Thursday, November 24, 2011

Chapter 8: Segmenting and Target Markets

Over the years Abercrombie & Fitch had one consistent target and generally catered to them. but over time as due to the change of many variables, Abercrombie has not only broadened their target market, but have segmented it as well. A good example would be Abercrombie's usage of geographic segmentation. For example here in New York City, Abercrombie & Fitch only has 2 stores, one of which is a flagship store the other a tier 1 store. Both those stores are very limited when it comes to the items they have on sale and the in store promotions that they have. Where as the stores located in New Jersey and Long Island fall lower on the companies totem poll. Not only do they carry a ton of sale items, but almost every week they have an inshore promotion offering at least 20% off all items Thats an example of geographic segmentation because the outer city target market widely varies from the inter city. A city as popular as New York brings in a lot of tourist, which definitely falls into Abercrombie's target market. Not only that, but over time the company has seen that the inner city target market is willing to spend more money which is why constant in store sales promotions and clearance sections aren't necessary.

With this holiday season Abercrombie has also shown examples of concentrated targeting strategy. For instance, since the company knows that the outer city target is the target looking for sale items and sales promotions, for black friday this year Abercrombie & Fitch are heavily promoting their stores in New Jersey and Long Island, even going as far as to open those store at midnight for the first time in company history. Although they would rather have people go to their stores to purchase full price items, they know that this is the time to largely promote to those who will purchase a lot of sale items an get them in the stores.

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