Levi Strauss & Co: Levis StraussBy

SHIVANI SINGH

13810072

Levi Strauss

• “Objects are what matter. Only they carry the evidence that throughout the centuries something really happened among human beings” - Levi Strauss

History

• Levi Strauss (1829-1902), the inventor.

• HEADQUARTERS: San Francisco, Brussels, Singapore

• FOUNDED: In 1853, Levi Strauss opened a wholesale dry goods business in San Francisco that became known as “Levi Strauss & Co.” Seeing a need for work pants that could hold up under rough conditions, he and Jacob Davis, a tailor, created the first jean. In 1873, they received a U.S. patent for “waist overalls” with metal rivets at points of strain. The first product line designated by the lot number “501” was created in 1890.

• TODAY : One of the world’s largest brand-name apparel companies and a global leader in jeans wear. They design and market jeans, casual wear and related accessories for men, women and children under the Levi’s®, Dockers®, Signature by Levi Strauss & Co.™ and Denizen™ brands.FY 2010 NET REVENUES: $4.4 billionEMPLOYEES: About 16,200 worldwide

Location

Levi Strauss & Co. is a worldwide corporation organized into three geographic divisions:

• Levi Strauss America (LSA), Head quarters –San Francisco.

• Levi Strauss Europe, Middle East and Africa (LSEMA) Head quarters - Brussels

• Levi Strauss Asia Pacific Division (APD), Head quarters – Singapore.

Target Market

• LEVI’s specifically targets customers falling under:Upper ClassUpper Middle ClassIt emphasizes more on the age group of 13-24 (youngsters), although it has its product range for people with above 30 yrs age.

• Its strategy is basically on having long-term relations with their customers by designing jeans, shape, color, and cloth so that fun mix and match clothes with accessories in style of fashion

• In 1930’s Jeans were positioned as being worn by “cowboys”.• Consumer demand shifts from durability of jeans to fashion of

jeans.• Culturally, jeans became symbol of youth and rebellion

Competitors & Segmentation approach

Threatened by competition, because barriers of entry were relatively low in the jean market. (excluding the patent).

Some of Levi’s competitors include:––Calvin Klein, Gap Jeans ,VF Corp (Lee, Wrangler),Tommy Hilfiger.

• The entrance of new competitors had many effects on Levi’s.• More competitive prices leading to lower profits• Availability of substitutes firm faces increase in elasticity of demand• Consumers prefer other brands Levi’s customers buy from

competition lowering Levi’s market share.• These newer upstarts are able to “chip away” at Levi’s market

dominance because they are able to capture segments.• VF Corp captures low--end jean consumers.• Calvin Klein captures high--end consumers

Competitors & Segmentation approach

Levi’s failed to recognize booming premium jeans market, originating in 2000 and led by brands such as Seven For All Mankind, True Religion, and Rock & Republic.

• Company was forced into radical cost--cutting, closing dozens of factories and laying off thousands of workers.

• The premium jeans market has over the last five years largely sales grew at 40--45% rate for multiple years.

• Posting declining sales in nine out of ten years prior to 2007.

• With the rise of competitors and decrease in brand image, Levi Strauss & Co. makes use of edgy advertisements

Competitors & Segmentation approach

Brand Loyalty––The word “original “is used many times.––Some television ads are set in the late 1800s, stressing the historic value of ads the company.

• Levi’s, Dockers, Denizen and Signature brands which are trusted .

• Recognized for their quality, integrity and originality.• Levi’s and Dockers denim and khakis set a standard

by them. • The quality craftsmanship and premium fit in family

clothing have made Signature brand a benchmark.• Denizen brand as jeans for new generation

Levis- Customer perception of the Brand

A tough pair of jeansOriginalAuthenticYouthful & Sexy.Stylish designRugged style.Affordable priceHighly durableHigh qualityComfortadventurous streak

What makes us different?

• Points of Parity– Accessibility– Convenience– Variety– Quality– Fitting jeans

• Points of Difference– Authentic– Original– Innovation– Premium price

Digital Media Strategy Objective

• Choosing media placement based on reach to target audience• Create forums in which customers can interact with each other

and with Levi’s to build brand image and loyalty.• Website – Corporate website (levi.com) linked to by over 1,000

sites• Face book – Largely trafficked, 60% of our target market are users

– Primary face of our digital media campaign• YouTube – Reach 52% of our potential customer base – Allows for

more “active” extension of “jeans for life” campaign• Twitter – Linkage to corporate website, Face book, YouTube –

Announce promotions, how-to videos, engage with customers

How Did Levi's Manage Its Comeback?

• More than offering their jeans at discount and specialty stores, Levi’s also tried to make themselves more attractive to younger consumers by making their jeans available stores frequented by younger shoppers(Lee).An important, and risky, move in Levi’s reinvention was to become more obtainable and offer something to different market segments. Furniture and home accessories such as sheets, blankets etc. Since Levi’s sponsors music festivals, camping gear could also be part of their product range.

• Product lines were in vogue and Levi’s enjoyed a triumph with new, trendier products such as their low-rise jeans. The company became better at responding to trends and once again gained popularity among younger consumers. Levi’s also became better at teasing out trends, not just in the apparel industry, but in society.

• Upholding a relationship with consumers and keeping them loyal to their brand is a continuous task and Levi’s needs to be innovative and create new ways to maintain these relationships. Different ways to do so could be: 1. Strategic alliances and licensing. Levi’s has often teamed up with different organizations to give back to society.

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