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Brand Audit Levi S Strauss Co LTD
Brand Audit Levi S Strauss Co LTD
-KARL MARX
2. BRAND AUDIT: LEVI STRAUSS & CO. LIMITED: The brand which we
have taken for audit is Levi’s Strauss. It is one of the premium players in the
apparel segment operating, globally. The point which is intriguing to a researcher
LEVI’S STRAUSS & CO.
[BRAND AUDIT] Ltd.
is how Levi’s has maintained its equity worldwide. A mix of standardization &
localization in Levi’s products has enabled the company to become a renowned
brand worldwide.
2.1. LEVI STRAUSS & CO.: A BRIEF HISTORY: Levi Strauss & Co.
(LS&CO) is a privately held clothing company known worldwide for its Levi's
brand of denim jeans. It was founded in 1853 when Levi Strauss came from
Buttenheim, Franconia, (Kingdom of Bavaria) to San Francisco, California to open a
west coast branch of his brothers' New York dry goods business. Although the
company began producing denim overalls in the 1870s, modern jeans were not
produced until the 1920s. The company briefly experimented (in the 1970s) with
employee ownership and a public stock listing, but remains owned and controlled
by descendants and relatives of Levi Strauss' four nephews.
Modern jeans began to appear in the 1920s, but sales were largely confined to
the working people of the western United States, such as cowboys, lumberjacks,
and railroad workers. Levi’s jeans apparently were first introduced to the East
during the craze of the 1930’s, when vacationing Easterners returned home with
tales (and usually examples) of the hard-wearing pants with rivets. Another boost
came in World War II, when blue jeans were declared an essential commodity and
were sold only to people engaged in defense work. From a company with fifteen
salespeople, two plants, and almost no business east of the Mississippi in 1946,
the organization grew in thirty years to include a sales force of more than 22,000,
with 50 plants and offices in 35 countries.
In the 1950s and 1960s, Levi's jeans became popular among a wide range of
youth subcultures. Levi's popular shrink-to-fit 501s were sold in a unique sizing
arrangement; the indicated size was related to the size of the jeans prior to
shrinking, and the shrinkage was substantial. The company still produces these
UN shrunk, uniquely sized jeans, and they still sell very well although popular
remains the original design.
2.2. THE LEVI’S BRAND: BRAND FACTSHEET:
LEVI’S STRAUSS & CO.
[BRAND AUDIT] Ltd.
On May 20, 1873 the U.S. Patent and Trademark Office grants Levi Strauss & Jacob
Davis a patent on the process of riveting pants. This heralds the invention of the blue
jean.
Levi Strauss was ahead of his time creating famous branding elements on his jeans
that
Are still in use, and often copied, today.
• In 1886 the Two Horse ® brand leather patch, a symbol of the pants'
Strength is first used on his jeans.
• The Levi's® brand eye-catching Red Tab Device was added to the jeans in
1936. Placed onto the right back pocket with the word "Levi’s®" stitched
in
White capital letters, it differentiates Levi's® jeans from competitors.
• Levi’s® jeans famous arched back pocket stitching is called the “accurate.”
This iconic stitching can be seen on back pockets throughout the world. Today, Levi’s®
jeans are sold in more than 110 countries worldwide. Levi’s® Jeans are single most-
often copied apparel item in the history of apparel. The Levi’s® brand several
collections around the world to meet the needs, and wants, of denim-wearers
everywhere. These include:
Levi’s® Vintage Clothing – Inspired directly from the Levi’s® brand archives
and
Available worldwide.
Levi’s® RED – A sexy and modern expression of the Levi’s® brand is sold in
Chains, department stores and Levi’s® Stores in the United States and Levi’s® Stores
and specialty retailers in Europe.
LEVI’S STRAUSS & CO.
[BRAND AUDIT] Ltd.
Levi’s® Blue – A European collection of jeans for men and women in premium
denim finishes that are appropriate for day or night.
Levi’s® Lady Style – A range of premium jeans for women available across Asia,
designed for more sophisticated wearing occasions.
Levi’s® Red Tab – The authentic core of the Levi’s® brand offers a wide range of
Fits and finishes in true Levi’s® style.
Table 1.0 depicts the products offering the brand represents, Owner Corporation and
other related details.
LEVI’S STRAUSS & CO.
[BRAND AUDIT] Ltd.
Along with the general information about the brand and the owner company details,
it is very important to realize the brand portfolio & product portfolio of the company
as it is very important in defining the purview of the audit report. Table 2.0
describes the levi strauss partial product & brand portfolio grid.
B PRODUCT PORTFOLIO
R
A
N
D
P
O DENIM PANTS NON-DENIM PANTS
SHIRTS JACKETS OTHER
R Levi’s Dockers Dockers Levi’s Strauss
T
Signature
F
O Levi’s 501 Levi’s Strauss Levi’s Strauss
L Signature Signature
Levi’s Engineered
Jeans
Other
Courage. These four values are linked. As we look at our history, we see a
story of how our core values work together and are the source of our success.
• EMPATHY – WALKING IN OTHER PEOPLE’S SHOES
• ORIGINALITY- BEING AUTHENTIC & INNOVATIVE
• INTEGRITY- DOING THE RIGHT THING
• COURAGE – STANDING UP FOR WHAT LEVI’S BELIEVES IN
depends on how well a brand manager monitors the changes in the external
marketing environment surrounding the brand. To be precise external marketing
environment comprises of demographic, social, economic, political and legal, &
competitive factors which directly influence the brand’s performance.
The company makes clothes foe men, women, children & teens. So everyone is a
potential customer for LEVI’S. LEVI’S generally appeals to more mature generations
not necessarily looking to make fashion statement. LEVI’S makes an effort to appeal
to all customers in one way or another, which has been a key to their success over
the years. Assuming that the world population is growing LEVI’S can infer that the
market for jeans is also growing. However this growth is characterized by slow rate
of growth. Graph 1. Describes the rate of growth of the target market
3.2. THE SOCIAL ENVIRONMENT: Society shapes the beliefs, values, and
norms that largely define consumer tastes and preferences. People absorb, almost
unconsciously, a world view that defines their relationships to themselves, to
others, to organizations, to society, to nature.
DATA SOURCE:
WWW.LEVIS.COM
LEVI’S STRAUSS & CO.
[BRAND AUDIT] Ltd.
India is a land of diversities, which is reflected not just in the topography but also in
the languages, cultures as well as religious beliefs.
The study further indicates that there is a progression from traditionalism and self-
sacrifice to westernization and individualism as one move from the lower socio-
economic classes to the higher socio-economic classes.
LEVI’S STRAUSS & CO.
[BRAND AUDIT] Ltd.
Global business requires decentralizing some of the activities to respond to the local
needs and to centralize others so as to cope with global scope efficiency. This can
be reflected on the organizational structure of the company.
LEVI’S “LOOK” has come to be identified with the establishment in the U.S, as jeans
today are the clothing of the middle aged, parents.
4.0 SITUATION ANALYSIS: Levi Strauss & co. is approaching to the saturation of
the jeans market. The fast changes in the consumer tastes, competition in both the
lower end and higher end brands, fast development in the modern distribution and
sales technology has brought about a continuing lose of the market share.
A new series of engineered jeans has been developed and launched as a part of a
program intending to meet the needs of their major target market, in order to regain
their lost market share and to maintain their position in the industry. Their expertise in
jeans and casual dress industry will be fully exploited at a world basis.
This year, they intend to strengthen the promotion of this new brand. Certain
resources will be allocated to their existing brands, to maintain market share of 501.
Communication with customers is also important for LEVIS. It is very important to
maintain good relations with them, and track the change in their taste and need of
their main target market. Information system will also be improved to enhance their
ability to adapt the market change.
Recently the company (in terms of sales) has been victimized by increasing
competition from the GAP’s private label jeans, resurgent LEE & WRANGLER brands
and other trendier brands. These brands offer the same basic product: jeans for a
cheaper price. For success, LEVI’S needs consumers to recognize the higher quality
and better reputation that is associated with their product as compared to that of
these new competitors.
LEVI’S STRAUSS & CO.
[BRAND AUDIT] Ltd.
From the analysis it is shown that, in general, the influence of the five competitive
forces is for LEVI’S. Therefore, the generic strategy to be chosen is differentiation. In
addition, and according to McDonalds’, if the company chooses differentiation with
relative low costs it will be able to reap outstanding success.
The previous graphic shows that LEVI Strauss is in the decline phase of the product
life cycle curve.
PRODUCT
M PRESENT NEW
A
R
K
E
T
LEVI’S STRAUSS & CO.
[BRAND AUDIT] Ltd.
From the ANSOFF’S MATRIX analysis, it is shown that in order to capture the
sales objective LEVI’S must choose the following growth strategies:
5.0 PLACE: LEVI STRAUSS & CO. Ltd: Successful value creation
needs successful value delivery. Holistic marketers are increasingly taking a
value network view of their businesses. Instead of limiting their focus to their
immediate suppliers, distributors, and consumers, they are examining the
whole supply chain that links raw materials, components, and manufactured
goods and shows how they move toward the final consumers. LEVI’S looks at
customer segments and considers a wide range of different possible means to
sell, distribute, and service their offerings.
LEVI’S has expanded its distribution channels and product ranges in order to
reach more consumer segments. LEVI’S has revitalized its retail relationships.
Indeed the company has turned its retail customer’s relationships into strong
and mutually beneficial ones. Actually LEVI’S and the retail accounts have
worked to get forth its re-segmented market by delivering a specific product
for every consumer segments. The segments identified were:
- Trend Initiators
- Trend Influencers
- Early- Adopters
- Traditional
- Value-Driven
Levi’s teams are also looking at the different segments within the youth
market to find out their expectations from the brand.
LEVI’S is using selective but intensive distribution level for the distribution of
its products.
LEVI’S plans to have more than one distribution model for different segments
or regions. It uses a distributer to serve small outlets but manages large ones
LEVI’S STRAUSS & CO.
[BRAND AUDIT] Ltd.
directly through a small group at the centre. It has also begun to open its own
franchised retail shops to carry its own brand exclusively.
6.0. PRICING: LEVI’S STRAUSS & CO. Ltd: price is the one element
of the marketing mix that produces revenue; the other elements produce
costs. Prices are perhaps the easiest element of the marketing program to
adjust; product features, channels, and even communications take more time.
Price also communicates to the market the company’s intended value
positioning of its product or brand.
age group of 15-19 who have a preference for fast fashion, fads, and
experimentation and higher receptivity to value for money proposition.
LE
VI
BR TREND RS 8,000
AN
D
SIG DATA SOURCE: ANNUAL REPORT OF LEVI’S
NA STRAUSS & C0.
TREND RS 5,500 – RS
TU
RE
EARLY RS 3,000 – RS
TRA
VALUE RS. UNDER
1500 – RS.
LEVI’S STRAUSS & CO.
[BRAND AUDIT] Ltd.
- Levi’s India plans to vacate the middle price segment and plans to
concentrate on the lower and the higher end- which is the value offering-
will see a further fall in price and start at Rs.900instead of Rs. 1,000.
- On the other hand the premium segment will see an increase of about
15% in average pricing and increase to about Rs.4, 400.
- Reason behind LEVI’S vacating the mid price segment attributes to the
minimum growth in the segment & share being taken up by local brands
that are more acceptable to the local conditions (SPYKAR, KILLER etc.)
7.0. PROMOTION: LEVI’S STRAUSS & CO. Ltd: although there has
been an enormous increase in the use of personal communications by
marketers in recent years, due to the rapid penetration of the internet and
other factors, the fact remains that mass media, if used correctly, can still
dramatically improve the fortunes of a brand or company. The power of
marketing communications is equally important in influencing attitudes and
behaviour with respect to socially relevant themes.
LEVI’S STRAUSS & CO.
[BRAND AUDIT] Ltd.
The ‘Twist’ campaign helped raise sales of LEJ in line with those of rival jeans
brand Diesel.
nothingness and freedom. Again, this theme was integrated across brand
communications using a variety of other media.
Advertising has firmly consolidated Levi Engineered Jeans’ market position,
resulting in widespread acclaim and numerous industry awards.
While the sales of LEVI’S 501 are still in a decline, sales of LEVI’S engineered
jeans are rising steadily and the line now accounts for 9-10% of the total sales
by volume for the LEVI’S brand.
– More than 25 years after LEVI’S first touched HIV/AIDS, ITS leadership
continues and it resolves to win against this disease remains
unabated.
the fast consumers taste changes and to move away from the saturation of the
jeans market.
8.1. STRENGTHS:
– History
– Brand name
– Finance and access to international capital
– Management
– Expertise in the jeans industry (R&D)
– Distribution channels & global sourcing
8.2. WEAKNESSES:
8.3. OPPORTUNITIES:
8.4. THREATS:
9.3. STUDY RESULTS: The results of the study were quite surprising &
interesting for us. For each of the questions we got surprising results which
clearly indicate the importance of conducting a brand audit. There was a clear
enthusiasm in the respondents while giving their feedbacks which proved to
ease our work. Brand awareness level among the respondents was also quite
high which shows efficient marketing communications by all the leading
brands as well as the competition among the brands.
OCCUPATION
STUDENT 57 (%)
JOB 35 (%)
LEVI’S STRAUSS & CO.
[BRAND AUDIT] Ltd.
USER TYPE
OUTGOING 50 (%)
CONSERVATIVE 23.52 (%)
CUTTING EDGE 38.23 (%)
The result clearly indicates that a majority of the respondents are ‘young’ as
the average age is nearly 25 years. If we look at the occupation of the
respondents we can easily figure out the lifestyle status of the respondents as
a majority (57%) are students. Income class of the respondents indicates that,
the respondents clearly belong to the middle & higher end consumer class.
Analyzing the responses of these respondents would easily signify the equity
of any well know brand.
The above graphic clearly shows that Levi’s has a better brand salience and
awareness than other brands as the number of the top of mind recalls and the
total awareness levels of the respondents were the highest for Levi’s(TOMR-
38) which was followed by SpyKar (TOMR-26), and Wrangler (TOMR-20).
We can infer from the responses that LEVI’S as a brand enjoys a high level of
brand awareness and brand salience as compared to other brands.
What the results show are the perceived alternatives to their preferred brand.
It is clear that people who say they prefer Levi’s see SpyKar, Wrangler, and lee
as good alternatives i.e. if a Levi’s user could not find their brand at the store
they would be happy to buy either of the three other brands.
As earlier stated the average age of the respondents is nearly 25 years and
the income levels are above Rs.20, 000, Levi’s as a brand can be considered
as a ‘young’ brand.
Nearly 50% of the survey respondents connoted the user type to be ‘outgoing’
so it can also be inferred that Levi’s can be considered as a brand of the
middle class who use a brand precisely because it is known to be the brand of
choice among the rich.
From the above results it becomes clear that Levi’s as a brand possesses a
higher upside elasticity as compared to downside elasticity, it suggests
increased perceived value for the brand. As the difference between the upside
& downside elasticity (72-62=10) is a positive figure. It also makes us clear
sales of Levi’s do not fall off much when prices are increased.
LEVI’S STRAUSS & CO.
[BRAND AUDIT] Ltd.
The result clearly indicates that brand name plays the most important role in
the buying decision criterion of the respondents which is followed by price and
design.
The result provides a summary of the importance of each variable studied to
choice, as well as the ‘part worth’ of each level within the variables studied.
ownership’ of the Levi’s brand questions were asked to the respondents and
we were surprised to know the results. Table 10.0 depicts the results.
Based upon what is learnt from the respondents it is possible to paint a good
picture of how the market ‘sees’ or understands the image of Levi’s as a brand
in the apparel category.
This on the other hand would also help in the proper positioning of Levi’s as a
brand, as those benefits are selected which are important to the brand’s target
market and that that they feel a brand can deliver. These can be then
presented in marketing communication as a visual or verbal benefit claim. This
enables a fuller understanding of image ownership, which in turn leads to a
better understanding of the Levi’s brand equity.
LEVI’S STRAUSS & CO.
[BRAND AUDIT] Ltd.
In our research survey of the target market, respondents were first asked how
important each of the benefits and the benefit claims are to them when
considering buying a apparel/denim wear. Importance is measured using a 3-
point scale where if the benefit is essential to them it is weighted as ‘3’, if the
benefit is desirable but not essential it is weighted as ‘2’, and if it is not all that
important it is weighted as ’1’.
Then for the brand under study i.e. LEVI’S and each of its major competitors
(SpyKar, Wrangler, Lee) respondents are asked how well that brand delivers
the benefit. Here again, a 3-point scale is used where if the brand is thought
to definitely deliver the benefit it is weighted as ‘3’, if it is thought to do only
an okay job in delivering the benefit it is weighted as ‘2’, and if it is not
perceived to deliver the benefit it is weighted as ‘1’.
After conducting the survey among the respondents the following results came
to picture.
The results clearly depict that product quality of the apparel/denim wear
remains the most important benefit to the consumers which is followed by the
brand name. the consumer psychology is also depicted by the results as the
brand name has more importance to the customers than the price/design of
the apparel. Interesting factor in the results is that price is not the essential
benefit factor in the minds of the consumers.
From the results it becomes clear that Levi’s is a leader in delivering the
benefit to the consumers. But, the point to be taken care of is that 20.58% of
the respondents feel Levi’s does not deliver the benefit at all, where as if we
look at SpyKar, though only 47.05% feel it delivers benefit completely but
41.17% feel that it does an okay job and only 14.70% feel it does not deliver
the benefit. We can infer from the results that SpyKar emerges out to be the
major competitor to Levi’s as far as brand name is concerned.
From the above results it becomes that Levi’s again comes out be a leader as
far as satisfying the design benefits of the consumers. But, again in this part
Levi’s facing a tough competition with Wrangler (only 20.58% respondents say
LEVI’S STRAUSS & CO.
[BRAND AUDIT] Ltd.
they are not at all satisfied), whereas 26.47% of respondents say they are not
at all satisfied by Levi’s designs.
Above table depicts the responses of the consumers of apparel as far as the
prices are concerned. Again, we see that Levi’s emerges to be the winner in
this category of benefit claim.
If we further analyze the results we find that Levi’s is facing competition in this
category also by SpyKar as only 20.58% of the consumers say that SpyKar
does deliver the benefit of price, whereas 23.52% of respondents say that
Levi’s does not deliver any benefit of price. These are the major areas of
concern to look upon by Levi’s as a brand.
LEVI’S STRAUSS & CO.
[BRAND AUDIT] Ltd.
From the above table it again becomes clear that Levi’s is a leader in
delivering the benefit of product quality, but again faces sheer competition
from the SpyKar brand as only 20.58% of the respondents feel that SpyKar
does not deliver any value. Whereas, 29.41% of the consumers feel that Levi’s
does not provide any benefit of the product quality.
LEVI’S STRAUSS & CO.
[BRAND AUDIT] Ltd.
Levi’s needs to look upon this segment of consumers who are not at all
satisfied by its products as these are ones who are the switchers of the brand.
– A brief knowledge of the history & and the product , brand portfolio of
the brand
– Comprehensive analysis of the competitors
– Analysis of the product life cycle of the brand
LEVI’S STRAUSS & CO.
[BRAND AUDIT] Ltd.
We can also conclude from the audit of Levi’s brand that to maintain
sustainable brand equity Levi’s must keep a keen eye on the change in the
consumer tastes and preferences and well as the movement of the
competitors.
LEVI’S STRAUSS & CO.
[BRAND AUDIT] Ltd.
12.0 BIBILOGRAPHY:
Beck Ernest, “Levi’s takes an international approach with its new marketing
pitch in Europe”, Wall Street Journal, New York, Sep 5, 2000, pg. 1.
Hill Suzette, “Levi Strauss & Co.: Icon in revolution”, Apparel Industry
Magazine, Atlanta, Jan 1999, Vol.60, Is. 1, pg.66, 4pgs.
Hammerstein Linda, “Levi’s is hiking up its pants; but will the brand’s
revamped products and marketing play with turned-off teens?”, Business
Week, New York, Dec 1, 1997, Iss. 3555, pg. 70.
Jar dine Alexandra, “Life for denim in a combat era”, Marketing, London,
Mar 4, 1999, p. 19.
Lee Louise, “Why Levi’s still looks faded; CEO Martineau is reaching out to
new markets, but style-conscious rivals continue to steal sales”, Business
Week, New York, July 22,2002 Iss. 3792
Lehrer Jim, “Leaving Levi’s”, Online News Hour, Feb 23, 1999,
http://www.pbs.org.
Nolan Kelly, “Levi’s tries out mass, and likes the way it fits”, DSN Retailing
Today, New York, Aug 22, 2005, Vol. 44, Iss. 16, pg. 1, 2 pgs.
Sardine Emily, “Wal-Mart tapped to host Levi’s coming out party”, DSN
Retailing Today, New York, Nov 11, 2002, Vol. 41, Iss. 21, pg. 5, 2 pgs.
Simms Jane, “When brands bounce back”, Marketing, London, Feb 15, 2001,
pg. 26, 2 pgs.
LEVI’S STRAUSS & CO.
[BRAND AUDIT] Ltd.
Voight Joan, “Levi’s scraps line efforts for image”, Brand week, New York,
Apr 28, 1997, Vol. 38, Iss. 17, pg 6.
Warner Fara, “Levi’s fashions a new strategy - A dynamic new team looks
to stamp innovation on an old brand”, Fast Company, Nov 2002, Iss. 64, p.
48.
Anonymous, “Levi’s antidote: Audience participation”, New Media Age,
London, Sep 8, 2005, pg. 19.
Anonymous, “Brand Mot: Levi Strauss & Co”, Brand Strategy, London, Jun
2004, pg. 10.
Anonymous, “Levi’s expands distribution”, New York, Dec 2002, Vol.78, Iss.
12, pg. 43.
Anonymous, « Original depuis 150 ans: L’histoire de Levi Strauss & Co. »,
MesNouvelles.com, Communiqués, Mai 2003.
FINANCIAL REPORTS
WEB SITES
http://www.brandimpact-forums.com/casestudy.htm
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[BRAND AUDIT] Ltd.
http://encyclopedia.thefreedictionary.com/jeans
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