Question

Based on the retail Company Abercrombie and Fitch Co., answer the following questions in a multi-paragraph response.

The two market segments under Abercrombie and Fitch are Hollister Co. and Abercrombie Kids.

TARGET MARKET STRATEGY

1. Is the size of each market segment sufficiently large or important to warrant a unique marketing mix?
2. Which are the high- or low-opportunity segments?
3. How much of the firm’s business is repeat versus new business?

Use MLA citation proper documentation is needed if outside sources are used.

Answer 1

Abercrombie and Fitch Co., is the largest American lifestyle retailer focuses on the casual wears with operating two sub-brands like Hollister Co and Abercrombie Kids. The company has overall 1049 stores worldwide and the resources of 22,500 employees working under the 128-year-old company. The brand image of the company with the slogan of ‘casual luxury’ and lifestyle concepts with high-grade materials in the segment. The two major market segments directly associated with the product dynamic and quality offerings in the market.

Hollister Co.

The company is focused mainly on the global teenagers and young adults in the segment, aged between 14-18 years. The Hollister goods and services are available through the flagship stores of A&F worldwide and the stores directly offering the products through 578 stores. The company also focuses on the marketing of clothing, fragrances, body care, and flagship stores.

Abercrombie Kids

The company is mainly focusing on the children brand and introduced under A&F in 1998. The market segment for the category of children from the age of 7-14 years old. The global operations are wide across the flagship A&B stores and individual 160 kid’s stores. The core focus of the sub-brand on clothing on children’s wear across the main brand entity also.

Target Market Strategy

The two brands under the Abercrombie and Fitch Co., are well established and specifically targeted on the two important genres of the market, one for kid category and other for the teenage category. The product offering for these segments has immense potential to gain the market share and the market share itself showed the output of US$ 450 million in the Abercrombie kids in previous years and Hollister Co. has $2.2 billion in annual revenue. By the analysis, clearly showed the importance of the marketing mix based on price, product, place, and promotion.

The marketing mix of Hollister Co., explains the product or service innovations, customer experience, and marketing investments. It helps to achieve business objectives and goals, and the (product strategy) of the multi-level focus of production rather than apparel, more into other accessories like jackets, activewear, sleepwear, eye mask, bracelets, fragrances, shoes, and more on the product categories. The strategy surrounded by understanding the pulse of the millennial and teenagers in the market. The major aim (pricing strategy) to the segment who has high disposable income and targets them with the latest trends or lifestyle options. The (distribution strategy) is focus thought the physical stores and more connectivity towards the online stores. The advertisement strategy also boosts the visibility of the product in the market and exemplifies the culture trend and classic collection in the stores. The marketing mix of the Abercrombie kids are into product offerings with better comfort, and safe clothing parameters to comfort the kid’s segment buyers, usually the parents of the kids. The themes are always related with cartoon characters and the mild patterns to attract the fairness of the apparel. The major concentration towards the fresh and light clothing for the kids.

The Hollister Co. has high opportunity in the market because of the product segmentation and the category of buyers are self-decision makers to choose or make the decision. The segment focuses on the teenagers (the millennial group) with high disposable income who are looking forward to more trend cultures and updates in the alternative seasons. The company generates products in winter and summer collection to drive the sales of the teenage category of buyers. On the other side, the Abercrombie kids have low opportunity because of the indirect target segment. The market has wide options and the A&F main brand converts the sales of A&F Kids to the context and the revenue absorbs the share of both, but less opportunity.

The key to a successful business to persuade the existing customers to buy again from the same company. The repeat sales increase the revenue and growth of the existing company. The A&F firm’s business is repeat versus new business because the new entities are structured inside the existing model with targeting different segments and it helps the company in many ways to contain the business to all categories of customers in the market. The major strength of the existing company involves good designs, unique retailing, and global presence, complete retail portfolio of products, strong brand building, window merchandising, and excellent quality offerings in the segment. The repeating of the clothes is common in the A&E Company and operating under the same name or shops across the markets. The new business is very less operative and the existing apparel businesses or product offerings are segmented into the age group differentiation between the kids and teenagers.