Beruflich Dokumente
Kultur Dokumente
Contents
Clodagh Hartley - W12005539
Li Gan - W13032496
Part 1 Page 4
Introduction Page 4
Part 2 Page 13
Part 3 Page 27
Conclusion Page 34
References Page 36
Appendix Page 38
Part 1 The Original Blue Jean
T
he essence of Levi’s is personified in its Levi’s campaigned for AIDS awareness as
core values: empathy, originality, integ- well as being the first Fortune 500 Company
rity and courage. The quartets of values are to extend medical benefits to employees’
evidently valuable to the functionality of the domestic partners (Fairchild, 2014). External
brand as they feature heavily across any in- to the company, Levi’s enforce empathy
These are Levi’s guiding principles that al- a valued relationship between consumer
through their products. Levi’s have demon- The originality of the brand goes without
strated over the years their ability to keep saying. The brand stands on the forefront of
aligned with the originality that they express user imagery, and those tangible attributes
through their products, namely the 501 jean. to which they believe consumers buy Levi’s
However, the path in which Levi has taken, for; the very nature of its iconic blue jean. The
being complacent with originality, has al- originality seeps through all corners of the
lowed them to ignore the obvious trends in brand, however its ability to stay relevant has
the apparel market thus resulting in a signif- caused serious concerns for the future of the
icant loss of percentage in the jeanswear company; the brand has remained strong
Nonetheless the empathy Levi’s value is reliance on originality has led to a compla-
Introduction worth its weight in gold. For instance, in 1982 cent attitude toward the brand as a whole.
L
evi Strauss and Co is a global manufacturer of brand-
selling a range of clothing products but primarily denim ’The Levi’s brand epitomizes classic American style and effortless cool. Since the invention and patent of riveted
clothing by Jacob Davis and company founder Levi Strauss in 1873, Levi’s jeans have become the most recog-
jeans. The American apparel company owns a range of
nizable and imitated clothing in the world – capturing the imagination and loyalty of people for generations. And
subsidiary clothing brands, these include: Dockers, Signa- while the patent has long since expired, the Levi’s brand portfolio continues to evolve through a relentless pioneer-
ture, Denzin and the iconic Levi’s. ing and innovative spirit that is unparalleled in the apparel industry’’
5
Business Distribution Structure Customer Segmentation
L
evi Strauss’ apparel see’s transactions in more than 110 A typical Levi’s consumer may fall into two age categories with distinct characteristics:
operates manufacturing, distribution, and finishing facili- Age: 15-30 years Age: 30-50 years
ties in the Americas, Europe, and Asia/Pacific regions. The This age bracket is made up of both male and fe- Levi Strauss and Co targets both male and female
company favours a multifaceted retail structure, namely male, fashion conscious consumers with ranging consumers in this age bracket and have developed
using a wealth of department stores, company operated household income. The medium – high income a strong sense of loyalty from them. These customers
retailers including online retailing, as well as multi-brand consumers typically buy the Levi’s brand and low- are considered to be professionals and blue collar
speciality stores. er income buyers opting for the Signature brand. workers, who have been wearing Levi’s since their
The selling and distribution spans across the global plat- This target market holds values of self-expression, youth. Their values are a sense of loyalty, American
form with significant success shown in established markets authenticity, peer acceptance, trendsetter and ef- spirit, familiarity and self-expression.
7
Pinterest is visual social media site that allows users to ‘pin’ ideas and create mood boards. The highly influen-
tial social media outlet suggests that Levi is associated with the following attributes:
• Cowboys
• Musicians
Converse Diesel
Brand Analogies
9
Timeline
Part 2
Brand Audit
the brand. Over recent decades, Levi’s has allowed their prod-
ty over jumping onto the latest trends’ (Lee Yohn, 2015). The pre-
vailing assets that provide value to the Levi Strauss brand will now
be explored.
Brand Inventory
Brand Audit
17
Brand Equity Loyalty
C
ustomers of Levi’s have forever been loy- used to strengthen the seams. Although Levi’s
al to the brand because of their quality, are still considered to be of a very high quality,
originality and style. During WW2 American sol- modern technology has allowed their competi-
diers wore their Levi’s overseas and when they tors to overcome the patented rivet design, and
returned they were passed down through their equal Levi’s quality. A strong emphasis on quality
generations. Since 1996, the loyalty of recurring can be seen throughout their marketing efforts
customers for Levis has fallen; which is evident as well as “quality clothing, every garment guar-
in the drastically falling revenue figures. This is, anteed” being stitched on the leather patch on
in part, due to the rise of close competitors giv- all Levi products.
L
evi’s has been stitched into American cul- Not many brands have a history as long or event-
“original” in an attempt to develop loyalty from study into brand awareness found that Levi’s
ture for decades, becoming the staple cloth- ful as Levi’s and this story of their heritage is used
younger customers. One study found that re- was the most recalled brand when prompted
ing for America’s labourers by offering comfort throughout many of their marketing campaigns.
peat purchases were more common within the with the word “blue jeans”, a recall rate of 40%
and durability. Founded in California Levi’s may Whether it was the American soldiers wearing Le-
older population when compared to the youth (Wight, 2011). The results of this test suggest that
have spread globally but it has never forgotten vi’s during WW2 or the athletes clothing of the
(Wight, 2011). brand awareness for Levi’s remain considerably
its roots. Levi’s association with Americanism has 1980 and 1984 Olympics, Levi’s has been through
high. In addition to this another study by Dolbow
helped the brand flourish in its biggest market, a lot. It is this experience and longevity that gives
Quality (2000) asked school students to name the pair
America, where the consumer’s patriotism at- consumers the confidence to find value with Le-
Quality is an integral part of the Levi’s brand and of jeans they were most likely to purchase in the
tracts them to brands like Levi’s. vi’s products.
has been a primary driver for their sales since the near future. While Levi’s won the majority, the
Original Cool
company was founded. For decades Levi’s jeans result was only marginal (see table) with many
The original blue jeans were created by Levi The term cool has been associated with Levi’s
have been the leader in product performance, competitors close behind.
Strauss and his business partner Jacob Denis in since the 1950’s when jeans started becoming
this originally stemmed from the patented rivets
1872, 144 years later and Levi’s are still primarily fashionable and a symbol for rebellion. Howev-
known for their jeans. Being the founder of such er the rise in competition, developing fashion
a prominent piece of clothing gives the brand a trends and Levi’s complacency to develop their
special status in the eyes of the consumer and brand has meant that the term cool is no longer
automatically reassures buyers that they will re- linked with the brand as it used to be.
Table x - Shows what jeans brand students would most likely purchase next
ceive value.
19
Keller CBBE Pyramid Kapferer Brand Identity Prism
• Following • Quality
Feelings • Affordable
• Community • American Individualism
• Inclusive • Way of life
• Excitement
• Empathy
Imagery
• American • Workmen • Sustainable • Fashion • Trendsetter
• Trendsetting
• Musician • Rebellious •Standardised • Durable • Rebellious
• Multi generations
Performance • Independent
• Biker • Cowboy • Heritage • Reliable
21
Brand Extention
I
n order to grow and expand, Levi’s has leveraged 2016). Although Levi’s blue jeans account for roughly
its brand and attempted to introduce many new 85% of their revenue (Fairchild, 2014) they have many
products in accordance with a brand extension strat- examples of successful brand extension products i.e.
egy (Kotler, Keller, Manceau, & Hémonnet-Goujot, belts, t-shirts and wallets.
No go areas
Extention Areas
Distribution
Belts Caps
Inner Core
501 Original
Channels
511 Slimfit
T-Shirts Shoes Online Levi’s stores
569 Loose
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evi’s sell all of their products directly from their own Levi’s own a number of stores to sell only their prod-
517 Bootcut
website, this has obvious cost saving advantages ucts in throughout various cities. Although these stores
Suits Mobile
Wallets Jackets Phones but it also allows the brand to be displayed and mar-
do not bring in a substantial amount of revenue com-
keted in the exact way that Levi’s see fit for their cus-
pared with the third party retailers, they do allow Le-
tomers. Levi’s also sell their products via other online
vi’s complete control of their customers experience
retailers such as asos, this however limits the image
with their brand.
exhibited of the brand but does help maximise brand
increases.
23
Brand Issues
Brand extension failures Trends and Competition Athleisure Trend
P S A
roducts that were associated with the brand ince their peak in 1996 Levi’s has used their fast growing movement in the apparel in-
but have had a negative impact are: market dominance and household name dustry is the athleisure trend among the
to drive business. This lazy and one dimensional millennials generation. It is this age bracket that
Levi’s Tailored Classics - Formal, pretentious, ex-
pensive compared to Levi’s casual, unpreten- strategy has meant that innovative companies Levi’s are targeting and yet this segment are be-
tious and affordably iconic jeans. like Calvin Klein and Wranglers have chipped coming more health conscious and turning to
away at Levi’s market share. The premium jeans the more comfortable athletic clothing; breath-
Levis Mobile - Drastically different industry which
market has been growing rapidly since 2000 and able and stretchy fabrics. Euromonitor predict
confused the identity and positioning of the
Levi’s have been complacent in reacting, this that the denim jeans market growth will slow to
brand.
left the door open for Calvin Klein to capture the just 1.4% by 2017 whereas Barclays forecast that
market. Similarly Wranglers has taken control of the athletic apparel market will grow by $30 bil-
the discount jeans which leaves Levi’s awkward- lion (Hanlon, 2015) further diminishing the want
D
ue to a loss of focus and lack of innovation,
vi’s have attempted to target the 15-25 year old “There is no question, we got
market, their typical customers are actually 20-45
G
lastonbury is a performing arts festival that at- Predominantly, sponsorship works so long as the part-
tracts thousands of festival goers every year nership of the brands aligns with, or ‘fits’ one anoth-
to its famous green fields. The festival entices vibrant er’s brand attitudes, values and beliefs. Both Levi and
crowds and fashion forward trendsetters; quintessen- Glastonbury strive for sharing sustainable change in
tially the festival was voted the third trendiest brand the world (Levi Strauss, 2016), as well as attracting
in 2015 (Brown, 2015); the ideal target audience that compatible, like-minded target audiences (Jagre,
Levi require in order to enhance their brand image. Watson & Watson, 2001).
T I
he sponsorship will aim to increase initial brand n search for a new, edgy and effortless cool, it is rec-
awareness and loyalty as well as generating cus- ommended that Levi’s should be the official sponsor
tomer preference through means of high brand re- for the world renowned Glastonbury festival held in
call. Levi’s has precedent associativon with music; the UK. To enhance positive brand equity, Levi’s need
therefore the company will understand the famil- to encourage brand preference and recognition of
iar connotation with music ventures. Sponsoring an what it offers in comparison to other apparel brands.
event as vast as Glastonbury will provide Levi with an Through event sponsorship of Glastonbury, Levi’s will
opportunity to build its brand position through its as- to trial their brand through pop-up stores across the
sociation, especially in the UK, as well as expose the festival, offering exclusive custom Levi apparel in a
brand to the media platforms that cover the event. bid to win new consumers as well as attempting the
Research of event sponsorship ventures indicate retention of past and present consumers. A stage
that it alters brand image positively and while initially within the festival will be named as the ‘Levi Stage’ as
used in a rather cavalier manner by many sponsoring a form of brand marketing. Levi currently uses guer-
companies, is regarded today as a highly cost-effec- rilla marketing in the ‘Live in Levi’s’ campaign that is
tive method of marketing communication’. (Meen- both striking and imaginative; the quirky advertising
aghan, 1991). Essentially, event sponsorship buys two will be featured heavily across Glastonbury platforms,
things; exposure with the audience and the image namely posters, flyers and small billboards.
association.
The Recommendation
T
o increase Levi Strauss’ brand awareness amongst younger consumers through
forming Arts.
29
2 The Partnership Strategy The Proposition
U T
sing the associative network memory model he store soundtrack and the marketing cam-
(Keller, 1993), Levi, using brand knowledge, can paign soundtracks will be available as a feature
build Levi’s customer based brand equity through the on the Spotify ‘genre’ feed. A Levi content section
association with Spotify. In 2014, the team behind Le- will be available alongside the pop, rock jazz gen-
vi’s store soundtrack stated that ‘music is an extension res, to name a few, to entice the curiosity of Spotify
of the brand’, and music is a marketing tool which users. Spotify was a new entry in the top 20 trendiest
can affect the consumer brand experience (Busnyuk, brands of 2015; so the association of Levi with Spotify
2014). The ultimate goal is to reinforce positive brand will have impact on the brand equity. Furthermore,
awareness in association with Spotify, as it Is evident Spotify’s platform allows content to be easily spread
through past ventures that Levi’s high regard music by word-of-mouth through Facebook and Spotify’s
The Recommendation as a part of their brand. social feed. If Levi was to be advertised via Spotify’s
To enhance the Levi Strauss brand image and attract a younger customer base through a partnership with Facebook, this would equate to millions of viewers
2014).
What is Spotify?
T
he digital music service has created an online to a pool of worldwide users who no doubt use Spot-
platform that has given listeners access to a vast ify on a daily basis.
music catalogue. Spotify is a global success, reach- Using the collaboration with Coca- Cola as an exam-
ing more than 100 million active users including 15 mil- ple Spotify provides the technology and music need-
Well-known brands such as Coca-Cola and Face- for Levi’s; Spotify can help boost the online market-
book have successfully partnered with Spotify, high- ing for Levi’s and help draw in more customers (Dai
lighting the integrity of the company and the benefits & Pietrobon, 2012). Spotify has gained a tremendous
that Spotify can contribute to brand equity. brand equity from their current co-branding partner-
T
he benefits Levi would obtain from a partnership
31
3 To rejuvenate the ‘cool’ image of the Levi Strauss brand,
The Recommendation
Why Ray-Ban? Benefits
R T
ay-Ban is being recommended as it is strongly he Levi’s brand would benefit from this acquisition
associated with being a cool brand, so much by adopting the cool associations with Ray-Ban
this report proposes the acquisition of the brand Ray-
so that it was voted the 2nd “coolest” brand in 2015 while keeping the ‘Original American’ image. This
Ban.
(CoolBrands, 2015). This recommendation looks to re- would allow Levi Strauss to develop a brand portfolio
juvenate Levi’s lost ‘cool’ image and therefore must which strongly reinforces the company’s values while
What are Mergers and Acquisitions (M&A)?
identify a brand that is deemed ‘cool’ but also holds branching out into a new but similar market. This ac-
M&A in general is a term used for the amalgamation of
similar values. quisition would go on to rejuvenate the diminished
two or more companies. The duration of this report will
In a similar way to Levi’s, Ray-Ban holds a close as- sense of ‘cool’ previously associated with Levi’s. Le-
focus on one specific type of acquisition being (A + B =
sociation the phrase ‘Original American’, this arose vi’s would therefore be able to leverage secondary
A1 + B).
because Ray-Ban founders, Bauch & Lomb, invented brand associations gained form Ray-Ban in order to
This type of M&A depicts the controlling parent compa-
the first aviator sunglasses for the US Airforce in 1929 increase its own brand equity (Campbell, 2002).
ny represented by A (which is able to make strategic
to help combat glare. Furthermore Ray-Ban also cap- Acquisition strategy
controlling action) and the purchased brand being B
italise on their heritage in a similar way to Levi’s to Firstly, once the target brand (Ray-Ban) has been
(Ray, 2010). For this report A will represent Levi Strauss
drive sales and develop as a brand. identified a brand team will be created in order to
and B representing Ray-Ban.
Although there is no overlap in product offerings be- conduct marketing due diligence. The primary goal
tween Levi’s and Ray-Ban, Ray-Ban have recently of this team will be to observe the transaction through
Type of Acquisition
launched a new line of sunglasses made from real the customers ‘eyes’. This is done in order to sustain
According to Ray (2010) there are three primary motives
denim. This link could be capitalised on too assert a loyal customers once the acquisition is completed,
for pursuing a brand acquisition.
connection while keeping their strong brand individ- making sure that the various customer touchpoints
• Growth strategy
uality. Furthermore Ray-Ban, like Levi’s, is a large ad- remain constant (Kumar & Hansted Blomqvist, 2004).
• Defensive strategy
vocate for guerrilla marketing as mentioned by Levin- The next step would be determining the method at
• Financial opportunity
son, Meyerson, and Scarborough (2008), evidence of which brand equity would be transferred from the
This recommendation will be based on pursuing the
this can be seen in their Never Hide campaign. acquired brand to the parent company, in essence
growth strategy theory as Levi Strauss and Co is currently
33
the goodwill. This report then proposes as mentioned
sociation of Levi’s.
Conclusion
T
his report has identified the need for the Levi’s
35
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Appendix
Porters 5 Forces Analysis
SWOT Analysis
Power of Suppliers - Low
Switching Costs Low Strengths • Established brand portfolio encourages repeat purchases
• Global footprint
Strength of Distribution Channel Low
• Multiple distribution channels increase market penetration oppor-
Supplier Competition Low tunities.
Differentiation of Inputs Low
Weaknesses • Dependence on few customers for substantial portion of revenues
Buyer Dependence Low • Reliance on contract manufacturers for product procurement,
manufacturing and finishing.
Threat of Potential Entrants - High
Opportunities • Increasing online retail spending
Capital Availability High • Growing US apparel market
Access to Technology High
Economies of Scale High Threats • Increasing competition
• Laws and regulations
Access to Distribution High • Increasing labour costs
Barriers to Entry High
Government Policy High
Industry Profitability High