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1. Industry Profile
India is the second fastest growing economy in the world growing at approximately 7%-8%
per annum. According to A.T. Kearney’s Global Retail Development Index, 2006, India
tops the annual list of most attractive countries for international retail expansion (Source:
India Retail Report, by Images F&R Research). Currently the Indian retail market is valued at
USD 270.0 billion. Organized retail has grown from USD 6.2 billion in 2004 to USD 8 billion
in 2005 to USD 12.4 billion, at a CAGR of 30% (Source: India Retail Report by Images F&R
Research 2007). Organized retail is on a high growth trajectory due to several favourable
drivers including:favourable demographic profiles, rising income levels, increase in
consumer spend, urbanization, growth in quality retail space, emergence of mall culture and
rapid development of malls, emergence of specialty and supermarket formats which have
the most potential for growth followed by hypermarkets.Apparel and accessories retailing
is the largest segment of organized retailing in India, constituting 39.0% of total organized
retailing business, which is valued at approximately Rs. 550.0 billion (USD 12.4 billion)
(Source: India Retail Report & F&R 2007). The organized apparel and accessories retail
market accounted for 13.6% of the total sector in
2004 and was valued at Rs. 109.0 billion. The share of organized retail has steadily grown to
18.9% in 2006, with the apparel and accessories sector showing a year on year growth rate
of 30.3% during 2005-2006. Approximately 42% of the Indian apparel market is dominated
by men’s wear followed by women’s wear at 34%.The ready to wear (RTW) market for
apparel in India is expected to show continued growth due to the softening of the
government regulations, among other factors. The readymade apparel segment includes both
branded and unbranded players. A branded store is wherein a manufacturer or marketer
makes conscious efforts to promote his brand, such as Gucci Retail India Limited, Madura
Garment’s Peter England, Arvind Brand’s Newport, ITC’s Wills Classic, and Raymond’s
Park Avenue. There are several foreign brands that have successfully established their
presence in the country. These players may have come in via a tie-up with domestic
concerns: (like Benetton), or via licensee route (like Allen Solly, Arrow). Some brands like
Metro come in with Cash and Carry wholesale trading route, while Tommy Hilfiger, Marks
and Spencer’s, Speedo, Umbro etc retail through franchisee channels. There are roughly

2. about 23 major players operating in branded apparel segment in India.For further details,
please refer to the section titled “Industry Overview” beginning on page 59 of this
Prospectus.
Apparel Manufacturing - Shifting towards Asia
India’s textile industry has opened up significantly with the dismantling of quotas; hence
apparel manufacturing is gradually shifting from Western countries to Asian countries on
account of cost competitiveness. The elimination of these quotas has led retailers to source
their requirements from the most competitive vendor. India also has an added advantage of
low labour cost, along with other countries like Bangladesh, Indonesia and China, which
has added to their rapid growth.
Growth DriversChanging Demographic profile
India has the youngest consumer profile as compared to the ageing population of USA, UK,
and Japan etc. Over 65% of the population is below 35 years of age; 54% of the population
is below 24 years of age. In contrast, the young population in Europe and Japan is declining;
Immigration is largely responsible for keeping a positive growth rate in US. (Source: Indian
Retail Report by Images & F&R)The composition of the Indian population is shifting more
towards the age group 20-49 i.e. the working population with purchasing power. This shift is
expected to be a major driver of consumption. The low median age of the population means
a higher current consumption spend vs. savings as a younger population has both, the ability
and willingness to spend. Higher consumption is a direct booster for the retailing industry.
There has also been a significant increase in the percentage of working women from 22% in
1991 to 26% in 2001. (Source: FICCI KPMG Report)Consumer lifestyles and preferences are
changing fast which is a prominent driving factor too. There are more nuclear families
proliferating which will result in 3% to 4% increase in aggregate spending over the next 5
years. (Source: India Retail Report by Images & F&R 2007).
Rising Income Levels
A larger number of households are getting added to the consuming class with growth in
income levels. There has been a 100% growth in the addition of households, from 40
million in 1995 to 80 million households in 2005. This has resulted in significant increase

3. in high income group from 5.5 million household in 1995 to 18 million households in
2005 for the high income group and from 18 million households in 1995 to 31 million in 2005
for the mass affluent. There has been increase in the nuclear family structure; a growing
number of educated and employed women (which translates into increasing disposable
incomes), media proliferation and growing consumerism have all contributed to the growth
of organized retail.
Consumer Spend
India has one of the youngest populations where 65% of the population is below 35 years and
54 % below 24 years. A younger population and the increasing disposable income levels,
along with higher aspirations and a feel-good factor, has tremendously affected the consumer
spend. Private consumption has a direct impact on the growth of the retail industry.
Today’s consumers are increasingly becoming brand conscious and are looking for products
with design and quality. There is easier acceptance of luxury and an increased willingness
to experiment with mainstream fashion which is seen as one of the main drivers for the
clothing and apparel segment in India.
Urbanization
Currently organized retail is focused on metros then moving down to the tier 1 and 2 cities.
In the next 10 years the growth in the organized retail is going to come from the metros thus
the target audience for organized retail is going to be the urban population. Organized retail
has been more successful in cities more so in the South and West of India.
The reasons for this regional variation range from differences in consumer buying behaviour
to cost of real estate and taxation laws. (Source: FICCI KPMG Report)There is increase in
awareness of the tier II cities and now this is eroding the difference between the metros and
the tier II cities in terms of “urban aspirations”. International brands like Nokia, Pizza
Hut, Ford, Reebok, and Adidas are increasingly relying on these tier II cities to drive their
growth.
Retail Space
Quality retail space has always been one of the key hurdles for the development of
Organized Retail. Currently there are 120 operational shopping centres with approximately

4. 33 million sq ft space growing to over 575 shopping centres/ malls covering more than 120
million sq ft space quality retail space by 2009. (Source: Images Yearbook Volume
III)There is additional retail space to add Rs. 400 billion of business to organized retail. This
growth in quality retail space will positively impact the growth in the apparel market as there
will be complete change in the shopping habits. Impulse shopping will go up to 40% of
total mall shopping. Awareness and sensitivity of brands will be heightened and a
shopping trip becomes more of an experience rather than a chore. (Source: Images
Yearbook Volume III)
Retail Formats preferred in India
The KPMG retail survey in India states that the specialty and supermarket format have the
most potential for growth followed by hypermarkets. With the increase in the percentage of
working women and dual income families, customers often visit shops with intention to
purchase a specific product, thus confirming the emerging trend of focused malls.
Source KPMG REPORT
Indian Apparel Market
The organized apparel and accessories retail market accounted for 13.6% of the total sector
in 2004; it was valued at Rs 10,900 crores. The share of organized retail has steadily grown
to 18.9% in 2006, with the apparel and accessories sector showing a year on year growth rate
of 30.3% during 2005-2006. Apparel and accessories retailing is the largest segment of

5. organized retailing in India, constituting 39% of total organized retailing business,
which values approximately at Rs 55,000 crores (USD 12.4 billion). (Source: India Retail
Report by Images & F&R 2007)
Source: India Retail Report by Images & F&R 2007
Indian Apparel Market trends
i) Malls are expected to be one of the main growth drivers of apparel retailing in India,
as such organized retail spaces offer large areas to fashion products.
ii) Existing apparel brands and retailers have started exploring the potential of the smaller
cities and expanding their retail network.
iii) In terms of opening new retail outlets, apparel retailers and brands attained growth in
opening up of number
The Indian Apparel Market’s lions share is taken by menswear with 42% value. The
women’s wear segment has increased its overall market share by 1% to 34% valuing it at Rs
30,380 crores. There is a drop in the kids segment from 18% to 17%. This drop is due to the
increase in usage of ready-to-wear branded uniforms.
Products in the unisex segment cater to all three major apparel segments in the ratio of 6:3:1
for men’s, women’s, kids apparel respectively. The segment for uniforms is considered
separately because it comprises both kids as well as sizing in men and women for
customers above 14 years of age.
Ready to Wear/ Tailored Segment
Traditionally, tailor-made garments had found flavour with the Indian masses but now the
trend is shifting at a fast pace. The last two decades of the apparel industry were in 4

6. different phases:
Phase 1 Pre 90’s : Era of tailor made
apparel
Phase 2 1990-1995 : Ready-to-Wear apparel
introduced
Phase 3 1995-2000 : Brands flourished
Phase 4 2000-2004 : Retail dominates
2005 onwards : Categories rule
The other growth drivers for the ready to wear (RTW) market are the softening of the
Government Regulations like:
a) The production of ready made garment is no longer reserved for
small-scale industry.
b) Excise duty on RTW garments has been abolished.
c) Implementation of VAT by various states will simplify the tax structure and reduce
the tax burden on branded garment manufacturer.
Branded/Unbranded/Private Labels
Within the readymade segment we have branded and unbranded players. A branded store is
wherein a manufacturer or marketer makes conscious efforts to promote his brand, such as
Gucci Retail India Limited, Madura Garments Peter England, Arvind Brand’s Newport,
ITC’s Wills Classic, and Raymond’s Park Avenue
There are several foreign brands that have successfully established their presence in the
country. These players may have come in via a tie-up with domestic concerns: (like
Benetton), or via the licensee route (like Allen Solly, Arrow). Some brands like Metro
come in with Cash and Carry wholesale trading route, while Tommy Hilfiger, Marks and
Spencer’s, Speedo, Umbro etc retail through franchisee channels.
Globally private labels contribute to 17% of retail sales and are growing at 5% pa. Private
Labels provide higher margin to the retailers simultaneously offering lower price to the
consumers. This is a strategy adopted globally and now is extensively used by Indian
retailers.

7. There are certain private label brands which have done exceedingly well like John Miller,
Bare, Stop, Splash. With the implementation of the uniform tax structure across the country,
quite a few of these labels are likely to aspire to achieve a brand status.
A survey carried by AC Nielsen has identified that 56% of their survey respondents in India
consider private labels to be good alternatives to manufacturer brands. This exponential
growth can be seen in the areas of groceries, home care, clothing and apparel. (Source:
Images Yearbook Volume III)

8. COMPANY PROFILE
(LEVIS)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. Levi’s jeans
apparently were first introduced to the East during the craze of the 1930’s, 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 defence 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.
THE LEVI’S BRAND: BRAND FACTSHEET:
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.

9. • 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 "Levi’s" stitched in
White capital letters, it differentiates Levi's jeans from competitors.
• Levi’s jeans famous arched back pocket stitching is called the “accurate.”
This iconic stitching can be seen on back pockets throughout the world. Today, Levi’s jeans
are sold in more than 110 countries worldwide. Levi’s Jeans are single most-often copied
apparel item in the
history of apparel. The Levi’s brand several collections around the world to meet the needs,
and wants,
of denim-wearers everywhere. These include:
Levi’s Vintage Clothing – Inspired directly from the Levi’s brand archives and
Available worldwide.
Levi’s Capital E – The most premium, finely crafted, luxurious expression of
The Levi’s brand is sold in select Levi’s Stores and premium stores in the United States.
Levi’s RED – A sexy and modern expression of the Levi’s brand is sold in Chains, department
stores
and Levi’s Stores in the United States and Levi’s Stores and specialty retailers in Europe.
Levi’s Blue – A European collection of jeans for men and women in premium denim finishes
that are appropriate for day or night.
Levi’s Lady Style – A range of premium jeans for women available across Asia, designed for
more sophisticated wearing occasions.
Levi’s Red Tab – The authentic core of the Levi’s brand offers a wide range of
Fits and finishes in true Levi’s style.

10. 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 LEVI’S,DOCKERS,SIGNATURE
WEBSITE WWW.LEVIS.COM
VISION STATEMENT: LEVI’S STRAUSS: Four core values are at the heart of Levi
Strauss & Co.: Empathy, Originality, Integrity and 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 PEOPLE’S SHOES
 ORIGINALITY- BEING AUTHENTIC & INNOVATIVE
 INTEGRITY- DOING THE RIGHT THING
 COURAGE – STANDING UP FOR WHAT LEVI’S 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.”

11. 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.
EXTERNAL MARKETING ENVIRONMENT: External marketing environment plays a
very important role in success/failure of a brand. This also 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 brand’s performance.
THE DEMOGRAPHIC ENVIRONMENT: There’s 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 LEVI’S. LEVI’S generally appeals to more mature generations not necessarily
looking to make fashion statement. LEVI’S 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 LEVI’S can infer that the market for jeans is also growing. However this
growth is characterized by slow rate of growth.
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.India

12. 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.The study further indicates
that there is a progression from traditionalism and self-sacrifice to westernization and
individualism as one move from the lower socio-economic classes to the higher socio-
economic classes.
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.
THE TECHNOLOGICAL ENVIRONMENT: One of the most dramatic forces shaping a
brand’s 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
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.

13. 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.
POSITION AND PRODUCT LIFE CYCLE: LEVI STRAUSS & CO. LTD
To overcome the decline in the sales in past few years levis had changed its place, pricing and
distributor and retail strategies
For tapping Indian market they had diversified
0
1
2
3
4
5
6
7
8
1994 1996 1998 2000 2002 2004 2006 2008 2010
TOTAL
SALES
()$MILLION)
YEAR
PRODUCT LIFE CYCLE: LEVI STRAUSS & CO. Ltd
TOTAL SALES

14. RECENT DEVELOPMENTS: PRICING (LEVI’S STRAUSS & CO Ltd): in order to
succeed its plans in India, LEVI’S has been making a number of efforts/developments. Some of
the important changes/developments made by LEVI’S in the recent past are as follows:
- Levi’s India plans to vacate the middle price segment and plans to concentrate on the lower
and the higher end- which is the value offering-will 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.
LEVI'S REDLOOP, LEVI'S
VINTAGE
TREND INITIATORS
8000 ONWARDS
PREMIUMSPECIAL EDITION
TREND INFLUENCER
5500 TO 8000
LEVI TYPE 1,PURE BLUE, ENGINEEREDJEANS, SILVER
TAB
EARLY ADOPTER 3000 TO 5500
RED TAB
TRADITIONAL-1500 TO 3000
LEVI STRAUSS SIGNATURE
VALUE DRIVEN-BELOW 1200

15. - Reason behind LEVI’S 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,GUCCI, etc.)
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. LEVI’S 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.
LEVI’S STRAUSS, one of the most respected apparel/clothing companies of the world, has
opened around 500 outlets at prime locations in India. (Source: Levi’s retail outlet,
Bhubaneswar). Aesthetically designed, the LEVI’S store offers wardrobe solutions to the
“INDEPENDENT MAN” through popular brands like LEVI’S RED, LEVI’S RED TAB,
LEVI’S SIGNATURE, & DOCKERS. Occupying a space of more than 1 million square feet,
the retail chain network offers over 3,000 shades and designs of LEVI’S fabric. The stores also
sell the LEVI’S 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.
PROMOTION: LEVI’S 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

16. communications is equally important in influencing attitudes and behaviour with respect to
socially relevant themes.
ADVERTISING CAMPAIGNS: LEVI’S STRAUSS & CO. Ltd: declining sales forced
Levi’s 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 LEVI’S 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. LEVI’S 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: LEVI’S 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 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 LEVI’S 501 are still in a decline, sales of LEVI’S engineered jeans are rising
steadily and the line now accounts for 9-10% of the total sales by volume for the LEVI’S
brand.
7.4. PUBLIC RELATIONS: LEVI’S STRAUSS & CO. Ltd: LEVI’S Strauss & CO. Ltd has
long been a corporate responsibility leader in the truest sense of the word; by doing things long

17. 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. Levi’s Strauss & CO. Ltd is
tackling complex challenges, like ensuring that worker’s rights are respected and combating
climate change, by collaborating with industry peers and through other systemic solutions.
CORPORATE SOCIAL RESPONSIBILITY: LEVI’S STRAUSS & CO. Ltd: THE
LEVI’S STRAUSS FOUNDATION: The LS&CO. business mantra, “adopt, adapt, invent,”
also is important in our approach to its work in HIV/AIDS. LEVI’S 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.
- 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
angles—what 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 LEVI’S first touched HIV/AIDS, ITS leadership continues and
it resolves to win against this disease remains unabated.

18. Brands
The products of Levi Strauss & Co are sold under three brands:
Levi's®
Since their invention in 1873, Levi's® jeans have become one of the most
successful and widely recognized brands in the history of the apparel industry
Dockers®
Dockers® brand, which pioneered the movement toward business casual, has led the
U.S.khaki category since the brand's 1986 launch, and is now available in numerous
countries.
Levi Strauss signature
In 2003 the launch of the Levi Strauss Signature™ brand, giving value consumers
high-quality and fashionable clothing from a company from which the customer trust.
Values of Levi Strauss
Levi Strauss & Co. has four major core values. These are
Empathy
Originality
Integrity
Courage Levi Strauss & Co. says, “Their corporate values -- empathy, originality,

19. integrity and courage -- are the foundation of our company and corporate values --
empathy, originality, integrity and courage -- are the foundation of our company and
define who we are. They underlie how they compete in the marketplace and how they
behave. Define who they are. They underlie how they compete in the marketplace and
how they behave.
MissionStatement
The mission of Levis Strauss & Co. is 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 our business ethically and
demonstrate leader ship in satisfying our responsibilities to our communities and
to 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.
Aspiration statement
They want a company that make them proud of and committed to, where all
employees have an opportunity to contribute, learn, grow and advanced based
on merit, not politics or background. They want their people to feel
respected, treated fairly, listened to and involved. Above all, they want
satisfaction from accomplishments and friendships, balanced personal and
professional lives, and to have fun in our endeavours.
Vision statement
When LS & Co. describe the future of Levi they are talking about a building on the
foundation they have inherited: affirming best of their Company’s tradition, closing
gaps that may exist between principles and practices and updating some of their values
to reflect contemporary.
Scanning the market environment
Like other successful companies, Levi’s also has realized that the marketing
environment presents a never-ending series of opportunities and threats. The major

20. responsibility for identifying significant changes in the macro environment falls to a
company’s marketers. More than any other group in the company, the marketing
managers of Levis are the trend trackers and opportunity seekers. Many opportunities
are found by identifying trends (directions or sequences of events that have some
momentum and durability) and mega trends (major social, economic, political and
technological changes that have long-lasting influence).Within the rapidly changing
global picture, the marketers of Levi’s are monitoring the following six major
“Environmental Forces”: Demographic Environment Economic Environment Natural
Environment Technological Environment Political-Legal Environment Social-Cultural
Environment Market Segmentation Market
Segmentation
Market segmentation is the selection of groups of people who will be most receptive to a product.
The most frequent methods of segmenting include demographic variables such as age, sex, race,
income, occupation, education, houseold status, and geographic location; psychographic variables
such as life-style, activities, interests, and opinions; product use patterns; and product benefits.
Much segmentation involves combinations of these methods. No matter how segments are
defined, however, they are characterized by considerable change over time. The readings in this
section exemplify areas of rapid change.
Basis ofmarket segmentationbasis of market segmentation
Demographic Segmentation Geographic Segmentation Psychographic Segmentation Behavioural
Segmentation Target Market:
JEANS targets its market by evaluating the wants of customers. Mostly Levi’s targets its market
among the following classes:
Upper Class
Upper Middle Class
Target Market Strategy
Target market strategy adopted by Levis is basically on having long-term relations with their

21. customers and to provide them with better product.
Benefits of Segmentation:
Levis has got customer oriented approach by segmentation. Company is promoting its products
effectively within segments by print media as well as electronic media, e.g. Newspapers,
Signboards, Television commercials, Internet, etc. Company is providing their customers with
stylish better quality and different product keeping in view its cost.
Conditions for effective segmentation
JEANS is fulfilling the conditions for effective segmentation.
Segments are strong enough to make profit. Segments of company are measurable
Limitation of Segmentation
Because of segmentation, Levi’s faces some limitations. Lack of awareness in middle class.
Company has to pay extra cost for multi-advertisement. In Pakistan they have to face several
Culture problems.
Marketing mix
The marketing mix is the set of marketing tools the firm uses to pursue its marketing objectives in
the target market. Marketing-mix decisions must be made for influencing the trade channels as
well as the final consumers. McCarthy classified these tools into four broad groups that he called
the four Ps of marketing: product, price, place and promotion. Note that the four Ps represent the
seller’s view of the marketing tools available for influencing buyers.
Levi’s portfolio analysis
Levi’s corporate strategy involves a number of businesses, so managers can manage this
collection or portfolio of businesses by using a corporate portfolio matrix.
BCG Matrix
A strategy tool that guides resource allocation decisions on the basis of market share and growth rate of SBU’s.
Boston Consulting Group introduced the idea of BCG matrix that an organization’s businesses
could be evaluated and plotted using a 2*2 matrix to identify which ones offered high potential

22. and which ones were a drain on organizational resources.
Horizontal Axis
The horizontal axis represents market share which is evaluated as low or high. Vertical Axis:
The vertical axis indicates anticipated market growth which is also evaluated as low or high
Categories
Based on its evaluation, the LS & CO.’s businesses are placed in the following:
Stars (High Growth, High Market Share)
“Stars include the businesses which are in a fast growing market and hold a dominant share of
that market.” Dockers® come under the head of stars as it is the major source of income for
thecompany.
Cash cows (LowGrowth, High Market Share)
Businesses in this category generate large amounts of cash, but their prospects for future growth
are limited.” The women apparels has got a low growth and high market share so it comes under
the Cash Cows head
Question marks (High Growth, LowMarket Share)
These businesses are in an attractive industry but hold as mall market share percentage.
Major Competitors
They are much proud to say with surety that their products completely satisfy their consumers.
That’s why they don’t face much competition in their business. But yet there are some
competitors.
Pepe Jeans
Leeds (US Apparels)
Gaap Jeans
Cambridge
Their prices are not influenced by the competitors. Such a stuff, design and fashion which don’t
have the enough sales are recall back to the company. Again company issues this stuff to their
own outlets for sale at discount prices.

23. SWOT Analysis
Strengths
Levi’s enjoys high brand equity. People all around the world recognize the brand name. Levi’s
products are unique and innovative in the style.
A lot of variety is offered by Levi’s ranging from sunglasses to skirts and shirts.
The products are renowned and are considered as the most durable i.e. the long lasting products.
Levi’s follows a high standard of quality
Weakness
Levi’s products are considered as very expensive. Therefore a large percentage of people are
reluctant tobuy the products.
As no discounts are present and products are sold at fixed prices many customers are lost. Levi’s
does not provide any services like free delivery etc
Opportunities
Levi’s can do more well in the women section. This section is give less importance as compared
to the men section.
The kid’s section, which has been started from few years, should also be given proper attention to
gain customers.
Sales promotion can be increased by increasing the advertisements expenses so as to enjoy a large
number of customers.
Threats
Likely entry of new competitors. Rising sales of substitute products. Slower market growth.
Adverse government pressures.

24. CLOTHING (Feature of all Human Societies)
A feature of all modern human societies is the wearing of clothing, a category encompassing a
wide variety of materials that cover the body. The primary purpose of clothing is functional, as a
protection from the elements. Clothes also enhance safety during hazardous activities such as
hiking and cooking, by providing a barrier between the skin and the environment. Further,
clothes provide a hygienic barrier, keeping toxins away from the body and limiting the
transmission of germs.
Clothing performs a range of social and cultural functions, such as individual, occupational and
sexual differentiation, and social status. A uniform, for example, may identify civil authority
figures, such as police and military personnel, or it may identify team, group or political
affiliations. In many societies, norms about clothing reflect standards of modesty, religion,
gender, and social status. Clothing may also function as a form of adornment and an expression
of personal taste or style.
Throughout history, many materials have been used for clothes. Materials have ranged from
leather and furs, to weave and woven materials, to elaborate and exotic natural and synthetic
fabrics. Recent scientific research estimates that humans have been wearing clothing for as long
as 650,000 years. Others claim that clothing probably did not originate until the Neolithic Age
(the "New Stone Age").
Articles carried rather than worn (such as purses), worn on a single part of the body and easily
removed (scarves), worn purely for adornment (jewellery), or those that serve a function other
than protection (eyeglasses), are normally considered accessories rather than clothing.
FASHION
Fashion, a general term for the style and custom prevalent at a given time, in its most common
usage refers to costume or clothing style. The more technical term, costume, has become so
linked in the public eye with the term "fashion" that the more general term "costume" has in
popular use mostly been relegated to special senses like fancy dress or masquerade wear, while
the term "fashion" means clothing generally, and the study of it. This linguistic switch is due to

25. the fashion plates which were produced during the Industrial Revolution, showing the latest
designs. For a broad cross-cultural look at clothing and its place in society, refer to the entries for
clothing, costume and fabrics.
An important part of fashion is fashion journalism. Editorial critique and commentary can be
found in magazines, newspapers, on television, fashion websites, social networks and in fashion
blogs.
At the beginning of the 20th century, fashion magazines began to include photographs of various
fashion designs and became even more influential on people than in the past. In cities throughout
the world these magazines were greatly sought-after and had a profound effect on public clothing
taste. Talented illustrators drew exquisite fashion plates for the publications which covered the
most recent developments in fashion and beauty. Perhaps the most famous of these magazines
was La Gazette du Bon Ton which was founded in 1912 by Lucien Vogel and regularly
published until 1925 (with the exception of the war years).
Vogue, founded in the US in 1892, has been the longest-lasting and most successful of the
hundreds of fashion magazines that have come and gone. Increasing affluence after World War
II and, most importantly, the advent of cheap color printing in the 1960s led to a huge boost in its
sales, and heavy coverage of fashion in mainstream women's magazines - followed by men's
magazines from the 1990s. Haute couture designers followed the trend by starting the ready-to-
wear and perfume lines, heavily advertised in the magazines, that now dwarf their original
couture businesses. Television coverage began in the 1950s with small fashion features. In the
1960s and 1970s, fashion segments on various entertainment shows became more frequent, and
by the 1980s, dedicated fashion shows like Fashion-television started to appear. Despite
television and increasing internet coverage, including fashion blogs, press coverage remains the
most important form of publicity in the eyes of the fashion industry.
However, over the past several years, fashion websites have developed that merge traditional
editorial writing with user-generated content. New magazines like iFashion Network, and
Runway Magazine, led by Nole Marin from America's Next Top Model, have begun to dominate
the digital market with digital copies for computers, iPhones and iPads.

26. Sporting a different view, a few days after the 2010 Fall Fashion Week in New York City came
to a close, Fashion Editor Genevieve Tax said, "Because designers release their fall collections in
the spring and their spring collections in the fall, fashion magazines such as Vogue always and
only look forward to the upcoming season, promoting parkas come September while issuing
reviews on shorts in January." "Savvy shoppers, consequently, have been conditioned to be
extremely, perhaps impractically, farsighted with their buying.
BRAND
 A trademark or distinctive name identifying a product or a manufacturer.
OR
 A brand is a name for or a trademark claimed for a certain product or service by either an
individual or a company. A brand helps others know and identify the product or service.
OR
 A brand is a name or symbol used to identify the source of a product. When developing a
new product, branding is an important decision. The brand can add significant value
when it is well recognized and has positive associations in the mind of the consumer.
This concept is referred to as brand equity.
Brand Equity:
Brand equity is an intangible asset that depends on associations made by the consumer. There are
at least three perspectives from which to view brand equity:
 Financial - One way to measure brand equity is to determine the price premium that a
brand commands over a generic product. For example, if consumers are willing to pay
$100 more for a branded television over the same unbranded television, this premium
provides important information about the value of the brand. However, expenses such as
promotional costs must be taken into account when using this method to measure brand
equity.

27.  Brand extensions - A successful brand can be used as a platform to launch related
products. The benefits of brand extensions are the leveraging of existing brand awareness
thus reducing advertising expenditures, and a lower risk from the perspective of the
consumer. Furthermore, appropriate brand extensions can enhance the core brand.
However, the value of brand extensions is more difficult to quantify than are direct
financial measures of brand equity.
 Consumer-based - A strong brand increases the consumer's attitude strength toward the
product associated with the brand. Attitude strength is built by experience with a product.
This importance of actual experience by the customer implies that trial samples are more
effective than advertising in the early stages of building a strong brand. The consumer's
awareness and associations lead to perceived quality, inferred attributes, and eventually,
brand loyalty.
Strong brand equity provides the following benefits:
 Facilitates a more predictable income stream.
 Increases cash flow by increasing market share, reducing promotional costs, and
allowing premium pricing.
 Brand equity is an asset that can be sold or leased.
However, brand equity is not always positive in value. Some brands acquire a bad reputation that
results in negative brand equity. Negative brand equity can be measured by surveys in which
consumers indicate that a discount is needed to purchase the brand over a generic product.
Building and Managing Brand Equity
In his 1989 paper, Managing Brand Equity, Peter H. Farquhar outlined the following three stages
that are required in order to build a strong brand:
1. Introduction - introduce a quality product with the strategy of using the brand as a
platform from which to launch future products. A positive evaluation by the consumer is
important.

28. 2. Elaboration - make the brand easy to remember and develop repeat usage. There should
be accessible brand attitude, that is, the consumer should easily remember his or her
positive evaluation of the brand.
3. Fortification - the brand should carry a consistent image over time to reinforce its place
in the consumer's mind and develop a special relationship with the consumer. Brand
extensions can further fortify the brand, but only with related products having a perceived
fit in the mind of the consumer.
Alternative Means to Brand Equity
Building brand equity requires a significant effort, and some companies use alternative means of
achieving the benefits of a strong brand. For example, brand equity can be borrowed by
extending the brand name to a line of products in the same product category or even to other
categories. In some cases, especially when there is a perceptual connection between the products,
such extensions are successful. In other cases, the extensions are unsuccessful and can dilute the
original brand equity.
Brand equity also can be "bought" by licensing the use of a strong brand for a new product. As in
line extensions by the same company, the success of brand licensing is not guaranteed and must
be analyzed carefully for appropriateness.
Managing Multiple Brands
Different companies have opted for different brand strategies for multiple products. These
strategies are:
 Single brand identity - a separate brand for each product. For example, in laundry
detergents Procter & Gamble offers uniquely positioned brands such as Tide, Cheer,
Bold, etc.
 Umbrella - all products under the same brand. For example, Sony offers many different
product categories under its brand.

29.  Multi-brand categories - Different brands for different product categories. Campbell
Soup Company uses Campbell's for soups, Pepperidge Farm for baked goods, and V8 for
juices.
 Family of names - Different brands having a common name stem. Nestle uses Nescafe,
Nesquik, and Nestea for beverages.
Brand equity is an important factor in multi-product branding strategies.
Protecting Brand Equity
The marketing mix should focus on building and protecting brand equity. For example, if the
brand is positioned as a premium product, the product quality should be consistent with what
consumers expect of the brand, low sale prices should not be used compete, the distribution
channels should be consistent with what is expected of a premium brand, and the promotional
campaign should build consistent associations.
Brand Image
Images evoked by exposure to a named brand
Like brand personality, brand image is not something you have or you don't! A brand is unlikely
to have one brand image, but several, though one or two may predominate. The key in brand
image research is to identify or develop the most powerful images and reinforce them through
subsequent brand communications. The term "brand image" gained popularity as evidence began
to grow that the feelings and images associated with a brand were powerful purchase influencers,
though brand recognition, recall and brand identity. It is based on the proposition that consumers
buy not only a product (commodity), but also the image associations of the product, such as
power, wealth, sophistication, and most importantly identification and association with other
users of the brand. In a consumer led world, people tend to define themselves and their Jungian
"persona" by their possessions. According to Sigmund Freud, the ego and superego control to a
large extent the image and personality that people would like others to have of them.

30. Good brand images are instantly evoked, are positive, and are almost always unique among
competitive brands.
Brand image can be reinforced by brand communications such as packaging, advertising,
promotion, customer service, word-of-mouth and other aspects of the brand experience.
Brand images are usually evoked by asking consumers the first words/images that come to their
mind when a certain brand is mentioned (sometimes called "top of mind"). When responses are
highly variable, non-forthcoming, or refer to non-image attributes such as cost, it is an indicator
of a weak brand image.
ABOUT GUCCI
The House of Gucci, better known simply as Gucci, is an Italian fashion and leather goods
label, part of the Gucci Group, which is owned by French company Pinault-Printemps-Redoute
(PPR). Gucci was founded by Guccio Gucci in Florence in 1921.
Gucci generated circa €2.2 billion worldwide of revenue in 2008 according to BusinessWeek
magazine and climbed to 41st position in the magazine's annual 2009 "Top Global 100 Brands"
chart created by Interbrand. Gucci is also the biggest-selling Italian brand in the world. Gucci
operates about 278 directly operated stores worldwide (at September 2009) and it wholesales its
products through franchisees and upscale department stores.
HISTORY
Like many other high-fashion companies, Gucci began as a small, family-owned saddlery and
leather goods store. Guccio Gucci was the son of an Italian merchant from the country’s northern
manufacturing region. As a young man, he travelled to Paris and London, where he gained an
appreciation of cosmopolitan culture, sophistication, and aesthetics. Gucci opened his first
boutique in the family’s native Florence in 1921 and quickly built a reputation for quality, hiring
the best craftsmen he could find to work in his atelier. In 1938, Gucci expanded and a boutique
was opened in Rome. Guccio was responsible for designing many of the company's most notable
products. In 1947, Gucci introduced the bamboo handle handbag, which is still a company

31. mainstay. During the 1950s, Gucci also developed the trademark striped webbing, which was
derived from the saddle girth, and the suede moccasin with a metal bit.Guccio and his wife Aida
Calvelli had a large family, six children in all, though only his sons—Vasco, Aldo, Ugo, and
Rodolfo—would play a role in leading the company. After Guccio's death in 1953, Aldo helped
lead the company to a position of international prominence, opening the company’s first
boutiques in London, Paris and New York. Even in Gucci’s fledgling years, the family was
notorious for its ferocious infighting. Disputes regarding inheritances, stock holdings, and day-
to-day operations of the stores often divided the family and led to alliances. As the Gucci
expanded overseas, board meetings about the company’s future often ended with tempers flaring
and luggage and purses flying. Gucci targeted the Far East for further expansion in the late
1960s, opening stores in Hong Kong and Tokyo. At that time, the company also developed its
famous GG logo (Guccio Gucci's initials), the Flora silk scarf (worn prominently by Hollywood
actress Grace Kelly), and the Jackie O shoulder bag, made famous by Jackie Kennedy, the wife
of U.S. President John F. Kennedy.Gucci remained one of the premier luxury goods
establishments in the world until the late 1970s, when a series of disastrous business decisions
and family quarrels brought the company to the verge of bankruptcy. At the time, brothers Aldo
and Rodolfo controlled equal 50% shares of the company, though Aldo felt that his brother
contributed less to the company than he and his sons did. In 1979, Aldo developed the Gucci
Accessories Collection, or GAC, intended to bolster the sales for the Gucci Parfums sector,
which his sons controlled. GAC consisted of small accessories, such as cosmetic bags, lighters,
and pens, which were priced at considerably lower points than the other items in the company’s
accessories catalogue. Aldo relegated control of Parfums to his son Roberto in an effort to
weaken Rodolfo’s control of the overall operations of the company.Though the Gucci
Accessories Collection was well received, it proved to be the destabilizing force that brought the
Gucci dynasty crashing down. Within a few years, the Parfums division began outselling the
Accessories division. The newly-founded wholesaling business had brought the once-exclusive
brand to over a thousand stores in the United States alone with the GAC line, deteriorating the
brand’s standing with fashionable customers. "In the 1960s and 1970s," writes Vanity Fair editor
Graydon Carter, "Gucci had been at the pinnacle of chic, thanks to icons such as Audrey
Hepburn, Grace Kelly, and Jacqueline Onassis. But by the 1980s, Gucci had lost its appeal,
becoming a tacky airport brand."

32. It didn’t take long before counterfeiters ravaged the company’s pomp by flooding the market
with cheap knockoffs, further tarnishing the Gucci name. Meanwhile, infighting was taking its
toll on the operations of the company back in Italy: Rodolfo and Aldo squabbled over the
Parfums division, of which Rodolfo controlled a meager 20% stake. By the mid-1980s, when
Aldo was convicted of tax evasion in the United States by the testimony of his own son, the
outrageous headlines of gossip magazines generated as much publicity for Gucci as its designs.
Rodolfo’s death in 1983 caused a major shakeup in the company when he left his 50% stake in
Gucci to his son, Maurizio Gucci. Maurizio allied with Aldo’s son Paolo to gain control of the
Board of Directors and established the Gucci Licensing division in the Netherlands for tax
purposes. (This action would later have a drastic impact on the outcome of the company’s
dispute with the world’s largest luxury goods company, LVMH Moët Hennessy Louis Vuitton.)
Following the decision, the rest of the family left the company and, for the first time in years,
one man was at the helm of Gucci. Maurizio sought to bury the fighting that had torn the
company and his family apart and turned to talent outside of the company for Gucci’s future.
Company Profile
Gucci Group is one of the world’s leading multi-brand luxury goods companies. Thanks to a
clear strategies and a set of unique competitive advantages, the group has developed and
strengthened a prestigious brand portfolio, broad product range and extensive geographical
presence worldwide.
The Group’s well balanced brand portfolio includes prestigious and clearly identified luxury
brands with a distinctive, specific role. Gucci Bottega Veneta and Yves Saint Laurent are the
engines of organic growth. Boucheron offers complementary expertise in segments like jewellery
and watches. Balenciaga, Stella McCartney, Alexander McQueen and Sergio Rossi are cutting-
edge brands with high potential for long-term growth.
Gucci Group has successfully attracted the best creative talents, who are now recognized as
rising stars. Frida Giannini at Gucci, Tomas Maier at Bottega Veneta, Stefano Pilati at Yves
Saint Laurent and Nicolas Ghesquiere at Balenciaga have perfectly interpreted the essence of
their brands, keeping their heritage alive with a contemporary mood. Designers like Alexander

33. McQueen, Stella McCartney and Francesco Russo at Sergio Rossi have set the trends with the
cutting-edge styles.
The Group creates and distributes high quality luxury goods including ready-to-wear, handbags,
luggage, small leather goods, shoes, timepieces, jewellery, ties and scarves. Also, under license
from global industry leader, eyewear and fragrances, cosmetics and skin care products. This vast
product range and the sharing of specific expertise among the various brands are one of the
Group’s greatest assets and a source of organic growth.
The carefully controlled development of an integrated distribution network with a sound
geographical basis has been a key strategic focus of Gucci Group. As of the end of 2009, the
group directly operates 609 stores in major markets throughout the world and wholesale products
through franchise stores, duty free boutiques and leading department and specialty stores.
Gucci Group is owned by PPR , a global player in retail and luxury goods.
Gucci Group
Brands under Gucci Group
 Gucci
 Bottega Veneta
 Yves Saint Laurent
 Boucheron
 Bedat & Co
 YSL Beaute
 Balenciaga
 Stella McCartney
 Alexander McQueen
 Sergio Rossi

34. BCG Matrix Of Gucci Group
As the Creative Director for both brands at Gucci and YSL, Tom Ford has the challenge to create
a distinctive image for both brands. The first fashion shows for YSL by Tom Ford were reported
to be a cheaper version of Gucci. This creates a huge problem, as the fashion shows contribute
largely to create the image required to generate big sales in the high-margin accessories
associated with that image, such as handbags, eyeware, watches, perfumes and cosmetics. Hence,
a key challenge will be to keep the new YSL look distinct within the growing Gucci empire.
Ford is trying to address this, and has presented the following image differentiation to the press
which was perceived with confidence by Business Week: “the YSL brand is starting to recapture
its star allure”. We believe however that the problem shall not be resolved entirely as Gucci
Group integrates more and more brands. Brand positioning shall be key, and keeping Chinese
walls between them will reveal a challenge to the new conglomerate. Additionally, front-office
synergies here are almost impossible as a blurring perception might result for clients.
VISION
Gucci Group strives to attract, hire, motivate, and retain the best talent in order to achieve
excellence in all aspect of businesses.
MISSION
 The price is forgotten long after the quality remains.”
 “To achieve profitable growth, while pursuing international expansion in a spirit of
achievement and creativity.”
Marketing Strategies
Marketing strategy is a process that can allow an organization to concentrate its limited
resources on the greatest opportunities to increase sales and achieve a sustainable competitive
advantage. A marketing strategy should be centered around the key concept that customer
satisfaction is the main goal.
A marketing strategy can serve as the foundation of a marketing plan. A marketing plan contains
a set of specific actions required to successfully implement a marketing strategy. For example:

35. "Use a low cost product to attract consumers. Once our organization, via our low cost product,
has established a relationship with consumers, our organization will sell additional, higher-
margin products and services that enhance the consumer's interaction with the low-cost product
or service."
A strategy consists of a well thought out series of tactics to make a marketing plan more
effective. Marketing strategies serve as the fundamental underpinning of marketing plans
designed to fill market needs and reach marketing objectives. Plans and objectives are generally
tested for measurable results. A marketing strategy often integrates an organization's marketing
goals, policies, and action sequences (tactics) into a cohesive whole. Similarly, the various
strands of the strategy , which might include advertising, channel marketing, internet marketing,
promotion and public relations can be orchestrated. Many companies cascade a strategy
throughout an organization, by creating strategy tactics that then become strategy goals for the
next level or group. Each one group is expected to take that strategy goal and develop a set of
tactics to achieve that goal. This is why it is important to make each strategy goal measurable.
Marketing strategies are dynamic and interactive. They are partially planned and partially
unplanned. The industry is more a pull than a push industry, explaining the large amount of
money invested in advertising (corporate or product specific level). On average, Gucci goods
industry spends more than 7% of its sales in advertising.Gucci Group reiterated its strong belief
in the control of the distribution channel and the development of DOS: “The idea here is to
control [the brand] to within an inch of its life, from creation to production to distribution”.Gucci
sends investigators into stores to keep legitimate other brands under Gucci group out of
discounters.As with the revival of Gucci, de Sole and Ford strongly believe in directly operated
stores to revive the brand and with the “dismember in order to rebuild” approach. “De Sole plans
to spend $20 million a year on marketing and real estate” with heavy investment planned in new
boutiques: new flagships shops are planned for Beverly Hills, New York, London, Hong Kong
and Milan.A detailed analysis of the actions that Domenico de Sole and Tom Ford undertook to
turn around Gucci shows that they have created a strategy and a process to execute this strategy
that not only enabled them to compete with the large luxury goods conglomerates such as
LVMH, and Richemont, but actually to outperform them on several counts, including stock
performance and compound growth.

36. In particular, we believe that they have achieved an extreme high-level of competence in several
areas, which combined have created their unique competitive advantage.
STRATEGIC MANAGEMENT PROCESS
The word Strategy means "to make plan for the right way, path or direction" while the word
Management means "to organize the things in a required or desired way". So the word strategic
management means "a process to organize the business on a right path to get profit and glory
from the scared resources." The term strategic management refers to the managerial process of
making the long term decisions, prediction about the business future position along with the
sense of purposeful action plan. In more simple words the strategic management is a managerial
process of making strategies towards organizational objectives and evaluating the performance
of employees and adjustments according to the requirements of the department to get best
possible result from the formatting strategy.
Some of the purposes of strategic management are:
1. To provide the better and up-to-date information about the organization's current position and
to predict where can be the organization stand in future.
2. To make managers and organizational members more alert about the opportunities and
threatening development in their corresponding field.
3. To help the entrepreneur to unify its managerial and organizational efforts.
4. To create a more proactive management posture.
5. To promote the development of a constantly evolving business model.
6. To provide the opportunities to managers for evaluating the company's budget according to the
situation.
Gucci Group has built a very solid base over the years to tighten its relationship with its
suppliers, particularly in the fashion and leather goods segments. They have incentivized them
both with capital and production tools. This creates much higher barriers to entry for a
competitor wishing to subcontract to them than the current exclusivity agreements. Although the
Italian model is to outsource this activity, we feel it is very close to a virtual vertical integration
backwards, while providing flexibility to Gucci (very low barriers to exit, as investment can be

37. considered as sunk costs).Gucci Group is also developing economies of scale buy using the same
suppliers to develop different lines of products for different brands.
Gucci is also building manufacturing capability in-house for crafts it did not master
(fragrances and watches). Its current agreement with Wella on Fragrances is an issue, as it does
not provide the right flexibility and economies of scale opportunities. However by building the
capability in house it is probably developing both a bargaining power, and a second sourcing
capacity for its other brands.
Marketing Mix
In the latest Global Luxury Brands Survey, one in five global consumers said they would choose
to buy Gucci (over any other luxury brand) if money was no option, making the Italian fashion
brand that was revived by Tom Ford in the 1990’s the most coveted and inspirational luxury
brand in the world today. 18% of South African Respondents said that they purchased Gucci, but
in South Africa the most popular luxury brands are Diesel and DKNY. It must be noted that this
survey is a reflection of internet users’ attitudes and therefore represents online consumers’
behaviour and attitudes only.
Globally, Chanel and Calvin Klein tied for second place in Nielsen’s 48-country online survey
that was conducted in November 2007. In third place came Louis Vuitton, followed by Giorgio
Armani, Christian Dior and Versace who all ranked forth. 28% of South Africans buy Calvin
Klein, but the rest of these brands are less popular in our country, with only 8% of respondents
saying that they buy Chanel and 4% buying Louis Vuitton.
Two years ago in the same survey, Gucci shared top honors in the survey with Giorgio Armani –
which has since slipped to fourth place in current global rankings. “It’s an incredible
achievement for Gucci to remain at the top of the most coveted league table for luxury brands,”
said Lennart Bengtsson, President Eastern Europe, Middle East & Africa (EEMEA), The Nielsen
Company.
“In the past two years, Gucci has managed to maintain and even increase its brand equity in a
very competitive and fickle industry. They have achieved this by consistently embedding their

38. core brand values in all their branded products, which range from perfume and sunglasses to
accessories, jewellery, handbags and ready-to-wear fashion,” noted Bengtsson.
According to the survey, if money was no object, 39% of South African consumers said they
would choose Gucci.The term "marketing mix" was first used in 1953 when Neil Borden, in his
American Marketing Association presidential address, took the recipe idea one step further and
coined the term "marketing-mix". A prominent marketer, E. Jerome McCarthy, proposed a 4 P
classification in 1960, which has seen wide use. The four Ps concept is explained in most
marketing textbooks and classes.
The duo designed the whole marketing mix, successfully changing the product mix, the pricing
strategy, the promotion strategy and the distribution concept, introducing a unique Gucci
approach to brand management.
 Product:
A tangible object or an intangible service that is mass produced or manufactured on a large scale
with a specific volume of units. Intangible products are service based like the tourism industry &
the hotel industry or codes-based products like cellphone load and credits. Typical examples of a
mass produced tangible object are the motor car and the disposable razor. A less obvious but
ubiquitous mass produced service is a computer operating system. Packaging also needs to be
taken into consideration. However, product has its life-cycle which result the growth will be
stopped and started declined when market saturated. To retain its competitive in the market,
product differentiation is required and is one of the strategy to differentiate from its competitors.
The main idea for both managers was that the brand should be consistent all over the world, and
convey the right image: “I wanted unity of style so that the customer who flies from Tokyo to
Milan to New York will find the same image” – de Sole.One of the first measures was to slash
unsuccessful product lines (a massive reduction in the range of leather products) and focus on
quality. All manufacturing licenses were terminated and production was brought back to the
Tuscany region, except for watches remaining in Switzerland. Franchises were granted
exclusively to sectors where craftsmanship is required, such as perfumes (Wella has a 25 year
contract). Finally the low-end products were slashed (although providing a very high margin)
because of brand dilution: “don’t run after the last dollar”.

39. Additionally both de Sole and Ford understood that they could not rely on designer
extravaganza, and very early on, introduced commercial considerations into their work: “in their
world, value comes from a brand image more than form a designer’s artistry”.Ford was then
instrumental in developing the Gucci new look. He dropped the old look of red and green stripes
that had adorned every Gucci product since its creation, and shifted towards an ultra-chic black
minimalist look, that appealed to the fashion conscious clientele. He also understood that ready-
to-wear (originally 10% of sales) should be used as an entry product and image ambassador for
the other much higher-margin products such as accessories (bags, ties, shoes, tableware and
belts).Indeed, Ford created a mechanism to design a pipeline of new products, heavily using
technology. Working from Los Angeles or London, he sent drawings electronically to Florence,
were they were shaped in 3-D, then modified using cupboard models, and finally made into
prototypes, again slashing both costs and new product development time.Additionally, there is
some evidence that he started to delegate part of the actual sketching to some 20 designers at
Gucci and later to some additional 10 designers at YSL.
 Price:
The price is the amount a customer pays for the product. It is determined by a number of factors
including market share, competition, material costs, product identity and the customer's
perceived value of the product. The business may increase or decrease the price of product if
other stores have the same product.Another measure applied immediately by de Sole was to
reprice every single item in the product line, mainly downwards, to create a consistent
positioning of the brand, taking into account the competitor landscape. He stressed the
importance of bringing value to customers.Indeed de Sole was quoted on several occasions that it
was stupid to try to chase the last dollar in sales if that created blurred perceptions and
inconsistency with the clientele.
 Place:
Place represents the location where a product can be purchased. It is often referred to as the
distribution channel. It can include any physical store as well as virtual stores on the Internet.
Place is not exactly a physical store where it is available Place is nothing but how the product
takes place or create image in the mind of customers. It depends upon the perception of
customers.De Sole is bullish in his ambition to control the distribution channel, for he believes

40. that in order to deliver the right image to his clients, Gucci needs to control the whole supply
chain from manufacturing to distribution where the brand image is finally conveyed to its
clients.In order to create the same look and feel all over the world, Gucci closed or bought back
all franchises and licensees, including airport duty-free shops, and shops in shops in large
department stores. “I am in the process of reducing the number of upscale retailers that carry
Gucci” – de Sole. He indeed closed down Gucci’s presence at Harrod’s in 1996, opening a new
store back a year later.He also heavily promoted directly operated stores (DOS) in exclusive
locations (Gucci Group: 67 self-owned stores in 1996, 124 in 1999). In 1999, all stores around
the world were redesigned simultaneously , in order to impact the clientele worldwide
simultaneously. And again de Sole went on annual tours to check consistency of brand
guidelines and closing down stores several times if necessary.
 Promotion:
It represents all of the communications that a marketer may use in the marketplace. Promotion
has four distinct elements: advertising, public relations, personal selling and sales promotion. A
certain amount of crossover occurs when promotion uses the four principal elements together,
which is common in film promotion. Advertising covers any communication that is paid for,
from cinema commercials, radio and Internet adverts through print media and billboards. Public
relations are where the communication is not directly paid for and includes press releases,
sponsorship deals, exhibitions, conferences, seminars or trade fairs and events. Word of mouth is
any apparently informal communication about the product by ordinary individuals, satisfied
customers or people specifically engaged to create word of mouth momentum. Sales staff often
plays an important role in word of mouth and Public Relations.We understand that the Gucci
brand was not heavily advertised in the pre-de Sole years. In order to relaunch the new image
imagined by Tom Ford, Gucci relied on the usual techniques for fashion: public relations and
press advertising. The difference with the previous era was the emphasis on this tool.
Indeed in 1994, “there wasn’t much money for advertising, so we decided to sink what we had
into fashion which is a highly publicized business” – de Sole. The two Milan readyto- wear show
in 1995 by Tom Ford were massive successes, and relaunched the brand into the forefront of the
luxury goods field.

41. Gucci also used public personalities to showcase its products and create press coverage, such as
with Hollywood stars: Madonna, Tina Turner, Nicole Kidman.A massive global advertising
campaign was then launched using the best fashion magazines: increasing from $6 million in
1993, to $28m in 1995 to $70 million in 1997, to $80m in 1998 (representing between 6 to 12%
of sales).
Marketing Research
During the late 1990’s, Gucci portrayed the characteristics of a firm with a differentiated
business-level strategy. Gucci provides value to their customers with high quality luxury goods
which consist of unique product features in relation to their rival competitors. One example of
Gucci’s distinct quality is the prestigious image of their brand name using the famous “GG” logo
on their items. Gucci is a successful firm in the luxury goods industry with many resources
and capabilities that differentiate them from other companies within the industry. The first
resource is the management team of Gucci following the millions in losses during the early
1990’s. Two managers in particular are Dominco De Sole, head of Milan office, and Tom Ford
who replaced Dawn Mello as creative director in 1994. The duo of Ford and Sole turned the
company around from near-bankruptcy to a close rival with LVMH, the luxury goods
powerhouse. The two of them possess an intangible resource to Gucci that is valuable, rare,
inimitable, and non-substitutable. Ford and Sole are considered to be valuable to the firm
because of their leadership and vision to make Gucci a global presence and rare because their
management skills are unlike any other firm in the luxury goods industry. What makes the
management team a sustainable capability is the difficulty for other firms to match their business
strategy from financial decisions to marketing abilities. Another resource that Gucci has used to
gain a competitive advantage is its glamorous fashion sense that captures consumers all over
the world. This resource only has the valuable characteristic however its quality is very
significant to the Gucci brand. It is not a sustainable advantage because competitors also use a
brand logo to maintain a loyal customer base.

42. SWOT Analysis
Gucci, being one of the premium brands, has to contend with a number of factors both internal
and external in order to maintain its current status. The following is the analysis on Gucci’s
strengths, weaknesses, opportunities and threats.
Strengths:
The strength of Gucci is in its established, very strong brand image and international presence.
Gucci has also the ability to control its distribution channels. This is part of Gucci’s defensive
strategy in the chain value to capture the value added instead of giving it to the middlemen such
as suppliers and retailers.
The company has also increased the number of their Directly Operated Stores (DOS) as part of
the defensive strategy of taking more control of the distribution process. The 2003 figure showed
that DOS accounted for 61.3% of revenues compared to a much lower 32.5% in 1999.
Its aggressive strategy accomplished through diversification and communication is also another
of Gucci’s strengths. Gucci changed its strategy of carrying a single brand to branching out to a
multi brand group. This strategy is also adopted by other conglomerates such as Louis Vuitton
and Prada.
Some luxury companies use the strategy of focusing only on one brand and add other business
segments such as what Armani, Polo Ralph Lauren, and Versace did.
This strategy is done in order to allow the positioning of the brand in the industry to differ
depending on the number of brands and the number of business segments the company wants to
compete in. This is the idea behind focus (mono brand) versus diversification (multi-brand).
Gucci Group has more than 10 brands, including Gucci, Yves Saint Laurent, YSL Beauté and
Sergio Rossi.

43. Weaknesses:
The weaknesses of Gucci include instability in management and financial base. The instability of
its management can affect the group’s corporate strategy and vision.The financial base is weak
and alarming, with a long term debt increase from $17 million in 1998 to $143 million in 1999
and to $1.3 billion in 2003. Some brands in the Gucci group’s portfolio are still not profitable,
and there is a need to promote and market them aggressively.
Opportunities:
Opportunities for Gucci abound especially in the emerging luxury markets in growing economies
from Asia such as India and China. People who come from these places who recently amassed
huge wealth due to the excellent performance of the economy would definitely want to try
luxurious brands such as Gucci.There is opportunity in the consolidation of other brands too. The
opportunity exists in creating competitive advantage in different business segments. There are
various business segments Gucci can venture into should the need to expand and create more
luxurious products arise.
Threats:
The luxury goods carry premium products designed for very wealthy individuals. This
demanding market spares on expense to get the best product in terms of quality, style and design.
Price, therefore, is not a basis of competition in this kind of industry.
Competition largely exists on how potent and valuable the brand image has become. This is the
focus of Gucci’s thrusts. Its competitor Louis Vuitton may have made its mark in size with more
than 50 luxury brands in its belt and sales of 12.6 billion euros in 2004 alone but it is not exactly
the single dominant player in the market.
This is because in the luxury products market, companies can carry several brands and business
segments which could change their positions depending on the segments such as leather & shoes,
cosmetics, jewelry & watches, wine and spirits and others.

44. Competition is also effectively minimized by the intense rivalry of established luxury goods.
New firms would definitely find it next to impossible to penetrate such an exclusive market. The
cost of maintaining and promoting this image are also prohibitive.
Companies are forced to invest huge money in brand promotions in order to maintain their
image. Expenses such as advertising and marketing expenses, acquisition of competitors, control
of the distribution channel and other strategies take the bulk of company’s operating budget.
The barriers to exit in this industry are low which means that survival is for the fittest. If the
company cannot compete with other players in the industry then it has to fold or sell to other
bigger firms which make exit quite easy and quick.
In this industry, the barriers to entry are really high and the barriers to exit are low, therefore
only the select few can maintain their position in the market, while others could give up
altogether or are bought by bigger firms.
Also, luxury goods do not have direct substitutes like other ordinary goods but the threat could
come from imitation. Counterfeits often penetrate the market. This could take away a portion of
the sales that should go to luxury goods companies.
There is also the threat of substitutes to contend with. These are products that are considered
ordinary or the medium brands but can eventually expand their product lines to premium brands
in the future such as Zara and Gap.
Internal threat could also come from French holding company Pinault-Printemps-Redoute (PPR)
who currently owns 68% of Gucci’s stocks.

45. 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 brand’s 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 centred 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.
Research design
This study was conducted as a factorial experiment to know about the consumer’s perceptions in
which design factors of different branded clothes , quality, brand image, celebrity endorsement,
pricing, store atmosphere, and method of information display, were manipulated. The
independent variables are both the quality and pricing. The dependent variables were three store
images (safety, convenience, and entertainment) and consumers’ expectation of merchandise
quality. These two dependent variables were measured on a five-point Likert-type scale (5—
strongly agree; 1—strongly disagree) asking the respondent to indicate their level of agreement
to the statement for a particular web site created for this study. Safety measures include
consumers’ perceived functional and financial risks, and privacy issues. Convenience measures
include consumer’s perceptions that the store makes shopping easy and saves time and effort.
Entertainment measures reflect an ‘‘enjoyable shopping experience’’ in a store. The merchandise
quality variable involved quality of fabric, design and construction of the clothing item.

46. Researchdesign
Research Design specifies the methods and procedures for conducting a particular study. A
Research Design is the arrangement of conditions for collection and analysis of the data in a
manner that aims to combine relevance to the research purpose with economy in procedure.
Research Design is broadly classified into three types as
 Exploratory Research Design
 Descriptive Research Design
 Hypothesis testing Research Design
On the basis of the objective of study, the studies which are concerned with describing the
character tics of a particular individual, or of a group of individual under study comes under
Descriptive Research Design.
Descriptive Research Design: In this research design the objective of study is clearly
defined and has accurate method of measurement with a clear cut definition of population which
is to be studied.A research design is purely and simply the focus of the study in on studying the
banner advertising is conclusive in nature that guides to the collection and analysis of data. The
descriptive research design has been used in this project, because consumer’s feedback was
necessary for obtaining the data.
Sampling design
A Sample Design is a definite plan for obtaining a sample from a given population. It refers t the
technique r the procedure adopted in selecting items for the sample. The main constitution of the
sampling design is as below-
 Sampling Unit
 Sample Size
 Sampling Procedure

47. Sampling unit
A sampling framework i.e. developed for the target population that will be sampled i.e. who is to
be surveyedRetailers, Customers, Working people, school students, unemployed and housewives
i.e. males and females irrespective of their education level.
Sample size
It is the substantial portion of the target population that is sampled to achieve reliable results.100
-----------------------------respondents.
Objectives
 To analyse factors influencing consumers decision to buy branded jeans.
 To analyse the factors influencing perception and buying decision of consumers.
 Measure the level of satisfaction of the brand from its competitors.
 To study and measure satisfaction level ofLevis jeans users.
 To suggest alternatives for enhancing customer satisfaction.

48. A Study on consumer’s perception about branded clothing in India:
Name: __________________________________Sex: -Male/ Female Status: -Single/Married
Age (in Years): 18-24 24-30 30-36 36-42 42-48 above 48
Occupation: Student Professional Govt. Employee Businessman Home Maker
1. Do you prefer buying branded clothes? Yes no
2. How often you prefer shopping for branded clothes?
Regularly Special occasions Some times Never
3. Which brand you prefer to buy?
Levis Gucci Others …………………………………………….
4. Which type of clothes you prefer to buy from a branded outlet?
Formals Casuals Night clothes Sports wear
5. Do you feel more confident after wearing branded clothes? Yes No
6. Does your peers appreciate brand you wear? Yes No
7. Does store ambience and merchandising affect your perception towards brand?
Strongly Agree Agree Neutral Disagree Strongly disagree
5 4 3 2 1
8. Rate your preferences while choosing a particular brand of clothing?
Please give your ratings on the scale of 1 to 6 (6 to the most preferred)
Brand image Quality Pricing Availability Variety Sizes
9. Rate levis brand compared to Gucci based on given parameter
Please give your ratings on the scale of 1 and 2 (2 for most preferred)
Levis Gucci
Brand image
Quality

49. Pricing
Availability
Variety
Sizes
10. Rank your preference of retail store based on the following parameters:
Please give your ratings on the scale of 1 and 2 (2 for most preferred)
Retail Outlet Levis Store Gucci Store
Product
assortment
widest selection of national
brand merchandise
Overall quality
Best value for your money
Prices the lowest prices overall
Offers and schemes
Store design &
ambience
Modern looking equipment
and fixtures
most convenient store layout
for shopping
Merchandise displays are
attractive
Store atmosphere and decor
are appealing
Store location Convenient parking area
Easily accessible