You are on page 1of 8

Levi Strauss Canada

Brand Management
Submitted by RENJITH RAVI & SUDHIN MUKUNDAN Dr. Abdul Waheed

Introduction to Levi Strauss

Levi Strauss & Co. is a privately held clothing company known worldwide for its Levi's brand of denim jeans. It was founded in 1853 by Levi Strauss. They have the headquarters in San Francisco, California; U.S. Levi Strauss is today the world s largest Jeans Manufacturer. The central brands by Levi Strauss are Levi s & Dockers. They produce Jeans which are high end products and marketed as a premium product. : Orange Tab is a medium priced premium product and Red tab is a high priced premium product. Levi is known for its continuous innovation and trendy products. They always analyze the market trend and it is reflected in their product. This makes Levi the biggest brand in its category.

Levis marketing
Levis has been very successful in promoting its brand worldwide and making continuous innovation in its products and marketing strategy. It is evident from their add marketing how they have evolved to satisfy the needs of current trends. Back in 1900 jeans was considered to be a workers pant. But today Jeans speaks about one character. Levi has been successful in evolving along with the market trends. Levis mainly market through TV ads, Promotion of Music or film events, Print ad in fashion, music and life style magazines. Levi is today a leading name in the fashion industry. They had successfully targeted the right customers and brought in adds that could please the target market. They came out with Slogans that could match the current trends. Some of the famous slogans adopted by them are

A style for every story. Have you ever had a bad time in Levi's? Quality never goes out of style. Levis. Original jeans. Original people. Our models can beat up their models.

These slogans have been well received by the consumers and they placed Levis as one of the premium brand in their mind.

Case: Levi Strauss Report

Institute of Management Technology, Dubai

Page 1

Introduction to Great Western Garment Co. and acquisition by Levis

The Great Western Garment Company (GWG) was a Canadian denim and western wear clothing company founded in 1911. GWG was one of the fastest growing Jeans manufacturers in Canada. Within a period of 5 years, they had 30% share of the Jeans market in Canada. 1972, Levi Strauss Co. purchased 100% shares of GWG, but did not merge into two entities. With the active participation of Levi, GWG started increasing the market share and was viewed as the most selling brand in Canada. GWG Brands had many brands among them the most selling ones were Scrubbies , Red Straps, Iron Man and Shrunk. GWG forecasted Trust and Respect. They promoted the Canadian culture until 1980 s and was very successful with its approach. They distributed the products through Department Stores & Small independent stores. After 80 s when less expensive jeans came into market, GWG lost market share and they lost their track. They stick to the conventional style and expected customer to buy the old fashioned Jeans. They rarely came out with trendy items and when the revenue went down they stopped advertising. They could not reinforce the brand in the mind of the customer later. This was the beginning of the failure of GWG.

Case Scenario
In1998, market share of GWG was just 1 %. Levi decided to license GWG to a small jeans manufacturer JACK SPART MANUFACTURING INC. based in Montreal, Quebec. Levi expected Jack Spart to reinforce the brand image in the mind of the customers but unfortunately by 2001, Jack Spart could not sell more than 200,000 units. Jack Spart has not invested any money into the development of GWG brand. Jack Spart felt the GWG Jeans was old fashioned and it could not be sold in the market. Since the market was concentrated with many brands they did not spend any money for its development. In 2001, Levis marketing head Ms. Julie Klee had to take a decision whether to continue Licensing with Jack Spart or take over GWG brand and reinforce the brand or else to drop the brand and concentrate on Levis existing brand.

Case: Levi Strauss Report

Institute of Management Technology, Dubai

Page 2

Jeans Market Trends

Jeans were invented in 1873 by Levi Strauss. Blue jeans were then adopted as Workers Pant. They needed tough pants to protect themselves from their working conditions. By 1950 s, Jeans became a Symbol of Rebellion. That was the time when many musicians and World leaders started wearing Jeans and it became a youth symbol. In the next four decades Jeans underwent various interpretations. Jeans has taken the market from other casual wear and everyone started to prefer wearing jeans. Today Jeans spoke about one s character. For youngsters Jeans was cool, for others Jeans was Comfort, Ease and Compatibility. People wear jeans for

Fashion Reasons Work, Relaxation To be themselves, attract others & to feel good.

Consumer Segments
The jeans market targets both Men and Women. The market is divided as follows: 1) Age: 15 24: Men and Women in this age range are the main consumers for jeans

manufacturers. They consume almost twice as much when compared to Age 25 to 50. They wear jeans to feel relaxed, to be cool, to attract and feel good. Most of the jeans manufacturers target this age group since the consumption is v high and they easily ery accept the change in trends. Levi mainly targets this age group. 2) Age: 25 50: This is mainly the working group and they wear jeans for comfort, ease and

compatibility. They are less oriented towards fashion and therefore styles have more life compared to other age group.

Jeans Distribution
With the growth of Large and Small Merchants, the market of jeans has become very strong. Customers can get wide verities and different price option. Large Merchants like Wall mart is the strongest player. Zellers also has many options and majority of the customers make their purchase from these merchants. The other strong player for premium products are Specialty stores like GAP, Marks Warehouse which customers consider as a place only for Jeans. The department stores are

Case: Levi Strauss Report

Institute of Management Technology, Dubai

Page 3

not an advisable place for Jeans selling these days. They are losing their share and a detailed study of distribution along with their sales is shown below for better understanding.

Channel Department Stores Jeaneries

Examples of Stores The Bay, Sears Original Machine Levi s Stores, Jean

000 s 3699 3105

Specialty Stores



Mark s



Wearhouse Large Merchandise Small Merchants Others Winners, Costco 3105 Mass Wal-Mart, Zellers Saan, Giant Tiger 6105

Levis Market Share

Levis is the leader with 16.1% market share today. They target the customers between the age range of 12 and 24. They distribute their product through all the channels and have therefore been able to reach all customers. The 2 main brands of Levis are:

Orange Tab

Price : $42.99 $29.99 5 main fits & 3 main finishes

Red tab Premium Product


Price : $69.99 $49.99 12 main fits

Orange Tab is a less premium product and it is sold by retailers at a discounted price of USD29.99 to a price of USD42.99. Red tab is quite expensive and is sold at a higher price compared to Orange tab. Red tab has more fits and they also introduce new finish every year.

Case: Levi Strauss Report

Institute of Management Technology, Dubai

Page 4

Other Market Leaders

VF Corp
VF Corporation is the biggest completion to Levi brand. They target the customer aged between 12 and 50. Their target market is bigger than Levis. They have two brands Rustler which is a less expensive product and their main premium brand Wrangler. The pricing is as below:


Price : $19.99 3 main fits & 2 main finishes


Price : $29.99 5 main fits & 3 main finishes

The prices are less compared to Levis but with the introduction of this brand Levi has lost a lot of its market share and therefore they consider Wrangler as their main competitor.

Private Labels
With the growth of large and small merchants, many private brands were introduced in the market. Sears, Wall Mart, Costco etc came up with their own cost effective brands. They targeted all age group and they brought in Jeans that could satisfy the current market style. They could easily copy the style from Levi or Wrangler since they distributed majority of their products. These were priced cheaper and consumed majority of the market share.


Reitman s ($25 to $30) Cotton Ginny s ($25 to 30) Nevada ($24.99)


Costco Rockland ($16.99) Wal-Mart Originals ($19.99) Zellers Cherokee & Truly($19.99)

Private brands were strong in Women's market, since they preferred more styles and cheaper price.

Case: Levi Strauss Report

Institute of Management Technology, Dubai

Page 5

Specialty Retailers
The other main competitors to Levis were specialty stores. They took a large number of customers. They offered quality and price. Also customers considered shopping with them more exclusive since they were specialty stores. GAP was leading among them and others were Mark Wearhouse which had their own brand called Denver Hayes and Thrifty with Bluenotes. The prices were very similar to that of Levi and they sold a number of jeans.

Marks Wearhouse Denver Hayes ( 34.99) Age 25 to 50 Thrifty - Bluenotes ($39.99) Age 15 to 24 GAP GAP ($49.99) Age 18 to 35

Premium Brands
The other brands in the market were high premium products which targets only a few customers. These were meant to be expensive and most of them priced from USD 70 to USD 100. Some of the premium brands are:

Silver ( $69.99) Guess ( $79.99) Tommy Hilfiger ($89.99) Polo Ralph Lauren ( $89.99) Calvin Klein ( $ 79.99) Diesel ( $ 100.00)

Position of GWG in the Market

GWG which is old fashioned jeans had to compete with all the above said strong stylish brands. GWG was priced between USD18 and USD 22. Customers could get better looking jeans at cheaper price and GWG was considered to be an old age Jeans. It was not possible to position GWG anywhere in the consumer market. It was neither cheap rather trendy. It was distributed through various channels but still it was very unsuccessful. Moreover lack of marketing efforts by GWG led to a stage where customer forgot GWG brand. After interviewing some of the consumers it is well understood many has never heard of such a brand and some people said they have seen such a Jeans in their dad s old photos.

Case: Levi Strauss Report

Institute of Management Technology, Dubai

Page 6

It is well evident that GWG brand has no potential strength to compete in the market and it has been positioned in the mind of the customers as old fashioned clothing. We recommend Ms. Julie Klee should drop this brand and use the available resources to build their existing Levis brand. They can come up with a signature brand to compete with very high end products like Diesel and Calvin Klein. Levis has been positioned as premium brand and they should keep their identity in the market. The best option for any company is to realize their strong points and bring in products that can easily compliment their existing brand image.

Case: Levi Strauss Report

Institute of Management Technology, Dubai

Page 7