Levi's marketing strategy in relation to Type I Jeans model.

Topics: Marketing, Levi Strauss & Co., Pricing Pages: 22 (3585 words) Published: March 19, 2004
The Marketing Plan.

1. Executive summary.

2. SWOT analysis.

3. Objectives and issues.

4. Marketing strategy.

5. Marketing mix - 4 P's - product, price, place, and promotion.

6. Action programmes.

7. Appendices.

1. Executive summary.

1. Analyse Levi's targeting of the jeans market with respect to:

- product

- price

- place

- promotion

2. Using independent quantitative survey to analyse and compare the validity of Levi's marketing strategy in respect of market segmentation and promotion appeal.

3. Analyse and comment on the strategy of Levi's and its approach in maintaining leadership in the jeans market.

2. SWOT analysis.

INTERNAL - Strengths

Position: Levi's has a market leading position, Levi's is the most named brand of jeans bought or received in the last 2 years - 34% of men and 24% of women in a purchase survey.

Brand Image: Huge promotion (August 2000) for 'Engineered' jeans (LEJ) positioned denim as 'cool' once again.

Brand Image: Levi's pioneer position generates trust and loyalty through establishment

Distribution Control: EU law(*) prevents the import of cheaper goods from 'gray' markets outside the EU, without the 'brand' owners' permission. Therefore retailers such as Tesco can not sell imported Levi's at cheaper prices.

Innovative Ability: Levi's definite talent to subtly change styles and create unique selling points parallels the spectrum of the segmented market (see *1)

Levi's in the midst of a tough market: Internal productivity improvements are required in tough markets through well targeted investment in better merchandising systems, stock control and forecasting systems. Levi's supply chain developments have replicated these requirements. As well as improving controls Levi's has also shortened the time between stock ordering and supply

EXTERNAL - Opportunities

Segmentation: The market has become segmented into a spectrum (*1) of looks, fits, cuts and finishes. This gives Levi's the opportunity to fully capitalize upon their strong NPD programmes. Recent conquests include Levi's Engineered jeans.

Translated Desire: Youth market 'grown up' wearing brands have translated their desire toward stylish fashion brands that command premium prices.

Strong Consumer Confidence: Expenditure growth faster then Personal Disposable Income growth (PDI) and individual's propensity to save decreased.

Segmentation & Innovation: Levi's recognized talent to innovate and variant style (NPD) satisfies different customer groups and needs.

INTERNAL - Weaknesses

Concentrated Product Portfolio: Lack of diversification and placement of products in the segmented markets of the trouser market once dominated by denim.

Concentrated Product Portfolio: Denim jeans are a winter range Levi's under-developed summer range leads to reliance on cold summers

Reducing market share: Between 1998 and 2000 Levi's (inl. Wrangler and Lee) lost market share whilst other designer (Diesel, CK) and premium brands gained market share

EXTERNAL - Threats

Diversification: Trend to diversify into more type of trouser, increasing variation and quantity of substitutes (Chinos, khakis, track pants, combat trousers, moleskins and cord jeans) segments the mass market displacing spending from classic denim and reducing economies of scale.

Challenges to Distribution Control: Threat of EU law (see*) being reversed as retailers such as Tesco selling Levi's at cheaper prices.

Diverted Spending: Increase in PDI directed toward the leisure industry, Hi tech retail goods (Television, mobiles etc.) and commitments to monthly payment schemes have diverted spending away from clothes. (Retail spending only represents 5.7% of PDI.)

Market Collapse: Between 1996 and 2001 jeans market fell by 19% in real terms. Lower demand = lower prices

Other Retailers: Explosion of factory outlets reducing the number of specialist jeans outlets. Supermarkets are expanding their...
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