Rommel E.

Lubon
Case Title: Abercrombie and Fitch Early 2005
Case Background
A & F was founded in 1892 and originally an outlet for camping gear. Eventually A &
F suffered decreasing sales and filed for bankruptcy. The Limited purchased the
chain in 1988 and 4 years later hired Michael Jeffries to oversee A & F operations. It
was during his term that the A & Fs target customers were directed to much
younger and faster-growing group-consumers between the ages 14 to 24. This
strategy worked. A & F enjoyed increasing sales figure and more number of stores
from 1998 to 2005. A survey showed A & F to be the sixth coolest brand in the world
among kids. The company also have a large catalog customer base through
Quarterly, its publication arm. The catalog is filled with erotic photographs making it
controversial and at the same time appealing to younger clientele.
Statement of the Problem
What should Abercrombie and Fitch do to maintain its competitive position in the
clothing industry?
Objective of the Analysis
This analysis explores various alternatives to solve the problem with consideration
of costs and benefits.
SWOT Analysis
Strength
Established brand name
Appealing to younger clientele which is expected to compose a bigger portion
of the entire population.
Large catalog customer base

 Increasing sales figure

Greater accessibility due to several stores across the country.
Weakness
Limited market segment. Products are mainly for youngsters while they do
not entirely compose the population.
The basis used in hiring employees is discriminatory.
Catalog published by the company includes sexually explicit content which
often stirs up controversy.
High prices compare to other brands.
Opportunities
International expansion
Consider including other market segments like kids and adults.
Introduce new styles and items
Add a product line with lower prices (quality must not be compromised)
Threats
Tight competition in the clothing industry for younger clientele
Style has driven away from customers
Rising cost of materials
Racial discrimination discourages customers
Alternative Courses of Actions
1. Add a product line with lower prices with quality not compromised.
Some consumers perceived that A & Fs products are heavily priced
compared to other clothing stores like GAP and American Eagle. These
consumers may potentially become customers when A &F adds a product line

with lower prices. If they are satisfied with the first purchase, they are most
likely to buy A & Fs products even those regular riced items.
2. Consider including other market segments like kids and adults.
A & F currently targets younger clientele ( 12 to 19 years old). While this
segment is a material portion of the total population, the other part can be a
potential source of customers. Hence, A &F may consider offering product
lines for kids and adults.
3. Enhanced Brand Equity
While A & Fs brand is identified and well established, there are factors
present which draws a mark on the companys brand name. It may be useful
to have these factors handled by the company since it influences customers
buying behavior. A & F may design programs showing its commitment to
gender equity, anti-discriminatory practices, and etc.
4. Introduce new styles and items
This may be helpful especially that there is little product evolution of A & Fs
products. New products and items may lead to more sales it suits to
customers taste. Product feasibility must be prepared beforehand.
5. International Expansion
International expansion enables a company to further increase earnings and
market size if just properly handled and executed. Since clothing is a global
product, the idea of international expansion is possible for clothing company
like A & F. It may expand to Europe where mall are a new concept.
Recommendation
I consider the third alternative, Enhance Brand Equity as the best course of action
to address the problem of the case.

Implementation
A & F may consider the following in enhancing its brand equity:

Diversity
Hire more individuals of different ethnicity and put those individuals up front.
It may also hepful to use more people of different ethnicity in advertisements.
This action may encourage consumers regardless of ethnical background to
wear A & F products.

Public Service
Support a cause. Equality Nowwhich was funded in 1992 works for the
protection and promotion of the human rights of women around the world.
Let 5 cents of every dollar purchased for specific items be donated tosuch
cause. Customers now feell much better because of a brand new fashion
experience and achance to help a good cause.

Good Press
Emphasize positive things going with company. Avoid stirring up controversy
with clothing.

Better Advertising
Be less aggressive. Sex does sell, but there is a line you dont ccross.In
addition, customers