Marketing Report ON Levis INC PDF

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MARKETING REPORT ON LEVIS INC

PRINCIPLES OF MARKETINGS

Levis GROUP MEMBER: M. Zeeshan Bhojani Bilal Tariq Maham Umar Hamna Naved

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Contents Acknowledgement ........................................................................................................................................ 4 Letter of Transmittal ..................................................................................................................................... 5 Background-History ...................................................................................................................................... 6 Background-Company Growth...................................................................................................................... 7 Background-Time Line .................................................................................................................................. 8 Successes-Expansion ..................................................................................................................................... 9 Successes-Positioning ................................................................................................................................. 10 Organization................................................................................................................................................ 11 Levis Pakistan Promotional Activities ......................................................................................................... 11 Marketing Mix of Levis................................................................................................................................ 14 PRODUCT ATTRIBUTESPRODUCT ATTRIBUTES ....................................................................................... 14 Comfort ................................................................................................................................................... 14 Durability................................................................................................................................................. 14 PROMOTION ............................................................................................................................................... 15 Objectives: ..............................................................................................................................................15 SWOT ..........................................................................................................................................................16 Strength ..................................................................................................................................................16 Weakness: ............................................................................................................................................... 17 Opportunities: ......................................................................................................................................... 17 Threats: ................................................................................................................................................... 18 Competition-Effect...................................................................................................................................... 18 Competition-Strategies ............................................................................................................................... 20 Competition-Premium Jeans ......................................................................................................................21 Solutions-Advertising .................................................................................................................................. 22 Solutions-Alternative .................................................................................................................................. 23 Responsibility-Background.......................................................................................................................... 25 Responsibility-Sweatshops .........................................................................................................................26 Responsibility-Environmental ..................................................................................................................... 27 Views on 4Ps: .............................................................................................................................................. 28 Price: ....................................................................................................................................................... 28

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Placement: .............................................................................................................................................. 28 Promotion: .............................................................................................................................................. 28 Situation Analysis ........................................................................................................................................ 29 Industry Analysis ..................................................................................................................................... 29 Brand Analysis ......................................................................................................................................... 29 Different ways in capturing more opportunities in the market ................................................................. 30 Overcome the problems in the strategy and 4Ps ....................................................................................... 30 Conclusion................................................................................................................................................... 31 Recommendation........................................................................................................................................ 32 References .................................................................................................................................................. 33

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Acknowledgement In the Name of Allah, the most Beneficent and Merciful. Firstly, we are grateful to Almighty Allah for His utmost graciousness and help throughout our work. We bow our heads in front of our Lord on the successful completion of our term report. We are profoundly indebted to our course faculty, Sir EJAZ MIAN, whose enormous support, mentoring, guiding principles and constructive disparagement has enabled us to accomplish this task. Without her constant check and immense determination, we would not have been able to complete our term report. “THANK YOU SIR”, for you sheer mentoring and enlightening our morals and intellect for good. We put forward our profound gratefulness for your support and generosity. We are also indebted to Institute of Business Administration for providing us with an opportunity to augment our skills and rationale through such projects. Lastly, we extend our appreciation for our group members for their cooperation; collaboration and fortitude without which we could not have consummate the task by the dead line. Hopefully, this report will lead to the positive reception and commend for our hard work.

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Letter of Transmittal Mr Ejaz Mian Course Instructor Institute of Business Administration (IBA) Karachi. May 18, 2015

Respected Sir, We hereby present our project report “Levis Inc”. This report identifies the Background, Marketing environment, SWOT analysis, and target market of the product. The Information has been collected through survey and books from library, all material used in the report has been acknowledged properly. Secondary data used in introduction, history and past image of brand, recommendations, strategy and SWOT analysis were made by us.

It was a truly difficult task but we have tried to do our best to make this report after conducting thorough research, which involved much help from the internet, books and survey, which provided us with tremendous amount of information. This report has given us a great opportunity to add to our knowledge and learning. We hope that this report will be good enough to come up to your level of expectation and requirement, and will be helpful to the society in general.

We are very thankful to you, for guiding us at all levels and being a very kind and patient teacher; and helping us in all the endeavors and difficulties that came across.

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Background-History The company was founded by Levi Strauss in 1853 primarily selling wholesale dry goods. The company was founded in San Francisco, California. A tailor named Jacob Davis thought of an idea to use copper rivets to reinforce the points of strain on pants. Davis and Strauss purchased the patent of the idea of using copper rivets in clothing on May 20, 1873.

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Background-Company Growth The innovation of the rivets in the jeans differentiated Levidifferentiated Levi’’s jeans from others because of its increased durability. Over the years, LeviOver Levi’’s jeans have become more popular, initially due to its durability. Jean products expanded, targeting different consumers. Levi Strauss & Co. eventually captures most of the denim jean market, becomes the largest manufacturer of jeans, and profits reach $1 billion by 1974.

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Background-Time Line •1853: Levi Strauss begins selling dry goods in San Francisco. •1873: Levi Strauss & Co. patent riveted jeans and begin selling them. •1912: Koveralls, denim playsuit for children, , is first nationally sold product for the company. •1935: Company sells first blue jeans for women. •1940s: U.S. government issues denim work clothes for employees in the defense industry. •1974: Company sales reach $1 billion •1986: Company introduces Dockers as a new casual line of clothes new clothes Successes-Monopoly Since the patent of the rivets in jeans in 1873, the company achieved monopoly power. Monopoly power was gained through entry barriers.  The patent granted the firm monopoly rights to sell riveted jeans. Also by product differentiation  The rivets on the jeans allowed for longer durability, a form of vertical differentiation. Product differentiation and barriers to entry allowed the company to gain more popularity and market share.

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Successes-Expansion •By 1977, Levi Strauss & Co. is the world largest jean manufacturer. •Department stores and boutiques sell Levi Department Levi’s products and are additional channels of distribution for the company. •LeviLevi’’s provides a wide range of products that target different market segments, capturing demands. •After the release of the 501 product line, Levi after Levi’s enjoys worldwide market dominance in the denim jean market. •Levi Strauss & Co. maintains it Levi its image as an American Icon and the originator of American jeans.

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Successes-Positioning Other marketing strategies, like the position of the product, other created increased differentiation, contributing to the company’s market power. In 1930s, the company survived the Great Depression due to increased interest in Western culture.––Jeans were positioned as being worn by ““cowboys.”” Levi’’s jeans were issued to employees in the defense industry (including veterans) during World War II.(II.––Post World War II, veterans that went to college wore Levi Post Levi’s jeans on campuses, increasing popularity. WWII veterans were regarded as heroes.––Jeans were shown to be suitable for casual wear, rather than worjean––During the Baby Boom era, Levi during Levi’s targets younger consumers and positions product as ““cool.”” Early movie stars wore Levi Early Levi’s jeans. An example of celebrity endorsements endorsement Consumer demand shifts from durability of jeans to fashion of Consumer jeans .ans.––Culturally, jeans became symbol of youth and rebellion culturally, rebellion••In 1960s, student protesters wore jeans as uniform In 1970s, company sells bellbottom jeans. The firm positioned its products with changing times and changing demands, keeping existing customers and capturing new markets. Increases in sales ultimately increased profits

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Organization Levi Strauss & Co. is a worldwide corporation organized into three geographic divisions: Levi Strauss Americas (LSA), based in the San Francisco headquarters; Levi Strauss Europe, Middle East and Africa (LSEMA), based in Brussels; and Asia Pacific Division (APD), based in Singapore. The company employs a staff of approximately 16,000 people worldwide. Levis has head office in 2800 company operated stores worldwide.

Levis Pakistan Promotional Activities Levis Pakistan offers different types of promotional activities throughout the year, the basic purpose behind all the promotional activities is to promote their new and existing products, through which they seek consumer attention. Different types of promotional activities include     

Print advertisement Hoarding Newspaper Online ads Social media campaign

Recently Levis Pakistan conducted Telenor Pakistan Fashion Week 2015 in collaboration of Fashion Pakistan Week (FPW) which kicked off on Tuesday at Pearl Continental Hotel Karachi where Levis showcased their amazing CT 501 collection on the 3rd day of Fashion Pakistan Week featuring the legendary Wasim Akram. There were also some other A-list fashion designers who rocked the runway on first day of FPW Spring/Summer 2015 with their most exclusive collections.

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Levis Pakistan also offers Pre-season and Post season discounts on selected products at various stores in different cities.

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Marketing Mix of Levis The Levi Strauss Signature™ brand was launched in 2003 exclusively for consumers who shop in the masschannel. The brand gives value-conscious 14 | P a g e

consumers access to high-quality, affordable and fashionable jeans wear from a company and name they trust. The Levi Strauss Signature™ brand includes a collection of denim and non-denim pants, shirts, skirts and jackets for men, women and children all designed with the high quality. PRODUCT ATTRIBUTESPRODUCT ATTRIBUTES

Products are usually considered to be the No.1 factor contributing towards building goodwill of a firm. A product should be unique, durable, reliable, comfortable and economical. Following are some of the basic attributes of LS&CO.’S products -Variety -Features -Design -Color -Size Features are competitive tools that differentiate the company’s products from its competitor’s products .Following are some of the main and distinctive features of Levi’s products. Comfort

Levi’s jeans and other products are comfortable enough to be worn even at the times of protest, war Cultural Revolution, relative peace and pure fun. Durability

The two figures on the patch of Levi’s jeans with whips in hand pulling in opposite directions, yet the jeans remain intact; symbolize the strength and durability of the ‘Patent riveted clothing’. Style Clothing means more than just fabric, thread and rivets. To clothe oneself means to put on something that symbolizes who you are. Levi’s jeans are available in different styles for men and women.

PROMOTION Promotion objectives: Promotion 15 | P a g e

Objectives:

To inform, persuade and remind the potential customers about its products Increase awareness and build primary demand To build strong brand equity. Build Company’s image as innovator. To create bonds between public and Levi Strauss by helping the people. To create the importance of its product

SWOT Strength 1. Strong Brand Name and popular top-of-the-mind brand 16 | P a g e

2. Expertise in Jeans Industry 3. Distribution Channels and Global Outsourcing 4. Finance and Access to International Capital 5. Has over 470 self-operated stored globally managed by 16000+ employees 6. Levi’s marketing includes retro popular songs in its TVC ad campaigns 7. Over 60 and 25 manufacturing plants in US and abroad respectively The foremost strength of the company is its brand name. Being the oldest brand for clothes and having invented the blue jeans, the company enjoys an elated status in the eyes of the people, and therefore people prefer buying Levi's goods, assuming that they are a perfect blend of design, comfort and reliability. Also the brand is considered to be a status symbol for the upper class, so they tend to go for it. Moreover, the advertising campaigns tend to choose energetic and enthusiastic themes so as to target the youngsters specially.

Weakness: 1. High Pressures of Brand Protection 2. Increasing competition means limited scope for growth 3. Customer loyalty has declined 17 | P a g e

4. Retail sales of Levi's Jeans are declining 5. Nine plants have been shut since 1982. Industry of apparels and clothing is such an industry in which, each day, many new people are attempting to step. With so much of external competition from new business and already established companies, it is too difficult for Levi's to maintain its brand image. It needs to be exclusively competent and keep on inventing new styles to stay ahead of the competition. Price is also a weakness factor for the company, because of as compared to other competitors, Levi's jeans are much more expensive, because of which, and the people from the middle class refrain from buying it. Opportunities: 1. Growing casual wear market 2. Low manufacturing and production costs in various international markets 3. Increasing acceptability of western wear across the world 4. The customers becoming more leisure-oriented and wearing jeans more often 5. Levis Strauss more commands 43% of the market in jeans 6. K-mart, Wall-mart and other retailers do not currently sell Levi's jeans Formerly, western clothes were not acceptable in eastern countries. However, with the introduction of new century, the clothing pattern, in fact, the culture has entirely turned its patterns. Today, western clothing is widely accepted in most of the countries. A growth in the market for western clothes means a growth opportunity for Levi's Threats:

1. Fast changing consumer tastes 2. Lack of protection of property rights in some countries like China 18 | P a g e

3. Increasing Competition and Product Substitution Customer is the king of the market. Without customers, there is no use of business. The industry of clothing is an industry where customers actually form the dominance, regardless of existing monopolies. This compels the businesses to be competitive and compliant to the public demands. Fast changing customer tastes are a serious threat to the company.

A cut-throat competition is also existent between Levi's and Lee, Wrangler, Spykar, etc. A slight mistake may leave Levi's out of the competition. However, there is yet much to be explored by the company. Competition-Effect Levi Strauss & Co. was threatened by competition, because Barrie Levi barriers of entry were relatively low in the jean market. (Excluding the patent) Some of LeviSome Levi’’s competitors include: ––Calvin Klein ––Gap Jeans Gap Jeans ––VF Corp (Lee, Wrangler) ––Tommy Hilfiger Tommy

The entrance of new competitors had many effects on Levi the Levi’’s. ––LeviLevi’’s no longer has monopoly power > more competitive prices >lower profits lower profits ––Availability of substitutes >firm faces increase in elasticity of demand firm demand

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––Consumers prefer other brands. Levi Consumers Levi’’s customers buy from competition lowering Levi lowering Levi’’s market share. These newer upstarts are able to ““chip away chip away” ”at Leviat Levi’’s market dominance because t...