Levi Strauss Case Study Marketing Essay

Levi Strauss Case Study Marketing EssayLevi Strauss is the worlds outmatch-kn induce jeans brand, solely its solid to see much chance of the compevery regaining its former repute with f alone kris up in a substantial overhaul. Iconic or non, what kind of future lies in store for a fellowship which derives around 85% of its annual revenues from interchange pants? And sole(prenominal) really two sorts of pants at that, which argon also sold by however about every incompatible clothing manufacturer on the planet. Either Levi Strauss needs to diversify substantially, and latch on other brands or more standardisedly needs to grant its long cherished but out-of-date independence and become procedure of some unrivalled elses larger multi-brand portfolio. These years of struggle against a vast transmit off of competitors have merely added to the gradual erosion of the brand. The development of value chore feeling has helped, but despite doubling in size during 2004, its sh ar has steadily decreased ever since.In the belatedly 1990s, Levis became a dupe of their own achiever. Too expectd in corporate restructuring, the company effectively ignore a seismic shift in the youth commercialize. In the 1980s and early 1990s, Levis 501 jeans had managed to dominate the merchandise for everyday clothing as a result of graduate(prenominal) quality manufacturing and smart marketing. There were some(prenominal) kinds of jeans, went the general perception, but Levis was the brand to which all others aspired. A brilliant marketing drive, especially in Europe, reinforced the brands hip status. But in the late 1990s, Levis jeans suddenly became a victim of its own success. They were seen by the in the raw coevals of teenagers as the jeans my Dad develops, and that put them completely out of personal manner. Fashions in constrict came and went but Levis failed to respond, leaving the market wide open for competitorsThe companys biggest mistake , arguably, was to ignore the haphazard cut, which rode in on the back of the mid-1990s grunge movement, and re master(prenominal)ed the leading excogitate dash for the rest of that ecstasy. While Levis stuck rigidly with the 16-inch straight-leg cut that appealed to the without delay ageing market who had rediscovered the brand in the 1980s, even the least hip of US retailers began selling extreme-cut. Millers Outpost, Tommy Jeans, JNCO and even JC Penney and Sears were selling jeans with legs as wide as 23 or 40-inches. The fashion-conscious teenage market began subverting their jeans from other manufacturers, bit a unsandedborn breed of retailers, led by The Gap, captured the middle ground. Protecting their premium status, Levis ref apply to succeed the market and strictly adhered to their long- pitched policy of only selling through specializer outlets and avoiding discount stores including Wal-Mart. Although this held the brands perceived value it also restricted g ross sales to only around half of the US retail market. Worse tranquillise, later that decade the market as a strong began moving away from dungaree altogether as combat and cargo pants became the new fashion dubiousness 2) How could a sensitive and informative Marketing Information body (MIS) have helped Levis to identify these environmental variable and form future strategies ?THE emergency FOR MARKETING SUPPORTIn 1986, Levis relaunched the 501 with the Launderette and Bath commercials. The tremendous success of these executions and thecampaign that developed from them has been well documented. All of the commercials featured the 501 jean and to the highest degree stated 501specifically in the end frame.The publicize success was non restricted to the 501 alone. There was a halo effect on the whole Levis icon. But naturally the 501 tookon a dominant sh ar of Levis business.This potence was intended. The 501 was positioned as definitive. It is an anti- setting jean which i s right for virtually pile, and, in a sense, 501for most lot took fit in out of the purchasing equation.Despite this, there were (and still ar) a signifi orduret number of people who, for reasons of personal physique or style, did non estimate the501 as the right fit for them.For this signifi lowlifet nonage Levis developed a cathode-ray oscilloscope of other sanguine contraceptive pill fits. The cuckold includesHistorically the strategy had been to sell these non-501 reddish Tab fits in-store, via POS and retailer advice.Levis own retailer and consumer research indicated, however, that the non-501 blushful Tab fits had been underperforming in the market.There were a number of reasons.l Many consumers were under the impression that Levis was really just about 501. They were unaware of the availability of otherRed Tab fits. So if they tried on 501 and were non completely happy, they would try on a nonher(prenominal) brand, rather than a nonher Levis fit.Or if they knew from the start that they wanted a fit other than 501, they would go directly to another brand.517 Regular set(p)518 overt Fit511 Zip Fly536 Girls Fitl Many retailers were not directing failed 501 traffic onto other Red Tab fits.l just about retailers, in the absence of specific consumer demand for non-501 Red Tab fits, were deciding not to stock these fits at all.The above factors created a problem that reproduced itselfLevis was losing out to competitive brands in this significant minority of the premium jeans market. And there was a risk that if no actionwas taken, the scale of the problem would spiral.Clearly the Red Tab range required marketing support, and advertising was deemed necessary.THE BRIEFWe persistent that there was a very specific mapping for advertising to maturate sense of the multiplicity of Levis Red Tab fits.Advertising should make people understand that if they want something other than 501, it will be there in the store for them. They candiscover exactl y the right fit in-store.And we drafted a very simple proposition to address this taskLevis Red Tab jeans come in as many different styles as the people that wear them.THE ADVERTISING MINEFIELDThis seems relatively straightforward.But in fact, in identifying these as the role for advertising and proposition, we had also identified what advertising could not do or say.Examination of previous competitive advertising relating to product ranges and fits indicated to us a series of problems and misconceptionsboth strategically and creatively.It was important that we map out for the creative ag free radical where these perils and pitfalls lay, in holy order that they could steer a wee-wee paththrough the minefield.The 501 issueWe were concerned that above-the-line support for fit numbers game other than 501 would confuse people and dilute the definitive status of 501.We get that we could not expect people to memorise a series of fit numbers and their definitions. It had taken a great deal of time and bills to establish one fit number in public consciousness.Indeed, we did not want non-501 fit numbers to develop their own identify to the effect that they became sub-brands. The non-501 RedTab fits could not approach the wealth of heritage and associated imagery commanded by 501. They could not really aspire to beingbrands in the kindred sense.More importantly we did not want to compromise in any way the definitive status of 501.Thus we specified in the legal brief that executions should avoid word of or comparison with 501s.Moreover, we determined that we could keep the Red Tab communication separate from 501 communication by adopting an entirely newmedium for Levis posters. More specifically, Adshels offered a street level impact, in retentivity with our youthful target and inwardly sight ofmost retailers.Since advertisings role was not to give rise awareness of individual fit numbers, we decided its effectiveness should not be judged by peoplesability to recollect specific numbers, but by their awareness that Levis have a range of Red Tab fits. arrange advertisingAdvertising a range of products is oftentimes strategically speculative and creatively uninspiring. pot chiefly do not buy ranges they buy individual products. A range campaign tends to proclaim the benefits of the range as awhole, or to highlight the differences within the range. But if people are interested in individual products, all they really want to make do iswhat is good about that product.Moreover, a brief for range advertising can often lead to creative cul-de-sacs a row of products and an invitation to the consumer to makehis or her own choice etc.Consequently, although the objective of the advertising was not to establish individual fit identities, we did specify that all(prenominal) executionshould feature one fit only and would mouth about the benefits of that fit. Across a range of executions we aimed to establish a sense of themultiplicity of the fits , thereby addressing the key objective.Fit advertingFit cognitive contents also pose a strategic and creative challenge.People lease different jeans fits for reasons both of personal physique and current fashion. If advertising addresses one motivation, itstruggles to communicate the other. And the more obvious creative solutions tend not to be challenging or motivating.For example, a tight fit can be communicated by showing a thin person and a decompress fit by showing a fatter person. But the latter(prenominal) expressionclearly does little for loose fit. And what of the people who wear loose fit for style rather than physical reasons?Alternatively, a fit message can be conveyed by showing the overall style or fashion of the wearers of different fits. For example, a punk intight jeans and a hip-hop fan in loose jeans. But youth fashion cannot easily be compartmentalised into discrete tribes with convenientlydifferent jeans fits. Moreover, unexampled people quite naturally reco il from any cynical move by advertisers to mirror their own street-levelcultures. And, as with the above, what of the people who do not choose fits for fashion reasons?We concluded that these more literal expressions of fit were not worth exploring and we directed the team to seek out more squint-eyedsolutions.THE CREATIVE SOLUTIONThe creative team, conscious of the objectives of the advertising and the strategic and executional minefields to be avoided, came up withan innovative solution to the brief.They developed a range of executions each employing a black and white still from the respected photographer billet Brandt to deal with oneRed Tab fit message.They did not talk about fit in a literal way. Rather they implied the several(prenominal)(a) fit messages.Moreover the images employed were not completely unrelated to fit. (They were not vegetables or fruit) Rather all the executions focusedon the sympathetic form, which is after all the basis of any fit choice.ADVERTISING re dischargeThe poster campaign ran subjectly for four weeks only in April 1993.Millward brownish tracking showed very high advertising recognition over 40% of a sample of 17 to 29-year-olds recognised the posters.More importantly, spontaneous and prompted awareness of Red Tab rose wine from 35% to 45% and from 57% to 75% respectively. Thepercentage of respondents able to quote any non-501 fit number rose from 50% to 60%.We are unable to divulge actual sales data.SUMMARYThe planners role does not only entail pointing the creative team in one particular direction it can also involve illustrating to them thestrategically unsound and creatively fruitless routes.In advertising non-501 Red Tab fits for the prime(prenominal) time, Levi Strauss were entering a minefield. By identifying the best role for advertisingand mapping out the geography of that minefield, the planner was able to crop a part in the development of advertising which maintainedLevis best standards of creativity and effectiveness.CREATIVE BRIEFWhy are we advertising?To raise awareness of the range of Levis Red Tab jeans by demonstrating that Levis produce different fits to compliment different bodyshapes and personal styles.Who are we talking to?Boys and girls, 15 to 19 years old. They are aware of Levis advertising and recognise that 501s are the original, definitive jeans. In fact,they may already own a gibe of 501s, but find certain aspects of 501s either inconvenient (ie button fly) or uncomfortable. They are at themiddle end of the market (early/late adopters) and are often insecure and lack confidence. They therefore need to be assure that theycan buy into the imagery associated with 501s, while having a pair of jeans that fits considerably and flatters their individual shape.What must(prenominal) the advertising say?Levis Red Tab jeans come in as many different styles as the people who wear them.And why should the consumer believe it?Levis make a range of different fits to guinea p ig your shape and tastes.What tone of voice?Confident, unadulterated (ie timeless), cool and sexy.What practical considerations?The campaign must work as both posters and press. The campaign should avoid discussion of, or comparison with, 501s. This is not anopinion leader campaign, and is aimed at a younger, more mass-market consumer.Question 3) Analyse the importance of the various marketing shuffle elements in the success failure of Levi, how important is design?Levis share of the denim market plummeted. In 1990, according to Tactical Retail Monitor, more than 48% of men chose Levis as their preferred choice of jeans. By 1998, this had tumbled to 25%, while Lee and Wrangler had risen from 22% to 32%, and sequestered estimate brands including Gap from 3% to more than 20%. In sales damage the brand slipped from a 30% US market share to 14%. (Upmarket designer labels such as Tommy Hilfiger and Calvin Klein got a great deal of forwarding but never achieved more than around 7% of the market). The percentage of teenage boys who thought Levis was a really cool brand had dropped from 21% in 1994 to just 7% by 1998. Levis position has, for the most part steady since thence, but competition remains intenseThe Levis brand now houses several sub-brands. Chief amongst these is Levis Red Tab, which includes the legendary 501 button-fly design. (The number 501 was originally the products stock number, inaugural adopted in 1890 the red fabric tab was first used in the back pocket from 1936). Levis Vintage features a broader range of classic retro designs. In pursuit of the youth market, the company has tried to turn back the tide with more extreme cuts, such as Levis Engineered Jeans, introduced in 2000 and supposedly designed ergonomically to fit the bodys contours. Some cuts are even pre-stained with oil. some other stylised new design launched in early 2003 as Levis guinea pig One. These offered exaggerated versions of traditional features such as rivets, stitc hing and the tab, blown up in size. However sales were slow to take off, especially in the US, despite high profile marketing, including a Super Bowl ad (which the company later claimed admitted was unsatisfactory). They, along with another stylised line cognize as Silvertab, were replaced by the Levis Capital E line. Levis ICD, a partnership with Philips to market workwear with integrated electronic devices such as mobile phones, MP3 players etc, was withdrawn in 2002. The group also licenses out the Levis brand to other manufacturers for brand T-shirts and accessories. feature sales of the core brand improved in 2007, reaching around $3.2bn. Levis is primarily a menswear brand, with just under three quarters of all pairs sold bought by men.After its many attempts to introduce more represent or fashion-oriented designs had failed, the company agreed to abandon its premium positioning and chase after the mass-market as well. A new design, Levi Strauss Signature, launched in Jul y 2003, initially available completely through Wal-Mart. By the end of the year it had become apparent that the new line was the much-needed hit for which the company had been searching. The group rebranded the range as Signature by Levi Strauss, extended distribution to Target Stores and Kmart in 2004, and also introduced the range into selected mass-marketers in Australia (including Coles Myers Target and Kmart), lacquer and other Asian markets. It was also launched in the UK (through Asda), France (through Carrefour), Germany (through Wal-Mart) and Switzerland (through Migros), but performed poorly and was withdrawn in 2007. Yet after a strong start, sales of the Signature line have fallen steadily since 2005, declining from a peak of around $410m that year to $260m in 2007.Dockers, first launched in the US in 1986, is the companys khaki-based casualwear line. It was launched as something of a reaction to inroads into the market by Gap and others, serving as a halfway point be twixt jeans and smarter dress pants. Dockers Slates, a sub-brand of dressier and more expensive trousers, was discontinued in 2004. Although it has been generally successful, Dockers remains very much the second string in the groups portfolio dirty dog its jeans line. In 2004, Levi Strauss put the Dockers brand up for sale in order to concentrate on its still struggling core business, but failed to pass a suitable buyer. gross revenue of the brand were reported at $1bn for 2003, but had fallen to around $775m by 2005, with sales concentrated in the US. Since then it has repositioned itself as a wider casualwear brand, diversifying into shirts, sweaters and blazers, as well as a line of womens clothing. The unit was rewarded with an increase in revenues for 2006, its first for several years. For 2007, it generated sales were around $915m. The group also generates significant income from royalties on Dockers belts, footwear and other accessories construct by other companies under l icense.Levi Strauss has production facilities and customer service centres end-to-end the world. Until comparatively recently the company maintained a policy of manufacturing its goods in the regions in which they are sold, but rising labour cost and declining sales made this increasingly unfeasible. Production in the US and Europe began to be farmed out to cheaper regions in the late 1990s. Having already closed six of its US factories by 2003, the group announced that the remaining four in northerly the States would also be shuttered by early 2004. The group supplies its products to around 60,000 retail outlets worldwide. It owns and operates around 200 of its own Levis or Dockers branded stores, and franchises around another 1,300. More than half of these stores are located in the Asia peace-loving region. Otherwise sales are through department stores and national chains.There are three regional business units Levi Strauss North America operates local subsidiaries in the US, C anada and Mexico, and accounts for almost 60% of revenues, or $2.5bn in 2007 (compared to a peak of $4.8bn in 1996). Levi Strauss EMEA is the second biggest market, but performance there took yearlong to recover than in other markets. Sales rose in 2007 for the first time in several years, finally returning above the $1.0bn barrier. Asia Pacific remains the smallest market for now, but has been the companys strongest performing region for several years. Sales rose by a further 6% in 2007 to $805m, with Japan contributing a little under half of all sales.Question 4) As a strategic marketing consultant, advise Levi about what now it should now do ?It is every businesss objective to maximize their profits and decrease their expenses. Levis has invested on one of the most important vision that a company could have its employees. Their corporate strategy has now been aligned with their human resource management which is valuing their employees due to high costs of recruiting and train ing new module. It must be noted that losing an employee can be very expensive and high staff turnover can eventually ruin a business. The stand up thing that businesses need is for its competitors to benefit from the training, knowledge and experience that it has built within its workforce.It is suggested that employers give their people the opportunity to make their own benefits decisions. This way, employees will take a keener interest in their benefits. The traditional company benefits package often has a rigid one size fits all approach it fails to consider the varying needs of individual employees. In addition, the traditional company benefits package may sometimes be complicated and difficult to manage. Thus, it is greatly recommended that companies like Levi Strauss and Co. implement a flexible benefits package to help reduce costs and provide a greater choice for their workforce. Furthermore, flexible benefits provide additive lifestyle choices along with traditional co mpany benefits such as private health care and the company pension scheme which will allow employees to choose the benefits that they want which in turn will motivate them and make them more productive.It is also important that companies like Levi Strauss and Co. consider some of the following pointers (1)the main goals of the companys employee benefits programme,the last time that the company last reviewed their benefits scheme,steps or initiatives undertaken to determine that the companys benefits programme underpins their business strategy,knowledge of employees regarding the benefits that the company offers and how they benefits from it,issues like sickness and absence, healthcare and dental care, and (6) the extent of the relevance and significance of the recruitment and key staff in employers business and their industry.