[BRAND AUDIT]

LEVIS STRAUSS & CO. Ltd.

The mystical value of commodities does not originate in their values

-KARL MARX 1.

INTRODUCTION: BRAND AUDIT: Brand audit is

concerned with the behavioral & psychological nature of brand equity, not the financial dimension, and it will be discussed in terms of the strength of a brands equity and its nature. In the management of a brand, the building, strengthening, and nurturing of its equity will lead to a more positive contribution to market value for the company. But from a strategic brand management standpoint, one is concerned with measures that will help better manage that equity. If successful, the financial value of a brand name will take care of itself. The real benefit of conducting a brand audit is that it helps provide a look at the current state of knowledge about a brands equity as well as providing a fresh understanding of the brand. It will also provide a better understanding of what role advertising and other marketing communication has played and can play in maintaining a brand. But, the most important question which comes to our mind is what should be reviewed? In a word, everything. At least everything that is reasonably available and likely to be relevant to the brand. Obviously, this will include any recent research that has been conducted for the brand, but also studies of general market trends and other information about the category, distribution channels, competitive activity etc. 2. BRAND AUDIT: LEVI STRAUSS & CO. LIMITED: The brand which we have taken for audit is Levis Strauss. It is one of the premium players in the apparel segment operating, globally. The point which is intriguing to a researcher [BRAND AUDIT]

LEVIS STRAUSS & CO. Ltd.

is how Levis has maintained its equity worldwide. A mix of standardization & localization in Levis products has enabled the company to become a renowned brand worldwide.

2.1. LEVI STRAUSS & CO.: A BRIEF HISTORY: Levi Strauss & Co. (LS&CO) is a privately held clothing company known worldwide for its
Levi's brand of denim jeans. It was founded in 1853 when Levi Strauss came from Buttenheim, Franconia, (Kingdom of Bavaria) to San Francisco, California to open a west coast branch of his brothers' New York dry goods business. Although the company began producing denim overalls in the 1870s, modern jeans were not produced until the 1920s. The company briefly experimented (in the 1970s) with employee ownership and a public stock listing, but remains owned and controlled by descendants and relatives of Levi Strauss' four nephews. Modern jeans began to appear in the 1920s, but sales were largely confined to the working people of the western United States, such as cowboys, lumberjacks, and railroad workers. Levis jeans apparently were first introduced to the East during the craze of the 1930s, when vacationing Easterners returned home with tales (and usually examples) of the hard-wearing pants with rivets. Another boost came in World War II, when blue jeans were declared an essential commodity and were sold only to people engaged in defense work. From a company with fifteen salespeople, two plants, and almost no business east of the Mississippi in 1946, the organization grew in thirty years to include a sales force of more than 22,000, with 50 plants and offices in 35 countries. In the 1950s and 1960s, Levi's jeans became popular among a wide range of

youth subcultures. Levi's popular shrink-to-fit 501s were sold in a unique sizing arrangement; the indicated size was related to the size of the jeans prior to shrinking, and the shrinkage was substantial. The company still produces these UN shrunk, uniquely sized jeans, and they still sell very well although popular remains the original design.

2.2. THE LEVIS BRAND: BRAND FACTSHEET:

[BRAND AUDIT]
LEVIS STRAUSS & CO. Ltd.

On May 20, 1873 the U.S. Patent and Trademark Office grants Levi Strauss & Jacob Davis a patent on the process of riveting pants. This heralds the invention of the blue jean. Levi Strauss was ahead of his time creating famous branding elements on his jeans that Are still in use, and often copied, today. In 1886 the Two Horse brand leather patch, a symbol of the pants' Strength is first used on his jeans. The Levi's brand eye-catching Red Tab Device was added to the jeans in 1936. Placed onto the right back pocket with the word "Levis" stitched in White capital letters, it differentiates Levi's jeans from competitors. Levis jeans famous arched back pocket stitching is called the accurate. This iconic stitching can be seen on back pockets throughout the world. Today, Levis jeans are sold in more than 110 countries worldwide. Levis Jeans are single mostoften copied apparel item in the history of apparel. The Levis brand several collections around the world to meet the needs, and wants, of denimwearers everywhere. These include: Levis Vintage Clothing Inspired directly from the Levis brand archives and Available worldwide. Levis Capital E The most premium, finely crafted, luxurious expression of

The Levis brand is sold in select Levis Stores and premium stores in the United States. Levis RED A sexy and modern expression of the Levis brand is sold in Chains, department stores and Levis Stores in the United States and Levis Stores and specialty retailers in Europe. [BRAND AUDIT]
LEVIS STRAUSS & CO. Ltd.

Levis Blue A European collection of jeans for men and women in

premium denim finishes that are appropriate for day or night. Levis Lady Style A range of premium jeans for women available across Asia, designed for more sophisticated wearing occasions. Levis Red Tab The authentic core of the Levis brand offers a wide range of Fits and finishes in true Levis style. Table 1.0 depicts the products offering the brand represents, Owner Corporation and other related details. [BRAND AUDIT]
LEVIS STRAUSS & CO. Ltd.

Table 1. LEVI STRAUSS (GENERAL INFORMATION) FOUNDED SAN FRANSISCO,CALIFORNIA,1853 FOUNDER LEVI STRAUSS HEADQUATERS SAN FRANSISCO,CALIFORNIA,USA AREA SERVED WORLDWIDE KEY PEOPLE T.GARY ROGERS(BOARD CHAIRMAN),JOHN ANDERSON (CEO) INDUSTRY APPAREL PRODUCTS JEANS(MALE & FEMALE WEAR) OWNERS DESCENDENTS OF LEVI STRAUSS EMPLOYEES 10,000+ DIVISIONS LEVIS,DOCKERS,SIGNATURE WEBSITE WWW.LEVIS.COM
DATA SOURCE: WWW.LEVIS.COM

[BRAND AUDIT]

LEVIS STRAUSS & CO. Ltd.

[BRAND AUDIT]

LEVIS STRAUSS & CO. Ltd.

Along with the general information about the brand and the owner company details, it is very important to realize the brand portfolio & product portfolio of the company as it is very important in defining the purview of the audit report. Table 2.0 describes the levi strauss partial product & brand portfolio grid.

Table 2.0. Levi-Strauss partial product & brand portfolio grid 2.3. VISION STATEMENT : LEVIS STRAUSS: Four core
values are at the heart of Levi Strauss & Co.: Empathy, Originality, Integrity and

DENIM PANTS NON-DENIM PANTSSHIRTS JACKETS OTHER Levis Dockers Dockers Levis Strauss Signature Levis 501 Levis Strauss Signature Levis Strauss Signature Levis Engineered Jeans Other
B PRODUCT PORTFOLIO R A ND P ORT F OL [BRAND AUDIT]
LEVIS STRAUSS & CO. Ltd.

Courage. These four values are linked. As we look at our history, we see a story of how our core values work together and are the source of our success. EMPATHY WALKING IN OTHER PEOPLES SHOES ORIGINALITY- BEING AUTHENTIC & INNOVATIVE INTEGRITY- DOING THE RIGHT THING COURAGE STANDING UP FOR WHAT LEVIS BELIEVES IN People love our clothes and trust our company.

We will market and distribute the most appealing and widely worn apparel brands. Our products define quality, style and function. We will clothe the world.

2.4. MISSION STATEMENT: LEVI STRAUSS & CO. Ltd.:

To sustain responsible commercial success as a global marketing company of branded apparel. They must balance goals of superior profitability and return on investment, leadership market positions and superior products and services. They will conduct their business ethically and demonstrate leadership in satisfying their responsibilities to their communities and to the society. Their work environment will be safe and productive and characterized by fair treatment, teamwork, open communications, personal accountability and opportunities for growth and development. 1. EXTERNAL MARKETING ENVIRONMENT: External marketing environment plays a very important role in success/failure of a brand. This also [BRAND AUDIT]
LEVIS STRAUSS & CO. Ltd.

depends on how well a brand manager monitors the changes in the external marketing environment surrounding the brand. To be precise external marketing environment comprises of demographic, social, economic, political and legal, & competitive factors which directly influence the brands performance. 3.1 THE DEMOGRAPHIC ENVIRONMENT: Theres little excuse for being surprised by demographic developments. The main demographic force that marketers monitor is population, because people make up markets. Marketers are keenly interested in the size and growth rate of population in cities, regions, and country; age distribution and ethnic mix; educational levels; household patterns; regional characteristics and movements.

The company makes clothes foe men, women, children & teens. So everyone is a potential customer for LEVIS. LEVIS generally appeals to more mature generations not necessarily looking to make fashion statement. LEVIS makes an effort to appeal to all customers in one way or another, which has been a key to their success over the years. Assuming that the world population is growing LEVIS can infer that the market for jeans is also growing. However this growth is characterized by slow rate of growth. Graph 1. Describes the rate of growth of the target market

GRAPH 1.0. TARGET MARKET OF LEVI STRAUSS 3.2. THE SOCIAL ENVIRONMENT: Society shapes the beliefs,
values, and norms that largely define consumer tastes and preferences. People absorb, almost unconsciously, a world view that defines their relationships to themselves, to others, to organizations, to society, to nature.
DATA SOURCE: WWW.LEVIS.COM

[BRAND AUDIT]

LEVIS STRAUSS & CO. Ltd.

India is a land of diversities, which is reflected not just in the topography but also in the languages, cultures as well as religious beliefs. A survey conducted by research international in 2008, indicates significant regional differences in values, attitudes, and preferences of customers and classified Indian states into five clusters. Table 3.0 describes the classification of customers.

Table 3.0 Classification of customers LIBERATED YOUNGSTERS (13%) MODERN CUSTOMERS (18% BEHIND THE TIMES (20%) REBELLIOUS YOUNGSTERS (22%) ORTHODOX CUSTOMERSS

(27%)
The study further indicates that there is a progression from traditionalism and selfsacrifice to westernization and individualism as one move from the lower socioeconomic classes to the higher socio-economic classes. [BRAND AUDIT]
LEVIS STRAUSS & CO. Ltd.

3.3. THE POLITICAL-LEGAL ENVIRONMENT: The political &

legal environment consists of laws, government agencies, and pressure groups that influence and limit various organizations and individuals. Sometimes these laws also create new opportunities for business. Two major trends in the political & legal environment are the increase in business legislation and the growth of the special interest groups. 3.4. THE TECHNOLOGICAL ENVIRONMENT: One of the most dramatic forces shaping a brands life is technology. Marketers should monitor the following four trends in technology: Accelerating pace of change Unlimited opportunities for innovation Focus on the research & development Increased regulation of technological change Technology is changing product, price, place, promotion. Thus, for instance products such as, jeans in USA have a wider fifth pocket to hold a pager device; transfer pants have contract stitching and side pockets big enough to hold a CD player. Promotion is facing new approaches through internet advertising. Distribution is enhancing using Electronic Data Interchange (EDI). Levis value delivery network that connects itself with its suppliers and retailers allow it to order more fabric for the next day out of its purchases of its major retailers. Communication and coordination activities, and therefore commercial relationships with the licensees, improve as a result of better technologies.

Global business requires decentralizing some of the activities to respond to the local needs and to centralize others so as to cope with global scope efficiency. This can be reflected on the organizational structure of the company. In the 1960s, LEVIS jeans were a part of the unifoffil associated with the sixties generation. Now the sixties generation has grown up. As a result the [BRAND AUDIT]
LEVIS STRAUSS & CO. Ltd.

LEVIS LOOK has come to be identified with the establishment in the U.S, as jeans today are the clothing of the middle aged, parents. 4.0 SITUATION ANALYSIS: Levi Strauss & co. is approaching to the saturation of the jeans market. The fast changes in the consumer tastes, competition in both the lower end and higher end brands, fast development in the modern distribution and sales technology has brought about a continuing lose of the market share. A new series of engineered jeans has been developed and launched as a part of a program intending to meet the needs of their major target market, in order to regain their lost market share and to maintain their position in the industry. Their expertise in jeans and casual dress industry will be fully exploited at a world basis. This year, they intend to strengthen the promotion of this new brand. Certain resources will be allocated to their existing brands, to maintain market share of 501. Communication with customers is also important for LEVIS. It is very important to maintain good relations with them, and track the change in their taste and need of their main target market. Information system will also be improved to enhance their ability to adapt the market change.

4.1. FIVE FORCES ANALYSIS: (COMPETITOR ANALYSIS): LEVIS

competitors include Bugle Boy, Calvin Klein, and Fruit of the Loom, Guess, J.C Penny,

Nike, J.Crew, Osh Kosh BGosh, Oxford Industries, Polo, GAP, Tommy Hilfiger, VF, & Warnaco Group. Recently the company (in terms of sales) has been victimized by increasing competition from the GAPs private label jeans, resurgent LEE & WRANGLER brands and other trendier brands. These brands offer the same basic product: jeans for a cheaper price. For success, LEVIS needs consumers to recognize the higher quality and better reputation that is associated with their product as compared to that of these new competitors. [BRAND AUDIT]
LEVIS STRAUSS & CO. Ltd. POWER OF SUPPLIERS:

(LOW) COMPETITION STRUCTURE & CONCENTRATION LOW SWITCH OUT COSTS LOW PRODUCT SPECIFICATIONS LOW DEPENDENCE OF BUYERS LOW FORWARD INTEGRATION LOW THREAT OF POTENTIAL ENTRANTS : (HIGH) Entrants access to capital HIGH Entrants access to technology HIGH Entrants access to materials HIGH Entrants access to distribution channels HIGH Competition industry HIGH Economies of scale HIGH Govt. encouraging new entrants HIGH
[BRAND AUDIT]
LEVIS STRAUSS & CO. Ltd.

POWER OF BUYERS: (LOW) Amount of purchases low Product features low Product sensibility low

Purchase power low Product importance to the buyer low THREATS FROM SUBSTITUTES: (HIGH) Substitutes from brand HIGH Substitutes from formal dress & sports suits HIGH INTENSITY OF INDUSTRY RIVALRY: (HIGH) Competitors number HIGH
[BRAND AUDIT]
LEVIS STRAUSS & CO. Ltd.

Market growth HIGH Exit barriers HIGH Production capacity HIGH

From the analysis it is shown that, in general, the influence of the five competitive forces is for LEVIS. Therefore, the generic strategy to be chosen is differentiation. In addition, and according to McDonalds, if the company chooses differentiation with relative low costs it will be able to reap outstanding success.

4.2 CONSUMER GOODS CLASSIFICATION: LEVI STRAUSS & CO. Ltd

We classify the vast array of goods consumers buy on the basis of shopping habits. We distinguish among convenience, shopping, specialty, and unsought goods. As, Levi Strauss deals with apparel/clothing it can be categorized as shopping good as consumer characteristically compares on such bases as suitability, quality, price, and style.

4.3. PRODUCT LIFE CYCLE: LEVI STRAUSS & CO. LTD

[BRAND AUDIT]
LEVIS STRAUSS & CO. Ltd.

The previous graphic shows that LEVI Strauss is in the decline phase of the product life cycle curve. In order to overcome this problem, a further analysis is required.

MARKET PENETRATION PRODUCT DEVELOPMENT MARKET DEVELOPMENT DIVEDRASTIAF ISCOAUTRICOEN:

WWW.LEVIS.COM

PRODUCT M PRESENT NEW A R K E T

[BRAND AUDIT]
LEVIS STRAUSS & CO. Ltd.

From the ANSOFFS MATRIX analysis, it is shown that in order to capture the sales objective LEVIS must choose the following growth strategies: (1) Introducing existing products in new markets: in order to extend the product life cycles of different product lines i.e. Russia, and central Europe. In order to do that they have to identify the potential users and to seek correct distribution channels in that location in accordance with other variables of the marketing mix.
(2)Developing

such as development of big pockets for the CD players or the creation of new engineered jeans. McKinseys matrix suggests that LEVIS having relative medium market attractiveness (big potential market but at the same time several competitors and low entry barriers) and high relative business strengths based on the LEVIS brand and expertise, should invest and grow. According to M.McDonald, first, LEVIS has to identify and exploit growth segments as it is shown with Dockers. Second, it has to emphasize product quality in order to avoid commodity competition. And finally, it has to systematically improve productivity and profitability by situating the production facilities in the most cost efficient place. Invest heavily in the most attractive markets. [BRAND AUDIT]
LEVIS STRAUSS & CO.

new products for the existing markets:

Ltd.

5.0 PLACE: LEVI STRAUSS & CO. Ltd: Successful value

creation needs successful value delivery. Holistic marketers are increasingly taking a value network view of their businesses. Instead of limiting their focus to their immediate suppliers, distributors, and consumers, they are examining the whole supply chain that links raw materials, components, and manufactured goods and shows how they move toward the final consumers. LEVIS looks at customer segments and considers a wide range of different possible means to sell, distribute, and service their offerings. 5.1. RETAIL OUTLETS: Marketing channels are sets of independent organizations involved in the process of making a product or service available for use or consumption. LEVIS STRAUSS, one of the most respected apparel/clothing companies of the world, has opened around 500 outlets at prime locations in India. (Source: Levis retail outlet, Bhubaneswar). Aesthetically designed, the LEVIS store offers wardrobe solutions to the INDEPENDENT MAN through popular brands like LEVIS RED, LEVIS RED TAB, LEVIS SIGNATURE, & DOCKERS. Occupying a space of more than 1 million square feet, the retail chain network offers over 3,000 shades and designs of LEVIS fabric. The stores also sell the LEVIS range of accessories including Footwear, Eye Gears, Caps, Belts, Leather Wallets, Carry Bags. The stores present world-class experience to discerning customers through well- designed and well-maintained interiors, attractive displays, superb assortments, spacious movements, and well trained sales persons. 5.2. MARKETING CHANNELS: LEVIS overall distribution strategy is to

sell relevant products at the right price in the places where people shop. [BRAND AUDIT]
LEVIS STRAUSS & CO. Ltd.

LEVIS has expanded its distribution channels and product ranges in order to reach more consumer segments. LEVIS has revitalized its retail relationships. Indeed the company has turned its retail customers relationships into strong and mutually beneficial ones. Actually LEVIS and the retail accounts have worked to get forth its re-segmented market by delivering a specific product for every consumer segments. The segments identified were: - Trend Initiators - Trend Influencers - Early- Adopters - Traditional - Value-Driven Levis teams are also looking at the different segments within the youth market to find out their expectations from the brand.

5.3. DISTRIBUTION OBJECTIVES: LEVI STRAUSS & CO. Ltd:

LEVIS follows the following as its distribution objectives: - To equalize the demand & supply of products at all places. - To provide desired products at proper place. - To fulfil the requirements of every locality according to the taste of the people. - To increase the brand equity by reaching every corner of the world. LEVIS strategy for choosing channels is according to the product, mostly LEVIS is limited to its wholesalers, because the unit value is high & cost related issues occur. [BRAND AUDIT]
LEVIS STRAUSS & CO. Ltd.

LEVIS is using selective but intensive distribution level for the distribution of its products.

5.4. ANALYSIS OF THE DISTRIBUTION MODEL OF LEVI STRAUSS: Distribution model of LEVIS in India varies by the number
of

layers in the channel, the intermediaries used, and the number of channel partners. LEVIS makes a trade-off between the degree of control and the reach. The goal is to find a balanced mix of approaches that confers a unique advantage depending on the sophistication of the market. The figure depicts the distribution model of LEVIS in India.

FIGURE 1.Distribution Model: LEVI STRAUSS & CO. Ltd

LEVIS plans to have more than one distribution model for different segments or regions. It uses a distributer to serve small outlets but manages large ones [BRAND AUDIT]
LEVIS STRAUSS & CO. Ltd.

directly through a small group at the centre. It has also begun to open its own franchised retail shops to carry its own brand exclusively. 6.0. PRICING: LEVIS STRAUSS & CO. Ltd: price is the one element of the marketing mix that produces revenue; the other elements produce costs. Prices are perhaps the easiest element of the marketing program to adjust; product features, channels, and even communications take more time. Price also communicates to the market the companys intended value positioning of its product or brand. 6.1. PRICING OBJECTIVE: LEVIS (India) objective as far as price is concerned is sales oriented as LEVIS has penetration plans in India. This can be supported by the following facts: -15 exclusive stores every year to be opened in India -Eyeing metro malls and state capitals -To enhance capacity from existing 32 vendors across India -Expand offerings at low price points of Rs 999-1099 LEVIS is accelerating its focus on low-priced street wear product initiativeLEVIS SYKES, which is expected to drive overall volumes and also penetration

in non-metro markets. LEVIS wishes to maintain a revenue growth of around 25-30 percent The concept of a low-priced street wear sub-brand Sykes is a India-only strategy for the denim MNC Levi Strauss. Sykes aim: to tap the youth in the [BRAND AUDIT]
LEVIS STRAUSS & CO. Ltd.

age group of 15-19 who have a preference for fast fashion, fads, and experimentation and higher receptivity to value for money proposition. 6.2. PRICING STRATEGY : LEVIS STRAUSS: As Levis has different products ranges for different segments the pricing strategy of LEVIS can be called as both penetrative as well as market growth pricing. Figure2. Provides us an idea how LEVIS has segmented the Indian consumer market.

FIGURE 2.0: INDIAN SEGMENTATION MODEL (JEANSWEAR)

LE VI BR AN D SIG NA TU RE RS. U1N50D0E R RS. RS 3,000 RS RS 5,500 RS RS 8,000 DATA SOURCE: ANNUAL REPORT OF LEVIS STRAUSS & C0. TREND TREND EARLY TVRAALUE

[BRAND AUDIT]

LEVIS STRAUSS & CO. Ltd.

6.3. RECENT DEVELOPMENTS: PRICING (LEVIS STRAUSS & CO Ltd): in order to succeed its plans in India, LEVIS has been
making a number of efforts/developments. Some of the important changes/developments made by LEVIS in the recent past are as follows:

- Levis India plans to vacate the middle price segment and plans to concentrate on the lower and the higher end- which is the value offeringwill see a further fall in price and start at Rs.900instead of Rs. 1,000. - On the other hand the premium segment will see an increase of about 15% in average pricing and increase to about Rs.4, 400. - Reason behind LEVIS vacating the mid price segment attributes to the minimum growth in the segment & share being taken up by local brands that are more acceptable to the local conditions (SPYKAR, KILLER etc.) 7.0. PROMOTION: LEVIS STRAUSS & CO. Ltd: although there has been an enormous increase in the use of personal communications by marketers in recent years, due to the rapid penetration of the internet and other factors, the fact remains that mass media, if used correctly, can still dramatically improve the fortunes of a brand or company. The power of marketing communications is equally important in influencing attitudes and behaviour with respect to socially relevant themes. [BRAND AUDIT]
LEVIS STRAUSS & CO. Ltd.

7.1. ADVERTISING CAMPAIGNS: LEVIS STRAUSS & CO. Ltd:

declining sales forced Levis into a major re-think culminating in a new strategy in which both product and advertising innovation are now challenging creative boundaries and evolving hand-in-hand. Even LEVIS advertising, much of which over the previous years had been widely regarded as iconic, seemed tired. As consumer tastes shifted away from denim in favour of combat gear and cargo pants. LEVIS had something to do to stem falling sales, and fast. The Company made a brave decision. It decided there was little point in doing things by halves and that structural change was needed to drive through any shift in product or communications strategy. 7.2. THE TWIST CAMPAIGN: LEVIS created a mould breaking campaign led by a 60-second TV commercial in which young people are seen

to be twisted to fit the jeans with a twisted seam. The idea seamlessly for the product.The execution was striking. The creative theme was used throughout the campaign which also included print and poster executions, shop window and point of display materials, and a web site. The unashamed aim was to create advertising to become famous. The Twist campaign helped raise sales of LEJ in line with those of rival jeans brand Diesel. 7.3. THE ODYSSEY CAMPAIGN: In this campaign, a young couple escapes from the restrictive confines of a series of rooms within a building, burst through the outside wall and scale a giant tree before leaping into [BRAND AUDIT]
LEVIS STRAUSS & CO. Ltd.

nothingness and freedom. Again, this theme was integrated across brand communications using a variety of other media. Advertising has firmly consolidated Levi Engineered Jeans market position, resulting in widespread acclaim and numerous industry awards. While the sales of LEVIS 501 are still in a decline, sales of LEVIS engineered jeans are rising steadily and the line now accounts for 9-10% of the total sales by volume for the LEVIS brand.

7.4. PUBLIC RELATIONS: LEVIS STRAUSS & CO. Ltd:

LEVIS Strauss & CO. Ltd has long been a corporate responsibility leader in the truest sense of the word; by doing things long before others do. Today, the company is doing that tradition in new ways, showing how product innovation on the eco line is central to a sustainable future. Levis Strauss & CO. Ltd is tackling complex challenges, like ensuring that workers rights are respected and combating climate change, by collaborating with industry peers and through other systemic solutions.

7.5. CORPORATE SOCIAL RESPONSIBILITY: LEVIS STRAUSS & CO. Ltd: THE LEVIS STRAUSS FOUNDATION: The
LS&CO. business mantra, adopt, adapt, invent, also is important in our approach to its work in HIV/AIDS. LEVIS works to share important learning when it can and adapt the good work of our trusted stakeholders wherever possible to advance its objectives. Below is a sampling of our efforts to influence social and policy change by sharing with and learning from United Nations (UN) agencies, business roundtables and thought leaders. [BRAND AUDIT]
LEVIS STRAUSS & CO. Ltd.

The role of health insurance in improving access to HIV/AIDS services worldwide. Approaches to accessing employee needs regarding HIV/AIDS services in India. LS&CO. has sustained a leadership position by addressing HIV/AIDS from a variety of angleswhat it does as a business for our employees and with consumers, how we engage with policy makers and leaders, shaping and promoting best practices, and partnering with community organizations and suppliers. More than 25 years after LEVIS first touched HIV/AIDS, ITS leadership continues and it resolves to win against this disease remains unabated. 8.0. SWOT ANALYSIS: LEVIS STRAUSS & CO. Ltd: based on LEVIS STRAUSS unique resources and capabilities and one of the top ten recognized Indian brand. LEVIS has to continue developing new products (as the jacket with MP3) and looking after new markets, this will allow to adapt to [BRAND AUDIT]
LEVIS STRAUSS & CO. Ltd.

the fast consumers taste changes and to move away from the saturation of the jeans market.

8.1. STRENGTHS:
History

8.2. WEAKNESSES:

Brand name Finance and access to international capital Management Expertise in the jeans industry (R&D) Distribution channels & global sourcing

High costs of brand protection Lack of control over quality (licencing) Lack of control over distribution decisions (retailers pressure to stop selling on the web)

8.3. OPPORTUNITIES:

Arising of new market segments Technological development lower production and coordination activities Low manufacturing and production costs in international markets Development in other industries such as electronic (MP3 PLAYER) could pose new opportunities for complementing new LEVIS products Total market for casual wear is growing [BRAND AUDIT]
LEVIS STRAUSS & CO. Ltd.

8.4. THREATS:
Saturation of the jeans market Competition from products of the higher end of the market Economic downturns in some countries Fast changes in the consumer tastes Local regulations on the advertisements in countries like India, china Lack of protection of property rights Increase in the local competition [BRAND AUDIT]
LEVIS STRAUSS & CO. Ltd.

9.0. RESEARCH METHODOLOGY: In this review of

available information about a brand, the primary objective is to generate hypothesis concerning the key assets of the brand that are likely to mediate its equity. These hypotheses will help guide and frame the measures of brand equity that should be used in any research that is conducted. Also, depending upon the brands marketing strategy; a researcher may also want to consider the information under review in light of other potentially related issues, for example: possible line or brand extension.

Up to this point the discussion has centered on those things it is necessary to understand before actually measuring brand equity. Now it is time to choose appropriate measures of brand equity. First, a number of techniques should be used to gain an understanding of its nature. 9.1. RESEARCH OBJECTIVES: The research concentrates on five major areas which are discussed as follows: (i) Accessing the strength of the brand equity: The most common measures of brand equity involve measuring its strength. A researcher needs to know about awareness and preference, who is buying the brand, and the effects of price. These are the practical measures that describe a brand and its users, and where it stands in the market relative to its competitors. But, this does not tell a researcher why, or what can be done to positive effect brand equity. [BRAND AUDIT]
LEVIS STRAUSS & CO. Ltd. (ii) CORE LOYALTY: Traditionally, researchers look at purchase

behavior and infer loyalty. Brand loyalty is a function of peoples attitude toward both brands and the category, and measures must take this into account. While it is important to identify and understand these loyal users, in reality there will be more switchers, those users who buy the brand but also buy competitors brands as well. Strategically these brand switchers are more important because that is where the brands growth is most likely to come from. (iii) Profiling brand users: Determining the profile of brand users is perhaps the most common use of the quantitative research. Profile measures are useful to researchers because they provide an idea of which it is that uses their brand. The most common measures for profiling brand users reflect general level characteristics of a market: demographics (age, income etc), lifestyle and psychographics (outgoing, conservative). Like all the assessments of brand equity, profile measures reflect the results of brand equity. Some brands are seen as young, some as old, cutting edge etc. (iv) Brand image ownership: Benefits, are either attributes, subjective considerations, or emotions, that are associated with a brand. In positioning a brand, benefits are selected that are important to the brands target market and that they feel the brand can deliver. The type of benefit selected will suggest the orientation of the benefit claim, which may looked at in terms of rational, emotional, relational,

or value consideration. [BRAND AUDIT]

LEVIS STRAUSS & CO. Ltd. (v) Brand attitude: Brand equity is a result of brand attitude, and

this is what provides the key to its understanding. It is this understanding that ensures an effective positioning, and the ability to adjust that positioning, and the ability to adjust that positioning over time as needed to continue building and sustaining positive brand equity. What we are looking to include in measuring brand attitude are those benefits associated with the category and the benefit claims for the brand in it that define the positioning of the brand. 9.2. BACKGROUND: To fulfill the aforesaid objectives a structured questionnaire survey was done. Along with it, we also visited two of the LEVIS stores at Bhubaneswar. Other than questionnaire, structured interviews and in situ observations were also been done. A total of 100 respondents gave their [BRAND AUDIT]
LEVIS STRAUSS & CO. Ltd.

feedbacks to the survey. Majority of the respondents were enthusiastic in giving their feedbacks as well as about the LEVIS BRAND. Bhubaneswar, being the capital of ORISSA has a developed consumer market with all the segments having their importance for a brand i.e. lower end, middle, high end segment. Thus, analyzing the equity of a brand in such a market becomes intriguing from a researchers point of view. Although, other brands both, local & international exist in the market (for ex: PePe Jeans, Killer, Allen Solly, SpyKar etc.). 9.3. STUDY RESULTS: The results of the study were quite surprising & interesting for us. For each of the questions we got surprising results which clearly indicate the importance of conducting a brand audit. There was a clear enthusiasm in the respondents while giving their feedbacks which proved to

ease our work. Brand awareness level among the respondents was also quite high which shows efficient marketing communications by all the leading brands as well as the competition among the brands. 9.4. DESCRIBING SURVEY RESPONDENTS: Profiling of the survey respondents becomes the most intriguing part for the researcher as one need to know who the people are buying the brands, their general level characteristics i.e. their demographic, psychographic, and the income class. The results of the survey respondents are depicted in the table 4.0

Table 4.0: Describing Survey Respondents AVERAGE AGE 24.29

OCCUPATION
[BRAND AUDIT]

STUDENT 57 (%) JOB 35 (%)

LEVIS STRAUSS & CO. Ltd.

OWNED BUSINESS 8 (%)

USER TYPE
OUTGOING 50 (%) CONSERVATIVE 23.52 (%) CUTTING EDGE 38.23 (%) AVERAGE INCOME 21,308.83
The result clearly indicates that a majority of the respondents are young as the average age is nearly 25 years. If we look at the occupation of the respondents we can easily figure out the lifestyle status of the respondents as a majority (57%) are students. Income class of the respondents indicates that, the respondents clearly belong to the middle & higher end consumer class. Analyzing the responses of these respondents would easily signify the equity of any well know brand. 9.5. BRAND AWARENESS & SALIENCE: To measure brand salience we asked the respondents, sample of a brands target market for all the brands that come to mind in the category, and then recorded the order in

which they were mentioned. Then, we took these responses and plotted the number of first mentions for each brand VS. Total number of mentions. The results are depicted in the following figure 3.0

Figure 3.0 Relationships between Top-of-Mind Recall and Total Brand Awareness
[BRAND AUDIT]
LEVIS STRAUSS & CO. Ltd.

The above graphic clearly shows that Levis has a better brand salience and awareness than other brands as the number of the top of mind recalls and the total awareness levels of the respondents were the highest for Levis(TOMR38) which was followed by SpyKar (TOMR-26), and Wrangler (TOMR-20). We can infer from the responses that LEVIS as a brand enjoys a high level of brand awareness and brand salience as compared to other brands. 9.6. BRAND PREFERENCE: Brand preference, like brand salience, can be an indicator of the strength of the brand equity. But, looking only at the level of overall brand awareness will not provide a good understanding of the strength of other brands. Looking at brand preference is useful, but it is important to go beyond overall preference and examine likely switching behavior. To understand this fact questions were asked to the respondents. Results of the responses are depicted in the table 5.0

Table 5.0 Brand Preference Behavior

[BRAND AUDIT]
LEVIS STRAUSS & CO. Ltd.

Which of the brands would be your preference if you dont find LEVIS? % OF RESPONDENTS SPYKAR 62 WRANGLER 27

LEE 11
What the results show are the perceived alternatives to their preferred brand. It is clear that people who say they prefer Levis see SpyKar, Wrangler, and lee as good alternatives i.e. if a Levis user could not find their brand at the store they would be happy to buy either of the three other brands. 9.7. PROFILING: To get a clear understanding of the user profiles questions were asked to the survey respondents related to demographics (age, income, geographic area), lifestyle, and psychographics. As earlier stated the average age of the respondents is nearly 25 years and the income levels are above Rs.20, 000, Levis as a brand can be considered as a young brand. Nearly 50% of the survey respondents connoted the user type to be outgoing so it can also be inferred that Levis can be considered as a brand of the middle class who use a brand precisely because it is known to be the brand of choice among the rich. Another important aspect of profiling lets us understand of how Levis as a brand is used. Table 6.0 depicts the results [BRAND AUDIT]
LEVIS STRAUSS & CO. Ltd.

Table 6.0 How Levis as a Brand is Used When do you wear Levis brand? % of Respondents Always 8 Sometimes 46 On special occasions 39 Never 7
This clearly reflects that Levis as a brand is perceived by the customers as clothing for special occasions. This supports the fact that Levis has a better brand equity than its competitors.

9.8. PRICE ELASTICITY: another important indicator of the

strength of a brands equity is the price elasticity i.e. to what extent a consumer is willing to accept a price increase without switching? One expects a brands core loyalty segment to be less price sensitive than switchers. There is a dual concept of price elasticity i.e. the upside and downside price elasticity. Upside elasticity is measured by looking at how much sales go up when the price is lowered, and downside elasticity by looking at how much sales go down when prices are increased. Questions were asked to the respondents in order to understand this dual concept of price elasticity. The results of the responses are depicted in the table 7.0 [BRAND AUDIT]
LEVIS STRAUSS & CO. Ltd.

Table 7.0 Price Elasticity of Levis brand (Upside Elasticity) Would you buy Levis if you come to know about a discount at Levis store? % of respondents Yes 72 No 28 Table 8.0 Price Elasticity of Levis brand (Downside Elasticity) Would you buy any other brand rather than Levis if its price is increased? % of respondents Yes 38 No 62
From the above results it becomes clear that Levis as a brand possesses a higher upside elasticity as compared to downside elasticity, it suggests increased perceived value for the brand. As the difference between the upside

& downside elasticity (72-62=10) is a positive figure. It also makes us clear sales of Levis do not fall off much when prices are increased. [BRAND AUDIT]
LEVIS STRAUSS & CO. Ltd.

9.9. CHOICE AND BRAND EQUITY: People make direct tradeoffs among a set of product characteristics (e.g. brand name, design, price, fabric quality/fit etc.) when choosing among apparel brands, and that the pattern of these trade-offs will predict their preference. The results of preferences of respondents are shown in the following table 9.0.

Table 9.0 Brand Effect on Apparel/Clothing Choice Describe your purchase decision criterion while buying an apparel/clothing? % of respondents Brand name 36.67 Design 22.82 Price 25.17 Fabric quality/fit 18.26

The result clearly indicates that brand name plays the most important role in the buying decision criterion of the respondents which is followed by price and design. The result provides a summary of the importance of each variable studied to choice, as well as the part worth of each level within the variables studied. 10.0. BRAND IMAGE OWNERSHIP: an important key to understanding brand equity is to identify those claims that signal a brands image. These signals are those aspects of the brand that are most likely to come to mind or be associated with the brand. In measuring brand image , and more particularly its image relative to competitors, one is looking for something that

might be thought of as image ownership. To understand the image [BRAND AUDIT]

LEVIS STRAUSS & CO. Ltd.

ownership of the Levis brand questions were asked to the respondents and we were surprised to know the results. Table 10.0 depicts the results.

Table 10.0 Brand Image Ownership You associate with Levis as : % of respondents Trendy apparel brand 32.35 Good fabric quality/fit 35.29 Economical 5.88 High-end denim wear 29.411

These results were surprising to us as the majority of respondents considered Levis as a brand which gives good fabric quality/fit rather than being a trendy apparel brand and being a high end denim wear. Based upon what is learnt from the respondents it is possible to paint a good picture of how the market sees or understands the image of Levis as a brand in the apparel category. This on the other hand would also help in the proper positioning of Levis as a brand, as those benefits are selected which are important to the brands target market and that that they feel a brand can deliver. These can be then presented in marketing communication as a visual or verbal benefit claim. This enables a fuller understanding of image ownership, which in turn leads to a better understanding of the Levis brand equity. [BRAND AUDIT]
LEVIS STRAUSS & CO. Ltd.

10.1 BRAND ATTITUDE: what is needed to really understand the

nature of brand equity is a measure of the components that lead to it, and this means

measures of how the market forms current attitudes towards the brand. To really understand a brands equity, it is necessary to understand how it is constructed. It is this understanding that ensures effective positioning, and the ability to adjust that positioning over time as needed to continue building and sustaining positive brand equity. In our research survey of the target market, respondents were first asked how important each of the benefits and the benefit claims are to them when considering buying a apparel/denim wear. Importance is measured using a 3point scale where if the benefit is essential to them it is weighted as 3, if the benefit is desirable but not essential it is weighted as 2, and if it is not all that important it is weighted as 1. Then for the brand under study i.e. LEVIS and each of its major competitors (SpyKar, Wrangler, Lee) respondents are asked how well that brand delivers the benefit. Here again, a 3-point scale is used where if the brand is thought to definitely deliver the benefit it is weighted as 3, if it is thought to do only an okay job in delivering the benefit it is weighted as 2, and if it is not perceived to deliver the benefit it is weighted as 1. After conducting the survey among the respondents the following results came to picture.

Table 11.0 Importance of Benefits/ Benefit Claims to Consumers (% of Respondents) Benefits/benefit claims Essential Desirable Not required Brand name 52.94 44.11 5.88
[BRAND AUDIT]
LEVIS STRAUSS & CO. Ltd.

Design/style 47.058 44.11 11.76 Price 41.17 47.058 14.70 Product quality 61.76 35.29 5.88

The results clearly depict that product quality of the apparel/denim wear remains the most important benefit to the consumers which is followed by the brand name. the consumer psychology is also depicted by the results as the brand name has more importance to the customers than the price/design of the apparel. Interesting factor in the results is that price is not the essential benefit factor in the minds of the consumers. After these results it becomes very essential for us to determine a comparative analysis is Levis and its competitors in satisfying the benefit claims of the consumers. Table 12.0 indicates a comparative analysis of the brands in satisfying the consumer benefit claims (i.e. brand name, design/style, price, product quality)

Table 12.0 Comparative analysis of Levis and competitors in satisfying benefits of brand name (% of respondents) Brands Delivers benefit Okay job Does not deliver Levis 50 29.41 20.58 SpyKar 47.05 41.17 14.70 Wrangler 26.47 50 26.47
[BRAND AUDIT]
LEVIS STRAUSS & CO. Ltd.

Lee 47.05 29.41 23.52

From the results it becomes clear that Levis is a leader in delivering the benefit to the consumers. But, the point to be taken care of is that 20.58% of the respondents feel Levis does not deliver the benefit at all, where as if we look at SpyKar, though only 47.05% feel it delivers benefit completely but 41.17% feel that it does an okay job and only 14.70% feel it does not deliver the benefit. We can infer from the results that SpyKar emerges out to be the major competitor to Levis as far as brand name is concerned.

Table 13.0 Provides a comparative analysis of Levis and its competitors in satisfying benefits of product design/style (% of respondents) Brands Delivers benefit Okay job Does not deliver Levis 61.76 14.70 26.47 SpyKar 23.52 52.94 26.47 Wrangler 32.35 44.11 20.58 Lee 32.35 32.35 38.23
From the above results it becomes that Levis again comes out be a leader as far as satisfying the design benefits of the consumers. But, again in this part Levis facing a tough competition with Wrangler (only 20.58% respondents say [BRAND AUDIT]
LEVIS STRAUSS & CO. Ltd.

they are not at all satisfied), whereas 26.47% of respondents say they are not at all satisfied by Levis designs.

Table 14.0 Comparative analysis of Levis and its competitors in satisfying the benefits of price (% of respondents) Brands Delivers benefit Okay job Does not deliver Levis 47.05 29.41 23.52 SpyKar 41.17 38.23 20.58 Wrangler 26.47 41.17 32.35 Lee 29.41 32.35 41.17

Above table depicts the responses of the consumers of apparel as far as the prices are concerned. Again, we see that Levis emerges to be the winner in this category of benefit claim. If we further analyze the results we find that Levis is facing competition in this category also by SpyKar as only 20.58% of the consumers say that SpyKar does deliver the benefit of price, whereas 23.52% of respondents say that

Levis does not deliver any benefit of price. These are the major areas of concern to look upon by Levis as a brand. [BRAND AUDIT]
LEVIS STRAUSS & CO. Ltd.

Table 15.0 Provides Us a Comparative Analysis of Levis and its Competitors in Satisfying the Benefits of Product Quality (% of respondents) Brands Delivers benefit Okay job Does not deliver Levis 52.94 20.58 29.41 SpyKar 50 32.35 20.58 Wrangler 29.41 41.17 32.35 Lee 35.29 26.47 41.17
From the above table it again becomes clear that Levis is a leader in delivering the benefit of product quality, but again faces sheer competition from the SpyKar brand as only 20.58% of the respondents feel that SpyKar does not deliver any value. Whereas, 29.41% of the consumers feel that Levis does not provide any benefit of the product quality. [BRAND AUDIT]
LEVIS STRAUSS & CO. Ltd.

Levis needs to look upon this segment of consumers who are not at all satisfied by its products as these are ones who are the switchers of the brand. 11.0 CONCLUSION: After conducting the audit of Levis as a brand we get to know a lot of information about the importance of conducting the audit of a brand. If we summarize all the factors a researcher comes to know after conducting this audit can be summarized as follows: A brief knowledge of the history & and the product , brand portfolio of the brand Comprehensive analysis of the competitors Analysis of the product life cycle of the brand [BRAND AUDIT]
LEVIS STRAUSS & CO. Ltd.

Analysis of the pricing strategies & recent developments in the pricing

strategies Analysis of the distribution channel system of the brand Analysis of the marketing communication strategies adopted by the brand Analyzing the consumer preferences and tastes of the consumer and the entire brand building process Analysis of a number of variables while auditing a brand. We can also conclude from the audit of Levis brand that to maintain sustainable brand equity Levis must keep a keen eye on the change in the consumer tastes and preferences and well as the movement of the competitors. [BRAND AUDIT]
LEVIS STRAUSS & CO. Ltd.

12.0 BIBILOGRAPHY:
Apple Michael, Levi Strauss Signature: The birth or demise of a brand? Retail Merchandiser, New York, May 2004, Vol. 44, Iss. 5, pg. 58. Beck Ernest, Levis takes an international approach with its new marketing pitch in Europe, Wall Street Journal, New York, Sep 5, 2000, pg. 1. Hill Suzette, Levi Strauss & Co.: Icon in revolution, Apparel Industry Magazine, Atlanta, Jan 1999, Vol.60, Is. 1, pg.66, 4pgs. Hammerstein Linda, Levis is hiking up its pants; but will the brands revamped products and marketing play with turned-off teens?, Business Week, New York, Dec 1, 1997, Iss. 3555, pg. 70. Jar dine Alexandra, Life for denim in a combat era, Marketing, London, Mar 4, 1999, p. 19. Lee Louise, Why Levis still looks faded; CEO Martineau is reaching out to new markets, but style-conscious rivals continue to steal sales, Business Week, New York, July 22,2002 Iss. 3792 Lehrer Jim, Leaving Levis, Online News Hour, Feb 23, 1999, http://www.pbs.org. Lockwood Thomas, Integrating design into organizational culture, Design Management Review, spring 2004. Nolan Kelly, Levis tries out mass, and likes the way it fits, DSN Retailing Today, New York, Aug 22, 2005, Vol. 44, Iss. 16, pg. 1, 2 pgs. Sardine Emily, Wal-Mart tapped to host Levis coming out party, DSN Retailing Today, New York, Nov 11, 2002, Vol. 41, Iss. 21, pg. 5, 2 pgs. Simms Jane, When brands bounce back, Marketing, London, Feb 15, 2001,

pg. 26, 2 pgs. [BRAND AUDIT]

LEVIS STRAUSS & CO. Ltd.

Voight Joan, Levis scraps line efforts for image, Brand week, New York, Apr 28, 1997, Vol. 38, Iss. 17, pg 6. Vrontis Demetris, Vronti Peri, Academic paper: Levi Strauss : an international marketing investigation, Journal of Fashion Marketing and Management, Bradford, 2004, Vol. 8, Iss. 4, pg. 389. Warner Fara, Levis fashions a new strategy - A dynamic new team looks to stamp innovation on an old brand, Fast Company, Nov 2002, Iss. 64, p. 48. Anonymous, Levis antidote: Audience participation, New Media Age, London, Sep 8, 2005, pg. 19. Anonymous, How Levi Strauss rekindled the allure of brand America, World Trade, Troy, Mar 2005, Vol. 18, Iss. 3, pg 28. Anonymous, Brand Mot: Levi Strauss & Co, Brand Strategy, London, Jun 2004, pg. 10. Anonymous, Levis expands distribution, New York, Dec 2002, Vol.78, Iss. 12, pg. 43. Anonymous, Original depuis 150 ans: Lhistoire de Levi Strauss & Co. , MesNouvelles.com, Communiqus, Mai 2003. FINANCIAL REPORTS Levi Strauss & Co., Annual Financial Report 2002. Levi Strauss & Co., Annual Financial Report 2003. Levi Strauss & Co., Annual Financial Report 2004. WEB SITES http://www.brandimpact-forums.com/casestudy.htm [BRAND AUDIT]
LEVIS STRAUSS & CO. Ltd.

http://encyclopedia.thefreedictionary.com/jeans RELATED BOOKS: PHILIP KOTLER, ABRAHAM KOSHY, MITHILESHWAR JHA: MARKETING MANAGEMENT RICHARD ELIOTT, LARRY PERCY: STRATEGIC BRAND MANAGEMENT