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(Case Study: Abercrombie & Fitch)A&F has undergone several unique transformations since its formation over 100 years ago. It began as a sporting goods store selling expensive and exotic merchandise to adventurers, presidents, businessmen, writers and movie stars. Its assets were acquired by Oshman’s Sporting Goods, where the Abercrombie brand had floundered for several years. A&F stores were acquired by the Limited Incorporated in 1988. The business experienced a period of rejuvenation and rebirth. A&F was spun off in 1996 and became a successful teen retailer selling casual apparel and accessories with a cool “preppy” look. It took a leading role in the creation of a new store format -- one that other retailers were eager to imitate. The format was intended to provide an entire experience for young shoppers with trendy music, appealing visuals, and perfumed interiors. This encouraged teenagers to “hang out” and “browse.” They wanted to act and look just like the models they saw in the stores.
A&F engaged in many controversial strategies and was the target of several lawsuits. Despite A&F’s experiences with recessions, war-time troubles, bankruptcy, changing ownership, and legal battles, it has survived. In recent years, it has benefited from significant financial success as well.
1. A&F paid $50 million to settle three lawsuits charging it with racial discrimination. Do you think the lawsuits were justified? Did A&F’s marketing strategies which apparently insulted certain minority groups encourage a corporate culture that was intolerant of diversity? Does A&F, as well as other retailers, have the right to market itself to any ethnic group it wants? Should retailers be free to hire employees with personal appearances that match the image they are trying to project – even if it means not hiring African-Americans and Latinos?
2. Consumers today are following two tracks: necessity shopping when convenience and price are important and recreational shopping when an individual shops for fun. Many retailers are trying to attract the latter consumer by providing an extraordinary shopping experience. According to a retail marketing expert, Pam Danziger, stores that rock -- or “pop” -- have the following distinctive features:
Do you think that A&F has implemented these features in its stores? Why or why not? Can you identify other retailers who are using emotional branding or appealing to the “experiential” buyer?
(Case Study: Respironics, Inc.)The case describes some of the competitive dynamics in the sleep and respiratory markets, with special emphasis on the OSA segment of the home medical equipment industry.
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