Levi Strauss & Co. started as a jeans company but has expanded into other clothing items. They launched the Dockers brand in the 1980s to enter the casual pants market. Dockers were marketed towards baby boomer men and positioned as more formal than jeans. The brand grew significantly through the 1990s but then faced maturity in the casual pants market and increased competition. Levi's has since worked to revitalize Dockers through brand extensions, new technologies, international expansion, and emphasizing the four main occasions for wearing Dockers pants.

1. Charles Laffiteau

2. Nature of Consumer Demand
Who & When What Where Why & How
In 1849 Levi Strauss
created first pair of
“jeans” for gold
miners. Today, the
company tries to
appeal to all
customers. They
make clothes for
men, women, teens
and children.
What started out
as a jeans
company, grew
into a large
corporation that
now offers shorts,
shirts, T-shirts,
slacks, jackets and
belts. The three
main brands are
Levi’s, Dockers and
Signature by Levi
Strauss & Co.
Levi’s stores are
now located in the
US, Europe, Latin
America, Asia
Pacific and Canada.
Dockers stores are
in Canada, the US,
Europe and Latin
America. Signature
brand is sold in the
US, Japan and
Canada. Products
are now also
available online.
The world’s first
pair of jeans was a
great success so
the company
started
diversifying in the
1970’s.
The 1990’s “501
Reasons”
campaign was
created to reach
young men ages
15 to 19.
Situation Analysis

3. Situation Analysis
Extent of Demand
Size of Market and Growth Potential
 In the early 1980s, the casual pants market represented tremendous
opportunity
 Overall, slacks as a percentage of bottoms sales (jeans plus slacks) grew
from 33% in 1981 to 40% in 1985. Between summer of 1985 and summer
of 1986 alone, slacks sales grew by 20%
 In 1991, 40% (approximately 20M) of consumers in the target market
(men ages 25 to 49) owned at least one pair of Dockers with the average
customer owning over two pair
 By 1999, 75% (approximately 40M) of American men owned a pair of
Dockers with the average customer owning close to four pair

4. Situation Analysis
Extent of Demand (cont’d)
Size of Market and Growth Potential
36.8
47.5
Market Population
(Men age 25 to 49 - in Millions)
52.5
48.7 49.7
52.9
60
50
40
30
20
10
0
1980 1990 2000* 2010* 2020* 2030*
Population in Millions
Year
* Projected numbers for 2000 - 2030

5. Situation Analysis
II. Extent of Demand (cont’d)
Market Analysis
 Baby Boomers, in general, see themselves as different from their parents.
They have a driving need to be active, involved, fashionable and
comfortable.
 In 1999, Levi’s observed that this segment wanted their clothes to be a
break from tradition; and fashion was more important for them compared
to previous generations.
 In the late 1990s, many companies were relaxing the office dress code
allowing for more casual attire. The male Baby Boomer needed a pant
that combined versatility and comfort appropriate for work and leisure.
 Pants available to consumers at that time were on the main floor in
department stores in “Better Sportswear” and priced at $60 to $80 per
pair. Dockers were merchandised to be more accessible to the target
market with a moderate price range averaging $32 per pair.

6. Situation Analysis
II. Extent of Demand (cont’d)
Dockers
Dockers were designed to appeal to the fashion demands of Baby Boomers
 Casual and comfortable, yet stylish
 Positioned as more formal than jeans but less casual than dress slacks
 Preference for more natural fibers (impetus for move to 100% cotton)
 Right pant for a variety of occasions

7. Situation Analysis
Nature of Competition
Competition
 Haggar, Farah, Bugle Boy—target Baby Boomers
 Gap, Polo, Tommy Hilfiger, Abercrombie and Fitch, American Eagle—target
younger generations
Which brands are successful and why? Haggar and Farah
 In 1980s, introduced wrinkle-free pants that looked like Dockers but did not have
to be ironed due to a new wrinkle-eliminating treatment in the fabric
 The concept allowed these companies to gain a significant competitive advantage
over Levi’s. Haggar in particular held 73% of the market share
 Levi’s was losing customers and failing to attract new ones. They had to change
strategy and adopt the new wrinkle-free trend to stay competitive
Is competitive retaliation anticipated?
 Innovation and a forward looking strategy are indispensable for staying
competitive in this market
 As Levi’s added new products through innovation, the competition retaliated with
similar innovations of their own, which is also expected going forward

8. Situation Analysis
Environmental & Social Climate
 The business casual trend which first appeared in the 1980s has
since grown to encompass 70% or more of the workforce.
 The trend also evolved and changed when the Baby Boomer
generation began to give way to later generations (X and Y).
 Gen X and Y workers regard business casual as outdated and prefer
an even more casual dress approach such as wearing jeans to work.
 But ‘new’ male role models and expectations of behavior have also
emerged, thus providing Dockers an opportunity to reposition khaki
pants as an essential element of the ‘new’ male’s wardrobe.

9. Situation Analysis
Marketing Timeline & Life Cycle
• Brand
Awareness
• Differentiation
New
Casuals
1986-
1993
• Market
Penetration
• Brand
Extension
Nice
Pants
1994-
2003
• Repositioning
• Dockers 4
Wearing
Occasions
Dress to
Live
2005+
Growth
• Highly
differentiated
product
• Expanding
market
Market
Leadership
• Increased
competition &
imitation
• Market
saturation
• Product
development
Maturity
• Declining sales
• Dockers San
Francisco
• Less brand
relevance for
Non-Baby
Boomers

10. Situation Analysis
Stage of Product Life Cycle (cont’d)
 Casual Pants market Mature and declining life cycle
 Maturity of market and poor growth led Levi Straus to explore a sale
of Dockers in 2004
 Product category has many strong competitors such as Banana
Republic, Gap, Abercrombie & Fitch as well as many private brands
 Popularity of jeans among younger workers pushed casual pants'
sales down 20% in 2009
 In 2010, Dockers launched a national advertising campaign to
reconnect & encourage male consumers to wear khaki pants

11. Situation Analysis
Cost Structure of Dockers
Year Product Price
1985 Original Dockers $32
2001 Dockers Thermal Adapt Khaki $60
2004 Dockers Perspiration Guard Shirt $50
2010 Original Dockers $34 - $50

12. Situation Analysis
Skills of the Firm
Marketing Skills
 “Hip” image in the 1970s to reflect new focus on diversification and
acquisition
 Initial Dockers TV campaign was “reality-based advertising” using
emotional appeal
 Spot TV ads in target markets aired during prime time, sports, and late
night programs supplemented by subway signs and mobile billboards in
NYC
 Dockers moved into European markets and launched the brand with pan-
European advertising
 Continuously modified marketing approach by adding new brands and
slogans in attempting to expand, compete, and meet changing consumer
demands.

13. Skills of the Firm (cont’d)
Additional Marketing Activities
 Co-op advertising; Dockers Shops; point-of-sale displays; planned sales promotions
 NYC Kick-off party for buying groups, trade press, and key retail executives
 Publicity campaign targeting “influencers” through talk show fashion presentations
and press kits
 Designers, merchandisers, marketing personnel, and senior management visits to
key retail accounts
 “Urban networking” program
R&D Skills
 Menswear research department studies led to development of the successful
“new casuals”
 Dockers Mobil Pant was named a “Best Invention of 2001”
 The Advanced Innovation Team researched materials and developed ways to
improve them
Situation Analysis

14. • Sales Support
• Point-of-Sale
• Advertising
• Networking
• Department
stores & chains
• Dockers Shops
• E- Commerce
Situation Analysis
Marketing Mix
• Moderate to
upper moderate
pricing
• Dockers Premium
• “New Casuals”
• Brand elements
• Advanced
Innovation Team
• Licensing
Product Price
Place Promotion

15. Case Study Questions

16. Case Study Questions
Characterize Levi’s branding strategy?
 General Brand Strategy: Throughout all of Levi’s products, the
main idea expressed is that the products are casual, comfortable
and good for any occasion, while at the same time still very
stylish.
 Positive Aspect: A major positive aspect of Levi’s branding
strategy is that they open themselves up to a very large target
audience.
 Negative Aspect: The negative aspect to Levi’s branding strategy
is that with such a large target audience, it is easy to lose sight of
your core strategy and products. Sometimes you just need to
stick to what you know best.

17. Case Study Questions
Analyze Dockers’ communication strategy
 At the time of the 1980s launch of Dockers, the company employed
new creative methods to promote the product
 Dockers shops were installed in the middle of the men’s department in major
department stores
 Fixtures and tables were set up displaying Dockers pants similar to the way
only jeans had been displayed in past
 Goal of advertising was to educate the audience and create an
image for the new product reflecting the high quality of the
established Levi’s jeans while also having its own autonomy
 Target audience was professional men ages 24 to 49
 Focus groups were used to test creative for TV ads, which used an
emotional appeal

18. Case Study Questions
How did the communication strategy fit with past
advertising efforts and contribute to brand equity?
 The communication strategy fit with the previous advertising efforts
in a sense that it emphasized high quality and comfort
 The launch of Dockers immediately created a strong brand. It
showed consumers that LS&Co was investing money in innovation
and created a new product that appealed to the target market. The
creative ways that were used to launch the product allowed the
company to capture over $1Billion in sales
 Consumers had high levels of brand awareness and image. The
brand awareness in the target market for males between ages 25
and 44 was 90%. About 40% of these males bought at least one pair
of Dockers annually
 Branding is about creating differences, and LS&Co was able to do
that with the “New Casuals”

19. Case Study Questions
Characterize the Dockers brand image
 Overall, the Levi’s brand was known for quality. Although moving
into the pants market was different, it was a natural move for the
company to meet changing consumer trends and needs
 Baby Boomers had grown up with Levi’s brand and had tremendous
loyalty towards it but now sought a different kind of pant
 To the target market of male Baby Boomers, Dockers were known
to be the alternative to jeans. They were unpretentious with a
moderate price point when compared to Men’s “Better
Sportswear” slacks
 Younger consumers had less interest in Dockers, with many saying
they were something “their fathers wore”

20. Case Study Questions
What makes up Dockers’ brand equity?
 The image that the Levi’s brand earned from the jeans business was
contributed to its slacks image. They were considered to be more
contemporary, less conservative and more casual than other slacks
 To start, Dockers was slower moving into natural fabrics but then
became the leader in fabric trends
 By 1991, Dockers was a $500 Million business and enjoyed 90%
awareness in the target market

21. Case Study Questions
Evaluate the move to expand into other markets
 Levi’s is a brand that has been associated with clothing for over one
hundred years. The Dockers brand was developed to respond to
changing consumer trends and needs.
 It makes sense that in order to grow, Levi’s wanted to expand into
other segments. However, bedding, bath and luggage are not logical
extensions for the Dockers brand. After building the brand to be
associated with pants, these new extensions do not resonate the
same needs for the Dockers consumer.
 Exploring various fabric technology and expanding into women’s and
kid’s clothing is a more logical and understandable move for
Dockers. These extensions relate better to the already established
brand identity attached to Dockers for Ready-to-Wear apparel.

22. Case Study Questions
Changes in strategy
 In the first decade of Dockers, the marketing strategy centered on
achieving brand awareness, establishing PODs, and obtaining
retailer buy-in for the “New Casuals” category.
 The mid 1990s to early 2000s found Dockers using more youthful
and “sexier” ad messaging, licensing outside of menswear, and
research to enhance product features in order to cope with
declining sales in the wake of new competition in the “Business
Casual” segment.
 With the election of John Goodman as brand president in 2005,
Dockers rebranded itself as Dockers San Francisco and re-segmented
their offerings according to Dockers’ four usage
occasions: work, weekend, dress and golf.

23. Case Study Questions
Changes in strategy (cont’d)
 After 20 years on the market, the marketing objectives changed from
educating consumers about the product to updating its image and
stabilizing flagging sales.
 With the casual pant market in a state of maturity and decline,
Dockers is not in a strong position to recapture market leadership.
The brand is strategically encircled by competitors such as The Gap,
Express, Banana Republic, retailer private labels, and producers like
Haggar and Polo.
 Furthermore, the “New Casuals” concept and Dockers product are
not sufficiently differentiated or exciting to the next generation of
urban male professionals ages 25 to 44.
 The Dockers brand must find a way to carve out a new identity
through its revised “occasion of use” segmentation strategy or
relegate itself to the discount market.

24. Case Study Questions
Adoption of new technologies
 After initially missing out on the “wrinkle-free” trend, embracing
new technologies in its products, such as the Thermal Adapt Khaki
and Perspiration Guard Shirt, years later was the right move for
Dockers.
 The success of “wrinkle-free” pants proved that consumers cared
about the added benefits from new technologies.
 The new technologies added to products were relevant to
consumers’ needs.
 Dockers was able to use its new technologically advanced products
to garner publicity.

25. Case Study Questions
Analyze decision to stop selling Dockers directly
 Levis and Dockers abandoned online retailing because the profits from
e-commerce didn’t cover their costs of operating their websites.
 In September 2005, Levis partnered with GSI Commerce, to launch
www.levisstore.com for the Levi’s® brand and in June 2006 for
Dockers.
 By contracting with an experienced e-commerce firm with more than
50 other partners, Dockers online retailing business stopped losing
money.

26. Case Study Questions
Recommendations for EVP John Goodman
 Brand extensions—revitalize the brand by making it
multidimensional:
 Transform Dockers into a lifestyle brand
 Focus on Dockers Four Wearing Occasions campaign
 Benefit from success in women’s brands
 Focus on continued quality and maintaining the Dockers brand -
fashionable, stylish and relevant
 Build on brand identity and speed to market
 Continue to lower product sourcing costs and inventory markdowns
 Capitalize on the momentum from the Asia Pacific success, and
develop this market
 Open Dockers stores to better display Dockers products,
improvements to the brand, and changes adopted by the company

27. References
 Day, Jennifer Cheeseman, Population Projections of the United
States by Age, Sex, Race, and Hispanic Origin: 1995 to 2050, U.S.
Bureau of the Census, Current Population Reports, P25-1130, U.S.
Government Printing Office, Washington, DC, 1996
 Hobbs, Frank and Nicole Stoops, U.S. Census Bureau, Census 2000
Special Reports, Series CENSR-4, Demographic Trends in the 20th
Century, U.S. Government Printing Office, Washington, DC, 2002
 Wong, Elaine.“Dockers Brings Back Khakis” Brand Week (December
9, 2009) retrieved at
http://www.adweek.com/aw/content_display/news/agency/e3i632
8aaffeb014c13a17b6f2ca4fb5cec

28. Charles Laffiteau