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 24year-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, an

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

” Noted one industry insider. finding the right size was difficult. vice president of research and development. everyone agreed that Slates was a dynamite brand. Levi's also responded with off-the-rack pants that require little altering. forcing alterations for off-size men. Levi’s backed Slates with $20 million in advertising. “The ads are stylish but they are not over [the market's] heads. just like the good news about Levi’s “back to basics” move a decade earlier. “The trick is to rein it back in so it isn't so chi-chi that people can't relate to it. the good news about Slates has been accompanied by bad news— plummeting market share in the core jeans market.9 percent of the U. and getting alterations was frustrating.Consumer research told Levi's that consumers found shopping for dress pants a chore: slacks departments were dreary. off-the-rack dress pants. Consumers wanted cash and carry. “Slates and other labels have pushed the envelope.7 percent seven years . Levi’s agency designed ads such as one showing a guy springing up from lunch with his partner to tango with his waitress. it had only 18.” Some retailers found that their tailored pants business was up 15 to 20 percent.” A year later. To charm potential customers. Whereas most dress pants come only in even waist sizes.S. However. Levi’s had turned on the Dockers customer to dress slacks just when “corporate casual” started to “dress up. 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. All Slates are hemmed and cuffed and have double pleats in the front. beginning with television ads at the opening of the National Football League season. the pleats are more kindly placed. Although Levi Strauss had 30. For customers with larger waist sizes. Slates also come in odd sizes.” said Nancy Friedman. blue jeans business in 1990. So Levi’s devised a carefully crafted strategy to overcome the typical male distaste for dress pants shopping. This has created a tremendous consumer awareness for slacks in general.

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

Levi's will introduce jazzier. Levi's is also taking action on the retail front. Questions for Discussion 1. And the company is recruiting more outside managers. Thus. it will have to contend with a similar problem with Dockers. Holding nothing sacred in its quest to reposition itself in younger segments. a little smug” says Isaac Lagnado. Will the new strategy work? Many industry insiders think that Levi has the money and market clout to pull it off. 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. which will serve as the company's flagship outlets in large cities. All that appears to be changing.Beverly Hills 90210. “[Levi Strauss & Company] has always been insular. president of Tactical Retail Solutions. Cone and Belding. quite frankly. In 1998. more colorful packaging aimed at giving its products a more exciting. which has been the Levi's agency for more than sixty years. It has dropped plans to open 100 new stores in malls across the country in favor of NikeTown-type stores. What actors and forces in Levi Strauss & Company's microenvironment and macroenvironment have affected its marketing position? . Even as Levi's is working to get its core jeans business back on track. the “dad's brand” problem that hit Levi’s in the blue jeans segment now threatens the Dockers market. Consequently. Levi's may have a problem making that brand relevant to the next generation of young men. Levi's is also searching for a new ad agency to replace Foote. youthful look. the Dockers brand that has been positioned for consumers just moving out of their core jeanswearing years may now be thought of as “my dad's brand” by the next generation of young men moving into this segment. Baby boomers who are aging out of the Dockers' target market have refused to leave the brand behind. paternalistic. and.

” Daily News Record. p. 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. 4. pp. . 22. December 11. August 19. 5. December 1. 3. “Denim Dish: Dream Jeans for Teens. Becky Ebenkamp. “Levi's New Dress Code. 1997.” Business Week. 3. p. 1997.” Adweek. September 8. 12. “Levi's Is Hiking Up Its Pants.” Brandweek. p. “Slates Speaks Directly to Men.2. September 24. Sources: Elaine Underwood. and Linda Himelstein. 70. 75. Stan Gellers. 1996. 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. p. 1997.” Womens' Wear Daily. “Tailored Slacks Follow the Mainfloor Leader: Slates Boom Trickles-Up to Better Makers in Casual Fabrics and Golfwear.

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