1/22/2021

Marketing Strategy and Management

Eastern International University

 Table of Contents

I. Background information 2
II. STP Analysis of A&F Co. 3
1. Segmentation of A&F Co. Case Study 3
2.
Abercrombie
Targeting of A&F Co.
& Fitch: Is it unethical to be exclusive?5
3. Positioning of A&F Co. 5
III. Review the two options the case proposes 6
IV. Recommendations 7

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 I. Background information

In 1898, Abercrombie Co. - a small waterfront shop founded in Manhattan. At that time,
Abercrombie targeted hunters and fishermen for outdoor gear. In 1970, Abercrombie & Ezra
Fitch (A&F) was formed to be an American retailer that focused on casual luxury clothing
style, but it became solely apparel-base after being bought by The Limited Inc (L Brands).
There are three subsidiary stores of A&F with three different target customers: pre-teens (12-
14 years old), teenagers (15-18 years old), early adults (19-22 years old). What makes A&F
experience a big change in the operation is the appearance of Michael Jeffries - a new chief
executive officer (CEO) hired to become the leader of A&F. Under the leadership of the
CEO, the company has achieved many successes through his clear vision and strategic plan
for instituting a segmented target market which is targeting cool, sexy and younger customers
and using sex appeal to refresh the brand. Nevertheless, this also aroused many controversies
for A&F as it faced problems from the public about marketing strategy.
During an interview, Jeffries declared that the target audience of A&F was for “cool and
good-looking people” as the brand just only created a quality brand that serves for cool
groups and has a sense of exclusivity. This claim alluded his strategy which is the exclusive
strategy to make A&F become an exclusive sought-after brand. However, this strategy is
debatable when it comes to limited size for women - “the largest size was only 10”.
Additionally, customers perceived this strategy was unethical practice as A&F restricts
customers to buy products because average US women could not fit. The company also
emphasised that those who were not its target customers would never belong to the brand.
Consequently, a lot of pressure from the media and consumers that made the company had to
consider “should the company stick to its current marketing strategy (exclusionary
tactics) or become more inclusive by adding more sizes?”.
Therefore, this analysing paper is to define clearly A&F’s segmentation, targeting and
positioning. Then, we draw out pros and cons of 2 options in the company. From that, the last
part is to give the final recommendations for the situation exposed in the Case Study which is
maintaining the same line (continue using the exclusivity strategy) or adding a fuller range of
sizes (amplifying more sizes such as extra large XL or double extra large XXL).

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 II. STP Analysis of A&F Co.

1. Segmentation of A&F Co.

There are two perspectives to take a look on the A&F segmentation which are macro
segmentation and micro segmentation.
In the macro segmentation, A&F focused on the consumer group, consumer needs and
product use.
● Customer group
A&F wants to create a quality brand to cater for a cool clique of teenagers which Jeffries
supposed that group should strive for the beauty image. Though serving a large number of
students, the company experienced amassed a majority market share in the teen apparel
market.
● Customer needs
It is not like other brands that serve for everybody: young, old, fat and skinny. A&F went
differently in customer type. Being a part of A&F’s community represents the customers as
are cool, sexy, good-looking, hip and spirited people that show a certain status in their
environment and differentiate themselves from casual basics.
By clearly defining a vision of what customers’ needs, A&F had become the envy of the
fashion world after the loss of $25 million despite operating 36 stores in 1992.
● Product use
Jeffries stated that “we want to market to cool, good-looking people. We don’t market to
anyone other than that”. Therefore, A&F just produced limited sizes for women to target
good-looking people. In the US, the average woman’s pants size is 12 to 14. Nevertheless,
A&F’s maximum pants size was only 10 for women. To make customers feel they belong to
the brand, A&F did not offer extra larger (XL) or double extra large (XXL) sizes for women,
those sizes are available for men though. In turn, A&F use this type of exclusionary
marketing tactics (via customer segmentation) to market their products like a high-desired
brand which stands for a sought-after brand and not easily attained by average people.
Putting the general information into details is the concentration on Micro Segmentation, A&F
focuses on 4 main types of market segmentation which are geographic, demographic,
psychographic, behavioural.
● Geographic segmentation
Though the case does not give any specific information about geographic segmentation, it can
be imagined that A&F segmented the geography based on region. Obviously, there are many

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types of regions, and one way to segment the region is based on cultural preferences as A&F
did. The evidence is illustrated through a Muslim female employee was fired from a
subsidiary store because she worn hijab. This can somehow bring a message that the firm
does not want to target these types of culture or religion. Hence, the geographic segmentation
of A&F here might focus on population attributes or population density.
● Demographic segmentation
As mentioned above in the macro segmentation. After segmenting groups of customers, A&F
focuses on the age of customers. From the statement of the firm “we want to market to cool,
good-looking people” and Jeffries drove A&F to become a “young, hip and spirited”
company, thus A&F’s customers that reveals the most attractiveness is young customers. As
mentioned before, A&F’s different brands provide different age groups. The Abercrombie
brand advertises to children in the age of 7 to 14, Hollister Co. targets 14 to 18 years old and
Abercrombie & Fitch focuses on college students from 18 years onwards. As seen here there
are no age gaps between the target groups of the three brands. This is A&F’s strategy to move
its customers from one into the next brand and in that way build up loyalty. Because one
thing all its brands have in common is the cool and trendy American lifestyle and attitude.
This leads to the educational side of the demographic segmentation. Additionally, I also
believe that A&F also focuses on customer segmentation based on social status. The evidence
is shown by saying never “vanilla” of A&F. Once the company makes a full range of size,
more women who are not attractive can buy their products. When more people can buy, the
company cannot be special. Therefore, A&F also has an impact on consumer trends and
status, thus influencing social class.
● Psychological segmentation
This category is demonstrated through sharing a high-class option in a certain level. As the
brand focuses on “cool and good-looking people”, therefore to influence the perception of
customers, the company only conducted advertising and product offerings by hiring only
models that fit their gender stereotype in their stores. Customers who have interest and
preferences in belonging to the standard of the A & F community would likely to purchase
more A&F clothing and might become loyal customers.
● Behavioural segmentation
A&F stated that they serve for young and good-looking people; hence, customers who seek
for benefits-sought will receive the benefit from wearing and representing A&F clothing
through being a part of “cool, good-looking people” or “young, hip and spirited”.

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 2. Targeting of A&F Co.
The strategic target of A&F are the three subsidiaries, including Abercrombie (targets middle
school students from 12 to 14 years of age), Hollister Co. (targets high school students from
roughly 15 to 18 years of age) and A&F (targets college students from 19 to 22 years of age).
In addition, they also target those young people that focus on their physical appearance. To
be more specific, they targeted cool, sexy and younger consumers and using sex appeal to
revitalize the brand.
Furthermore, it was no secret that A&F had a large impact on how teens viewed beauty. In
order words, such news and brand image of this company influences them a lot. Actually,
they are not aware of negative brand image like their parents, instead they focus more on
being part of “a young, hip, and spirited” community as status and fashion is an important
factor in their range of ages. Therefore, the brand pays more attention to target the college
students group.

3. Positioning of A&F Co.

A&F Co. is an inspirational brand of college, cool, with high quality products. They
positioned themselves as a cool clique and had a sense of exclusivity. Actually, they cater to a
very niche market. In addition, A&F positioned themselves as a near luxury brand to casual
luxury. To be more specific, the brand targets customers from the middle to upper-middle
class who desire to wear the latest fashions, but cannot afford to pay premium, luxury prices.
Nevertheless, this positioning strategy made A&F in danger due to several mistakes of the
company, especially former CEO Jeffries transmitted the A&F’s brand image in a concern of
racism, discriminations (Rainer, 2016).
Therefore, having the right positioning strategy is essential in apparel companies. Towards
the A&F case, one way that could make the firm overcome this situation and become “cool”
again is not only regaining consumers’ trust from customers loyalty but also spreading the
cool gender stereotypes to other customers. Repositioning could provide a second chance for
A&F.
The below part would examine the pros and cons of two options as two types of positioning
strategy for A&F Co to solve the problem.

III. Review the two options the case proposes

● Option 1: Add a fuller range of sizes

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 Pros Cons

- Enhancing the target market and
increasing market share
- Changing customer perception of
A&F as discriminatory
- Reducing the current negative
reputation
- Dilution of the prestige of the brand
- Becoming an average brand, losing
status
- Additional manufacturing and
production cost
- Losing loyal customers

By adding a fuller range of sizes, A&F could gain more potential customers by enhancing the
target market and thus increasing market share. Actually, this option could make the
company seem more inclusionary and accept all customers. Especially, it would help to
change the customers perception of the company as discriminatory which damages the firm’s
reputation. Consequently, when the customer perception was changed, the current negative
reputation of A&F would also be reduced. However, by doing that, A&F would also face a
lot of loss. Firstly, there would be a significant decrease in the prestige of the brand in the
community. In order words, they would become “vanilla” - an average brand and become no
longer exciting and desirable. Then, A&F would lose loyal customers as they feel no more
exclusive. Additionally, increasing clothing sizes would increase the manufacturing and
production cost as more fabric would have been used to make products in larger sizes. As a
result, offering a variety of sizes would not only make a concern on fabric, but also there
would be more subsequent concerns that are resulting in complex production systems and
reducing margins as well.

● Option 2: Maintain the same line

Pros Cons

- Maintaining the customer loyalty and - Negative perception of customers

the brand exclusivity - Bad publicity and criticism might
- No additional production and increase
marketing costs - Losing opportunities to increase
- A&F has clearly targeted markets market share and new target
already customers

By maintaining the same line, A&F’s loyal customers would stay with them as they maintain
their exclusivity. In fact, if the company is trying to target everybody, they would become
“vanilla” which then may lead to the potential of losing loyal customers that they have
worked hard to retain. Supported in the case is “average, mainstream and no longer highly

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desirable”. In addition, the company would not need to pay for additional production and
marketing costs. If A&F wanted to serve more customers in other segments, it would take a
huge amount of money for the production process and marketing activities to attract them.
Moreover, A&F already has a clearly targeted market group, so it would be easier and less
expensive for the brand to continue their marketing activities. On the other hand, there were
also lots of negative perceptions of customers because of the size issue. From that, A&F
might lose a huge number of customers. Even, these negative repercussions might destroy the
brand reputation, thus we would also lose the loyal customers because they didn’t see the
benefits of belonging to an exclusive community anymore. As a result, all of this would lead
to a reduction in A&F’s opportunities to increase in market share and new target customers.

IV. Recommendations
A&F brand is in trouble as the sales decrease and negative reputation. There is no best option
of either of the above. Therefore, in order to help A&F keep its positioning as well as
exclusivity and also avoid negative effects from the customers, there are some suggestions.
Firstly, A&F should have a sincere apology for their customers in order to alleviate
customers after Jeffries negative’s comment. From this, it can keep A&F away from being
boycotted and having a negative impact on brand reputation.
Secondly, offering an average size 12 to 14. According to the case, the average US women's
pant size is 12 to 14, but the largest pant size for women of A&F was only 10. Therefore, the
company should receive feedback from their customers by adding a wider range of sizes for
their customers. Additionally, this will definitely increase A&F market share in a target
segment that they had ignored. However, unlike their competitors (such as H&M), A&F just
offers sizes to average women which are 12 to 14 only, from this they can avoid criticism for
promoting obesity like their competitors.
Thirdly, A&F should create a new marketing campaign in order to rebuild A&F reputation.
As the previous brand image of the company was “cool and sexy”. This statement was quite
sensitive to customers’ perception as it made a large number of customers feel they did not
belong to A&F target. Therefore, the practical way for A&F to overcome this problem is
having a clear message about the brand to customers. The suggestive message can be “being
cool, sexy with A&F”. Actually, the meaning of the campaign is to target audiences to think
A&F with a cool and attractive image, instead of making people think of discrimination.

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 References
Rainer, E. (2016). The influence of sexualized advertising on consumer behavior:
Abercrombie & Fitch case study. Retrieved from
https://repositorio.ucp.pt/bitstream/10400.14/20614/1/Elena%20Rainer
%20%28152114108%29%20-%20Master%20Thesis%2C%20May2016.pdf