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Strategic Marketing Paper on Levi Strauss

Levi-Strauss and Company is one of the world’s most famous manufacturers of denim clothing. It was founded in 1853 by Levi-Strauss a Bavarian immigrant, originally the company was set up as a dry goods store, in just over twenty years this small business grew in to a large prosperous store house.

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In 1872 Strauss was in contact with Jacob Davis regarding the new process of attaching copper rivets to the pockets men’s pants. The patent for the copper riveted denim pant is agreed and confirmed in1873, the first jean waist overalls become available.

In 1902 Levi Strauss died, the company was taken over by his nephews. Despite the San Francisco earthquake of 1905 Levi Strauss and Company continue to manufacture denim pants, new temporary headquarters are moved into and wages for staff are continued. In 1912 son of Jacob Davis, Simon invented the Koveralls, these were the first type of leisure and work wear for children.

In 1915 Levi Strauss and Company received the highest award for their waist overalls at the Panama Pacific International Exposition in San Francisco. Levi Strauss and Company began to sell their products nationally in 1920, also invented during this time was the corduroy pants.

In 1928, Levis Strauss and Company registered the name Levi’s® as a trading and brand name trademark. Today, the Levi’s® trademark is one of the most recognized in the world and is registered in more than 160 countries. In 1929 the great depression hit the world, with Wall Street and the Stock Market crash Levi Strauss puts its staff on a short day week, some members of staff are put into no manufacturing work, such as laying the hardwood floors that are still seen in the head office today.

During this time Levi Strauss adopt the cowboy image as its representative for cornering the market on denim jeans, along with this introduction of the cowboy came the new Levi 501 Jeans (waist overalls). In 1935 Levi Strauss began to cater for both sexes, and released Lady Levis, the first blue jean for ladies.

In the 1940’s Levis become internationally known as G.I’s wear their jeans and shirts overseas, also during this time African American workers in the Californian plants begin to work in integrated areas.

During the 1950’s Levi-Strauss formed the Levi Strauss foundation, a foundation that oversaw its charitable contributions. In 1958 and 1959 Levis are chosen for the Worlds Fair in Brussels and are exhibited for the Fashion Industry show in Moscow. Levis continue with the integration of races within their plants, a new plant opened in Blackstone, Virginia continues this tradition, several years before desegregation became law.

Levis have continued through out the decades to provide new and innovative designs within the fashion world, catering for all walks of life from the cowboy, laborer and even the academic lifestyle with the introduction of the STA-PREST jeans, which was soon adopted by the Smithsonian Institute.

Today Levis are a world leader the market for denim clothing, however they do have their drawbacks which will be discussed at a later date.

As seen above Levi Straus and Jacob Davis patented the idea of stamping copper rivets onto mane’s pants to give them added strength. These became the world’s first jeans.

· The Levi’s® trademark is probably the most famous trademark in the world of denim fashion, recognized in nearly 160 countries.
· Levi Straus and Company is a private ownership of the original founders family.
· The Shares and Stocks of the company are not part of the public concern.
· The Japanese Shares of Levi Strauss Japan K.K. The company’s affiliated Japanese consortium, are publicly traded in Japan.
· Levi-Strauss and Company employs a staff of nearly seventeen thousand four hundred worldwide, these include one thousand four hundred staff at the San Francisco headquarters.
· Levi Strauss and Company is organized into three geographic divisions worldwide.
· Levi Strauss America (LSA) is the largest of the Company’s regional groups, employing over ten thousand seven hundred staff, through out the United States, Canada, Mexico and the Latin States.
· The regions of the American Markets include Levi Strauss U.S., Levi Strauss Canada, Levi Strauss Mexico, Levi Strauss do Brasil, and Levi Strauss Argentina.
· Levi-Strauss have the following market brands under their trademark Dockers®, and Slates® brands.
· The regional headquarters for Levi Strauss America is based in San Francisco, the company’s headquarters. LAS alone accounted for $3.1 billion of the company’s $4.6 billion in total sales in 2000.
· The Asian Pacific region of Levi Strauss and company comprises of subsidiary business, licensees and distributors through out the region.
· It employs nearly one thousand five hundred members of staff, all talented people that work together ensuring that Levi brands are to the highest of standards.
· The Asia Pacific Division was established in 1995.
· Levi Strauss Europe, Middle East and Africa has the responsibility of designing, manufacturing and marketing jeans and casual wear under the Levi’s® and Dockers® brands in these regions.
· Levi Strauss Europe, Middle East and Africa have a network of around eleven sales offices, two licensee businesses thirteen centers for distribution and with areas for production. Therefore employing a total of five thousand two hundred members of staff.
· Levi Strauss Europe, Middle East and Africa headquarters are located in Brussels, Belgium.
· Levi Strauss Europe, Middle East and Africa accounted for revenues of $1.1 billion in 2000.

Levi-Strauss although being one of the worlds most known maker and distributor of denim and casual wear are victims of fashion. They do not allow for the larger person with their most popular jeans. For example, within the European region one of Levi Strauss’ most popular brand is the 501: if a person has a 39 or 40 inch waistline then there are no products suitable in the red tab range for this size like wise for some one with a 35 or 37 inch waistline. For someone with a waistline between30 and 34 inches all sizes are available however the slimmer the person the leg size decreases.

Levi Strauss by allowing their regions to be autonomous have in some ways lost a certain area of the denim clad market. A major competitor of theirs, wrangler jeans, provides sizes up to 50 inch waists on many of their popular products and are run not as an autonomous regional unit but as major corporation with divisions answerable to the head office.

Therefore, by this action of not manufacturing larger size clothing Levi-Strauss are not only limiting their customer base, and profits but also alienating those who cannot wear their garments due to their size. The percentage of large and outsize people in Europe is vast compared to those who have average size or undersize proportions.

Therefore by only making the clothes for the “model” type populace the customer base they could have had by opening up the size of garments has been reduced, reducing potential sales and potential profits. In the meantime their competitors are taking advantage of this apparent weakness and increasing their profits by making clothes for the larger marketed person.

However, the American side of the company has a different size range, they do provide 501 jeans for larger sizes and taller customers. The waist sizes are restricted to size 40 inch waist yet the it is likely that as the Americans understand the need that humans are not built in equal sizes they therefore are willing not to cater for a fashion market but for their customers.

Perhaps Levis should take a look at their competitors, carry out customer research on a wider basis encompassing a wider aspect of the community and not just those who regularly wear their brands but those who would like to wear their brands but cannot due to the failure in the regional offices and manufacturing personnel to provide them.

Levi Strauss need to increase their market share by increasing their range of clothing sizes. Levi Strauss should remember that the larger part of their market are from the elder generation, within that older generation are those who have a higher disposable income, many of this older generation are not the model size and therefore if they wish to wear denim or fashionable clothes out side of the office then they are forced by the limitations of Levi Strauss’ inept marketing strategies.

Levi Straus has a unique brand name that is known across the globe, not only have they produced the Levi range but in recent decades the Docker and Slates brands have become popular, within not only the leisure and casual wear market but also the sophisticated market.

Therefore Levi Strauss have become more aware of their brand names and are working hard to maintain their image and good name within the market. Whilst maintaining a good reputation for having good clothes, designs and in many areas affordable prices.

Levi Strauss’ have over the decades produced quality clothing and accessories that has led to them receiving a reputation for such manufacturing and progress. Coupled to this Levi Strauss and Company also have a very strong ethical and motivational program that encompassed not only their workers but also charities and universities (Grant, 1998).
Levis Strauss and Company have also taken a large size of the clothing market, although their clothing does not make the height of fashion with names such as Gucci and Ralph Lauren, their clothing and accessories form a major part of the clothing industries area.

One of Levi Strauss and Company’s major strengths is their regional autonomy, this allowance of having each regional headquarters answerable to itself has worked in many ways for Levi Strauss not least in the ability to corner the market in each sphere of influence. This regional autonomy also reduces the non regional and global bureaucracy that could possibly occur with international corporations.

Due to the Regional autonomous attitudes and set up of Levi Strauss and Company one the major weaknesses is the probable inability to work as a unit, where most companies are unique in their approach to a collective fashion and style Levi Strauss are unique in that each region does its own market research, design and development, by doing this they are in effect creating a uniqueness in their diversity to be different from each region.

By having regional centers they are creating duplicate jobs through out the company, by centralizing each department and having line managers rather than regional mangers it would save on staff and also save on cross over of decisions and therefore save on a duplication of departments.

By Decentralizing each department it has led to a limited range of products for each region, this is due again to market research of what the designers feel the customer wants or needs, for instance, Europe is allegedly a heavy fashion area , therefore the very few if any styles of Levi Jeans are now straight leg, it could be argued that s the flares or boot cut or bell bottom is now in fashion then all styles have to have the wider cut leg or have a baggy style.

Whereas in the United States region, the style differs still with a straight leg for those who desire it, a baggy or comfort fir and for those into fashion the bell bottom cut. If Levi Strauss were to decentralize this then the market would be open for them in each region to cater for all demands rather than that of the fashion conscious in certain regions.

The changes within the regional centers and within the global aspect of Levi Strauss may be an unrealistic change just because of one weakness in not covering the entire fashion and not fashion market, the cost of changing ideas, patterns and styles would be a costly change and may cause large problems within the company.

However, by changing over to the long term opportunity it may just aid the company in netting the larger share of the denim market, and catering for those who will wear clothes for clothes sake and not just to look good for cosmetic reasons. Levi Strauss could make wearing their name a fashion statement for all rather than the few. By centralizing decisions and structures this change over could be very cost effective and in the long term profitable.

Levi Strauss and Company has many threats to it’s supremacy as one of the world’s leading clothing manufacturers, among these threats are other manufacturers of jeans and clothes, for instance Wrangler, have a huge following within the United States and in Europe, as we have seen above Wrangler provide outsizes for larger men and women, something that Levi Strauss has failed to consider and implement in some of its regional center.

Alongside this danger from established company’s there is also the added danger of new manufacturers entering the market region in which Levi Strauss has a majority share and attempting to snatch some of that profit from them, for instance in the United Kingdom Supermarkets are making their own brand of jeans that are half the cost of Levi denims. This type of own name branding by other stores is becoming popular within most European regions where the styles are catering for the customers and the Levi Strauss makes are not.

Levi Strauss with such a large share in the fashion market have to be aware of the change in global attitudes and markets, if a recession were to hit the cotton trade or the markets were to change against Levi then they would be in danger of losing a large proportion of their funding as sales would be reduced.

By being selective in their regional centers Levi have to be aware of the change in fashion, if they continue on the present journey of only selecting and making fashion in the style for those who would wear a particular style of fashion then by alienating others they are losing sales if a change in the fickle fashion industry suddenly happens then many regions will be left with a slow change over that may again have them losing customers to other company’s that are up to date with their styles.

Levi Strauss are in direct competition with companies that are involved in the denim and fashion field, companies such as Wrangler Jeans company, Lee, Chino, Marks and Spencers.

They are also in indirect competition with companies that have entered the manufacturing market and are using their own name and their own stores to sell their products. And other businesses that are not normally know for making denim clothing such as Adidas.

For a strategic plan looking at a possible new design to enter the market within the first half a year:
From months one through to three, the company should carry out customer research and also company research, looking at what sizes and styles the customer would consider wearing. The company should also stay away from its regular fields of purchasers and look at the age groups of 18 to 20, 21-24, 25-30. 31-38 and 39 and above. Also the company should look at differing sizes rather than the average size.

Carrying on from customer research, researcher should also look at the competition with in the market and compare what their competitors have to offer, if a similar range is offered then compare the differences and attempt to improve on design, size, and even cost.

During this preliminary stage a marketing plan should be drawn up and examined against previous marketing plans, again looking for improvement in regions that have been explored and also exploring new regions.

From months three through to six, prototypes should be developed in conjunction with new designs and also from the analyzation of the customer research results, making the necessary changes in the marketing plan, and also bringing in new designs if the research calls for it.

From six through to twelve months designs should be finalized, and appropriate launch dates for the new style or range of clothing should be launched, perhaps arranging a clothes show in key areas or arranging the launch to coincide with a major fashion show in several regional areas.

The low key marketing plans should be initiated, with use of appropriate media uses such as slimming or health magazines along with women’s and certain men’s magazines.

Distribution to main suppliers including point of sale materials should be arranged during this stage, jeans should be established within retail units and outlets by the end of the twelve month stage.

From the twelve through to twenty four month stage, marketing campaigns should be reviewed, changes within the point of sale material should be undertaken to avoid advertising becoming stale and boring, and also attracting those customers who have slipped through previous advertising campaign. Original sale projections should be compared with actual sales, marketing plans should be improved or reviewed or updated where necessary.

By the twenty four through to the thirty six month stage all products should have been absorbed into normal sales plans.
As would be fairly standard with this form of marketing plan.

The company does have alternatives apart form the above 3 year plan, it can do nothing and hope that the problem of not having all the market does not affect sales in any way. Or it can expand another line of clothes different from jeans, however this could prove difficult with styles and designs and possible market research still would be carried out therefore bringing the company back to its original three year plan for a revamping of an old style garment for a new market.