In 1986, Levi Strauss & Company found that the best way to stay true blue to its
customers was to change its colors. Riding high on the results of a recent \u201cback to
basis\u201d campaign with its flagship 501 brand, Levi's was enjoying reinvigorated jeans
sales. But the good news was followed by bad. Research showed that baby
boomers, the core of the company's customer franchise, were buying only one or
two pairs of jeans annually, compared to the four to five pairs purchased each year
by 15 to 24-year-olds.

Born between 1946 and 1964, the baby boomers had adopted jeans as a
symbol of their break with the tastes and traditions of their parents. They had, in
the words of Steve Goldstein, vice president of marketing and research for Levi's,
helped turn the company into an \u201cinternational global colossus\u201d in the apparel
industry. Now, however, the baby boomers were looking for something different.
They still wanted clothing that was comfortable and made from natural fabrics, but
fashion had become more important. Many worked in environments with relaxed
dress codes, so they sought clothing that combined style and versatility\u2014something
appropriate for both professional and leisure activities.

\u201cWe set ourselves out to answer the big question,\u201d Goldstein says. \u201cHow
could we keep the baby boomer generation in Levi's brands when they weren't
wearing so many pairs of Levi's jeans? And the answer was Dockers, something
between the jean that they loved and the dress pants that their parents expected
them to wear when they got their first job.\u201d

Dockers created a product category\u2014new casuals. Blue denim was out;
cotton khaki (in brown, green, black, and navy, but mostly traditional tan) was in.
Positioned as more formal than jeans yet more casual than dress slacks, Docker's
satisfied an unfulfilled need. They were the right pants for a variety of occasions,

The challenge in marketing Dockers was to leverage the Levi's name and
heritage while establishing the independence of the new brand, and to do so
without detracting from Levi's core jeans focus. According to Goldstein, the
company briefly considered not using the Levi's name at all, but realized that this
would be \u201csort of like trying to put a space shuttle up without any launch rockets.\u201d
So the original theme for Dockers was \u201cLevi's 100 percent cotton Dockers. If you're
not wearing Dockers, you're just wearing pants.\u201d

Response from retailers and from the target market of 25- to 49-year-olds was
everything Levi's hoped for. All the top menswear accounts across the country
placed the new product in their stores, and in only five years, Dockers became a $1
billion brand. Brand awareness among men 25 and older was 98 percent, and 70
percent of target consumers had at least one pair of Dockers in their closets.

With the new brand sailing along smoothly, Levi Strauss & Company began to
dissociate Dockers from the company brand name. In 1993, the Levi's name and
the words \u201csince 1850\u201d were removed from the Dockers logo. Robert Hanson, vice
president of marketing and research for Dockers, claims the change was needed to
\u201callow the Levi's brand to be focused on the core teen target because\u2026it's the
quintessential icon of youth culture.\u201d

Still following the baby boomer market, Levi's in 1996 brought out Slates, an
extensive line of wool, polyester microfiber, and fine-gauge cotton dress pants. \u201cWe
thought there was room in a man's closet for a third brand,\u201d says Jann Westfall,
president of the Slates division. \u201cThat's why Slates was created to [fill the gap]
between khakis and suits.\u201d To Levi Strauss & Company, it seemed a natural
evolution\u2014the guy who wore Levi's in the '70s and Dockers in the '80s would be
ready for Slates in the '90s. Slates would be the high end of casual, neatly filling
the \u201clunch with client/salary review with boss\u201d role in the Docker man's wardrobe.

Consumer research told Levi's that consumers found shopping for dress pants
a chore: slacks departments were dreary; finding the right size was difficult; and
getting alterations was frustrating. Consumers wanted cash and carry, off-the-rack
dress pants. So Levi\u2019s devised a carefully crafted strategy to overcome the typical
male distaste for dress pants shopping. Slates were sold in scientifically tested
selling areas consisting of mahogany-toned circular store displays that allowed easy
access to the various styles and sizes. Levi's also responded with off-the-rack pants
that require little altering. Whereas most dress pants come only in even waist sizes,
forcing alterations for off-size men, Slates also come in odd sizes. All Slates are
hemmed and cuffed and have double pleats in the front. For customers with larger
waist sizes, the pleats are more kindly placed.

Levi\u2019s backed Slates with $20 million in advertising, beginning with television
ads at the opening of the National Football League season. To charm potential
customers, Levi\u2019s agency designed ads such as one showing a guy springing up
from lunch with his partner to tango with his waitress. \u201cThe ads are stylish but they
are not over [the market's] heads,\u201d said Nancy Friedman, vice president of research
and development. \u201cThe trick is to rein it back in so it isn't so chi-chi that people
can't relate to it.\u201d A year later, everyone agreed that Slates was a dynamite brand.
Levi\u2019s had turned on the Dockers customer to dress slacks just when \u201ccorporate
casual\u201d started to \u201cdress up.\u201d Noted one industry insider, \u201cSlates and other labels
have pushed the envelope. This has created a tremendous consumer awareness for
slacks in general.\u201d Some retailers found that their tailored pants business was up
15 to 20 percent.

However, just like the good news about Levi\u2019s \u201cback to basics\u201d move a
decade earlier, the good news about Slates has been accompanied by bad news\u2014
plummeting market share in the core jeans market. Although Levi Strauss had 30.9
percent of the U.S. blue jeans business in 1990, it had only 18.7 percent seven