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Compulsory Assignment

Course: Strategic Marketing


Module: International Marketing and Sales


CASE:
Levi Strauss & Co.















Introduction:
GWG was Canadian first jeans brand and it was found 1911. He was competing with Levis jeans for role of main producer of
jeans until 1961 when Levis bought 75 per cent of GWG. Even then, Levis decided to leave GWG to work autonomously.
In 1972 Levi Strauss & Co. bought rest of the company but they didnt merge them.
In 1992 GWG drop the sell. Then they presented new line by GWG, and it was named Company. The plan was to focus
Company to produce high-quality and just for men market jeans. Eventually sales of Company jeans declined.
Levi Strauss & Co. was founded in 1853. And now they are largest jeans manufacturers in the world.
At beginning of 21st century they faced with problem. They had current leading brands (Levis and Dockers) with big
market share and profit and there is brand GWG with low market share and marginally profit.
Main question is what should they do with GWG?




1. QUESTION:
Product portfolio strategy using BCG matrix
BCG matrix was suggested by Boston Consultation Group as tool in evaluating products (in this case brands) based on their
market share and they growth.
Horizontal review of BCG represent market share of certain product and its divided on high and low market share.
Vertical review of BCG is also divided on high and low and but it represent market growth of certain product.
According to BCG matrix we have 4 categories of watched products:
STARS- represent products with high market share and also with high growth rate.
CASH COWS represent products with high market share but their growth rate is low.
DOGS they have low market share and low growth rate. Most of product which belongs to this specific group is determent
to be liquidated.
QUESTION MARKS for this group is specific to have low market share but their growth rate is low. Some of product in this
group are or divested or prioritized.
We will take main brands of Levis and determent their position according to BCG matrix.
First we will make list of main brands which we are going to analyze with BCG matrix:
GWG
Levis
Dockers
Denizen
Levis 501
As we saw from case, GWG was, after long history, facing with big issues as low market share and low growth rate.
So they are in DOG category by BCG matrix. On their hands was long history. Even they had all predispositions to be
divested, Levis decided to give one more shot with GWG but they didnt succeed and GWG was closed down in 2004.
Under question marks there are Levis jeans, because in recent years they are not target for young peoples, so they lose a
lot of market share and related to that they lose good part of profit they was making for Levi Strauss & Co.
Cash cows in this case would be Dockers and Levis 501
Because they have big market shares in jeans industry.
Denizen is new brand. Before it was named Levis signature.
It was set as fighter brand. Target for Denizen are young people between 18-28 years.


Denizen is one year old brand focused on young peoples, with a lot of marketing strategies planed to be used for
expansion of brand. They are focused on Asia, mostly targeting middle class peoples who are seeking for high quality jeans
with affordable price.
Considering all this we can say that Denizen is still in group called QUESTION MARKS, mostly because they are still in
expansion and brand itself is old just one year.

2) Penetration and existing products pricing strategy
Market penetration strategy is oriented to conquer the existing market with an existing product. Penetration is focused on
increasing market share in existing operations which leads to the changes in the competitive position. This strategy is
commonly used in the following situations:
- When the current market is not saturated with an existing products
- When the rate of use of products from existing customers could be increased
- When the market shares of major competitors decreases and total sales increases, etc.


Pricing
There are three main approaches that business takes to set a price:
- Cost-oriented Pricing ( full cost pricing, direct cost pricing )
- Competitor-oriented Pricing (going-rate pricing, competitive bidding )
- Marketing-oriented Pricing
(Rapid skimming strategy, slow skimming strategy, rapid penetration, slow penetration)
The choice of the right strategy significantly affects the price of product or service sales in the market. In order to form and
align prices to the market it is necessary to monitor and know the market and its law, constantly, to determine the price
elasticity and ultimate the limits to which the price can be raised or lowered without product jeopardizing.
Pricing is important part of marketing mix, (as opposed to three left which can represent a variable costs) it is the only one
that can create the business turnover.
There are four strategic objectives that are relevant to pricing of the existing products:
- Build objective (lower price of the product compared to the competition)
- Hold objective (same prices compared to competition. In case where competition makes changes with price, price of
our product changes as well. )
- Harvest objective (even if sales decreases, profit margin maintenance)
- Reposition objective (price changing)

Levi Strauss & Co. lasts since 1873, the year when they created and patented the worlds first blue jeans. And despite the
fact that that patent lasts long, their devotion to innovation continues. Throughout their long history they have inspired
change in the marketplace, the workplace and the world. Innovative, modern, wanted price setter. At the very beginning,
they had no competition; they were the only jeans manufacturer at that time. As time went on, there were other companies
that appeared with the same product; they had to struggle for market share. How did they achieve the goal? They advertised
their product in a good way; they had a good idea-cooperation with celebrities. And then the demand increased. Then they
expanded the choice of jeans, they had many jeans styles. They used rapid penetration strategy which means that they had
high promotional expenditure and inexpensive product.
List retail prices ranged from $42.99 for Levis Orange Tab at Zellers to $69.99 for the classic fits such as 501 at the
Bay. The average wholesale price of Levis was $28, weighted between Red Tab and Orange Tab. However, due to
aggressive off-pricing by retailers, Orange Tab jeans were often available for $29.99 and Levis Red Tab for $49.99
with new fits and styles being constantly updated and brought to market. The differences between Red Tab and Orange
Tab were design, color, etc.
Wrangler and Rustler were the main competitors of Levis.
Wranglers product price - $29.99
Rustlers product price - $19.99



As well, there were Premium Brands and they offered high price and high quality of the product. They had strong
advertisement and promotion; domination in market was their goal and their mission. For example, Tommy Hilfiger with the
product price of 79.99 dollars per unit.

If we take into consideration the objectives that are relevant to pricing of the existing products, Reposition
Objective for Levis could be helpful because price changing is the tool that Levis needs.

3. Brand positioning and being first strategy.
A strong brand positioning is marketing strategy which is describing us the brand details, the uniqueness of the brand and
how is it similar to the competitive brands and the reasons for buying that specific brand?
For good brand positioning we have to develop and increase required knowledge and perception of the customers. That
knowledge is making the difference between your and competitive brand.
If we want to enter in the mind of our customers Levis brand has to posses the mix of these brand elements: name, image,
service, design, guarantees, packaging and delivery. Strong brand positioning on the market has to clarify which are the
factors who will present him the best. These are clarity, consistency, credibility and competitiveness. The best option is when
these factors are equally represented.
Before explaining which are the most important elements for brand positioning, we have to take into a consideration that no
matter how strong our brand position is, acceptability of our brand differs across countries. So, what is what is premium in
USA, maybe it will not be in Europe.
These are key Levi Strauss brands: Levis, Dockers, Signature, Denizen.
Brand domain is describing us where our brand are competes in the marketplace. We cannot include neither one of these for
brands in some specific market, which can be explained by the fact that these brand were always presented like product for
all classes of people. But! Levis is always thinking about the culture of the country they are entering. In some cultures, jeans
are presented as high fashion, in others as every day fashion. Here are some classes which Levis is aiming on the market:
Upper class, upper middle class, middle middle and lower middle class.
Brand heritage can be translated as brand biography, how it developed, in which kind of culture, successes and failures. Levi
Strauss has commendable heritage, they have history to talk about. They have the right to boost about being first on the
blue jeans market, and how they survived on the market using innovation, even though their patent expired. Other three
brands maybe do not posses such heritage as Levi Strauss, but customers are always connecting them with Levis, which is
giving them a certain flavor.
Brand values are the core characteristic of the brand, something which is giving brand competitive advantage. Levis is
company which pays attention about the world around us. They are listening for the desires of the customers, showing
emphatic behavior. They were always authentic and innovative, always showing integrity and courage.

Brand assets are something which makes the difference between you and competitive product. Levis Strauss is probably one
of most recognized cloth name in the world. So we can say that there are using their name and their logo and symbols: two
horse brand, red tab, arched stitching on the pocket.
Brand personality-the character of the product described like people, animals and objects. Questioner downloaded
from:http://answers.yahoo.com/question/index?qid=20080506082636AABsrae
If Levis was a car, what type of car would it
be?
If Levis was a person, what type of person would it
be?(or Who?)
If Levis was an animal, what type of animal would it
be?
If Levis was a drink, what type of drink would it
be?
Car: a shiny, brand new, black Ford truck

Person: cowboy or Brad Pitt... handsome, muscular, fit, not very talkative...

Animal: a sleek, well-groomed horse

Drink: Jack Daniels

We can also mention that it is genuine, original, authentic and real.


Brand reflection-how the customers perceives themselves when they buy/wear the certain product. If we talk about Levis it
is certainly sentence being cool.
As Levis was first on the market, presenting blue jeans, they had and still have privileges and as pioneer brand. Levis was in
a position to enter in customers mind and to stay in them. But being strategy did not provide Levis success. Their sustained
market effort provided them place in to crowded jeans market. They had to be innovative to resist competition attacks. Levis
survived because of their vision, effort to expand and creativity.

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