Levi Strauss & Co.

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Levi Strauss & Co. is the world’s largest maker
of pants, noted especially for its
blue denim jeans called Levi’s (registered
trademark). Its other products include tailored
slacks, jackets, hats, shirts, skirts, and belts, and it
licenses the manufacture of novelty items. The
company is headquartered in San Francisco.

The company traces its origin to Levi Strauss (1829–1902), a Bavarian immigrant who arrived in
San Francisco in 1850 during the Gold Rush, bringing dry goods for sale to miners. Hearing of
the miners’ need for durable pants, Strauss hired a tailor to make garments out of tent canvas.
Later, denim was substituted, and copper riveting was added to pocket seams. A merchandising
partnership of Strauss and his two brothers, Jonas and Louis, was formed in 1853.

After Strauss’s death in 1902, leadership of the company passed to four nephews and, after 1918,
to in-laws, the Haas family. The company’s most spectacular growth occurred after 1946, when
it decided to abandon wholesaling and concentrate on manufacturing clothing under its own
label. By the 1960s, Levi’s and other jeans—once worn chiefly by American cowboys—had
become popular worldwide. When the company went public in 1971, it was operating in 50
countries.

In 1985 the Haas family, along with other descendants of Levi Strauss, staged a leveraged
buyout that returned the company to private ownership. In 1986 Levi Strauss & Co. introduced
in the United States a new line of casual pants called Dockers; the brand was released in Europe
in 1994. During the 1980s, because of increasing competition and financial difficulties, Levi
Strauss closed nearly 60 of its U.S. manufacturing plants and began shifting production overseas.
In 1990 a class-action lawsuit against the company alleged that it had closed its plant in San
Antonio, Texas, and relocated it to Costa Rica to avoid paying pension, disability, and other
benefits to its workers; the case was eventually dismissed. The last two U.S. manufacturing
plants were closed in 2004. However, in the following decade some production of Levi Strauss
items returned to the United States.

In 1991 an investigation revealed that some products that Levi Strauss had represented as made
in the United States were actually manufactured in the Northern Mariana Islands (a U.S.
commonwealth) by Chinese labourers working in illegal sweatshop conditions. The
subcontractor managing the island factories was fined nearly $10 million by the U.S.
government, and Levi Strauss subsequently took steps to improve labour standards and
inspection practices for its offshore suppliers.

In 1996 Levi’s Vintage Clothing (LVC)—a line of reproductions of clothing items from the Levi
Strauss Archives—was introduced worldwide. The company later launched (2003) the Signature
by Levi Strauss & Co. brand, a more affordable line of jeans and casual wear, and in 2007 Levi
Strauss partnered with the French company ModeLabs Group to develop a series of Levi’s-
branded mobile telephones.
Despite these moves, sales stagnated, and in 2011 Levi Strauss hired Chip Bergh as CEO. He
was credited with turning the company around as he instituted various changes, such as
modernizing its e-commerce division and expanding overseas markets. In March 2019 Levi
Strauss went public again, and its IPO raised more than $620 million.

MISSION STATEMENT:

"The mission of Levi Strauss & Company is to sustain responsible commercial success as a
global marketing company of branded casual apparel. We must balance goals of superior
profitability and return on investment, leadership market positions, and superior products and
service. We will conduct our business ethically and demonstrate leadership in satisfying our
responsibilities to our communities and to society. Our work environment will be safe and
productive and characterized by fair treatment, teamwork, open communications, personal
accountability, and opportunities for growth and development."

Pricing Strategy:
Owing to the brand being an established player, Levi’s has a policy of maintain standard fixed
prices all throughout the globe.
Price of a pair of Levis jeans is mainly influenced by a number of factors. These include cost of
the product, affordability for the target customer, demand of the product and uniqueness and
innovative features that it offers. In India for example, the price of a pair of Levi’s jeans varies
from about 1299 for the price sensitive customer to as high as 7000 for a customer looking for
luxurious style.
In an interview with The Wall Street Journal, Levi Strauss’ CFO spoke about the brand’s
clothing lines and the pricing differences between third-party retailers (Target, e.g.) and its
direct-to-consumer sales. The CFO said, “If you think about product hierarchy, there’s a better
product and a best product. The good product is the jeans (sic) for about $40. The better product
is anywhere between $60 and $80. And the best product is upward of that. Wholesale in the US
is largely a good product market. Our direct-to-consumer business is more of a better and best
product.” A good-better-best strategy price-tier strategy can be death-wish marketing. It can kill
the most wonderful brand-business strategies. A good-better-best price strategy is all about price
and not about value. Price segmentation is a manufacturer’s approach. Manufacturers decide the
price. But, customers decide value. Price and value are not the same. For example, the lowest
price tier is designed to appeal to “price-conscious” customer. While, the implication of the
highest price tier appeals to customers who care about price. Price segmentation is a risky
strategy. It is easy to do and easy to explain. Just carve up the marketplace by price point.
Sometime the price points are given names such as mid-market, up-market, and premium. The
automotive industry is great at this: entry-level, mid-range, mid-luxury, near-luxury, luxury and
premium. Hotel marketers have a similar approach… limited service, entry-level, mid-scale,
upper-mid-scale, upscale, and luxury. Labels such as these make no sense from the viewpoint of
customers. The best approach is to create strategies that are focused on customer perceived
value. Organizing by price point reinforces the misperception that marketing is all about price. It
confuses price and value. Which is the better value? The lowest price? The highest price? Or is
the mid-price the best compromise? It is an unfortunate occurrence that the word “value” is
becoming synonymous with “price.” Some brands say they target their low-price “value brands”
for the so-called “value-conscious” consumer. Do these brand leaders think that if we pay a
premium price we are not value-conscious? Mercedes buyers believe they purchased a good
value for their needs. Kia buyers feel also feel they purchased a good value. For some of us, in a
certain situation feel that a glass of Prosecco is the best value while for others, in a different
situation a glass of Moet is the best value. All of us are value-conscious, and this includes those
of us who pay super premium prices. People value different things for different needs in different
situations. What price-point strategies fail to take into account is the fact that all of us want to
think we have purchased the best value for our particular need in our particular circumstances
within the set of brands we can afford.
As Professor Robert H. Frank said in one of his Upshot columns for the New York Times,
“Clearly many rich people like to display their wealth. Yet, generally, they think they know
value when they see it.” He continued,” The rich, of course, are willing to spend more, often a lot
more, for products that deliver quality improvements they value. But, few of them want to throw
money away.” A price focus demeans the brand. It is price management rather than brand
management. Price segmentation sets the stage for third-party online shopping channels that sort
brands by price from lowest to highest within a set of specifications and without regard to brand
differentiation. For example, sites like Expedia lead to the unintended consequence of brand
commoditization driven by price-focused segmentation. Price segmentation is not customer-
centric. Customer-focused segmentation should be focused on situation-based needs, not merely
on price. Value is in the eye of the customer. Levi Strauss’ CFO indicates that they understand
its customers varied needs. Shoppers want positive branded experiences that they value. This is
why Levi Strauss is retaining many brick and mortar establishments. Levi Strauss strategy is to
implement a needs-based segmentation approach to channel management. Levi Strauss has a
hybrid strategy that addresses online clothing ordered directly from a brick and mortar store,
brick and mortar store sales and wholesale to other retailers such as Target, Macy’s and Kohl’s.
However, every price point must be a great value. In our uncertain times, we want the best value
for our money regardless of price point.

BONANZA SATRANGI:
Established in 1976, Bonanza Garments started its operation
with only a handful of machines and individuals. Bonanza
Garments is the most successful, widely recognized and often
imitated clothing products in the history of Pakistan apparel
industry. Over successive generations, Bonanza Garments have
secured the attention, imagination and loyalty of diverse
consumers. At the time when Bonanza was established, not
many people wore ready-made clothes in Pakistan. Traditional tailor’s stitched clothes were
more popular. Today almost everyone goes for ready to wear clothes. In today’s fast moving
world no one has the time to visit the fabric shop and purchase suitable material, think of or
select a style and then give it to the tailor and wait hoping for the best. With Bonanza’s large
selection, one can just walk into one of House of Bonanza out let and pick up ready-made clothes
for the entire family. Clothes that are in tune with the latest fashion and are reasonably priced.
The ready-made garment manufacturers are armed with scissors and seam, fabric and flair have
won the wardrobe war and there is no doubt that Bonanza is one of the conquerors in this war.
All Products are built on two things, quality and innovation. The use of only the best materials
and an unflinching resolve not to compromise on quality, coupled with the use of state of the art
technology enables us to produce products which are no less in quality and design than the best
in the world.

MISSION:

“BONANZA IS BUILT ON A COMMITMENT TO QUALITY, INNOVATION AND THE

QUEST FOR CREATING CLASSIC, TIMELESS, DESIRABLE PRODUCTS.”

PRICING STRATEGIES: