Levi’s case – marketing test
Until the mid-1990s LEVI’s had benefitted from a growth in sales and in 1996 a record sales of $7.1 billion was reached.
The decline in sales was due to a change in culture. It roots back to 1992 when rap music came up as a new culture and “baggy trousers” were starting to become more popular. LEVI’s simply missed the opportunity to get into this business and stay popular among young customers. Competitors such as Gap, Diesel and Wrangler on the other hand managed to connect with young people very well.
The 501 five-pocket Jeans by Levi’s had been launched in the mid-1980s with a large TV campaign. This was very successful and sales began a twelve year rise for LEVI’s. But in the 1990s this cash cow (501 Jeans) was milked out. It was not considered cool anymore and young people preferred other brands.
The number of US teenagers who considered Levi’s to be cool dropped from 21% in 1994 to only 7% in 1998. Since Levi’s focuses on young people aged 15 to 25 years this had a major impact on sales. Levi’s simply didn’t manage to keep young people thinking that it was a cool brand. While it was still fairly expensive the brand was considered being uncool and something that is “for the older generation” by teenagers.
So summing up the major problems were that Levi’s…
* … didn’t manage to stay responsive to consumer changes (rap culture) * … didn’t manage to connect with young people any more * … relied on the cash cow 501-Jeans for too long
* … was still an expensive brand but people didn’t want to spend the money since the brand wasn’t considered cool any more
Advantages and disadvantages of using a different brand name for re-launch
Another way to restore Levi’s brand positioning could have been re-naming the brand of Levi’s. There are some advantages and disadvantages in re-naming a famous brand like Levi’s:
* People who have a negative image of Levi’s might buy the ‘new’ brand because it seems interesting to them. There is a chance of gaining new customers who are strongly unavailable for Levi’s right now. * Levi’s would have the opportunity to start all over again without people having prejudices about the brand. This might give Levi’s the chance to make some changes in their focus groups or the attitude which they want to reflect.
| * Loyal Levi’s users will not recognize the ‘new’ brand name and even if they do they might think it’s not the same any more. * A new brand name also means that people are not aware of the name. Even though Levi’s might not have been the most popular brand at some point people were aware of the brand. This is very important to get potential customers to try the product.
Would I recommend them to do it?
Personally I wouldn’t recommend Levi’s to re-launch their brand using a different name. I think that even though it might not be the most fashionable brand people are aware of the brand and that is a very important factor. Also I do not think that the number of people who would never buy Levi’s is large enough. It may not be considered cool by teenagers but that is something the company can work on without changing the name of the brand. Fashion is a fast-changing market and just because something isn’t considered fashionable today doesn’t mean that it won’t be in one or two years from now. So my answer to this question is definitely no. Maybe there is a need for some changes but it certainly shouldn’t be the name that should be changed.
Levi’s has in the last years found some ways of selling their products without writing a big sign showing that it is Levi’s.
For example the Signature range of Jeans which was sold without the red Levi’s trademark on them.
Another example is the shop called Clinch! In London. This retail shop sells Levis Jeans among other products like Casio watches for example. It focuses on...
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