MKT 445: Branding & New Product Development
-Surveyed 50 people within the brand's target market to understand the brand from the consumer and brand manager's perspective based on its brand equity.
- Developed 2 new (possible) brand extensions. Identified the opportunity, conducted focus groups to qualitatively measure its favorability, recommended a decisive final outcome with rationale.
Class Concepts: Points of Parity, Points of Differentiation, Positioning, Brand Resonance Pyramid Model, User Profiles, Mental Maps, Sources of Brand Equity
2. The 5p’s
Promotion
Levi’s main methods of promotion include Influencer
Marketing and Social Media Ads. They often combine the
two by using influencers in their social media ads
Product
Denim Jeans are Levi’s main product. However they also
produce other denim products such as jackets, overalls,
and shorts.
Price
The average price of Levi’s denim jeans is $80.
Objectively, their jeans are above average in price.
Placement
Sold online, in department stores, thrift stores (third
party), and its retail stores
Positioning
*see next slide
3. Positioning
Target Market:
Middle class, males and
females, 20 - 35 years old,
usually college students or
recent college graduates
Category Membership:
Jeans
Points of Parity Points of Difference
Jeans Manufacturer
Reasonable pricing
Retail & online distribution
channels
Original pair of Jeans
Sizing language (501, 505, etc.)
Strong Recall
High profile endorsements
5. Competitors
Target Market Price Benefits
Wrangler
Middle class
20-35 years old
workwear
Average Sturdy outdoor work
apparel
H&M
Lower middle class
15-25 years old
everyday
Below average Fashionable at an
affordable price
Levi’s
Middle Class
20-35 years old
everyday
Above average classic everyday jeans
9. Levi’s Cafe
This initiative aims to give customers a
more intimate feel for Levi’s through a
curated experience. The idea will offer a
space for customers to have light bites
and coffee in an immersive experience
that is connected to a flagship store. The
cafe offers a collaborative opportunity
with interior designers, chefs, and artists
to bring Levi’s essence into a physical
space. The purpose the café is to build
customer loyalty, get customers in the
store, and give an opportunity to buy.
1.
10. Market Trends & Opportunity
Size of US. Dining out sector (Mintel)
2009 – U.S sales estimated to $395 Billion
2014 – up to an estimated $482 Billion
Size of US. Coffee Shop sector (Mintel)
2009 – U.S sales estimated to $16.6 Billion
2014 – up to an estimated $19.1 Billion
“If it harmonizes well with the brand, then it is
going to enhance that brand and cement the
relationship consumers have with the retailer,
they will associate the good sensations,
feelings and memories they have of the
experience with the brand, the retailer and its
merchandise.”
– Joe Pine, co-author of The Experience
Economy.
11. Focus Group Feedback Summary
Positive:
• People consider this a cool thing to do if
they are in the area
• If they utilize their partnership with Emma
Chamberlain, there will be immediate
interest
Negative:
• Is it interesting enough for people to make
an intentional trip to visit?
• Seems ”gimmicky” because it is not
clothing related
Key Learnings:
Consumers are wary that this might be gimmicky
product with no real value. We hope to improve this
concept with creating a more experiential space
that can also be used with special promotional
events.
“Joffee???”
“Is this necessary?!”
12. 3 Factor Model
Salience
This extension is borrowing a little equity from the Parent Brand.
The Café is only borrowing Cool for Levi’s
Favorability
The Café creates a strong association with “gimmicky” due to similar fashion
brand cafes such as Gucci and Brandy Melville. However, the extension has
also generated new positive associations (Fun and Exciting) and increased
the Quality association.
Uniqueness
Levi’s cafe provides the opportunity to communicate its brand identity with
experiential and promotional elements. It is a space where they can be
creative with the sensory elements (taste, visual, smell, etc.). While being a
fun new way to promote its own new products, influencers, and brand.
13. 4 Factor Model – Relevance
Feelings
* Impact on Levi’s
• Self-respect (2.79)
• Excited (3.13)
• Inspired (3.00)
• Cool (3.31)
• Secure (2.92)
• Fashionable (3.08)
• Trendy (3.68)
Our survey asked to rank the impact of the Telfar
collaboration from 1 - 5.
With 1 = strongly decreases, 3 = no change, and 5 =
strongly increase
Results: Only Secure and Self-respect decreases, all
other positive association is increased.
Judgements
*impact on Levi’s
• Quality (2.71)
• Superior (3.24)
• Comparable (3.16)
• Credible (2.89)
Results: The collaboration will negatively impact
customers judgment on Levi’s product quality and
credibility, which will be a concern.
14. 4 Factor Model – Compelling
Compelling
This category extension will affect the parent brand by:
• Gaining associations Trendy
• And gaining the Negative association of Gimmicky
• Will not increase/decrease Levi’s current associations
Levi’s
Reliable
Classic
Comfortable Stylish
Well
Designed
Levi’s
Cafe
Trendy
Stylish
Gimmicky
15. 4 Factor Model – Consistent
Emotional
Modifier
Descriptive
Modifier
Brand
Function
Classic
* A café a classic place for
people to enjoy
Everyday
*Not an everyday occasion
as there will be very few
locations in urban cities
and this café aims to
provide a more special
experience
Denim
* The Café does not
function as denim
How the new product fits within Levi’s Brand Mantra
16. 4 Factor Model – Strong
Relevance
This extension is borrowing a little equity
from its own. It is only borrowing Cool
Compelling
A few positive associations are added and
improved. But this extensions largely
increases the negative association of
Gimmicky. This concept proves to be risky
decision.
Fit
The new product fits in to 1/3 of Levi’s brand
modifiers and only 18.42% of survey
responders believe that this is a product
Levi’s would introduce.
Advantages:
Provides Levi’s the opportunity to express
their brand image in new ways and
increase foot traffic into their retail
stores.
Disadvantages:
Fashion brand café’s have been done
many times and has a negative
connotation of subpar food & beverages.
Can negatively affect Levi’s brand equity.
Conclusion: 1/3 Launching the cafe in its
current concept is unfavorable. It should
not be launched.
Decisive Rationale
17. Levi’s x Telfar
This collaboration allows Levi’s to tap into a
more trendy and fashionable audience that
that Telfar has created. Telfar is having their
mainstream moment as an affordable luxury
brand because of their forward-thinking ethos
based around inclusivity and diversity. Telfar
has yet to create a denim version of their cult-
favorite bags. For Telfar, this collaborations with
a heritage brand will help cement Telfar’s status
as a brand that is here to stay. While Levi’s will
be able to refresh their brand and be seen as
stylish, innovative, and in touch with the
current cultural zeitgeist.
2.
18. Market Trends & Opportunity
Size of U.S. Luxury Handbag market (Allied
Market Research)
2018 – U.S sales estimated to $58.3 Billion
*2026 – projected estimate of $89.9 Billion
Telfar’s Revenue
2016 – estimated $102,000 (Financial Times)
2019 – estimated $2 Million (Financial Times)
2022 - estimated $146.5 Million (Business of
Fashion)
19. Focus Group Feedback Summary
Positive:
• Has the “cool” factor
• Perfect for everyday use. Elevated yet
approachable design that will draw eyes
but is not flashy.
•Negative:
• Not appropriate for a night out due to
denim material. Casual wear.
• Telfar’s exclusive purchase model may
prevent some from acquiring the bag at
retail price.
Key Learnings:
People think this is a cool collaboration. Many of the
college students surveyed said if they had the
financial means, they would purchase the product.
Overall, this product is favorable and has little
negatives.
“The new it bag”
“Jelfar”
20. 3 Factor Model
Salience
This co-brand extension borrows 3 (positive) brand equity elements from
Telfar.
• Gains: Trendy, Fashionable
• Increases: Stylish
Favorability
This co-brand concept creates a new positive association (“Exclusive”) and
overcomes a negative association (“Boring”) for Levi’s
Uniqueness
This extensions includes PODs from both Telfar and Levi’s. Telfar provides
elements of Stylish, Fashionable, and Trendy. This is combines with Levi’s
PODs of heritage and Classic. This mixture of PODs creates a product that
cannot be replicated and will provide unique and exclusive product to the
market that will enhance the brand equity of both brands.
21. 4 Factor Model – Compelling
Compelling
The co-brand extension will affect the parent brand by:
• increasing the association of Stylish
• Gaining associations of Exclusive, Fashionable, and Trendy
• And gaining the Negative association of Gimmicky
Levi’s
Reliable
Classic
Comfortable
Stylish
Well
Designed
Telfar x
Levi’s
Fashionable
Trendy
Exclusive Stylish
Gimmicky
22. 4 Factor Model – Relevance
Feelings
* Impact on Levi’s
• Self-respect (3.56)
• Excited (4.08)
• Inspired (3.79)
• Cool (4.03)
• Secure (3.51)
• Fashionable (4.10)
• Trendy (4.05)
Our survey asked to rank the impact of the Telfar
collaboration from 1 - 5.
With 1 = strongly decreases, 3 = no change, and 5 =
strongly increase
Results: the collaboration increases all of Levi’s
positive associations
Judgements
*impact on Levi’s
• Quality (2.72)
• Superior (3.67)
• Comparable (3.64)
• Credible (3.44)
Results: The collaboration will negatively impact
customers judgment on Levi’s product quality but
increase Superior, Comparable, and Credible.
23. 4 Factor Model – Consistent
Emotional
Modifier
Descriptive
Modifier
Brand
Function
Classic
* Telfar is on its way to
classic recognition within
fashion as it has lasted
many trend cycles
Everyday
* Telfar bags are elevated
tote bags that people use
as everyday bags
Denim
* Combines Telfar’s iconic
design with Levi’s classic
denim. Maintains the
excellent craftsmanship of
both brands
How the new product fits within Levi’s Brand Mantra
24. 4 Factor Model – Strong
Relevance
The extensions borrows a lot of positive
equity, adds favorable attributes, and dilutes
a few negative attributes.
Compelling
New positive feelings are added judgements
are improved. More favorable attributes are
added than negative.
Fit
The new product fits in to 3/3 of Levi’s brand
modifiers and 69% of survey responders
believe that this is a product Levi’s
would introduce.
Advantages:
Telfar has a large and growing audience
that value quality, fashion, style, and
value. The collaboration will allow Levi’s
be seen as a more fashionable and
potentially build off it in the future.
Disadvantages:
Telfar’s ”Drop” purchase model may not
allow all those want the bag to obtain it
and gain negativity towards Levi’s.
Conclusion: 3/3, it is recommended to
issue.
Decisive Rationale