LEVIS: AIMING AT THE ECHO BOOMERS 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 “back to basis” 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 “international global colossus” 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—something appropriate for both professional and leisure activities. “We set ourselves out to answer the big question,” Goldstein says. “How 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.” Dockers created a product category—new 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,

In 1993. the company briefly considered not using the Levi's name at all.to 49-year-olds was everything Levi's hoped for. . you're just wearing pants.” Still following the baby boomer market. Slates would be the high end of casual. If you're not wearing Dockers. and fine-gauge cotton dress pants. “We thought there was room in a man's closet for a third brand. and to do so without detracting from Levi's core jeans focus. and 70 percent of target consumers had at least one pair of Dockers in their closets. vice president of marketing and research for Dockers. Robert Hanson. “That's why Slates was created to [fill the gap] between khakis and suits. it seemed a natural evolution—the guy who wore Levi's in the '70s and Dockers in the '80s would be ready for Slates in the '90s. an extensive line of wool. All the top menswear accounts across the country placed the new product in their stores. neatly filling the “lunch with client/salary review with boss” role in the Docker man's wardrobe. The challenge in marketing Dockers was to leverage the Levi's name and heritage while establishing the independence of the new brand. polyester microfiber.” Response from retailers and from the target market of 25.” says Jann Westfall.” To Levi Strauss & Company. and in only five years. the Levi's name and the words “since 1850” were removed from the Dockers logo.” So the original theme for Dockers was “Levi's 100 percent cotton Dockers. Levi's in 1996 brought out Slates.an unpretentious alternative to dressy. president of the Slates division. According to Goldstein. Dockers became a $1 billion brand. tailored slacks. claims the change was needed to “allow the Levi's brand to be focused on the core teen target because…it's the quintessential icon of youth culture. With the new brand sailing along smoothly. Brand awareness among men 25 and older was 98 percent. but realized that this would be “sort of like trying to put a space shuttle up without any launch rockets. Levi Strauss & Company began to dissociate Dockers from the company brand name.

off-the-rack dress pants. Consumers wanted cash and carry. Slates also come in odd sizes. Whereas most dress pants come only in even waist sizes. This has created a tremendous consumer awareness for slacks in general. Levi’s agency designed ads such as one showing a guy springing up from lunch with his partner to tango with his waitress. vice president of research and development. Levi’s backed Slates with $20 million in advertising. Levi's also responded with off-the-rack pants that require little altering. and getting alterations was frustrating. Although Levi Strauss had 30.9 percent of the U. just like the good news about Levi’s “back to basics” move a decade earlier. For customers with larger waist sizes. “The ads are stylish but they are not over [the market's] heads.” Noted one industry insider. All Slates are hemmed and cuffed and have double pleats in the front.7 percent seven .S. beginning with television ads at the opening of the National Football League season. blue jeans business in 1990.Consumer research told Levi's that consumers found shopping for dress pants a chore: slacks departments were dreary. So Levi’s devised a carefully crafted strategy to overcome the typical male distaste for dress pants shopping. finding the right size was difficult. it had only 18. To charm potential customers. everyone agreed that Slates was a dynamite brand. the pleats are more kindly placed. 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. “The trick is to rein it back in so it isn't so chi-chi that people can't relate to it.” said Nancy Friedman.” A year later. the good news about Slates has been accompanied by bad news— plummeting market share in the core jeans market. “Slates and other labels have pushed the envelope. Levi’s had turned on the Dockers customer to dress slacks just when “corporate casual” started to “dress up. forcing alterations for off-size men.” Some retailers found that their tailored pants business was up 15 to 20 percent. However.

“They missed all the kids and those are your future buyers. compared to 25 for Levi's other products. Silver Tab has a baggier fit and uses non-denim fabrics. more trendy styles. The company also plans to boost Silver Tab promotional spending fivefold for events . Male teenagers increasingly prefer brands like Tommy Hilfiger and Old Navy.years later. had dropped from 33 percent in 1993 to 26 percent in 1997. Gap. What is Levi's doing to fix the problem? It’s pumping up the Silver Tab brand. “It's very important that you attract this age group.000 salaried workers in February 1997.” says Gordon Hart.” says Bob Levi. the core blue jeans buyers. Levi's sales to teens. the younger segment sets fashion trends that influence older shoppers. By concentrating on Dockers. owner of Dave's Army & Navy Store in New York. “By the time they're 24. It’s a classic marketing goof: Levi's lost sight of the market that launched it to success. The median age of a Silver Tab buyer is 18. Levi’s now faces indifference in this segment and an attitude that Levi's are “your dad's pants. an eight-year-old jeans line considered more stylish among young consumers. Once the darling of the 15to 24-year-old buyer. executives were distracted from the threat to the core jeans business. Levi's plans to expand the line to include more tops. Even the young women who have been more inclined buy Levi's are moving toward brands such as Calvin Klein. and Guess. The mistake has been costly: falling sales and market share forced Levi’s to lay off 1. they've adopted brands that they will use for the rest of their lives. vice-president of the Lee brand at VF Corp. and new khaki pants. and to shutter 11 plants and lay off one-third of its North American workforce in November of that year. Worse yet.” Moreover. and more recently on Slates. Levi's is being squeezed by upscale brands like Tommy Hilfiger and Ralph Lauren on one end and private label or store brands on the other.” The bottom-line message: Levi's are uncool.

Holding nothing sacred in its quest to reposition itself in younger segments. But didn't we just read that some of those trendy new styles for Silver Tab include khakis? Doesn't that sound like Dockers? And speaking of Dockers. Levi's will introduce jazzier. it will have to contend with a similar problem with Dockers. All that appears to be changing. Levi's is also searching for a new ad agency to replace Foote. more colorful packaging aimed at giving its products a more exciting. paternalistic.such as concerts in New York and San Francisco. Levi's may have a problem making that brand relevant to the next generation of young men. Thus. Even as Levi's is working to get its core jeans business back on track. “[Levi Strauss & Company] has always been insular. It has dropped plans to open 100 new stores in malls across the country in favor of NikeTown-type stores. which has been the Levi's agency for more than sixty years. Baby boomers who are aging out of the Dockers' target market have refused to leave the brand behind. quite frankly. . which will serve as the company's flagship outlets in large cities. and. Will the new strategy work? Many industry insiders think that Levi has the money and market clout to pull it off. Levi's is also taking action on the retail front. the “dad's brand” problem that hit Levi’s in the blue jeans segment now threatens the Dockers market. president of Tactical Retail Solutions. Consequently. and for outfitting characters on hot television shows such as Friends and Beverly Hills 90210. In 1998. And the company is recruiting more outside managers. for up-and-coming bands playing music known as Electronica. Cone and Belding. a little smug” says Isaac Lagnado. the Dockers brand that has been positioned for consumers just moving out of their core jeans-wearing years may now be thought of as “my dad's brand” by the next generation of young men moving into this segment. youthful look.

What actors and forces in Levi Strauss & Company's microenvironment and macroenvironment have affected its marketing position? Why was Levi's so successful in designing products for the baby boomers? How and how well has Levi's responded to changes in its marketing environment? Evaluate Levi's strategy for the Silver Tab brand. “Levi's Is Hiking Up Its Pants. .” Brandweek. p. September 8. Sources: Elaine Underwood. 12.” Business Week. p.” Womens' Wear Daily. December 11. 75. 3. 70. December 1. pp. 22. “Tailored Slacks Follow the Mainfloor Leader: Slates Boom Trickles-Up to Better Makers in Casual Fabrics and Golfwear. 1997.” Adweek. p. 1997.Questions for Discussion 1. 3. August 19. 4. 5. and Linda Himelstein. p. September 24. 2. Becky Ebenkamp. Stan Gellers. 1997. Is the strategy likely to succeed? Does it meet the concerns of younger buyers? How does Silver Tab compare with the competition? What marketing recommendations would you make to Levi’s management? 5. “Slates Speaks Directly to Men.” Daily News Record. “Levi's New Dress Code. 1997. 1996. “Denim Dish: Dream Jeans for Teens.