Gap Direct Marketing Strategy in Malaysia:
Direct marketing exposes customers to merchandise through an impersonal medium such as a catalog,
brochure, and telephone conversation. The inability to inspect tangible merchandise makes the buyer‟s
decision more risky. This is a serious problem as Gap executive notes in Malaysia, since many customers inMalaysia place great value on browsing through the merchandise they will buy and take home. To reducethe Malaysian
customers‟ risk and to effectively
compete against Gap Old Navy Jeans for example ondisplay, Gap offer
generous return policies such as, For example, fig-1 L. L. Bean is famous for its earlyintroduction of an unconditional, no questions-asked warranty of its merchandise. Gap Inc. follows the suiteand they did the tried and tested direct market strategy, with variations in warranty policies. Such asexchanging the Top Value merchandise, but not refund, charge restocking fees, or impose time limits onreturns.Fig: 1 - L. L. Bean Return Policy: Source: L.L Bean. (2012).
It is reported that return rates at L.L. Bean which had historically been around 5% of sales jumped to 14%. :(L.L Bean, 2012).
Therefore, it is important for Gap. Inc, in Asian context, to create detailed statisticalmodels of their returns, and which Gap company, could learn from the market feedback they are getting toapply the above model for example. Gap Inc, should also create the market database infrastructure to havecomplete historical records for the customer behavior. Where by indexing the customer as a quick returneror a late returner. Thus, retaining the customer in the computer generated rating system from 1-5, where by#1 implies to quick returner and #5 scores as late returner. Moreover, major factor in scoring customers fordirect mailing e.t.c, because it will have a major effect on the customer lifetime value.It is also important for Gap, Inc, to have a customized model that is sophisticated enough to judge subtledifferences in races in Malaysia, rather than solely relying on average return rates. Thus, intervention may