Jae Ah Ho's Blog

The retail business is all about the portrayal of image. What is the right image to portray? Well, it depends on the demographics of the consumers. Old Navy, Wal-Mart and Target all have similar consumer base, people looking for the highest quality at the most nominal price. Old Navy used to rule this market, but recently Wal-Mart and Target have moved into its territory and took a big chunk of the market and now are becoming a dominating force. In a situation like this, Old Navy needs a new image to distinguish itself and evolve into a new territory in terms of the demographics of the market. Old Navy has to take decisive action to project a revolutionized image to survive in this competitive industry.

Toyota and Lexus are prime examples where the image of a brand name is all it takes to sell products at a premium. Toyota makes cars for the common working class and Lexus is a subsidiary of Toyota that makes luxury cars for the upper class. However, what most people do not realize is that the premium is the cost to buy the image of the Lexus brand name and not the superior engineering of the parts that make the luxury cars. Yet, people are so naturally inclined to think that price defines quality, and that the quantity of the premium is directly proportionate to the quantity of higher quality. Old Navy has to take advantage of this marketing strategy and portray a modern image that can relate to the current trend in fashion and charge a premium.

Evolution is the key to survival in business and in life. When businesses fail to adapt and innovate, it has already failed and is only a matter of time before retailers like Wal-Mart and Target take the lead. It is not the product that sells itself; it is the marketing that sells the product.

Image taken from www.insidesocal.com/bargain/2007/08/ (Old Navy)http://lexusenthusiast.com/2007/11/21/lexus-europe-hopes-to-triple-sales-by-2010/ (Lexus)