Re-Branding Abercrombie and Fitch by isadora alvarez

BY: Isadora Alvarez & Maira Garcia

TABLE OF CONTENTS Abercrombie & Fitch History............................................................................... 3 A&F Cares.......................................................................................................... 8 A&F Product Mix................................................................................................ 10 A&F Price Points................................................................................................ 11 A&F Current Target Market.................................................................................12 Abercrombie and Fitch Ads.................................................................................13 A&F Financial Report..........................................................................................17 A&F Competitors.................................................................................................18 Good/Bad Press Articles..................................................................................... 19 SWOT Analysis....................................................................................................20 A&F Survey......................................................................................................... 23 Marketing Strategy.............................................................................................. 25 Pricing(Women’s & Men’s products)................................................................... 27 Promotion............................................................................................................ 29 Advertising........................................................................................................... 30 Sales Promotions................................................................................................. 31 Personal Selling................................................................................................... 32 Direct Marketing................................................................................................... 34 Store Placement/Store Atmosphere..................................................................... 35 Customer Profiles................................................................................................. 36 New Product (5P’s)............................................................................................... 38 A&F Expansion..................................................................................................... 40 Citations................................................................................................................ 42

Abercrombie and Fitch History Founded in 1892 by David T. Abercrombie and Ezra Fitch, Abercrombie and Fitch originally started as a small specialty shop that sold sporting goods and camping gear that catered to the elite class. David Abercrombie who was born and raised in Baltimore, Maryland was a former trapper, prospector, topographer and railroad surveyor. In addition to that, Abercrombie was also an inventor and designer of tents, rucksacks, and other camping equipment which he sold under Abercrombie & Co. Inspired by his love of the great outdoors, Abercrombie decided to open the shop Abercrombie & Co. Ezra Fitch, a successful lawyer in Kingston, New York was one of Abercrombie’s loyal customers. Soon after, Fitch was finding himself wanting to buy into the Abercrombie & Co. business and by 1900 Fitch convinced Abercrombie which was then the start of their partnership (Abercrombie Facebook). By 1904 the shop officially moved to its new location at 314 Broadway with the name: Abercrombie & Fitch. Their partnership started to get rocky after that, with numerous disagreements over plans and ideas for the business, their partnership finally disintegrated in 1907 when Abercrombie resigned. After Abercrombie’s resignation in 1907, the store kept expanding under Fitch’s management. Fitch wanted the store to have an outdoor feeling, so all the stock was displayed as if in use, there were no glass cabinets. He displayed a tent in the store that was fully equipped as if it was being used outdoor. There was a campfire flaming in one corner while an experienced guide was there in attendance giving out information to the customers, creating a total outdoor experience.

Continuing its expansion, by 1913 Abercrombie and Fitch became the first store in New York to supply rugged outdoor clothing for women off of 5th Avenue in New York City. The shop then moved to Madison Avenue and 45th St., which occupied a 12-story building in the year 1917. By this time Abercrombie and Fitch was known as the largest sporting goods store in the world with some celebrity clients such as Presidents Hoover and Eisenhower, Amelia Earhart, President Taft, Harding and Kennedy, the Duke of Windsor, Bing Crosby, Howard Hughes, Katherine Hepbum, Greta Garbo and Clark Gable. In 1928 Ezra Fitch retired from the business. Even after his retirement A&F continued to grow, opening stores in Chicago and San Francisco. During the late 1960’s the store was facing hard times and it went bankrupt by 1976, closing their flagship store in Manhattan. By 1977 Oshman’s Sporting goods, a Texas based company, bought Abercrombie and Fitch and operated it as a mail-order retailer that sold and specialized in hunting wear and outdoor novelty items. Under Oshman’s management, Abercrombie and Fitch opened stores in Beverly Hills, Dallas, and back in Manhattan by 1985. In 1985 Oshman’s sold the company to The Limited, a clothing-chain operator based in Columbus, Ohio, which still owns the company presently. By 1996 Abercrombie and Fitch was one of the fastest-growing merchants of the highest quality men’s and women’s casual clothing in America. This was the year when The Limited maintained 84% of the company, however it became independent in June of 1998, where the remainder of the company spun off to the Limited shareholders. By 1998 the brand Abercrombie which was then introduced as a store for a younger target market of ages 7-14 in 1998. Abercrombie faced a 3 year long law suit

for having sweatshops in Saipan in 1999. The company then introduced its third brand Hollister Co. on July 2000, which was the Southern California surf lifestyle with the target of high school students. In September 2004 they launched the fourth brand, RUEHL No.925 for older consumers of ages 22-35. In 2006 Abercrombie and Fitch began its Canadian expansion when they opened 2 A&F stores and 3 Hollister Co. stores in Toronto and Edmonton. Then in the fall of that same year, the 3rd Canadian Abercrombie and Fitch store opened in the Toronto Eaton Centre. Abercrombie and Fitch opened its first European Flagship in London at 7 Burlington Gardens in Savile Row in 2007. The store generated $280,000 in the first 6 hours of operation. This flagship store remains to be the most profitable A&F stores. In 2008 Abercrombie introduced the intimate apparel brand Gilly Hicks which is officially labeled as the â&#x20AC;&#x153;Cheeky cousin of Abercrombie and Fitchâ&#x20AC;?. In April, 2008 they relaunched A&F Quarterly for release in the UK flagship. In December of that year, they announced that there was a new employment agreement with Mike Jeffries that was to expire in 2014. Then for the first time, A&F suffered a financial decrease to $3.54 billion in revenue for the fiscal year of 2008. They say it was because of the economic recession and because the company refused to set lower price points and offer sales. In 2009 the company reported the worst drop of sales and shares and it suffered financially. In January 50 employees lost their jobs and many positions were still unoccupied. In May, 170 employees were dismissed. In June 17, 2009 it announced the closing of Ruehl No.925 brand on the year 2010. In October 2009 it opened its official Facebook page. October 29, 2009 it opened its flagship store in Milan despite the

financial downturns the company was facing. December 15, 2009 it opened a flagship in Tokyo, Japan where they made $550,000 the same day it opened. After shutting down Ruehl, they noticed some financial progress. They announced the relaunch of A&F Quarterly on July 17th 2010. Which is part of the marketing campaign for Back to School, so they can attract more customers. The CFO later announced that they will close roughly 60 stores in 2010 there may be another 50 stores closing in 2011. In September 2010 profits began to pick up with the help of the Back to School Campaign and the numerous sales throughout the season. Abercrombie announced that there will be 110 store closings in 2011 mostly because of expired leases. There was about 60 U.S. stores closed in 2010 and 50 will be closing this year. There’s a total of 1,098 stores that are operating under Abercrombie and Fitch which are: Abercrombie Kids, Hollister and Gilly Hicks Brands.(bizjournals). Currently Abercrombie and Fitch is aiming towards raising their sustainable and social responsibility profile by embarking on projects such as reducing waste, they were nominated for a SWACO(Solid Waste Authority of Central Ohio) Emerald Award in category of partnership. They are partnering with their manufacturing base to educate them on responsible consumer resource consumption around the world. A&F joined the Environmental Protection Agency (EPA) Climate Leaders Program where they are taking note of the company’s greenhouse gas emissions, they then want to set goals to reduce those emissions. They’ve made extensive commitments with internationally recognized hospitals that are close to corporate home in Columbus, Ohio. (Nationwide Children’s Hospital, and Ohio State University James Cancer Research Center). They

also have the A&F Challenge which is a 5k race, bike race, and other activities that benefits Nationwide Childrenâ&#x20AC;&#x2122;s Hospital, and Ohio State University James Cancer Research Center. The Board has a Corporate Social Responsibility Committee which monitors issues and practices relating to A&F Corporate social responsibility on a global basis. (a&fcares).

A&F Cares A&F Cares Website shows Abercrombie & Fitch’s commitment to promote diversity of their associates & management throughout the organization. They support diversity by encouraging a culture of inclusion that allows them to understand their customers better and “operate more efficiently, capitalize on the talents of our workforce, and represent the communities where we do business” (afcares). They are committed to give back to the communities by monetary and product donations, volunteer work by their associates for great causes, they have an annual fund raising event that benefits many people including employees. This annual charity has raised over $100,000 in the last several years. A&F donates to the Nationwide Children’s Hospital which will help fund a new emergency room and trauma center , it also donates to The Arthur G. James Cancer Hospital of The Ohio State University and it will support research and patient care in digestive diseases and women’s oncology. A&F supports organizations such as: The Central Ohio GLBT Policy Study, the United Negro College Fund, the Hispanic College Fund, the Asian Pacific Islander American Scholarship Foundation (a&fcares). Abercrombie & Fitch is also committed in sustainability, their goal is to reduce waste around their corporate headquarters that is located on 460 acres of wilderness in New Albany, OH. They came up with the Three R’s concept which is: Reduce, Reuse, and Recycle and they have already started to reduce the use of non-sustainable materials. Their focus is also on recycling. In the past year they recycled: 5,502 tons of cardboard, 441 tons of paper, 131 tons of plastic, and 327 tons of wood pallets and it has saved 21,180 cubic yards of landfill space. They have saved: 102,600 mature trees,

2,751,000 gallons of oil, 142,600 gallons of gasoline, 41,601,000 gallons of water, 24,366,000 KWh of electricity. From the year 2008 to 2009 they reduced gas usage 37% and electrical usage 21%. They want to protect and sustain the environment by taking these steps to make a change and even though it will take time, they are committed to this goal (a&fcares).

A&F Product Mix A&F focuses on Casual Luxury, Clothing that embodies the “All- American” look Men’s and Women’s ·

Jeans

T- Shirts and Tank Tops

Dresses

Outerwear

Underwear

Perfume

Accessories

Body Care

Swim line

A&F Price Points A&F focuses on Casual Luxury, Clothing that embodies the “All- American” look Women’s ·

Bottoms: $30.00-$90.00

Dresses: $45.00-$100.00

T- Shirts: $15.00-$40.00

Polos and Shirtings: $30.00-$70.00

Outerwear: $90-$350.00

Underwear: $18.00-$30.00

Swim: $25.00-$40.00

Fragrance: $40.00-$50.00

Accessories: $14.00 (Flip-flops) -$320.00 (Leather goods)

Men’s ·

Bottoms: $80.00-$200.00

T- Shirts: $20.00-$50.00

Polos and Shirtings: $30.00-$70.00

Outerwear: $100-$150.00

Underwear: $18.00-$30.00

Swim: $50.00-$60.00

Fragrance: $30.00-$70.00

Accessories: $20.00-$50.00

Body Care: $30.00-$40.00

A&F Current Target Market Demographics: ·

Age: 18-22 years old

Education: High School- College Level

Gender: Male and Female

Race: Caucasian

Social Class: Middle Class Psychographics:

All American upbringing

Good-looking, Charismatic, and represents the “American” look

Prefers the preppy and frat boy/sorority girl look

Takes pleasure in socializing

Likes to belong in “Elite” groups

Likes to engage and support sports such as American football

Abercrombie and Fitch Ads Years: 2001-2011

Abercrombie and Fitch 2001 Back to School Quarterly-(google)

Abercrombie and Fitch 2002 Back to School Quarterly -(google)

Abercrombie and Fitch 2003 Quarterly(before they discontinued A&F Quarterly) (google)

Abercrombie and Fitch 2004 Back to School Quarterly(only in UK) -(google)

A&F Quarterly 2008(only in UK) -(google)

Abercrombie and Fitch 2010 -(google) 15

Abercrombie and Fitch 2005 Quarterly -(google)

Abercrombie and Fitch 2011 Ad -(google)

A&F COMPETITORS

Good/Bad Press Articles ABERCROMBIE & GLITCH / Asian Americans rip retailer for stereotypes on T-shirts April 18, 2002 Abercrombie & Fitch had new t-shirts at their stores that caused many Asian Americans upset. The t-shirts were of caricatured faces with slanted eyes and ricepaddy hats, one T-shirt had “Wong Brothers Laundry Service--Two Wongs Can Make it White” on it. The public Relations firm for Abercrombie & Fitch said “We personally thought Asians would love this T-shirt”. Hampton Carney said "We are truly and deeply sorry we've offended people". He spent a whole afternoon returning calls of complaints and many of those who complained were Stanford students (ABERCROMBIE & GLITCH).

Abercrombie & Fitch In Trouble Again With Obscenity Laws with Ads February 3, 2008 19

There were many citizen complaints in Virginia Beach for the Large promotional photographs from Abercrombie & Fitch store in Lynnhaven Mall. They cited the manager on obscenity charges. This happened after the managers did not remove them after they received warnings from the police. The citation was under the City Code Section 22.31. The police names Adam Bernstein mentioned that it was a crime to display “obscene materials in a business that is open to juveniles”. The photographs were then taken away from the store. The manager was issued a Class One misdemeanor, he was not arrested but faces a fine up to $2,000 and as much as a year in jail if convicted(ScaredMonkeys).

Abercrombie & Fitch: Worst Recession Brand? August 25, 2009 Abercrombie & Fitch suffered 10 straight months of double-digit same-store-sales declines in 2009 and sales were down 30% throughout the stores Abercrombie, Hollister, and Ruehl. They lost $26.7 million including $24.4 million in charges that were from closing the Ruehl stores. Abercrombie & Fitch refused to lower prices even when their competitors like Aéropostale discounted their products. “The company insisted that price-cutting would cheapen the cachet of the brand”. Another problem Abercrombie & Fitch was facing is how fashion is changing and their “Classic look” went out of style, that is when they introduced dresses to their line that went well (TIME).

Abercrombie & Fitch Sparks Outcry With Padded Bikini Tops for 8-Year-Olds March 25, 2011 20

Abercrombie & Fitch launched a padded bikini for girls this summer 2011. It is for the spring line of Abercrombie Kids ages 8-14. It is the “Ashley” Push-up Triangle that s triangular shaped with thick padding for breast enhancement. There are many mothers and child development experts that are against this product because it can make the girls “feel inadequate with their pre-adolescent bodies”. Dr. Nancy Irwin, a Los Angelesbased psychologist said “Wearing a padded bra at that age when unnecessary is encouraging sexual precociousness, a dangerous muscle to flex for the girl as well as for peers and predators”.(abercrombie scandal).

A&F SWOT Analysis 21

Strengths

Weaknesses

*Solid brand image

*Declining sales in the U.S.

*Brand recognition is strong

*Have lost the trust of the U.S. consumers due to scandals such as discriminatory hiring practices and sexual ad campaigns

*Continued growth in sales overseas

*A&F has good placement when it comes *Disconnected with its target market to their brick and mortar stores *Employs premium pricing strategy in post *Good quality clothing recession period *Has a philanthropic arm in the company

Opportunities *Can penetrate emerging economies *Re-structure marketing strategy to promote awareness of the brand *Can capitalize on the good deeds of brand as marketing strategy

Threats *U.S. market may be too saturated to revive brand *Competitors may have gotten ahold of target market loyalty *Overseas market may not accept brand and brand image

*Emphasize awareness on quality of clothing *Switch focus on different target market

Abercrombie & Fitch Survey

•Since we are creating a customer driven marketing strategy, we created

the

Abercrombie & Fitch survey to listen to the demands and wants of the current market place and also to pinpoint the problem areas and come up with solutions. We had 100 people answering our survey and here are our findings: •

Out of the one-hundred people, only nine percent shop at A&F, sixty-two percent don’t. twenty-three sometimes shop there, and nine percent hate A&F.

•

When asked why they do or do not shop in A&F 14 responses said that they found the prices too expensive, 29 responses said that they felt that it was not their style anymore and the sizing was off. 10 people said they liked the style, and the rest had varying answers of not liking the discriminatory image of A&F, the smell of the shops are too strong, the lighting too dark, and the sizing of the clothing off.

•

When asked if they have ever been inside an A&F store 86% said yes and 14% said no. When we asked what they liked or disliked about the store, 30% answered that the scent was too strong, 10% percent said it was too loud, 15% percent said it was too dark, 5% said that they do not even bother going inside because the sizing is off, 10% say that they feel intimidated by the brand identity and they feel that the brand is sending discriminatory image. On the other hand, 10% said they liked the smell, 5% liked the club-like music and atmosphere of the store, and 5% liked the sexual images they have around the store, while the rest answered N/A.

•

When asked if they like the clothing that A&F offers 19% said they love it, 5% said they hate it, and 77% said they don’t care for it.

â&#x20AC;˘For the next part of the survey, we asked about their thoughts on the recent ad campaign we have included above and what their reaction of it is. 25% said they like it, 44% said they do not like it, 22% were undecided, and 11% hated it. â&#x20AC;˘As for the success in promoting the brand and their clothing 53% thought this image was not successful for selling clothing, and only 9% percent thought it was successful, 9% said kind of while 23% said absolutely not. â&#x20AC;˘The last question of our survey was about what the public thinks about using sex as a ways to advertise. 51% percent said yes, 16% percent said no, 32% percent said maybe, and 5% mentioned it never was.

After reviewing the responses from the survey, we realized that the main problems that A&F are currently facing are pricing, brand image, and store atmosphere. In our new marketing strategy the areas of the styling of the clothing, promotions, advertisements, the store atmosphere and pricing.

Marketing Strategy

Product- Based on our survey, 38% of the people answered that the reason why they stopped or donâ&#x20AC;&#x2122;t purchase anything at A&F is because it they do not like their style. We aim to change this by creating products that still retain the casual luxury, American preppy look with a A&F Standard line, but also offer clothing that is more trend oriented under the A&F lifestyle line. We will still retain the excellent quality that A&F is famous for when it comes to both lines as this differentiates us from our competitors (surveymonkey).

Sample of the A&F Lifestyle Clothing line. A&F lifestyle will be more trend driven in order to accommodate the A&F consumer who is loyal to the brand but also like to follow current trends. These clothes will still embody the casual luxury look that A&F is known for but it is more trend driven.

Pricing- A&F will switch to market penetration pricing because of several reasons. The first reason is our surveyâ&#x20AC;&#x2122;s findings say that forty-two percent of people do not buy A&F clothing because it is too expensive for casual basics. Second is, A&F has seen growth 25

after a slump in sales once they started to reduce their prices and by offering sales promotions. Also, A&F is in a stage of maturity, which is not the stage where marketskimming pricing is retained. With that being said we will reduce our prices by 20% that will enable A&F to directly compete with the price points of their main competitors, such as American Eagle Outfitters and H&M (surveymonkey).

WOMENâ&#x20AC;&#x2122;S PRODUCTS

Current Price: $30 New Price: $24

Price: $50 New Price: $40

Price $38 New Price: $30.40

Price: $70 New Price: $56

Price: $350 New Price: $280

Price: $62.40 New Price: $49.92

Price: $68 New Price: $54.40

Price: $88 New Price: $70.40

Price: $40 New Price: $32

Price: $40 New Price: $32 27

MEN’S PRODUCT’S

Price: $30 New Price: $24

Price: $120 New Price: $96

Price: $90 New Price: $72

Price: $150 New Price: $120

Price: $78 New Price: $62.40

Price: $44 New Price: $35.20

Price: $70 New Price: $56

Price: $48 New Price: $38.40

(abercrombie.com)

Promotion New A&F messages:

A&F is YOUNG and FUN A&F CARES Because of all the scandals A&F has been going through, the biggest change will be in promotions. We will need to make the American market trust A&F again by sending out a new message to the A&F customer. Currently, the A&F image is more sexually oriented which only appeals to a small percent of the market place as the fad of rebellion and promoting sexuality has faded. According to our survey forty-four percent answered that they dislike the current ads and image of A&F, it does not appeal to them anymore because it is not promoting the products A&F has to offer, most of the models hardly wear clothing. Fifty-three percent said that advertising this way is not successful. By changing their image into a youthful and fun one, the brand will be tapping into a wider market segment while still retaining their current customers. We will also start cleaning up the brandâ&#x20AC;&#x2122;s image after the numerous scandals by promoting A&F Cares. Through promoting the A&F Cares slogan we will be sending a message that A&F practices social responsibility.

Advertising We will revive interest in the brand by advertising in select publications. A&F has been known as a brand that does not advertise, and in the height of their popularity this has worked for them. But as the brand is in itâ&#x20AC;&#x2122;s stage of maturity and the American public has lost interest, advertising is one way for the people to take notice and remember their favorite brand, A&F, again. Ad Campaigns- We will be creating ad campaigns that will be focusing on youthfulness and fun while using models of different ethnicities while still retaining the preppy casual look of A&F. These changes will send a message to the public that A&F has shifted its focus from sex and rebellion into a more youthful and fun vibe. The campaign will be placed in publications that cater to our target market such as Nylon, Teen Vogue, and NYLON Man. We are choosing these publications because this will introduce the brand to a fresh market, which will result in new wave of younger consumers. Example:

Sales Promotions A&F will be conducting more sales promotions throughout the year that caters to their target market such as “Back to School” “Spring Break” “Hurry up, Summer!” and “It’s the Holidays!” sales.

Back to School Abercrombie & Fitch 2002 Back to School Ad

Up to 50% off select items!

Our Back to School Ad example

A&F will also offer incentives to their target market through promotions such as bring your I.D to the store and receive 5% off or a free fragrance promotion. Personal Selling Sales Associate selection process- Sales Associates of different ethnicities should be selected to show that A&F does not discriminate against non-whites. However, sales associates should also be selected according to their appearance, knowledge of the brand, and the way they present themselves during the interview. Training- During our in-store survey our team noticed that most of the sales associates were not helpful to the customer and were more interested in folding the clothes rather than helping us. This practice will be changed by implementing a training plan that is more customer oriented. Sales Associates will be trained to greet and assist the customer while they shop and have thorough knowledge of all the items that A&F have to offer. A&F Sales Associates will also undergo Styling workshops that teach them how to mix and match A&F clothing and accessories that fit the stylish but casual look that A&F is known for, these workshops will enable them to have the skill to provide styling suggestions to their customers. Arrival Procedure- Each associate at Abercrombie & Fitch will have to follow this procedure when customers arrive to the store. This procedure is to make all customers feel welcome, comfortable, and have a pleasurable shopping experience. Also it is important to have interaction with each customer to build customer relationships and customer loyalty. With this procedure, associates will gain the customersâ&#x20AC;&#x2122; trust and will be giving their customers a great store experience that will make them come back again. 1. Acknowledge the customer. When the customer walks in, smile, make eye contact and greet the customer. For example: â&#x20AC;&#x153;Hello, welcome to Abercrombie & Fitch, how are you doing today?â&#x20AC;?

2. Mention to the customer about any new arrivals and sales to excite the customer. Talk in a clear and pleasant manner and do not rush. Offer to walk them through the store so you can show them where the new arrivals and sales items are located. 3. Ask the customer if they are looking for anything in particular. In most cases they will answer “No, I’m just looking around”, if so, respond politely and pleasantly: “If there is anything you need help with, please let me know. My name is ______ and I’ll be happy to help you”. Do not be insistent and leave them be should they decide to say “I’m just looking around” however, keep an eye on them just in case you see them needing help. If the customer does need help looking for something, make sure you ask questions to find out what he/she needs. If they don’t know what they are looking for, provide them with items you think they will like. Start picking out items and talk to them about how you can style or wear them. 4. Get the customer’s name, by doing so, you are connecting more with the customer, he/she will feel comfortable with you and will come to you for assistance. 5. Checkout: the associates working at the register will have to ask each customer if they found everything they needed. Ask them if they would like to avail of what current promotion that A&F is offering or inform them that they can leave their emails to be included in the mailing list should they be interested in future news and sales. Make a lasting impression with this customer by acting pleasant, informative, and never pushy or insistent. As they are about to leave, give them smile and wish them a great day.

Direct Marketing A&F Quarterly Magazine is a periodical that is targeted to their consumers as a promotional vehicle for the brand. This magazine will be given in store and sent to customers who have entered their information in the A&F customer files. The Quarterly will promote the new A&F message of youthfulness and having fun through editorials portraying this kind of lifestyle. The A&F quarterly will also be a vehicle for promoting A&F Cares by sending out articles and images on the progress of the philanthropic and sustainable projects that A&F are doing. The Magazine will include: photography,

interviews, articles about pop culture, and other teen interests. The models will be wearing the A&F products that are available at stores. A&F Facebook and Twitter will be a way to connect directly with their customers. Daily news will be posted like the new Classic looks and sales going on throughout the stores. A&F will also be sending newsletters promoting new sales, new styles and A&F news through emails. 34

Placement All A&F products will still be sold only at A&F brick and mortar and online stores in order to maintain its exclusivity. Store Atmosphere According to our survey, thirty-percent of the answers said that they did not appreciate the strong smell that A&F had in their retail stores and 10% said that the music was too loud. In order to cater to consumer demands we will lessen the amount of fragrance that is sprayed throughout the store, but we will still retain it in a more subtle way by only spraying a minimal amount around the store to give a pleasant hint of smell. We believe that we should still retain the scent because it is an integral part of the A&F identity. The music that plays current disco pop songs will also be retained but it will be reduced by several decibels so that it does not overpower and overwhelm the customers. The dark lighting will also give way to a brighter more cheerful illumination that will give a more fun and youthful atmosphere to the store (surveymonkey).

Customer Profiles

Name: Michael Race: ½ Filipino, ½ White Age: 18 yrs. Old Education: Michael is a high school senior, who aspires to go to a top-notch university such a Stanford and University of Pennsylvania. Income: lives in a household with an income of $100,000/year Interests: Michael belongs to his school’s soccer team and is being offered scholarships in different universities to play for them. Michael’s favorite subjects are Biology and Math, and hopes to be a doctor or a stockbroker when he grows up. He prefers to listen to hip-hop and r&b artists such as Chris Brown, Far East Movement, Drake and Bruno

Mars and a little bit of rock such as Paramore, Fall out boy, and Good Charlotte (bayareacensus).

Name: Nessa Race: Â˝ Irish, Â˝ Indian Age: 18 Education: Nessa is currently a high school senior who has just recently found out that she has been accepted in San Francisco Stat University.She has dreams of going to medical school in Stanford University. Income: Lives in a household with an income of $76,000/year Interests: She is a smart and caring person who enjoys doing ballet, reading, and hanging out at the mall with her friends and family. She is into social media networks and music and lists Enrique Iglesias, Lady Gaga, Usher, and Bruno Mars as her favorite artists (bayareacensus). 37

Product The “A&F cares” T-shirt is made out of sustainable materials, it donates it’s proceeds to the “A&F and your education ” fund that will give local San Francisco high school students scholarships for college. The A&F Cares t-shirt is made of organic and recycled cotton and will be printed with low-impact water-based inks that will reduce environmental impact. By using sustainable materials for this t-shirt we are showing our market that we care for the environment, and it shows that A&F has Eco minded initiatives. The Scholarship fund also sends the message that the company cares about the youth and that the company practices social responsibility by giving back. This tshirt also targets the tourist market, which often shop in A&F, who might not understand nor care about A&F Cares but see the shirt as a souvenir of their visit in San Francisco. Pricing The “A&F Cares” T-shirt will be retailing at $25 dollars each for boys and girls. This price point still falls under the price range of the normal A&F t-shirt. We have priced it in such a way that it is a little bit more expensive than the normal A&F shirt because the sustainable and philanthropic angle adds value to the t-shirt.

Placement A&F cares t-shirts will only be sold in A&F stores in the bay area and online initially. If response is good, we will be releasing one for every big city. Promotion A&F Campus Tour- To promote the new A&F Cares T-shirt, we will be creating a campus tour wherein we will be visiting select universities in the bay area to hold a day event promoting A&F. The event will have fun activities such as a fashion show featuring the t-shirt styled in different ways and the latest A&F clothing plus a mini concert featuring popular campus bands. The event will also have a booth where students can find information on how they can apply for the “A&F cares” scholarship, and also employment opportunities. Potential universities: San Francisco State University Stanford University UC Berkeley USF We will be partnering with local newspapers such as SF Weekly, The Guardian, 7x7, and local bloggers plus local radio stations for coverage of the event. In-store promotions- The T-shirt will have its own ad campaign photos that will be displayed throughout the store. The Sales Associates will also be trained to talk about them to the customers and ask them if they would want to purchase the t-shirt. National Promotion- The A&F Cares T-shirt and it’s ad campaigns will be placed in the A&F quarterly with an in-depth report on how it is made and where the proceeds of the sale will go.

A&F Expansion Hong Kong Demographics: The Hong Kong population in 2011 is approximately 7,122,508. 95% of the populationsâ&#x20AC;&#x2122; ethnic groups are Chinese and 5% other (Hong Kong). Industry: 32.4% of population work: Wholesale, retail, import/export trades, restaurant and hotels. 14.1% work in finance, insurance, real estate, and business services. 3.5% work in manufacturing. Hong Kong has a free market economy, which is highly dependent on international trade and finance (Shopping in the Suburbs). Lifestyle: People living in Hong Kong spend a lot of their time out eating with friends, walking, hiking, and going to work. Their average commute is about thirty minutes and they usually work from 9am-6pm Monday through Friday, and half day on Saturday. Shopping is their favorite pass time, they enjoy shopping in the classic areas such as Causeway Bay and at malls (Shopping in the Suburbs). Interests: Shopping is their favorite pastime, they enjoy shopping in the classic areas such as Causeway Bay and at suburban malls in Hong Kong like: Festival WalkKowloon Tong Station, where there are anchor stores including: Marks & Spencer, H&M, Armani Exchange, Ashworth, Diesel, French Collection, Vivienne Westwood and Vivienne Tam. Another popular mall is at the Shatin New Town Plaza-Shatin Station where there is Zara, Agnes B., Armani Exchange, Apple, etc. Hong Kong has a free market economy, which is highly dependent on international trade and finance (Shopping in the Suburbs). Hong Kong Tourism: In 2010, Hong Kong received a record-high of 36 million visitors from around the world, a remarkable increase of 21.8% over 2009. It is also the first time that the number of arrivals surpassed the 30 million mark. The improving global economy and travel sentiment have fueled the impressive performance. For other shorthaul markets, arrivals from Taiwan increased by 7.7% to 2.2 million in 2010 as a result of a 29.0% increase in vacation visits. North Asia also registered a growth of 21.1%, thanks to the favorable exchange rate and strong outbound travel from Japan and South Korea. For South and Southeast Asia, arrivals also rose by 21.3% alongside the increased flight capacity (Tourism Commission). In respect of long-haul markets, the improved global economic situation has rejuvenated business and vacation arrivals. In 2010, long-haul markets recorded a 10.5% growth over the 2009 to 4.7 million. In particular, the United States remained the largest longhaul market with 1.2 million arrivals in 2010, representing a 9.5% increase. The European market also performed well with 1.8 million arrivals, a 9.1%-increase over 2009. Emerging markets, including India (+44.8%), the Middle East (+20.7%) and Russia (+102.0%), also registered significant increases in arrival numbers.

Hong Kong is the perfect place for A&F to continue its expansion because of several reasons. The Hong Kong dollar is in good standing, and the Honkongese are known for their love of shopping. The plethora of western brands that can be found in Hong Kong indicates that they are very accepting of western fashion. This is also a good time for A&F to penetrate and position themselves in the HK and Asian market because it is not too saturated yet and the brand will be in the introduction stage again. Product- A&F Hong Kong will carry all products from the A&F product mix. Because of Hong Kong also has winter season, winter wear such as coats and jackets and fleece hoodies should also be carried. Pricing- We will retain the market skimming pricing in Hong Kong because the brand will be in an introduction phase and we can command a higher price because we have not saturated the market yet. Placement- A&F will be setting up itâ&#x20AC;&#x2122;s first Hong Kong store in the Pacific Place mall. This mall is in the top five malls in Hong Kong and has brands such as Agnes B, French Connection, and Coach. Promotion- Promotions in Hong Kong will be throwing a private opening party with the latest popular DJ in Hong Kong spinning music in the store giving it a party atmosphere. HK press and radio stations will be invited, also with the young â&#x20AC;&#x153;Itâ&#x20AC;? people of Hong Kong. There will be a mini fashion show in the store with Caucasian models sporting the latest A&F fashion. The next day will be the grand opening day where the store will be opened to the public. A DJ will still be present to continue the party atmosphere. A&F will also be sending out a press release in the US to various publications announcing the opening of the first Hong Kong Abercrombie and Fitch Store. The opening will also be included in the A&F quarterly, talking about the expansion and the success of the opening, and newsletter.

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