the wrong people in charge & promote the wrong people. I've often thought of writing a book called "great job" with stories of all the people who breeze through organisations, make it to the top & leave a trail of destruction that someone else gets the blame for...The good thing is more & more brand people are dropping out of the circus & starting their own things which kill businesses that aren't in touch, unfortunately they normally sell them back into the circus again!

David Tillinger

This is the same phenomenon that's going on with Victoria's Secret right now, the whole concept of Victoria's Secret getting too sexy and youthful for its previous sophisticated female audience. When a company rides a wave of momentum and expand, they need to be careful not to go so far past their original customer base that they lose that base.

Greg Hollingsworth

I have heard for many years that the Gap also owns the counter culture brand Hot Topic. If this is true it is definitely an attempt to market to the generation of kids that are rebelling against the Gap brand.

Although Hot Topic markets it's own brand of conformity it is one that targets teens who are doing everything they can to "rebel" against the norm. Would this not be a great brand expansion for the gap in terms of dollars and cents?


Laura, wats funny is when you mention "The problem is two-fold. (1) Using too many celebrities diminishes the value of any one celebrity. (2) None of the celebrities had credentials with the brand."
though I can unedrstand the second point but the first one seems disputable when the 2nd point is taken care of. You can have multiple celebs echoing your brand values and culture. Lux is an example on that. In india the actress lamost changes every six months...and luc stays up as soap of successful film stars.

Jay Ehret

Laura, you have so deftly and concisely pointed out the simplicity of The Gap's problem. And this puzzles me. The solution you present sounds so obvious and easy, yet it is so difficult for CEO's like Murphy to understand. Why?

It's darn near impossible to find examples of companies that shrink their way to success, yet this tactic is repeatedly repeated.

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