Levi’s Straus & Co.

Presented by:

Shrijesh K. Govindan

Roll no. 52

Introduction

• Levi Strauss & Co. (LS&CO.), one of the world's largest apparel manufacturer brand

• Sold in over 110 countries, in more than 55,000 retail locations worldwide

• Manufactures jeans in approximately 108 sizes and 20 finish fabrics

• 3 Brand Portfolio - Levi’s ®, Dockers ® & Levi’s Strauss Signature®

Levi’s Product & Brand Portfolio

External Marketing Environment

Classification of Customers (%)

Liberated Youngsters 13

Modern Customers 18

Behind the times 20

Rebellious Youngsters 22

Orthodox Customers 27

Social Environment

External Marketing Environment

• Technological Environment

– Levi’s focuses on internet advertising

– Levi’s has enhanced its distribution network through Electronic Data Interchange (EDI)

– Levi’s Value Delivery Network Enables coordinated supply of fabric to retailers and suppliers

– Focus on achieving global scope efficiency through decentralization and centralization

External Marketing Environment

• Demographic Environment– Focuses more on mature generation– Does not position itself as a brand for

fashion statement

Situational Analysis

• Levis is approaching to saturation in the Jeans Market

• Development of markets distribution and sales technology has caused loss of market share

• Levis biggest challenege is to cater changing consumer tastes and competition in lower and high end brands

• Levis has come up with new engineered jeans and Levis 501 in response to above challenges

Competitor Analysis

Levi’s Distribution Channel Management

• Retail Outlet Status

– 500 outlets at prime locations in India

– Current Space: 1 million sq feet

– 3000 shades and design

– Accessories includes : Footwear/ Eye gear/ Caps/ Belts/ Wallets/ Carry bags

• Marketing Channels

– Focus on retail relationship

• Segments Identified

– Trend Initiators

– Trend Influencer

– Early adopters

– Traditional

– Value driven

Levi’s Growth

• The innovation of the rivets in the jeans differentiated Levi’s jeans from others because of its increased durability.

• Over the years, Levi’s jeans have become more popular, initially due to its durability. Jean products expanded, targeting different consumers.

• Levi Strauss & Co. eventually captures most of the denim jean market, becomes the largest manufacturer of jeans, and profits reach $1 billion by 1974.

• The USP and UCP of Levi’s jeans is durability and good product quality.

Levi’s Pricing

Levi’s Pricing: Recent Development

• Plans to focus on lower and high end by vacating the middle price segment

• Premium segment will see a price rise of 15% in average pricing

• Local brands entry and low growth compelled levis to vacate the middle price segment (Spykar, Killer, Wrangler)

SWOT Analysis

STRENGTHS

 

• History

• Brand name

• Finance and access to international capital

• Management

• Expertise in the jeans industry (R&D)

• Distribution channels & global sourcing

WEAKNESSES

 

• High costs of brand protection

• Lack of control over quality (licensing)

• Lack of control over distribution decisions (retailers pressure to stop selling on the web)

SWOT Analysis

OPPORTUNITIES:

• Arising of new market segments

• Technological development lower production and coordination activities

• Low manufacturing and production costs in international markets

• Development in other industries such as electronic (MP3 PLAYER) could pose new opportunities for complementing new LEVI’S products

• Total market for casual wear is growing

THREATS

• Saturation of the jeans market

• Competition from products of the higher end of the market

• Economic downturns in some countries

• Fast changes in the consumer tastes

• Local regulations on the advertisements in countries like India, china

• Lack of protection of property rights

• Increase in the local competition

Objective

• Since the patent of the rivets in jeans in 1873, the company achieved monopoly power.

• Monopoly power was gained through entry barriers. The patent granted the firm monopoly rights to sell riveted jeans.

• Also by product differentiation The rivets on the jeans allowed for longer durability, a form of vertical

differentiation.

• Product differentiation and barriers to entry allowed the company to gain more popularity and market share.

Levi’s Promotion

• In 2002, Levi’s brand was rated as the No. 1 brand for brand awareness and brand retention

• The company frequently promoted music & theatrical productions

- Sponsored artists incl. Christina Aguilera, Mariah Carey, Ben Folds Five, The White Stripes etc.

• Levi’s ads stress the “youthfulness "of their brand jeans

- Television advertisements are more innovative and target younger crowds

Levi’s Promotion

• The “TWIST” Campaign

• The “ ODYSSEY” Campaign

• CSR Activity with Levis Strauss Foundation

Budget of advertising in the following media

Television• Timing - 19:30-22:00

• Pricing - 50000/30 sec

• Basis of Selection - This is Prime time Includes Major Running dramas

• Days to run – 10

• Time to Run Per Day – 5

• Total Cost per day – 150000

• TOTAL – 1500000

Budget for Newspaper: 1,00,60,000

Budget of advertising in the following media

RadioTotal Cost per city: 10,00,000.00

• Total Cities covered: 05

Mumbai

New Delhi

Bangalore

Chennai

Hyderabad

• Total Cost: 50,00,000.00

Budget for Billboards: 1,00,00,000

Coordination with distributors

• Channels of distribution:

Functions of the brand manager in production

• Identifying new product candidates

• Gathering market requirements

• Defining product requirements

• Scoping and defining new products at high level

• Building product roadmaps, particularly Technology roadmaps

• Working to a critical path and ensuring all products are produced on schedule

• Ensuring products are within optimal price margins and up to specifications

• Product Life Cycle considerations

• Detailed Product planning

Functions of the brand manager in Sales

• Strategic market & sales potential analysis to provide in-depth market, & competitive information important for Product growth & activities. 

• Develop & execute key activities, tactics, action plans, and investment to impact the market share, market growth strategies, and profits for key products. 

• Develop Product strategy, promotional materials & activities to deliver Product objectives aiming at market differentiation, maintaining leadership position, and increasing awareness 

• Ensure Sales & Marketing alignment towards local priorities, objectives & field execution.   

• Work closely & develop professional relationships with other functions in the organization to successfully execute above highlighted responsibilities.

Thank You