The 2nd component of the Marketing Mix is price.

Gap adopts the High-Low Pricing Approach. In high-low pricing, a retailer charges high prices but then runs frequent promotions in which prices are temporary lowered. Gap does the same. They have frequent promotions every now and then to lure their customers into buying their products. One of their shirts can cost $40+ but during a promotion, it is significantly lowered.

At Gap Inc., they offer discounts at all of their brick & mortar locations. For example, they may offer a buy one shirt and get the 2nd half off sale. Gap is always using this type of advertising to increase sales. This brings loyal customers and new customers into the stores. The new customers get to try the product at a discount and if they like it, they can buy more.

Gap also does relationship pricing. With relationship pricing, customers have incentives to be loyal - get price incentives if you do more business with one firm. As for Gap, they focused on getting their customers to be loyal; meaning they are focusing more on retaining their customers than getting new ones. For example, the credit card case. This relationship pricing occurs in a nonprice competition, where firms focus more on building brand equity and relationships with customers. In this relationship pricing, Gap uses price as a method to build long-term relationships with their best customers. Gap focuses on giving better deals to better customers. The goal is to price relative to the value of the customer to the firm, while building loyalty and stimulating repeat buying. Like in Gap's case, they usually have sales and promotions every now and then to attract their customers to purchase their products. Gap sets their price at quite affordable prices for their customers.

Gap succeeds in the huge variety of style that it offers. Whether it is a simple classic black t-shirt or a more modern example, complete with logo, Gap consistently supplies quality at an agreeable price.

the Fashion Lurver

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