Osh Kosh B’Gosh, baby sub-brand Brand - · PDF fileOsh Kosh B’Gosh, baby sub-brand Brand BRAND ANALYSIS INTRODUCTION ... The Company began making the pint-size version in the early

1© 2003-2008 Incitrio | web: incitrio.com | tel: 858.202.1822

Osh Kosh B’Gosh, baby sub-brand Brand

BRAND ANALYSIS

INTRODUCTIONOsh Kosh B’Gosh has a long history of strong brand presence in the children’s clothing market. The baby

sub-brand has become weakened by inconsistent naming: OKB, Baby B’Gosh, Osh Kosh, and Osh Kosh Baby

(Figure 1). In addition, logos have been selectively and inconsistently manipulated to fit the needs of clothing

design. Package design varies from piece to piece and overall there is no indication that any piece of clothing

or packaging is related to any other (Figure 2).

Within the retail department store outlets, Osh Kosh B’Gosh’s baby clothing are displayed throughout the

store counter-intuitively. In order to find all that the brand offers, a shopper must peruse every section of the

store. While this sounds like a good strategy for store coverage, the reality is that consumers are unwilling

to spend a lot of time hunting for a specific clothing brand and will more likely pick up a competitor’s clothing

that fits their needs. Shoppers are unwilling to spend the extra time to find an Osh Kosh B’Gosh clothing item

- even though it may fit their needs better than the competitor’s clothing. The subjects of brand image and

product availability are the two largest problems plaguing Osh Kosh B’Gosh today.

The baby brand needs a new name, a new look, and a new flexible family of logos. Osh Kosh B’Gosh needs to

seriously reconsider their current marketing strategy, focus on their core competencies, and develop a new

marketing mix. They are already underway in deals to move their fashion design team to New York, launch

a series of brick and mortar retail outlets, and increase availability of their product through a new licensing

agreement with Target Stores, Inc. I will discuss how their new strategies either fit or don’t fit into my recom-

mendations, as well as make suggestions for how they can take their brand to the next level. In my recom-

mendations, no longer will the brand identity be subservient to the clothing.

HISTORICAL BACKGROUNDFounded in 1895 in Oshkosh, Wisconsin, Osh Kosh B’Gosh, Inc. has grown from a small-town manufacturer

of adult work wear into a global marketer of children’s clothing and accessories. Best known for its rugged,

men’s hickory-striped bib overalls. The Company began making the pint-size version in the early 1900’s, so

that children could dress like their fathers. It wasn’t until a local mail order firm featured a pair of children’s

bib overalls in its national catalog that sales of the item took off. Prompted by the strong response, Osh Kosh

B’Gosh expanded distribution into specialty and department stores, and gradually broadened its children’s

wear line.

SITUATIONAL ANALYSISA strong brand name is a key element in the company’s financial stability. Osh Kosh B’Gosh, Inc. has earned a

profit every year for more than 75 years. Osh Kosh B’Gosh’s vision statement states:

“ Our vision is to become the dominant global marketer of branded products for children ages newborn

to ten.



This will be accomplished by leveraging our existing brand franchise in Osh Kosh B’Gosh and utilizing

our core competencies to supply the market with all appropriate products for children where quality,

durability and fashion innovation are important.

Secondarily, we will pursue niche opportunities, where appropriate, in adult apparel where our century

old heritage can provide meaningful differential advantage to address the needs of the marketplace.”

Osh Kosh B’Gosh uses their core values of: Integrity, Innovation, Teamwork, Continuous Improvement, and

Financial Success to accomplish these goals.

PRODUCTToday, the core strength of their business remains the Osh Kosh B’Gosh brand name, recognized nationally

and internationally for its classic American style, durability and quality. They’ve grown from a small town

manufacturer into an incredibly strong and powerful consumer brand. Over the years, they’ve extended their

strong brand name to include products in a variety of size ranges. In addition to the Osh Kosh B’Gosh name

brand for boys and girls sizes 12 months to 6x/7, the Osh Kosh B’Gosh family of brands now includes Osh

Kosh B’Gosh Baby for newborns to size 6/9 months, Genuine Girl for girls sizes 7-16 and Genuine Blues for

boys sizes 8-16. Their products include bib overalls, pant, shorts, shirts, and swimwear, as well as a layette

line for newborns. The children’s wear and youth wear category is divided into two groups: Fashion and Re-

plenishment. The Fashion group is organized primarily in a collection format of seasonal themes and Replen-

ishment consists of staple denim products. The Group operates 154 retail stores under three formats: factory

outlet stores, showcase stores, and strip mall stores.

Osh Kosh B’Gosh merchandise also includes a variety of licensed products such as car seats, strollers, bed-

ding, eyewear, plush toys, hair accessories, shoes, socks and sleepwear. One problem with their many licens-

ing agreements is that the company does not have control over the quality of the products and has suffered

from the partnership agreements they’ve made – particularly with car seats. The design and low pricing of

the majority of these brand extension products are inconsistent with regard to the company’s core values and

brand image: quality and innovation.

PLACeCurrently, the company distributes their clothing and accessories through a variety of distribution channels.

Their primary distribution lies with major department stores such as: Dillards, Famous-Barr, and JC Penney’s

as well as baby/kids specialty stores like: Babies ‘R Us and Kids ‘R Us. At this time, they offer virtually the

same clothing product lines in each department store. In the baby specialty stores, however, they offer their

full line of clothing as well as brand extension products such as car seats. In addition, the company sells

their clothing line through their own bricks and mortar stores in select areas. They also offer factory outlet

stores remotely located outside major cities. Several years ago, they established an online presence with an

e-commerce web site (www.oshkoshbgosh.com) – this virtual store offers even less clothing products than

the baby specialty stores and appears to be used as a clearing house for any surplus clothing products they

were unable to sell. Osh Kosh also suffers from problems with stores and product distribution on a global

scale. Finally, the company has entered into a licensing agreement with Target Stores, Inc. to create a spe-

cialty clothing line, “Genuine Kids,” which will debut in Fall 2003.



PROmOTIONOsh Kosh B’Gosh does not take advantage of promotions or advertising. Their website while offering an online

presence, does not sell the brand but devalues it through their limited offerings of clearance clothing products.

While the company does use a couple of poorly located and poorly designed display racks within Babies ‘R

Us, they do not use custom display racks to draw attention to their clothing/brand located within department

stores. Osh Kosh B’Gosh does not use any television or print advertising to my knowledge.

PRICeOsh Kosh B’Gosh prices their clothing at a medium-high range consistent with the company’s heritage and brand

equity. Their high-quality products are reflected by appropriate pricing structures. One problem, however, is that

the baby specialty store clothing line is devalued due to constant mark-downs and the online store used as a

clearance center sends a negative image. In addition, they suffer from poor licensing agreements which hurt the

brand image and ultimately the consumer perception of the clothing line. For example, poor quality car seats

with the Osh Kosh B’Gosh name are marked as clearance items and placed near the baby girl’s Osh Kosh cloth-

ing section of Babies ‘R Us. This sends a negative message to car seat and baby clothing consumers.

COSTS & CAPABILITIeSIn 2002, the company’s revenues consisted of retail sales which accounted for 57%, Domestic wholesale

which accounted for 42%; and Procurement, nominal and Others, 1%. Between 2001 and 2002, the company

suffered a slight drop in sales consistent with the rest of the clothing industry. In addition, they experienced

lower operating income and lower net income consistent with the industry. Their Pe Ratio is low compared to

their main competitors, and their ePS is relatively high. This could indicate either the stock is undervalued, or

that the market feels the company does not have good growth potential. I believe the stock is undervalued

due to poor brand perception. Osh Kosh, while suffering from the market effects of 9/11, does seem to be a

strong stock capable of growth.

CUSTOmeR BASeD BRAND eqUITY

Cute &Innovative

MEN

KIDS

BABY History &Heritage

WOMEN

OverallsHighualityQ

0

1

2

3

4

5

6

7

8

9

10Quality

Price

Value

Innovation

Clothing Design

Product Availability

Color Palette

Store Design

Osh Kosh B'Gosh Carter's Baby GAP Gymboree

ytilauQ hgiHytilauQ woL

High Price

Low Price

Cute &Innovative

MEN

KIDS


WOMEN

OverallsHighualityQ

0

1

2

3

4

5

6

7

8

9

10Quality

Price

Value

Innovation

Clothing Design


Color Palette

Store Design



High Price

Low Price



Brand Leverage

Osh Kosh B’Gosh is unable to leverage their brand with regards to their current product line. While the com-

pany produces products of high quality, the poor quality of their licensed brand extensions creating problems

for the company. In addition, their wide distribution strategy could be cannibalizing the purchase of products

from their own brick and mortar stores as well as their ecommerce website.

Internal Conflicts

Recently, Osh Kosh B’Gosh hired a new president due to the death of their previous leader. In addition to

this shake-up in the leadership position of the company, they have decided to move their design offices from

Wisconsin to New York in the hopes of becoming more contemporary. Their justification for the move was that

they were unable to entice great designers to relocate to Wisconsin. This is a major departure from their long-

standing heritage of being a home-grown mid-America corporation.

Company Strengths

The Osh Kosh B’Gosh brand name is recognized for its classic American style, durability and quality. They’ve

grown from a small town manufacturer into an incredibly strong and powerful consumer brand. Over the

years, they’ve extended their strong brand name to include products in a variety of size ranges. Their product

strengths lie in high quality, innovative, and attractive clothing. They have a strong presence in the children

and baby clothing market.

Company Weaknesses

The Osh Kosh B’Gosh brand suffers from a brand split-personality. The inconsistency of using four different

baby brand names, is weakening them. Inconsistent logo design/application, and inconsistent packaging fur-

ther fragments the brand.

Their presence within the stores is also disorganized. Their current strategy is to place different products in

different areas of the baby/kids clothing departments. While their intent may have been to saturate the areas,

the actual result is a hit-and-miss approach where only loyal Osh Kosh B’Gosh consumers might take the time

to search for their various products. The company also suffers from inadequate availability of their products

within a metropolitan area. The company distributes small, identical groupings from select clothing lines to

each department store. This lack of segmentation hurts them by giving consumers no clear incentive to go

to one location over another to obtain a specific product. To add to these issues, there is no visible presence

within the stores due to a complete lack of Osh Kosh clothing displays. Any consumer may be altogether un-

aware that Osh Kosh B’Gosh products are sold within department store outlets.

Their final major weakness lies with the licensing agreements they’ve made with various children accessory

product manufacturers. It appears that Osh Kosh does not have any quality or price control. Such lack of

quality could lead consumers to think that Osh Kosh products are of low quality, especially if their first experi-

ence of the brand is with a licensed product. Therefore they are not benefiting or controlling their brand but

hurting it and devaluing it. The brand image is suffering due to these licensing agreements, and will continue

to suffer unless major changes are made.



COmPeTITOR ANALYSISThere are three major competitors in the baby clothing market: Carter’s, Gymboree, and Baby GAP. Carter’s

is the largest competitor due to their overwhelming saturation of the market and their appeal to the every-

consumer. Gymboree has excellent brand perception due to a successful branding strategy. They target the

design-savvy, interactive mom with vibrant clothing and gym/music classes offered at their activity centers.

Baby GAP is a growing threat due to their strategy of trying to keep every member of the family in GAP

clothes. Their target consumer is likely the mom who already buys clothes from the GAP for herself, as evi-

dence by the proximity of the baby/kids clothing stores and the female GAP clothing stores.

Perceptual map

Carter’s

Carter’s is the behemoth with a major share of the baby clothing market. Their strengths include: a strong

heritage, a saturated market strategy, excellent distribution channels, low prices, and strong brand equity.

Their weaknesses are: low quality products, no online presence, and poor clothing design. Carter’s also faces

the problem of creating a majority of their clothing for the baby girl or baby unisex market and offers a lim-

ited variety of baby boy clothing options. Carter’s continues to control a large share of the market due to their

broad distribution strategy. They offer their clothing at every possible location that mom might shop; from

discount stores like Sam’s Club, to eDLP stores like Walmart, throughout every department store. Add to that

their own factory outlet stores – often located very near Osh Kosh B’Gosh’s factory outlet stores, and their

coverage is comprehensive.

Gymboree

Gymboree is a relatively new up-and-comer with a targeted strategy. Their strengths are: their fun brand im-

age, partnership of classes and products, appealing identity system, good brand equity, and loyalty program

(GymBucks). Gymboree targets two types of consumers: the interactive mom and the incentive shopper. The

interactive mom might participate in Gymboree classes with her baby and later be enticed to buy Gymboree

clothing. The incentive shopper is seduced by Gymboree’s loyalty program which offers more GymBucks with

every purchase. Their weaknesses are: an unfocused clothing design strategy, a lack of proximity between

Cute &Innovative

MEN

KIDS


WOMEN

OverallsHighualityQ

0

1

2

3

4

5

6

7

8

9

10Quality

Price

Value

Innovation

Clothing Design


Color Palette

Store Design



High Price

Low Price



their distribution stores and activity centers, a fragmented brand presence, and limited distribution of their

products due to a small number of stores. Another weakness that Gymboree faces is that there clothing of-

ferings are targeted more to little girls than little boys – this a major component of the problems with their

unfocused design strategy.

Baby GAP

Baby GAP targets the mom who wears GAP clothes and buys them for her baby, too. Baby GAP’s strengths

reside with: their family of brands, good baby brand equity, excellent parent brand equity, their customer-for-

life strategy, great clothing design, good quality, innovative characters and color schemes. Their weaknesses

derive from: their pricing structure and product availability. Currently, Baby GAP prices their products very

high. However, due to the GAP company’s fast and periodic markdown strategy, the clothing sells faster the

lower the price goes. Rather than using this data to find the right pricing formula, Baby GAP tries to sell as

much as they can at the highest price and then uses price cuts to get rid of their inventory. It is interesting to

note that at this time, the company has adopted a new way of marking down their clothing items. Rather than

putting stickers on the pricing tags of clothing, they have put up small signs indicating what items are on sale

and what their new sale price is. It appears this is working to their disadvantage due to the fact that many

consumers are unwilling to pay high prices and may not see the small signs that list all clothing items on sale.

Additionally, due to the clothing industry’s problems with inconsistent labeling of clothing styles – it is difficult

for the consumer to discern which clothing is actually marked down. While this new strategy may have been

designed to encourage the perception of the Baby GAP’s high quality, high price brand image – the reality may

be that they will suffer from greater lost sales and still not fix the constant markdown pricing problem.

Competitor Opportunities

Carter’s poor quality, Gymboree’s relatively short history, and Baby GAP’s inconsistent pricing structure all of-

fer opportunities for Osh Kosh B’Gosh to gain market share. Currently, Osh Kosh B’Gosh leverages their high

quality, strong heritage, and med-high pricing structure to their advantage. If the company can jump on these

opportunities and strengthen their position, they will definitely increase their presence and sales in the baby

clothing market. In addition, Osh Kosh needs to capture more of the baby boy market share neglected by

Carter’s & Gymboree, and the online market share that Carter’s is currently not attempting to acquire.

Competitor Threats

Carter’s has saturated the market – the fact that a consumer can buy Carter’s virtually anywhere poses a

major threat to Osh Kosh B’Gosh. Gymboree’s loyalty program poses another threat to Osh Kosh – they have

devised a successful promotion that continues to encourage repeat business. Baby GAP may be stealing in-

novative designs from its competitors. many product innovations have shown up at Baby GAP within weeks or

months of new product distribution of Osh Kosh B’Gosh baby clothing products. While these may be coinci-

dences, Osh Kosh needs to stay on top of their innovation strategy before Baby GAP steals that core compe-

tency from them and makes it their own.

DemAND ANALYSIS AND CONSUmeR BeHAvIORFor the purposes of this paper, I created two surveys: one for a focus group and one for one-on one inter-

views. each survey attempted to gain different insights. The focus group survey sought to discover who the

main target market was for Osh Kosh products and their perceptions of competing baby clothing manufactur-

ers/stores. The psychographic survey attempted to discover consumer awareness, perception, availability, and

other intangible values that may factor into a new strategy for Osh Kosh B’Gosh.



quantitative Survey Data

Osh Kosh B’Gosh’s current target market consists of mom’s age 28-40, with an average household income of

$50,000+, who own their home and car, work part-time or have a flexible schedule, and some college educa-

tion. Their secondary target market consists of friends/family of these moms who may be encouraged to buy

Osh Kosh baby clothing to fit with baby’s existing wardrobe.

Psychographic Survey Data

In an analysis of the psychographics of consumers, I tested two hypotheses: 1. that there is a direct corre-

lation between the type of grocery store a mom shops at, and the type of baby store a mom shops at. 2. A

correlation between the type of food a mom purchases/makes for her baby, and the type of clothing a mom

purchases for her baby. What I learned was very interesting – there is a direct relationship between these

groups. In attempting to understand how and why consumers choose their grocery stores, I discovered that

on average the consumers that purchase Osh Kosh baby clothing prefer a smaller, local, intimate grocery

store that offers easy-to-find, quality products. The food items they purchase are typically wholesome, not too

fancy, and the quality of what “mom would make.” This discovery is particularly relevant as it relates to my

recommendations, discussed later in the analysis.

The consumers of Carter’s and other baby clothing stores typically shopped at major grocery stores, and pur-

chased name brand basic baby food. Non-Osh Kosh consumers chose their grocery stores based on proximity

to their house and ease of getting in-and-out of the store. In addition, they chose their baby food based on

promotional mailings with coupons, advertising in magazines, and baby food brands with name recognition/

equity. Wholesomeness or quality was not an immediate issues as nutritional value and appropriateness was

assumed appropriate based on advertising and heritage of baby food company, such as Gerber’s. From this

information, I can conjecture that their entire philosophy for choosing baby stores and baby clothing is very

different from the Osh Kosh consumer.

New, evolving Segments

The company can capitalize on trends in socially aware purchasing behavior that benefits the consumer as

well as makes the world a better place. There are also community-oriented marketing strategies, and the

challenges of marketing to a growing global economy. Osh Kosh has several new and evolving market seg-

ments they could pursue.

macro-environmental Issues

There are several macro-environmental issues which could indirectly affect Osh Kosh B’Gosh. The political

environment is very unstable due the republican President’s economic policies and the conflict in IRAQ. This

could provide an opportunity to capitalize on current patriotic sentimentalities. The stock market has been

suffering ever since the 9/11 terrorist incident and the current decline in spending. The technological environ-

ment provides opportunities because the market currently rewards innovation. The “martha Stewart Phe-

nomenon” has created a market that is color and design savvy – this opportunity falls directly inline with Osh

Kosh’s current innovation core value. With regards to the social environment, there is no longer one nuclear

family stereotype. This poses a challenge with regards to advertising. The company must take care not to

exclude any potential market by using “traditional” family stereotypes in their advertising. It is important that

they target every family within their target whether they have a non-traditional family structure or a minor-

ity race configuration. In addition, the company should target both baby boys and baby girls, as well as baby

unisex markets. It is crucial that they find a way to appeal to all babies, not just one race or gender. Osh Kosh



could also benefit from the current cultural environment in which consumers support the “Made in America,”

“Buy America,” and “Support America” trends. With regards to demographic trends, the baby clothing mar-

ket is growing - every 8 seconds a new baby is born in the United States and Osh Kosh can be there for all of

baby’s layette needs.

Opportunities of macro-environmental Issues

Osh Kosh could create a line of America-centric clothing. They have the advantage of already being a com-

pany that is based in America and makes clothing in America for Americans. They should take advantage of

this positioning to create a patriotic clothing line timed to release before the 4th of July. For example, they

could use their signature product, their overalls, to create a line of red, white and blue overalls complemented

by shirts, hats, and socks that match. Additionally, they could pursue an advertising campaign to be shown

only in the United States in which they emphasize their core values as well as create a new slogan: “made in

America for Americans.”

Osh Kosh could also create a line of socially aware clothing through a licensing agreement with Unilever to co-

brand a line of baby clothing called “Ben & Jerry’s Lil’ Yummies.” The licensing agreement would enable them

to use the existing designs and patterns used by existing ice cream flavors produced by Ben & Jerry’s. Since

their target market already shops at grocery stores that likely carry Ben & Jerry’s, this would be an unusual

but delicious way to show that they know their core consumer and have a sense of humor, too. To continue

along the lines of socially aware positioning, like Ben & Jerry’s, a portion of their proceeds could go to non-

profit organizations. Osh Kosh could choose organizations that help babies – like the March of Dimes.

Threats of macro-environmental Issues

Due to the unstable market economy and military action overseas, Osh Kosh, like the majority of the chil-

dren’s clothing industry, will continue to face an uphill battle in its fight to return to pre- 9/11 profitability and

income. In addition, negative political perception of America due to the military conflict in Iraq could extend to

American companies and cripple Osh Kosh’s global sales efforts.

ReCOmmeNDATIONS FOR THe GeNeRAL mARKeTING STRATeGYProduct

The company should continue to maintain their current quality level and innovative clothing design strategy.

By staying true to their core competencies of quality and innovation, Osh Kosh should be able to launch them-

selves ahead of the competition and gain greater market share. It is important that the company keep in mind

the design-savvy and color-sensitive attributes that the target audience already possesses. Osh Kosh should

establish new clothing lines: the patriotic “America” line and “Lil’ Yummies” Ben & Jerry’s line. Osh Kosh

should rescind their current licensing agreements with any baby clothing accessory manufacturer that does

not meet Osh Kosh’s high standards. They should renegotiate licensing agreements with existing companies

and negotiate to a higher quality standard and allow on-site audits at partner companies by Osh Kosh selected

representatives.

Osh Kosh should create several different lines, in keeping with their current design strategies. However, they

should distribute select lines to each store chain with minimal overlap between chains. Combinations could be

determined based on the department store’s data and target market demographics. Osh Kosh B’Gosh could

use this information to determine which lines would be best suited for each market/store. This mix-and-match

strategy could entice consumers to check out the Osh Kosh display at each department store they frequen



because one store may offer something another does not. This could also address potential cannibalization is-

sues competing stores suffer when located in the same mall. The full line of all their clothing could be offered

exclusively through Osh Kosh stores and their online store. This would also encourage consumers to check

out the website or store more frequently to see what new products have come out and encourage purchases

through company-owned distributions channels.

Production Design/Facility

In keeping with the move of their design office to NY, Osh Kosh should establish another satellite design office

in CA. In addition, to ensure quality control and keep expenses down, the company should establish two new

production facilities – one in New Jersey for the NY design office and one in CA near the CA office. By setting

up these production facilities near the design offices, Osh Kosh can maintain greater control over their prod-

ucts and brand; and decrease design-to-ship timing.

Package/Identity

The image Osh Kosh B’Gosh presents to the public needs to be consistent and strong. I propose that they

rename their baby clothing line to “OSH Baby” and design a new family of “OSH Baby” logos that will provide

flexibility for the clothing designers and consistency for the brand image. In addition, the company could re-

name the children’s clothing line to “OSH KOSH Kids” and design a new family of logos for that portion of their

brand. The design principles used in the new logos should be extended to every facet of the brand image.

Osh Kosh needs to design attractive store clothing displays so that a consumer can find their products easily

anytime and anywhere. Clothing displays would be designed in keeping with the new look and feel, as well as

use the new name/logo. All Osh Kosh products would be conveniently located and contained within the compa-

ny provided display. In this way, Osh Kosh could help direct traffic to their specific locations within the stores.

The company needs to design new hang tags, clothing tags, boxes, bags, and most of all a new website. Their

current website is poorly designed and reflects negatively on the brand. The home page is difficult to navigate

and once you do find the type of clothing you want by gender and age, the product offerings are poorly dis-

played and counter-intuitively organized. By revamping the look and appeal of their current website, Osh Kosh

can maintain brand perception at every level. As of 5/5/03, Osh Kosh has attempted to update their website –

the new look and navigation is an improvement, but not yet at the level it needs to be.

The company must control how the consumer enters the site and allow for clear and easy navigation. The new

look I propose would be in keeping with the new name/logo strategy to create a cohesive and comprehensive

brand feeling. Clothing should be sorted by gender and size in accordance with Osh Kosh’s current sizing/

labeling strategy. To complement that, Osh Kosh should implement an advanced search engine that enables

customers to select from a set of variables (gender, size, weight, length, age, and clothing type) to find ex-

actly what they are looking for the first time around. As survey data has suggested, customers are unwilling

to waste time hunting around for what they want. This is even more applicable in an online setting in which

upload time and ease of navigation can make or break an online site.

The brick and mortar Osh Kosh stores should also be redesigned to match their online presence and maintain

consistency. By using the data collected from the grocery store to baby store analysis, they can rearrange

store interiors to fit the cozy, warm, easy-to-navigate feeling to match the desires of their existing customer

base. By creating a look and feel that is matched throughout every aspect of the brand’s image, the company



can improve consumer awareness of the brand and thereby enhance their overall brand equity.

Promotions

Osh Kosh B’Gosh needs to develop a strong marketing/advertising strategy to educate the consumer about

their new look/strategy. The company should create advertising campaigns that speak about their core values,

their new America-centric clothing line, and their new name/look which is stronger and more appealing. It is

important to note that Osh Kosh must avoid family, gender, and race stereotypes in their advertising. There

are three ways in which they can accomplish this goal: 1. focus on tone by using all races and genders co-

existing together and wearing Osh Kosh products to communicate harmony, 2. focus on personality by using

illustrated characters to communicate Osh Kosh’s heritage and appeal, and 3. focus on core competencies by

showing only Osh Kosh products and what makes them better than the competition to communicate aspects

of quality and innovation.

Tv ads could be strategically placed during progressive shows which mom and dad might watch after baby is

asleep or other shows that mom might watch during the day, such as: Baby Story on TLC or martha Stewart

Living. To complement the television spots, Osh Kosh should develop a series of magazine ads that showcase

their new name, new look, and exciting new clothing lines. Ads could be placed in such magazines as: Martha

Stewart Baby, Junior, and Mothering Magazine. By selecting more progressive baby magazines, where the

other companies may not be currently advertising, Osh Kosh could stand apart from their competitors’ satura-

tion strategies and showcase their designs.

In addition, Osh Kosh needs to develop some sort of loyalty program to compete with Gymboree’s lucrative

GymBucks program. They could offer incentives to consumers to purchase online or at their stores and re-

ceive a coupon for any Osh Kosh product at any store. In this way, the initial purchase would be made at their

own virtual/online store and hook them in to their Osh Kosh product line. In this way, they could keep the

customer regardless of where the consumer prefers to purchase their baby clothing products.

Osh Kosh must redesign their website to keep current with online purchasing trends that are consistent with

their target audience. The website has the potential to be used as a promotional tool if they create sections to

educate customer about product quality and innovation to tell stories about what makes their company better.

Also, they could stay ever-present in their consumer’s minds by offering html-based newsletters that combine

information and products. moms could register themselves and their babies to receive monthly newsletters

which discuss baby developmental issues as well as products that solve those issues. For example, when your

baby is getting ready to walk, that would be the time to switch from footed coveralls to footless coveralls –

babies learn to walk better and faster when their feet are bare. This tool would enable Osh Kosh to encourage

moms to return to them for wardrobe updates and speak to moms that the company knows what they need

due to their long-standing heritage and history in the baby clothing industry.

Place

For the short term, Osh Kosh should definitely keep the agreements they share with existing department

stores. The company should also pursue adding other department stores such as Nordstrom’s. Stores, like

Nordstrom’s, would be in keeping with their higher-end image and improve overall brand perception.

In the long term, Osh Kosh B’Gosh needs to invest heavily in expanding company-owned stores. Their two

major competitors: Baby GAP and Gymboree compete strongly on this level and it is only a matter of time



before they begin stealing even more market share from Osh Kosh. If they want to maintain their high-quality

perception, they need to begin distancing themselves from every-location children’s clothing companies like

Carter’s. In-store design should reflect survey data results which recommend that customers prefer a smaller,

more intimate shopping experience in which products are high quality, and easy to find.

Osh Kosh’ joint venture with Target Stores, Inc. could be a boon or a disaster. To prevent brand destruction,

Osh Kosh must emphasize Target’s newer, high-end status and distribute a line specifically created for Target

customers. At this time, the company plans to call the line Genuine Kids, but it is unclear if the products of-

fered will be their own separate line or an identical line with different labeling. It is imperative that Osh Kosh

separate this line from their department store lines and attempt to design a line in keeping with current Target

design trends such as: Mossimo and Michael Graves. Consumers are just beginning to perceive Target Stores,

Inc. as a step above Walmart and Kmart. Osh Kosh has a responsibility to foster this perception if they want

to properly leverage their brand.

Profit/Unit

Osh Kosh must attempt to maintain or increase their current profitability levels in this unstable economy.

Their current ePS of 2.54 compared with GAP’s .54 and Gymboree’s .16 indicate that this is an attainable

goal. As stated earlier, the company must increase the number of units sold by creating new department store

agreements, short-term and expanding rapidly their own retail stores, long-term.

People

The company’s new hiring in NY and proposed new hiring in CA pose a potential threat to the company’s exist-

ing corporate culture. Previously, this was not an issue because everyone was located in the same place – Osh

Kosh, WI. Now, with two new design offices and two new production facilities, Osh Kosh must take major

steps to ensure their corporate culture is preserved. As a company with excellent benefits and employee-care

programs, this should be easy to attain. In addition to current practices, Osh Kosh could hold quarterly “family

reunion” events in which member of the satellite offices could come to the WI headquarters for team-building

events.

Partner/Support

The licensing strategy for Target Stores, Inc.’s proposed “Genuine Kids” line must clearly support both brands

by distributing a specially-designed line just for Target’s customers. Department store distribution strategies

should include a mix-and-match approach in which each department store will offer some similar products to

other department stores but also some unique products to only their store. This will reduce cannibalization

and improve department store/company relationships. Finally, Osh Kosh should enter into a licensing strategy

with Unilever’s “Ben & Jerry’s” division to utilize existing ice cream names/package designs and adapt them

for a new line of “Lil’ Yummies” clothing for babies.

Persistence and Focus

Overall, Osh Kosh must focus their efforts on the re-launch of the new and improved Osh Kosh B’Gosh baby

and kids clothing lines. They must re-focus their brand identity and presence in every area: from department

store displays to logos to packaging to online commerce.



SUmmARY OF ReCOmmeNDATIONSOsh Kosh B’Gosh is a strong brand with a long history and heritage of making quality children’s clothing. To

maintain brand equity, they must stay focused on their target market and how they will position their products

to their customers. Short-term plans should include re-development of department store relationships, re-

negotiation of licensing agreements, and re-designing of name/logo families and the overall image the brand

presents to the public. Long-term plans should include extensions of design/production facilities, expansion of

company-owned stores, re-development of online commerce site, and a comprehensive advertising campaign.

In addition to traditional promotional methods, Osh Kosh should develop a loyalty program to compete with

Gymboree’s GymBucks program.

Competitor retaliation is a possibility, and is something for which the company must plan. The current status

of market share among the competitors is comfortable as evidenced by the minimal advertising dollars spent

by the major members of the baby clothing industry. Once Osh Kosh attempts to gain larger market share,

they must initiate brand-building campaigns to help avert such retaliation. Competitors may try to adopt Osh

Kosh’s core competencies make them their own and use them against Osh Kosh in advertising and promotion-

al campaigns. If Osh Kosh can successfully place themselves within their niche in the mind of their consumers

prior to store launches, they can more easily defend any competitor onslaughts.

If they begin phase one with a logo/name redesign, clothing line extensions and department store re-nego-

tiations, the company can take their time moving into phase two without giving their competition obvious

advance notice. It is imperative that Osh Kosh rebuild the brand and strengthen their equity so that they are

able to withstand any retaliation and expected competitor backlash.

Osh Kosh is a great brand, but they have the potential to become so much more. They already have the es-

sential building blocks in place, all they need to do is evolve into the company they were meant to be. By

following the recommendations made in this paper, I believe that Osh Kosh B’Gosh can gain market share to

become the category leader.

Figure 1: Osh Kosh B’Gosh – Inconsistent Logos and Naming Practices



Figure 2: Osh Kosh B’Gosh – Inconsistent Packaging

Figure 3: Key Financials for Osh Kosh B’Gosh

Key Financials

Y2002 Y2001 Y2000

Sales 436.99 463.07 453.06

Operating Income 41.30 45.46 47.41

Net Income 32.05 32.81 32.22

Total Assets 153.45 157.04 153.31

Total Liabilities 61.07 83.34 108.83

eBITDA 59.88 63.54 65.93

Market Cap 347.38

Source: Worldscope - Millions USD

Figure 4: Osh Kosh B’Gosh - Key Ratios

Key Ratios

P/E Ratio* 11.52 Dividend Yld 0.96

Price to Book 4.00 1 Yr Tot Return -26.79

Price To CF 8.62 Beta** 0.09

1Yr Sales 1Yr ePS

-5.63 -2.68

Growth Growth

Source: Worldscope,*IBES,**Worldscope

Figure 5: Osh Kosh B’Gosh - Stock Chart

incitrio brand analysis: Osh Kosh B’Gosh, baby sub-brand

Osh Kosh B’Gosh Brand Analysis by Angela Hill © 2003 incitrio (www.incitrio.com) or contact [email protected] 29


Figure 6: Osh Kosh B’Gosh – Per Share Data

PER SHARE DATA 12/31/02 12/31/01 12/31/00 12/31/99 12/31/98

Net Operating EPS n/a n/a n/a n/a n/a

EPS 2.54 2.61 2.58 1.99 1.52

Fully Diluted EPS 2.54 2.61 2.58 1.99 1.52

Figure 7: Osh Kosh B’Gosh - 5 Year Summary: Sales, Net Income, EPS

Scale: 1000000

5 YR SUMMARY 12/31/02 12/31/01 12/31/00 12/31/99 12/31/98

Sales 436.99 463.07 453.06 429.79 423.23

Net Income 32.05 32.81 32.22 32.45 29.34

EPS 2.54 2.61 2.58 1.99 1.52





Figure 8: Osh Kosh B’Gosh – Profitability Ratios





PER SHARE DATA 12/31/02 12/31/01 12/31/00 12/31/99 12/31/98


EPS 2.54 2.61 2.58 1.99 1.52



Scale: 1000000

5 YR SUMMARY 12/31/02 12/31/01 12/31/00 12/31/99 12/31/98

Sales 436.99 463.07 453.06 429.79 423.23

Net Income 32.05 32.81 32.22 32.45 29.34

EPS 2.54 2.61 2.58 1.99 1.52





PER SHARE DATA 12/31/02 12/31/01 12/31/00 12/31/99 12/31/98


EPS 2.54 2.61 2.58 1.99 1.52



Scale: 1000000

5 YR SUMMARY 12/31/02 12/31/01 12/31/00 12/31/99 12/31/98

Sales 436.99 463.07 453.06 429.79 423.23

Net Income 32.05 32.81 32.22 32.45 29.34

EPS 2.54 2.61 2.58 1.99 1.52


PROFITABILITY

RATIOS

12/31/02 12/31/01 12/31/00 12/31/99 12/31/98

Return On Equity 43.48 73.77 137.45 31.50 25.92

Reinvestment Rate 39.23 67.88 127.22 28.48 23.11

Return On Assets 20.87 22.37 28.65 21.19 17.48

Return On Invested Capital 33.54 38.77 52.81 32.44 26.16

Cash Flow To Sales 10.57 9.83 8.94 10.51 8.91

Net Margin 7.33 7.08 7.11 7.55 6.93

Figure 9: Osh Kosh B’Gosh – Growth Ratios

GROWTH RATIOS 12/31/02 12/31/01 12/31/00 12/31/99 12/31/98

Sales 1Yr Growth -5.63 2.21 5.42 1.55 7.09

Sales5 Yr Growth 2.03 0.81 0.94 3.41 4.47

Operating Income 1Yr

Growth

-9.15 -4.12 2.59 13.46 40.74


Growth

7.37 15.40 21.10 38.84 19.42

Net Income 1Yr Growth -2.33 1.83 -0.71 10.61 30.04

Net Income 5Yr Growth 7.27 96.53 24.10 35.75 45.34

Net Margin 1Yr Growth 3.50 -0.37 -5.81 8.93 21.43

Net Margin 5Yr Growth 5.14 94.95 22.94 31.27 39.13

EPS 1Yr Growth -2.68 1.16 29.65 30.92 49.75

EPS5Yr Growth 20.14 125.26 43.43 51.42 57.87

Equity 1Yr Growth 25.36 65.72 89.74 -77.25 -8.96

Equity 5Yr Growth -3.97 -11.80 -21.59 -31.80 -9.74




Figure 10: Gymboree - 5 Year Summary


PROFITABILITY

RATIOS

12/31/02 12/31/01 12/31/00 12/31/99 12/31/98

Return On Equity 43.48 73.77 137.45 31.50 25.92

Reinvestment Rate 39.23 67.88 127.22 28.48 23.11

Return On Assets 20.87 22.37 28.65 21.19 17.48

Return On Invested Capital 33.54 38.77 52.81 32.44 26.16

Cash Flow To Sales 10.57 9.83 8.94 10.51 8.91

Net Margin 7.33 7.08 7.11 7.55 6.93


GROWTH RATIOS 12/31/02 12/31/01 12/31/00 12/31/99 12/31/98

Sales 1Yr Growth -5.63 2.21 5.42 1.55 7.09

Sales5 Yr Growth 2.03 0.81 0.94 3.41 4.47


Growth

-9.15 -4.12 2.59 13.46 40.74


Growth

7.37 15.40 21.10 38.84 19.42

Net Income 1Yr Growth -2.33 1.83 -0.71 10.61 30.04

Net Income 5Yr Growth 7.27 96.53 24.10 35.75 45.34

Net Margin 1Yr Growth 3.50 -0.37 -5.81 8.93 21.43

Net Margin 5Yr Growth 5.14 94.95 22.94 31.27 39.13

EPS 1Yr Growth -2.68 1.16 29.65 30.92 49.75

EPS5Yr Growth 20.14 125.26 43.43 51.42 57.87

Equity 1Yr Growth 25.36 65.72 89.74 -77.25 -8.96

Equity 5Yr Growth -3.97 -11.80 -21.59 -31.80 -9.74


5 YR SUMMARY 01/31/02 01/31/01 01/31/00 01/31/99 01/31/98

Sales 505.38 448.61 437.08 457.22 373.44

Net Income 4.58 -36.87 -10.60 6.24 35.17

EPS 0.16 -1.38 -0.44 0.26 1.41

Figure 11: GAP – 5 Year Summary

(Note: Baby GAP’s information cannot be broken out from the GAP parent company’s

information.)

5 YR SUMMARY 01/31/03 01/31/02 01/31/01 01/31/00 01/31/99

Sales 14,454.71 13,847.87 13,673.46 11,635.40 9,054.46

Net Income 477.46 -7.76 877.50 1,127.07 824.54

EPS 0.54 -0.01 1.00 1.26 0.91

Figure 12: Carter’s – 3 Year Summary (5 Year Summary - not available due to non-public status)

Historical Financials & Employees

Income Statement

Year

Revenue

($ mil.)

Net Income

($ mil.)

Net Profit

Margin Employees

Dec 01 518.5 (4.2) -- 6,083

Dec 00 463.4 12.7 2.7% 6,948

Dec 99 406.9 (3.8) -- 7,244




(Note: Baby GAP’s information cannot be broken out from the GAP parent company’s information.)

Figure 12: Carter’s – 3 Year Summary

(5 Year Summary - not available due to non-public status)

Figure 13: Sales Comparison of Top 4 Competitors in Children’s Clothing Industry



5 YR SUMMARY 01/31/02 01/31/01 01/31/00 01/31/99 01/31/98

Sales 505.38 448.61 437.08 457.22 373.44

Net Income 4.58 -36.87 -10.60 6.24 35.17

EPS 0.16 -1.38 -0.44 0.26 1.41



information.)

5 YR SUMMARY 01/31/03 01/31/02 01/31/01 01/31/00 01/31/99

Sales 14,454.71 13,847.87 13,673.46 11,635.40 9,054.46

Net Income 477.46 -7.76 877.50 1,127.07 824.54

EPS 0.54 -0.01 1.00 1.26 0.91



Income Statement

Year

Revenue

($ mil.)

Net Income

($ mil.)

Net Profit

Margin Employees

Dec 01 518.5 (4.2) -- 6,083

Dec 00 463.4 12.7 2.7% 6,948

Dec 99 406.9 (3.8) -- 7,244

$0.00

$2,000.00

$4,000.00

$6,000.00

$8,000.00

$10,000.00

$12,000.00

$14,000.00

$16,000.00

Osh Kosh B'Gosh PAGeerobmyG Carter's

Clothing Companies

Sales 02 Sales 01 Sales 00

-$200.00

$0.00

$200.00

$400.00

$600.00

$800.00

$1,000.00

$1,200.00

$1,400.00

$1,600.00

Osh Kosh B'Gosh s'retraCPAGeerobmyG

Clothing Companies

Op Inc 02 Op Inc 01 Op Inc 00

-$200.00

$0.00

$200.00

$400.00

$600.00

$800.00

$1,000.00


Clothing Companies

Net Inc 02 Net Inc 01 Net Inc 00


5 YR SUMMARY 01/31/02 01/31/01 01/31/00 01/31/99 01/31/98

Sales 505.38 448.61 437.08 457.22 373.44

Net Income 4.58 -36.87 -10.60 6.24 35.17

EPS 0.16 -1.38 -0.44 0.26 1.41



information.)

5 YR SUMMARY 01/31/03 01/31/02 01/31/01 01/31/00 01/31/99

Sales 14,454.71 13,847.87 13,673.46 11,635.40 9,054.46

Net Income 477.46 -7.76 877.50 1,127.07 824.54

EPS 0.54 -0.01 1.00 1.26 0.91



Income Statement

Year

Revenue

($ mil.)

Net Income

($ mil.)

Net Profit

Margin Employees

Dec 01 518.5 (4.2) -- 6,083

Dec 00 463.4 12.7 2.7% 6,948

Dec 99 406.9 (3.8) -- 7,244



Figure 14: Operating Income Comparison of Top 4 Competitors in Children’s Clothing Industry


Figure 15: Net Income Comparison of Top 4 Competitors in Children’s Clothing Industry


Figure 16: Pe Ratio Comparison of Top 4 Competitors in Children’s Clothing Industry

(Note: Baby GAP’s information cannot be broken out from the GAP parent company’s information. Carter’s is

not a publicly traded company at this time.)

$0.00

$2,000.00

$4,000.00

$6,000.00

$8,000.00

$10,000.00

$12,000.00

$14,000.00

$16,000.00


Clothing Companies


-$200.00

$0.00

$200.00

$400.00

$600.00

$800.00

$1,000.00

$1,200.00

$1,400.00

$1,600.00


Clothing Companies


-$200.00

$0.00

$200.00

$400.00

$600.00

$800.00

$1,000.00


Clothing Companies


$0.00

$2,000.00

$4,000.00

$6,000.00

$8,000.00

$10,000.00

$12,000.00

$14,000.00

$16,000.00


Clothing Companies


-$200.00

$0.00

$200.00

$400.00

$600.00

$800.00

$1,000.00

$1,200.00

$1,400.00

$1,600.00


Clothing Companies


-$200.00

$0.00

$200.00

$400.00

$600.00

$800.00

$1,000.00


Clothing Companies


0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00


Clothing Companies

0.00

0.50

1.00

1.50

2.00

2.50

3.00


Clothing Companies

Figure 16:

Figure 17:



Figure 17: EPS Comparison of Top 4 Competitors in Children’s Clothing Industry

(Note: Baby GAP’s information cannot be broken out from the GAP parent company’s information. Carter’s is

not a publicly traded company at this time.)

Figure 18: Brand equity Chart

Figure 19: Spider Chart

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00


Clothing Companies

0.00

0.50

1.00

1.50

2.00

2.50

3.00


Clothing Companies

Figure 16:

Figure 17:

Cute &Innovative

MEN

KIDS


WOMEN

OverallsHighualityQ

0

1

2

3

4

5

6

7

8

9

10Quality

Price

Value

Innovation

Clothing Design


Color Palette

Store Design



High Price

Low Price

Cute &Innovative

MEN

KIDS


WOMEN

OverallsHighualityQ

0

1

2

3

4

5

6

7

8

9

10Quality

Price

Value

Innovation

Clothing Design


Color Palette

Store Design



High Price

Low Price

Cute &Innovative

MEN

KIDS


WOMEN

OverallsHighualityQ

0

1

2

3

4

5

6

7

8

9

10Quality

Price

Value

Innovation

Clothing Design


Color Palette

Store Design



High Price

Low Price



Figure 20: Perceptual map

Figure 21: Survey Data – quantitative

Please rank the following children’s clothing companies in terms of quality, price, value,

innovation, clothing design, product availability, color palette, and store design on a scale from

one to ten.

Figure 22: Survey Data – Results based on an average of data responses collected (total: 30).

Figure 23: Survey Data – Demographics and each Company’s Ratings

(Please see following Excel spreadsheets.)

Figure 24: Psychographic Survey

1. What is your biggest complaint about children’s clothing design?

2. What frustrates you about using children’s clothing?

3. If you could design your own baby clothing what would you do differently?

4. What is your biggest complaint about the baby clothing shopping experience?

5. Do you ever or regularly purchase products from Ben & Jerry’s or Paul Newman’s?

6. Do the social policies of a company have an impact on your decision to buy their products?

7. Which is your favorite baby clothing brand? When and how often do you purchase this brand?

8. What is your favorite grocery store and why?

9. Where do you do most of your grocery shopping?

10. Do you make your own baby brand food or buy it at the store? If you buy it, what brand do you buy?

11. What three words would you use to describe yourself as a caregiver?

12. Have you heard of Osh Kosh B’Gosh? What is the first thing that comes to mind?

Cute &Innovative

MEN

KIDS


WOMEN

OverallsHighualityQ

0

1

2

3

4

5

6

7

8

9

10Quality

Price

Value

Innovation

Clothing Design


Color Palette

Store Design



High Price

Low Price

Figure 22: Survey Data – Results based on an average of data responses collected (total: 30).

Quality Price Value Innovation Clothing Design Product Availability Color Palette Store Design

Osh Kosh B'Gosh 10 8 8 10 9 4 8 4

Carter's 4 5 5 3 6 10 7 7

Baby GAP 8 6 7 8 10 8 10 8

Gymboree 7 9 6 7 8 6 9 9



13. If yes, what do you think of Osh Kosh B’Gosh’s baby clothing line? What do you think of their other baby

products?

14. How does Osh Kosh compare to other brands in terms of quality and innovation?

15. Does availability affect the frequency of Osh Kosh clothing purchases you make? Why?

16. What do you like or dislike about Osh Kosh’s baby clothing line or other baby products?

Figure 25: New OSH Baby logo

Figure 26: New OSH KOSH Kids logo











SOURCeS

Popular Articles about: Osh Kosh B’Gosh, Carter’s, Gymboree, and baby GAP

http://web.lexis-nexis.com/universe

search by company name and dates

Company-based information about: Osh Kosh B’Gosh, Carter’s, Gymboree, and baby GAP

http://www.oshkoshbgosh.com/default.asp

http://www.carters.com/main.html

http://www.gymboree.com/index.jsp

http://www.gap.com/asp/bb_directory.asp?wdid=50

Logo and Package Graphics

Babies ‘R Us store

Osh Kosh B’Gosh website: http://www.oshkoshbgosh.com/default.asp

Investment Information and Tables, Thomson Analytics

http://analytics.thomsonib.com/pw/?ExpressCode=wustlbasic

search: GOSHA (Osh Kosh B’Gosh)

search: GPS (GAP)

search: GYmB (Gymboree)

Investment Information and Tables, Hoovers Financials

http://www.hoovers.com/annuals/4/0,2168,52644,00.html

search: Carter’s Holdings, Inc.

Documents

Osh Kosh B’Gosh, baby sub-brand Brand - · PDF fileOsh Kosh B’Gosh, baby sub-brand Brand BRAND ANALYSIS INTRODUCTION ... The Company began making the pint-size version in the early