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Introduction
Marketing is essential for business organizations and should be a well-formulated strategy in order to remain relevant in the market. Business organizations that implement reliable marketing strategies increase their ability to meet their customers’ needs and demands, thus, realizing more profits from their operations. On the other hand, business companies that fail to formulate long-term marketing strategies only remain relevant in the market for a short time. One major company that has failed due to unreliable marketing strategies is Abercrombie & Fitch. Abercrombie & Fitch is an American Fashion company that was founded in 1892. The company became famous globally for making excellent fittings that effectively served their target customers’ needs and demands. The company also relied on unmatched advertising, using almost nude persons to advertise their products. The company ruled the fashion industry in the 1990s and rose to unmatched levels globally. This paper explores the various marketing strategies used by Abercrombie & Fitch. These factors led to the company’s failure and appropriate strategy to avoid repeating the mistakes that led to the company’s failure in the market.
Strategies Used by Abercrombie & Fitch
Abercrombie & Fitch relied on several marketing strategies that made it stand out among its competitors. First, Abercrombie & Fitch primarily focused on products for young people aged below 21 years (Lascity, 2019). The strategy of manufacturing clothing for young persons below 22 years worked excellently for the company because it managed to amerce huge profits, making it one of the most successful textile industries in the 1990s (Lascity, 2019). Abercrombie & Fitch relied on social networks and a Viral marketing strategy to advertise its products. Most of the company’s advertisements were almost naked, which attracted the youth to buy its products (Walters, 2016). Although the explicit advertisements might have seemed unfavorable to many adults, they were attractive to the youth, making them the company’s target customers. The sales made by Abercrombie & Fitch kept on soaring in the 1990s, making the company the favorite among young people.
Meaning of Failure or Decline
The business world is characterized by failures and declines in sales and other market-related issues. Failure or decline in the marketing field entails a drop in the number of sales a business organization makes. At the introductory stages of a new product in the market, most business organizations realize enormous sales because of the high demand for the new products. The trend of high sales might persist for several years but starts to decline once a new and superior product is introduced into the market (Cole et al., 2021). Suppose a business organization cannot realize the number of sales it used to have within its stipulated time. In that case, the sales are said to have declined and the business organization affected fails to meet its sales goals and targets. There are several factors that might lead to a failure or a decline in a business organization. First, a failure or a decline might result from redundancy. Redundancy refers to relying on a particular product or a marketing strategy without instituting relevant adjustments to enhance the reliability of the product or marketing strategy.
The business world is dynamic and ever-changing to accommodate new developments and demands. The new developments in the business world require appropriate strategies to match them in order to remain relevant in the market. For instance, the marketing strategies that were used in the 1990s cannot be applicable in the modern business world. The business world has witnessed numerous changes since the 1990s; thus, organizations must devise relevant countermeasures to match the demands of the new developments. Similarly, prolific products in the 1990s might be unpopular in the current decade because the needs and demands of the people have significantly shifted (Cole et al., 2021). Some clothes that were excellent in the 1990s are no longer relevant currently because new fashions and modes of manufacturing clothes have cropped up. Any business organization that fails to adjust its operations to match new demands in the market ends up failing and recording a decline in sales.
The failure or decline of a business organization might also result from the high competition (Bruckmeier, 2020). Competition is one of the most important elements of marketing because it encourages innovation and the invention of new goods and products. The market is characterized by business organizations that constantly devise new products to surpass products made by other companies. Business organizations with superior products and advertising capabilities remain competitive in the market. On the other hand, business organizations with unreliable marketing strategies and low-quality products are easily outdone by their competitors with superior products and excellent advertising strategies. Therefore, business organizations must maintain a high quality of products and unique advertising strategies to avoid declining sales and failing to achieve their goals and targets. Business organizations should remain up-to-date with any new developments in the market in order to make the right decisions to ensure sustainability in the market.
Factors that Led to the Failure of Abercrombie and Fitch
Despite the excellent performance of Abercrombie & Fitch in the 1990s, the company’s sales declined significantly during the 2007-2008 recession in the United States (Cameron and Hutchison, 2018). Before the 2007-2008 recession, Abercrombie & Fitch had been characterized by unethical and illegal practices that escalated its downfall and failure in the market. Abercrombie & Fitch was faced with several legal issues that attracted global attention and negatively affected the company’s reputation. One of the factors that led to the failure and decline of Abercrombie & Fitch was the 2004 discrimination case. In 2004, Abercrombie & Fitch was sued for discriminating against the company’s Africans, Latinos, and Asian Americans (Hansen et al., 2018). White employees were favored in almost all the sectors of the company. Discrimination against Africans and Latinos in Abercrombie & Fitch was so prevalent that it raised concerns from the judicial system. Numerous mistreatment cases were shown towards non-white employees in the company, which gradually affected its reputation.
Any form of discrimination affects the workplace negatively. Employees’ motivation in a workplace characterized by discrimination is usually, and the employees’ productivity declines. This was a common phenomenon in Abercrombie & Fitch, where the productivity of non-white employees was negatively affected over the years. As the cases of discrimination increased in the company, the company started losing customers to other equivalent business organizations that withheld fair treatment from all employees. During the 1990s, the Europeans held top job positions in the company (Ross, 2022). Non-white employees only held low job positions that did not significantly influence the productivity and profitability of the company. Since the whites held the top job positions, their salaries were higher compared to those of employees from other races. These unfair treatment cases showed towards non-white employees reduced the company’s popularity, especially from the African and Asian continents. As the popularity of Abercrombie & Fitch declined, the number of sales decreased gradually until the company could not match the competition from other fashion companies.
In one instance, the company moved a staff member with a prosthetic limb from a floor shop to the warehouse because the company believed he was a shame to them and portrayed a negative picture about the company to its customers (Ross, 2022). That open discriminatory incident caused a global uproar because it violated employees’ rights. In another instance, a woman with a hijab was forced by the company’s administration to remove the hijab because it violated the look policy of Abercrombie & fitch Company (Ross, 2022). These incidents and other discriminatory cases resulted in legal cases that cost the company huge losses. For instance, the open discrimination case against non-white employees cost the company $40 million before it could be settled in a court of law (Ross, 2022).
The company’s CEO from 1992 to 2014, Mike Jeffries, contributed significantly to the downfall of Abercrombie & Fitch. Mike Jeffries held on to exclusion policies, where non-white employees were unvalued in the company, and their efforts mostly went unrecognized. As a result, their productivity declined during the reign of Mike Jeffries, affecting the profitability and sustainability of the company. Mike Jeffries held on to the strategy of manufacturing outfits for young people below 21 years. When asked why the company did not consider manufacturing outfits for the older generations, Mike Jeffries openly claimed that Abercrombie & Fitch was only for the cool people and not for the aged or overweight people (Matuschek et al., 2019). This utterance was wrong for the company because it was an unreliable marketing and leadership strategy. Mike Jeffries lacked a good communication and leadership skills needed in the market. As a result, he could not effectively manage the company and implement strategies to help the company withstand competition from other textile industries.
Another factor that led to the failure of Abercrombie & Fitch was the size of clothes they manufactured. Trousers manufactured by Abercrombie & Fitch only went up to size ten, while the shirts went up to large size. As a result, the company did not effectively serve the customers’ needs in the market but only concentrated on one population. Other textile companies maximized the weakness of Abercrombie & Fitch to manufacture clothes for all age groups and populations to meet the needs and demands of the people in the market (Mian, 2019). Abercrombie & Fitch started to lose customers to its competitors who could manufacture clothes that suited the needs of all the customers in the market. The loss of customers led to a decline in sales and recording of losses that eventually brought down the company. The mode of advertising utilized by Abercrombie & Fitch was also unethical. The company used almost naked models to advertise its products. It was easy for other fashion companies who used decent advertising strategies to outdo Abercrombie & Fitch and rule the textile and fashion industry.
Ways of Avoiding the Mistakes Made by Abercrombie and Fitch
The mistakes made by Abercrombie & Fitch led to its downfall but could have been avoided if good marketing strategies and communication skills had been utilized. First, factors that demotivate employees in the workplace should be avoided and replaced with strategies to motivate the employees. Abercrombie was characterized by discrimination and exclusion practices that demotivated employees and led to the company’s poor performance. One of the communication skills that was lacking among administrators in Abercrombie & Fitch was respect. The administrators did not respect or value non-white employees but only valued white employees. A workplace that lacks respect performs poorly because the disrespected employees lack motivation and enthusiasm to perform as expected. Other fashion companies that observed respect for all employees in the workplace performed better than Abercrombie and out ruled the company’s dominance. Respect in the workplace deters instances of racial discrimination and the use of harsh language that might negatively affect employees’ well-being and productivity.
Abercrombie lacked a marketing strategy or Product Development Strategy. Product development strategy enables business organizations to innovate and devise unique products to meet their customers’ needs and demands. Abercrombie & Fitch began manufacturing clothes for young people aged 21 years and below and refused to expand their manufacturing to include clothes that could fit other populations. Although that strategy worked well for them in the 1990s, it became redundant with time. It allowed other fashion companies to manufacture clothes for all age groups, negatively affecting Abercrombie’s profitability. Abercrombie should stick to the Product development strategy to gradually develop new products to meet the demands of its customers (Cuatrecasas, 2021). The diversification strategy was also absent in Abercrombie & Fitch company.
The diversification strategy enables a business organization to manufacture products that can serve the needs of a diverse population. Since Abercrombie & Fitch is an international brand, they should maximize their global fame by manufacturing outfits for all age groups and special groups in modern society. The company should also prioritize different manufacturing brands to ensure customer satisfaction. The company should implement programs to train its employees on various communication skills and their importance. The programs will deter the company’s administrators from being discriminative and biased towards certain races and groups of people in the company.
Conclusion
Effective marketing has been the dream of every business organization. Effective marketing strategies enable business organizations to penetrate any market and make huge sales that impact their profitability positively. Good communication skills and strategies should accompany effective marketing strategies. Communication skills are utilized in the workplace because they determine the level of motivation of the employees and their productivity levels. Poor marketing strategies and communication skills have rendered some fashion industries unproductive in the fashion industry. Abercrombie & Fitch failed in the market because its administrators used poor marketing strategies and communication skills. In order to remain relevant in the business world, the product development strategy and the diversification strategy should be utilized. These two marketing strategies help business organizations continually invest in product development and improvement to meet their customers’ needs and demands. On the other hand, good communication skills – respect and empathy – ensure high motivation for the employees in the workplace. These communication skills deter administrators from being biased or discriminative towards certain employees while favoring others.
Reference List
Bruckmeier, K. (2020) ‘Conflict, Relapse and Failure in the Sustainability Process: Neglected Problems’, Economics and Sustainability, pp. 293-336.
Cameron, B.N. and Hutchison, B.L. (2018) ‘Thinking Slow About Abercrombie & Fitch: Straightening Out the Judicial Confusion in the Lower Courts’, Pepp. L. Rev., 46, p. 471.
Cole, R., Johan, S. and Schweizer, D. (2021) ‘Corporate failures: Declines, collapses, and scandals’, Journal of Corporate Finance, 67, p. 101872.
Cuatrecasas, L.D. (2021) ‘Failure to function and trademark law’s outermost bound’, NYUL Rev., 96, p. 1312.
Hansen, N., Kupfer, A.K. and Hennig-Thurau, T. (2018) ‘Brand crises in the digital age: The short-and long-term effects of social media firestorms on consumers and brands’, International Journal of Research in Marketing, 35(4), pp. 557-574.
Lascity, M.E. (2019) ‘Lifestyle journalism as brand practice: The cases of Uniqlo and Abercrombie & Fitch’, Lifestyle Journalism, pp. 154-166.
Matuschek, A., Beukmann, U., Furin, I., Pistorius, C. and Lawlor, B. (2019) ‘Abercrombie & Fitch: How a CEO can wreck a brand in one interview’, Southeast Case Research Journal, 16(1), pp. 40-61.
Mian, M. (2019) ‘The Economics of Fashion: Do Newcomers to the Industry Have a Chance?’, Southeast Case Research Journal, 16(1), pp. 40-61.
Ross, S. (2022) ‘What happened to Abercrombie and Fitch? Who was CEO Mike Jeffries and when is White Hot documentary on Netflix’, Southeast Case Research Journal, 16(1), pp. 40-61.
Walters, K. (2016) ‘Mall models: How Abercrombie & Fitch sexualizes its retail workers’, Sexualization, Media, & Society, 2(2), p. 23-43.
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