Professional Documents
Culture Documents
Brand Levis
Research Methodology
Members:
Deepa H Jain
Meghana Simha
Deepak Talteja
Devanandan K V
Ritesh Choudhary
Sudhir K Mohan
Executive Summary
Title: Marketing Research on brand Levis in the denim market
Author: Deepa Jain, Meghana Simha, Deepak Talreja, Devanandan KV, Ritesh
Choudhary, Sudhir K Mohan
Purpose: The purpose of this research is to understand the satisfaction of IIPM students
with Denim Brands. Study the market shares of the top 5 brands. Find any differences
areas where the brand Levis is lacking and recommendations for overcoming the
shortcomings.
Method:
a) Find the attributes which people look in a denim through Hyper Research
Conducted on 20 students & transcripts were recorded by each of us
b) Collect data related to overall consumer perception about the denim brands &
the consumer satisfaction with respect to brand with the help of a questionnaire.
To test the model out of 80% of the sample size and compare it with the rest
20%
c) Use statistical tools to form conclusion
Findings:
The research team gratefully acknowledges the help & support provided by Prof
M.D. Rao during our research. Sir, we are thankful for your support.
We would also like to thank all the respondents for spending their valuable time
on our Hyper Research & the subsequent questionnaire.
1. INTRODUCTION
Several Luxury brands like Calvin Klein and GAS were not able to compete in these
markets. They are now in a retractory phase in the Indian market. The price band for
these brands is high. Levis was one of the first MN Brand to be launched in India. The
primary reason for its success in India has been the different price bands for different
categories.
Levis also had an effective distribution of goods. They serviced their denim fabric from
India which was cost effective and hence they were able to capture the market. They
are however losing out their market share to other competitive brands like Lee and
Spykar.
The parameters for satisfaction were arrived at from a prior study; students were
interviewed and asked to list the attributes that they want most in their denim brand.
Thus, some attributes like influence of brand ambassadors were not considered for the
study.
The sample size was 150, and 150 cases were interviewed. 3 of the 150 were lost.
It all began in California, the golden state of the USA, where legendary Levi Strauss
made the first jeans. The year 1873, was the year of gold rush era. Jeans got created
in Genoa, Italy when the city was an independent republic and a naval power. Jeans
were made for the Genoese navy because it required all-purpose trousers for its sailors
that could be worn wet or dry. Jeans were laundered by dragging them in large mesh
nets behind the ship, and the seawater would bleach them white for an attractive blue-
white contrast and soften the garment a great deal for comfort. Levi Strauss was a
Bavarian dry goods merchant living in San Francisco. One of Levi's customer was
Jacob Davis, a tailor who frequently purchased cloth from Levi Strauss & Co. He had
an idea to use copper rivets to reinforce the points of strain, such as on the pocket
corners and at the base of the button fly. Jacob along with Levi Strauss took the patent
and the blue jeans, as we know it today, was born.
The first denim boom in India Arvind launched New Port - This was the first attempt
made by anyone to launch a national brand at sub Rs. 400.00. In 1990 Lee started
their marketing and manufacturing centres in India in collaboration with Arvind Mills.
In the same year Levis also started their India Operations.
The total denim market in India is estimated at 100 million units per year. Out of this
total market size, the branded denim market is only about 10 million units, comprising
brands such as Levi’s, Lee, Wrangler, Pepe Jeans, Spykar and Flying Machine, in
addition to the international denim brands.
The Indian Jeans market can be broken down into the following categories:
• Super Premium Segment (Rs. 2000+)- brands like Tommy Hilfiger, Hugo Boss,
AN Jeans, Rocky S Jeans, Rathore Jeans
• Premium Segment (Rs. 1000-2000)- Pepe, Levi's, Lee, Wrangler
• Middle Segment (Rs. 500-1000)-Most Indian brands cover both Middle and
Premium categories
At the lower and unorganized end of Jeanswear market the price is assumed as under
Rs.300.
The economy segment is growing at 10% and the premium segment performing a
large amount of visible and faster growth. During the period of 2003-2004, the
premium segment performed with the 25 percent rise.
The premium international denim brands that entered India with hopes of cashing-in
on increasing luxury spends in the country have been unable to find a foothold in the
domestic market. While some international brands are limiting their presence, others
are on their way out.
Premium brands like Calvin Klein and GAS are closing their stand alone stores in
India. High price points due to import duties and skyrocketing retail rentals in premium
locations, which are not supported by adequate sales, are some of the many
challenges these brands face. Only those international brands that source garments
from India for their local stores are able to succeed. High import duties, which range
between 25-30 per cent, increase the price of the merchandise besides leading to a
high turnaround or lead time, which consequently results in high inventory cost. So the
entire cost of operations for these international brands becomes unsustainable.
It is also seeking to strengthen its Value Brand - Signature. Launched last year and
priced between Rs 599-Rs 999(USD 15- USD 25) in small towns and up to Rs
1399(USD 35) in larger towns. Signature seeks to capture a large share of the Value
segment of Branded Jeans, which is currently estimated at about 10 million units – by
having more than 5000 sale points for the same throughout India (as against 1000
currently).
In the Premium segment the prices are in the range of Rs 2000-4000(USD 50-USD75),
Super premium has price range of Rs 4000-6000(USD 75-100) and Connoisseur
segment is Rs 6000-12000(USD 150-300). Levi’s wants to increase its presence in
these segments. It however does not want to be present in the Mid Price Segment ie Rs
1000-2000(USD 25-50). Thus Levi’s India is following the International trends where
Value and Premium segments are expected to do better than the mid priced segments.
They are accelerating its focus on low-priced street-wear product initiative, Levi’s
Sykes; which is expected to drive overall volumes and also penetration in non-metro
markets. Levi’s says that it would maintain revenue growth of around 25-30 per cent
and will post even better profitability growth as it drives retail expansion across
geographical markets.
The Sykes street wear portfolio is expected to account for a quarter of Levi’s overall
volume sales in 2004-05 — it is already accounting for 15 per cent of sales within a
year of launch.
The concept of a low-priced street wear sub-brand Sykes’ is an India-only strategy for
the denim MNC Levi Strauss. Sykes’ aim is to tap the youth in the age group of 15-19
who have a preference for fast fashion, fads, and experimentation and higher
receptivity to value for money proposition
The estimates for the market of Premium and Super Premium denim in India are about
7 million and 3 million and offer substantial possibilities for growth for brands like
Levi’s. However, the going will not be as smooth since Levi’s will not be able to offer
great washes in its Signature line – and washes are one of the biggest factors for
purchase of Jeans by the young.
They were interviewed on their favourite brand, what they liked about the
brand, how loyal they were to the brand, if they were willing to switch brands,
how much do they pay on an average on their jeans, how much of price
increase will prompt them to change their brand, if they are willing.
The information was coded in Hyper Research and the codes with the highest
frequency were selected.
(For Frequency of Codes and Master code list please refer Appendix 6.1. and
6.2. Respectively)
The population is the complete student population of IIPM. There are about 455
students studying the MBA course across all batches.
To arrive at the sample, names of the MBA students will be included in a list
which will then be given a set of random numbers. These random numbers
were sorted in ascending order. The 1st 147 names were taken from the list for
the interview.
Since the target group people have no significant age differences and are
studying management course, however the questionnaire was designed to be
easy and understandable. The questionnaire was structured and undisguised.
The questionnaire was pre-coded for easier tabulation.
Most questions only required a single answer out of the wide choices. It is not
only useful to keep respondents’ attention and patience, but helpful for the
analysis of the answers.
After the questionnaire design, a pilot study was conducted. The reason for this
was to make those questions used in the final survey to be specific,
understandable, and capable of being answered by the sample population and
free from bias.
Piloting helped us with the wording of the questions and also with procedural
matters such as the design of the introduction, the ordering of question
sequences and the reduction of non-response rates.
The pilot test was carried out on 10 cases. They were from different batches
and different classes. After the pilot work it was found that:
The Z-test analysis is also utilized to conduct the results by OPENSTAT software.
Regression Analysis, ANNOVA, correlation and chi square tests were used for
analysis. A regression model was formed using 80% of the cases and was
tested on the remaining 20%.
4. ANALYSIS AND RESULTS
4.1. Sample Size
To calculate the sample size, the data which was floating Point type was used for
analysis. The sample size was calculated using the following formula.
N = Zα/2 X σ Pop / (ME) 2
Test N
1 Level of Satisfaction Brand 151.87
2 Level of Satisfaction Category 151.06
3 Brand Recall 150.87
4 Average Spend 152.18
5 Annual Budget 149.75
151.15
The highest values of all the data were taken and its average was calculated. The
average value was 151. Samples analysed were 147.
The distribution of these brands among males and females are almost alike. We see
that a greater number of women prefer other brands. Levis is a brand used by almost
50% of the sample both male and female.
Thus, the population proportion 0.30 does not fall in the confidence interval, we reject
the null hypothesis. Thus we can say that Levis’ market share is greater than 30%.
The buying behaviour demonstrated in case of jeans purchase are Impulsive and
Planned. An equal proportion of the sample exhibits both these types of behaviour.
Fewer females show Impulse buying behaviour. Male population shows more Impulse
Buying behaviour; however the difference between the numbers is marginal.
The average amount that the sample spends on a pair of Jeans is Rs 2130.687. The
average amount spent per pair is different for different brands; however the difference
is not significant. The standard deviation of the price is Rs.1111.314.
H1: The mean expenditure of a student on one pair of Jeans is less than 2000.
The T test value is less than the value for rejection. Thus, we retain the Null Hypothesis,
i.e.
A two way ANNOVA test was also done to check if the mean price paid for a pair of
jeans is different across gender and Monthly Household Income.
Ho: Average price paid per jeans depends on Gender and Monthly Household
Income
H1: Average price paid per jeans does not depend on Gender and Monthly
Household Income
The overall probability for variation across gender and Monthly household Income is
higher than that for the test to be significant. The interaction between the groups is
low. Since the probability is high, the test results are not significant.
It can be concluded that there is no significant variance among the rows and columns,
i.e. Gender and Monthly Household Income Respectively. Thus, we reject the null
hypothesis
The average annual budget on Jeans is 8760. The difference in annual budget
between males and females is 705. Thus females spend more per jeans than men as the
frequency of purchase is same between ma\les and females.
Male Female
Average Annual Budget 8577 9282
H1: Annual Budget on Jeans does not depend on Monthly Household Income
The probability value is less than the significance level 0.05. Thus, we retain the null
hypothesis, i.e. the annual budget depends on Monthly Household Income.
This question aims at determining the person who makes the decision of the purchase.
A summated scale up to 10 was used to estimate this.
Thus if we see the total score and the average score are both the highest for Yourself.
Thus it can be said that buyer himself is the decision maker. In some cases may take
help from friends and partner however the least influence is that of parents.
The average rating for the variables was calculated and a graph was plotted.
The overall satisfaction for Spykar was the least; it was the highest for wrangler. The
average rating for Levis on overall satisfaction is 4.2.
The average rating for all brands on sales and promotions is least, for Levis it is 3.6,
which is the highest. Levis also scored the highest for brand image, comfort,
availability, variety. It is the second highest in overall satisfaction. Other brands are
considered to be trendier and fashionable compared to the five top brands. , however
Indian Institute of Planning & Management Page 19
the other brands are more than 2 brands thus it can be said that Levis is the trendiest
brand.
Levis was rated the lowest in variety of colours, price and fabric.
The satisfaction for the brand was measured using the Lickert Scale. The attributes
were rated on a scale of 1-5. A regression model was developed to estimate the level
of satisfaction using the software OPENSTAT.
A Forward Step-wise regression was done. The results of the analysis are:
Regression Equation:
Only 80% of the data i.e. 117 cases were used for developing the model. The
remaining 20% was used to test the model.
To validate the regression model, the regression point was arrived at by substituting
values of slope, Intercept and the individual rating given to the variables. The actual
“Overall satisfaction score” was subtracted from the regression point value.
Mean Absolute Percentage Error was used to determine the validity of the
model. The percentage values were calculated and the mean of the percentage was
found to be 14% for the data from which the model was created.
The MAPE value for the Hold Up data was 16%, which is close to the MAPE of the
data from which the regression model was formed. Hence the model is successful and
can be used to make predictions.
From the graph above and the regression equation we can see that even though Levis
scored low on price, variety in colours and light fabric; it scored high on overall
satisfaction. Levis however scored high on the key factors that determine overall
satisfaction and hence is among the top brands.
This exercise was done to estimate the most well known brand and the loyalty of the
customer to each brand.
The average brand loyalty is almost the same for all brands. People are somewhat
loyal to their brands but will switch in some cases. Loyalty to Levis brand is 4.4.
The satisfaction for the category was measured using the Lickert Scale. The attributes
were rated on a scale of 1-5. A regression model was developed to estimate the level
of satisfaction using the software OPENSTAT.
A Forward Step-wise regression was done. The results of the analysis are:
Regression Equation:
Only 80% of the data i.e. 117 cases were used for developing the model. The
remaining 20% was used to test the model.
To validate the regression model, the regression point was arrived at by substituting
values of slope, Intercept and the individual rating given to the variables. The actual
“Overall satisfaction score” was subtracted from the regression point value.
Mean Absolute Percentage Error was used to determine the validity of the
model. The percentage values were calculated and the mean of the percentage was
found to be 14% for the data from which the model was created.
The MAPE value for the Hold Up data was 16%, which is close to the MAPE of the
data from which the regression model was formed. Hence the model is successful and
can be used to make predictions.
Since there is no high correlation between the variables, there is no need to do factor
analysis. However KMO value is 0.692, which is significant. Thus,
Factor 5- Durability
The respondents were asked to tick the options. The frequency of the response
The most common source of awareness is Newspaper Ads, followed by television Ads
and Hoardings and bill Boards.
The TV channel that shows most denim Ads is MTV, followed by Channel V, least Ads
on Sports Channel.
The most read magazine is Business India, followed by Business Today and Outlook,
the 4th most read magazine is India Today. Week is the least read Magazine.
4.16. Gender
In the data the total sample size is 147 and the number of females in the sample is 39
and that of male 108. The proportion of males is 73% and females are 27%.
The proportion of male and female in the market is equal. The choice of brand is independent
of gender. To eliminate any statistical error, we formed a hypothesis to test the proportion in
the market. We used Chi Square Test to test the hypothesis.
Ho: Pm = Pf
H1: Pm ≠ Pf
O O Male Female
Most Purchased
Brand Male Female E [O-E] /E E [O-E] /E
Levis 52 20 72 53 0.02 19 0.04
Wrangler 16 3 19 14 0.30 5 0.83
Lee 13 4 17 12 0.02 5 0.06
Spykar 7 5 12 9 0.37 3 1.04
Pepe 16 5 21 15 0.02 6 0.06
Others 4 2 6 4 0.04 2 0.10
Grand Total 108 39 147 0.77 2.13
Grand Total -- 2.89
4.17. Age
60% of the sample is in the age group 22-25. 82% of the population is in the age
group 26-29.
4.18. Monthly
Household Income
According to our study buying behaviour for men and women is different. Men tend to
be more impulsive than women. Women plan their purchase. Thus, the store layout
should facilitate impulse buying for men. The advertising in the Multi-Brand Outlets
should be high for the Men’s Brands again to facilitate Impulse Buying.
The difference in the proportion of females who follow planned and Impulse Buying
Behaviour is very low. Thus, those who may be swayed can be influenced through
advertising and attractive discounts to facilitate impulse buying behaviour.
According to our study people are ready to pay 2000 on an average per jeans. Hence Levis
should develop the brands that are priced in the price band 1800 - 2000 compared to other
brands.
According to our study women pay more per jeans than men. Hence they can use
discriminatory pricing for Women. They can charge a higher amount for women’s brands.
Also the annual budget is positively correlated to house hold income; higher the income,
higher the budget.
5.5. Attributes
According to our study the preference of attributes is different for different customers. However
most customers look for comfortable fit, choice of different styles, easily available Jeans. They
also prefer Jeans which are trendy & fashionable Jeans. Levis is among the brands, which is
ranked highest among these attributes. The advertising campaigns should highlight these
attributes to build a positive image.
Levis is the brand that is recalled the most without aid. It is among the most well known
brands. It is a Top of the Mind recall for more than 50% of the population. They have been
able to successfully build a brand image.
According to our study brand loyalty for levis is the highest so levis can introduce some loyalty
program like levis circle with a card where accumulated points can be converted into cash or
discount. An online Levis community where the loyal customers can be members and can shop
at discounted rates will help build greater resonance with these customers.
According to our study brand awareness among the target population is is created by News
Paper Ads, followed by Television Ads and then by Hoardings. So levis can advertise and
promote through advertising through such media vehicles .
Also we observed that MTV is the channel where most ads are shown so, sponsoring shows
on the channel would help in creating awareness among the target population.
Sl. Sl.
No. Code No. Code
1 Attractive Advertising 12 Light fabric
2 Brand Ambassador 13 No Alterations needed after purchase
3 Brand Image 14 Promotions and sales
4 Comfortable Fit 15 Smooth Fabric
Store location-Distance not a big
5 Durable fabric 16 criterion
Easily Available (Multi-brand
6 Outlets) 17 Store location-Near
7 Exclusive Brand 18 Trendy and Fashionable
8 Exclusive Pricing 19 Value for money pricing
9 Fabric-color stays well for long 20 Variety in colour
10 Fabric-Easy to maintain 21 Variety in fits
11 Influence of the peer group 22 Variety in Price
6.3. Questionnaire
(Test, before Pilot Test)
Questionnaire
We are students of IIPM and are conducting this survey for academic purpose. We
are determining the shopping habits of IIPM students in purchase of Jeans. Please
spare 10 minutes of your valuable time to answer the following questions.
PHSYCOGRAPHICS
BRAND AWARENESS
9. Encircle the correct option. For brands that you are able to recall on the top of
your mind circle the number 1, for brands you are able to recall spontaneously
circle 2 and for brands that you can recall with the help of aids like
advertisements, hoarding, boards etc; circle 3.
I. Tick 1 against the brand in Column Top of Mind.
II. Tick 2 against the brand in Column Spontaneous
III. Tick 3 against the brand in Column Aided
IV. For the last column select numbers 1 to 5, where 1 – completely Disloyal, 2
- Somewhat Disloyal, 3 - Neutral, 4 – Somewhat loyal, 5 – Completely Loyal
10. Here are a few attributes customers like you have said about various
Denim Brands. We would like to have your impression on the following Brands
11. How satisfied are you with the brand you are using?
MEDIA HABITS
16. Which Magazine do you read the most? (Any language, should have
read at least last 2 issues of)
PERSONAL DETAILS
17. Name:
18. Class & Batch:
19. E-mail address Gender:
20. Phone number:
DEMOGRAPHICS
21. Age
6.4. Questionnaire
(After Pilot Test)
Questionnaire
We are students of IIPM and are conducting this survey for academic purpose. We are
determining the shopping habits of IIPM students in purchase of Jeans. Please spare 10
minutes of your valuable time to answer the following questions.
PHSYCOGRAPHICS
Yourself
Spouse/Partner
Friend
Parent
10
8. What influences your choice for the brand that you buy?
Rate the following attributes on a scale of 1 to 5 , 1 – Very Poor, 2 - Poor, 3 - Neutral,
4 - Good, 5-Excellent
BRAND AWARENESS
9. Encircle the correct option. For brands that you are able to recall on the top of your
mind circle the number 1, for brands you are able to recall spontaneously circle 2
and for brands that you can recall with the help of aids like advertisements,
hoarding, boards etc; circle 3. Select numbers 1 to 5, where 1 – completely
Disloyal, 2 - Somewhat Disloyal, 3 - Neutral, 4 – Somewhat loyal, 5 – Completely
Loyal for the denim brands that you purchase.
V. Tick 1 against the brand in Column Top of Mind.
VI. Tick 2 against the brand in Column Spontaneous
VII. Tick 3 against the brand in Column Aided
VIII. For the last column select numbers 1 to 5, where 1 – completely Disloyal, 2 -
Somewhat Disloyal, 3 - Neutral, 4 – Somewhat loyal, 5 – Completely Loyal
1 2 3 4 5
Brand Image (1)
Comfortable Fit (2)
Durable fabric (3)
Easily Available (Multi-brand Outlets) (4)
Light fabric (5)
Promotions and sales (6)
Smooth Fabric (7)
Trendy and Fashionable (8)
Price (9)
Variety in Color (10)
Variety in fits (11)
Overall Satisfaction (12)
Others Specify (13)
Others Specify (14)
MEDIA HABITS
12. What are the 3 TV Channels you watch most regularly? (Rate the channels on a
scale of 1 – 5, where 5 is for the most watched channel, 1 for the least watched
and the rest in between on an equal scale)
13. What TV Channels have you come across denim ads the most? (Rate the channels
on a scale of 1 – 5, where 5 is for the channel with most number of Ads, 1 for the
least and the rest in between on an equal scale)
15. Which Magazine do you read the most? (Any language, should have read at least
last 2 issues of)
Business India (1) Outlook (2) Week (3) Femina (4)
Business Today (5) India Today (6) Time (7) Cricinfo (8)
Cosmopolitan (9)
Other, Specify (10):
PERSONAL DETAILS
16. Name:
17. Class & Batch:
18. E-mail address
19. Phone number:
DEMOGRAPHICS
18 Age