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Levi's Marketing Plan
This document provides a marketing plan for Levi's 501 original fit jeans. It begins with an executive summary that outlines the plan's goal of increasing sales by 6% through various tactics. It then gives background on Levi's as a company. The plan establishes smart objectives and tactics related to distribution, promotions, pricing, and changing the product image. It analyzes the market situation, strengths/weaknesses, opportunities/threats, and main competitors. The target market is identified as well. The integrated marketing mix discusses bringing back the classic American look through advertising, promotions, and competitive pricing. Specific tactics are outlined for pricing, product, distribution, and promotion elements. Advertisements, a storyboard, and evaluation methods are also mentioned
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Levi's Marketing Plan
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- 5. 5 Company Description Levi Strauss was founded in San Francisco by Bavarian immigrant Levi Strauss in 1853, we created the very first pair of jeans. Today, products, are sold under the Levi’s®, Dockers®, Denizen®, and Signature by Levi Strauss & Co.™ Levi Strauss & Co. is one of the world's largest apparel companies and a global leader in jeans. The Levi's® brand is just part of our story. Levi Strauss is also home to Dockers®. There are some 500 stores, and our products are available in 110 countries around the world.
- 6. 6 Smart Objective >Increase the sell of Levi 501 Jeans 6% by April 1st 2014< Increase Distribution> Place Tactics 1. Get a full list of outlets that are currently carrying the 501 jean by 11/7/2013 2. Meet with the Director of Logistics by 11/09/2013 3. Brainstorm about effective distribution methods by 11/10/2013 4. Set up meeting with major distribution channels to discuss ways of improving delivery times by 12/01/2014 5. Increase production 15% by 1/01/2014 6. Close deal with overseas retailers that aren’t currently selling Levis 501 jeans by 1/01/2014 7. Meet with marketing team to discuss production opportunities by 12/1/2013 Increase Promotions> Promotion Tactics 1. Meet with promotions team by November 2, 2013 2. Create budget for promotions by November 4, 2013 3. Create storyboard for commercial by November 2013 4. Release a press release by November 10, 2013 5. Start Holiday Special by November 12,2013 6. Create commercial by November 20, 2013 7. Sponsor four events by December 15, 2013
- 7. 7 Decrease Price> Price Tactics 1. Set up meeting to discuss pricing strategy by 11/12/2013 2. Get a full list of all competitor products and their prices by 11/12/2013 3. Decrease price to $48.00 by 11/18/2013 4. Brainstorm how to effectively cut costs by 11/22/2013 5. Get full list of Allowances and Discounts by 11/22/2013 6. Decrease Price to $44.00 12/01/2013 7. Decrease Price to $40.00 04/01/2014 Change Product Image> Product Tactics 1. Tactic 1: Meet with marketing team to discuss ideas for enhancing the appeal of the product by 11/23/13 2. Tactic 2: Get a list of top 10 designer competitors 11/27/13 3. Tactic 3: Get a list of the top 10 designers of jeans, that are willing to work with Levis to work on the redesign of Levis 501 Jean by 12/2/2013 4. Tactic 4: Brainstorm ways on improving Levis 501 by 12/25/2013 5. Tactic 5: Introduce product images and mock ups of the “Classic American look” 1/15/14 6. Tactic 6:Develop the “skinny jean and boot cut” style option for 501 2/15/14 7. Tactic 7: Communicate and deliver the benefits of the quality and design of the Levi 501’s 2/20/14
- 8. 8 Situation Analysis There are many different factors that will impact Levi’s product marketing plan. The economic environment has been slow over the past couple of years, especially in Europe. Recently the economy has been has picking up, and the apparel industry that had seen sluggish growth over the past years has been coming back as well, which will positively affect Levi’s sales. With some of our focus centered around increasing sales in Europe this slow, but steady economic growth will bring stronger sales for the region in the future. There have also been challenging market conditions in some of our Asian based stores and retailers, which caused us to exit certain portions of the region. But we with increasing disposable income in India and China there is still much hope for this area. The apparel environment is becoming more and more competitive at both the brick-and- mortal level as well as increasing competition from online vendors. Levi’s is has a pension fund valued at $1,388,700,000, which is 35%, underfunded which decreases its competitive advantage due to these cash requirements. Online retail sales in the U.S grew to 224 billion in 2012. If Levi can market and sell strongly in this exponentially growing online environment it will mean increased sales for the future. In the political realm Levi’s faces challenges with laws and regulations in some foreign jurisdictions. With so much clout surrounding labor, working conditions, and environmental protection many retail manufacturer’s are at risk. Though there are regulations and standards in place, uncertainty can harm a company if some violations were to occur.
- 9. 9 Strengths 1.Strong Brand Name and popular top-of-the-mind brand 2. Expertise in Jeans Industry 3. Distribution Channels and Global Outsourcing 4.Finance and Access to International Capital 5. Has over 470 self operated stored globally managed by 16000+ employees 6.Levi’s marketing includes retro popular songs in its TVC ad campaigns 7.Over 60 and 25 manufacturing plants in US and abroad respectively 8. Brand Recognition 9. Strong operating performance despite a unsteady economy 10. Global Footprint
- 10. 10 Weaknesses 1.High Pressures of Brand Protection 2. Increasing competition means limited scope for growth 3. Lack of overall quality (licensing) 4.Lack of control over distribution decisions (Retailers pressures to stop selling on the Web) 5. Distribution conflicts 6. Heavy pension expenses increase vulnerability to financial markets 7.Substantial portion of revenues are realized from the top ten wholesale customers. 8. A rapidly changing apparel market increases uncertainty 9. Soft sales in Europe 10. Loss of luster to younger generation.
- 11. 11 Opportunities 1.Growing casual wear market 2. Low manufacturing and production costs in various international markets 3. Increasing acceptability of western wear across the world 4. Arising of new markets such as Central Europe and Russia 5. Technological development lower production and coordination activities 6. Opportunities in arising markets such as China and India 7. Increasing online retail sales 8. Extending leadership in jeans and khakis through innovation and consumer focus helps Levi’s to develop its brand globally 9. Strong social marketing could increase sales 10. Total apparel industry is growing
- 12. 12 Threats 1.Fast changing consumer tastes 2.Lack of protection of property rights in some countries like China 3.Increasing Competition and Product Substitution 4. Saturation of Jeans' Market 5. Competition from products of the higher end of the market i.e. Mochino and D&G 6. Economic downturns in some countries 7. Local regulations on advertisement such as the case when Levi's had to hire the services of a Brazilian ads company to release TV ads; and the increase tariff and non- tariff barriers. 8. Dependent on contract manufacturers for product procurement, manufacturing, and finishing. 9. Laws and regulations. 10. No long term contracts with wholesalers that buy the largest portion could hurt their future sales
- 13. 13 Competition Lee Mercantile Company was founded by Henry David Lee in 1889, when Lee opened his first garment factory in Salina, Kansas, producing dungarees and jackets. Lee Jeans is a leading international retailer and manufacturer of denim wear and casual wear. Headquartered in Merriam, Kansas, near Kansas City, Lee currently employs more than 400 people across the United States. Lee Jeans' parent company, the VF Corporation, is the largest publicly held apparel company in the world. We believe that though Lee is a well-known jean producer we can better them in quality. By having a price set higher than Lee we can give off the image that our brand of jeans is superior in quality. Wrangler® is enduring American freedom; it's in the spirit of people who work hard, have fun and recognize courageous individuality. As a company, they believe in solid commitments and perseverance in the face of obstacles and challenges. Most of all, they respect themselves, each other, their western heritage and the environment in which they live. They value their customers, and strive for full customer satisfaction. Each item they manufacture carries a one- year warranty, which covers actual defects in materials or workmanship. This warranty is a statement of Wrangler's continuing commitment to high standards of quality. Wrangler takes the rugged Cowboy approach to marketing their jeans. This angle someone intermixes with our image promotion of the all American brand. Similar to Lee, we believe that we have a better quality product and pricing our jeans above their will demonstrate this. We may not be able to take away any of their die-hard American cowboys, we believe in the international market we will be able to best them because our brand is less image specific.
- 14. 14 As one of the world’s leading premium lifestyle brands, Tommy Hilfiger delivers superior styling, quality and value to consumers worldwide. The brand celebrates the essence of Classic American Cool and provides a refreshing twist to the preppy fashion genre. Since its debut in 1985, the Tommy Hilfiger Group has become a US$ 4.6 billion apparel and retail company by offering consumers a breadth of beautifully designed, high quality products including men’s, women’s and children’s apparel, sportswear, denim, and a range of licensed products such as accessories, fragrances and home furnishings.Tommy Hilfiger today has become a global brand with strong recognition and a distribution network in over 90 countries and more than 1,000 retail stores throughout North America, Europe, Central and South America and Asia Pacific. Tommy Figure is a prominent retail company that has a focus on all types of higher-end products sold at a premium price. Their jeans are more fancy and colorful. We believe that by keeping our core focus on our classic denim jeans we can better them in this specific market. Calvin Klein, Inc. is one of the leading fashion design and marketing studios in the world. It designs and markets women’s and men’s designer collection apparel and a range of other products that are manufactured and marketed through an extensive network of licensing agreements and other arrangements worldwide. Product lines under the various Calvin Klein brands include women’s dresses and suits, men's dress furnishings and tailored clothing, men’s and women's sportswear and bridge and collection apparel, golf apparel, jeanswear, underwear, fragrances, eyewear, women’s performance apparel, hosiery, socks, footwear, swimwear, jewelry, watches, outerwear, handbags, small leather goods, and home furnishings (including furniture). Calvin Klein will be one of our most difficult competitors. They have a more upscale and trendy look. We are the classic company that is trying to gain some market share by promoting a newer fresher look. Calvin Klein has a different target market then we do, but offers quality jeans priced a smaller amount above ours, but has varying price ranges. If we promote our product to this younger and trendier demographic in the correct way, we will be able to take some market share away from Calvin Klein.
- 15. 15 Target Market Levis Jeans demographic segment are 20-24 year old, white male and female, college students, with income in the range of $30,000-$45,000. Our psychographic segmentation includes young men and women that are outgoing, strivers, that are apart of the upper class, Generation Y. Our target customer spends a great deal of time at live music events. The genre of music that these people listen to is rock, hip- hop, and trap music. They read GQ, Men’s Fitness magazine, and US weekly. Watch ESPN and shows such as Breaking Bad, Mad Men, The Voice, Broke Girls, and Modern Family. A large amount of their time is spent engaging with friends and family via social media. The geographic areas that we will target are urban settings like River North, and West Loop. These people shop at stores such as, Macy’s, Nordstrom, and Bloomingdales. Integrated Marketing mix The slogan that embodies our theme for the marketing mix is, “ Levis… Bringing back the all American look,” we believe that through aggressive advertising and promotions, we’ll be able to position Levis 501 jeans in a way that will drew on the emotional appeal of Americans and also grab the attention of those in our overseas markets; that are looking for ways to capture the classic American look. Secondly, because Americans have become a lot more conscious of their spending, we have implemented a competitive pricing strategy. By using this pricing strategy we’ll be able to gain a larger market share by cutting the price of the product, while still giving our target customers the same quality. In order to stress the value of our products, the jeans will be sold in upscale stores around the.
- 16. 16 Pricing Our Company, Levi’s, will be pursuing a competitive pricing strategy. We are choosing this strategy to gain market share. With one of our tactics centering around expanding our brand in overseas markets we believe that lowering the price will increase market share in these areas. These lower prices will attract more people to our brand that is less prominent overseas than it is at home. At these decreased prices we believe that we can take customers away from some of our competitors. We will participate in frequent promotional pricing in order to get as much traffic into the store that we can in order to promote and show everyone our that Levi’s is still a strong and prominent brand. In our specific distribution area for the stores located in the city of Chicago we will sell the jeans at a slightly higher price of $50. Seeing as it is an urban and expensive area to live people will be willing to pay this higher price for our jeans. The price decrease of $8 will also be applied to our distributors, such as Macy’s, and Nordstrom’s. We will give a 5% quantity discount to retailers that buy 100 jeans or more.
- 17. 17 Product Levi 501 jeans are classified as a shopping product, meaning that the pricing, quantity, and style characteristics must be acknowledged of our various competitors as these can have a huge impact on consumer behavior in our market. Levi jeans are made to ensure that they last for a long time. Unlike our competitor’s product, Levi’s 501 are made with durable materials that are less likely to tear. Although our jeans are higher quality, the pricing still lower when compared to competitors such as Calvin Klein. We offer numerous styles and shades that cater the preference of each individual. Since a brand’s name and reputation are crucial in marketing, as a shopping product we heavily depend on the fact that Levi’s is a known as a reputable, classic American company. Through increasing promotions, decreasing price, and entering upscale department stores the Levi 501 branding will gain recognition in a younger, upper class target market. Also, although new consumers are the aim, old and new consumers will be exposed to Levi’s new style and image. The look the company is marketing and reinforcing the product as the trusted Classic American brand. Additionally, we will also be introducing the “skinny” jean fit to the Levi 501 brand for female consumers. We are implementing an exclusive distribution method. Rather than selling to lower end retailers like Kohl and JCPenny’s, we plan to sell to upscale distributors such as, Nordstrom’s and Macy’s. We seek to change our product positioning by reintroducing the attributes of style and versatility our product offers. Brand equity will help reach this goal since Levi’s is a very well-known brand due to its long standing in the market. To add to existing customers, we hope to increase the appeal to people who have not ever bought the product. Our denim is in the maturity stage of the product life cycle so we are constantly seeking ways to differentiate and promote our product from our competitors by increasing our demand. We seek to spur and attract new demand from young, trendier individuals for our line in an attempt to further differentiate ourselves the in our competitive environment. While Levi’s product mix is extensive, our line focuses on developing younger males and female market while still maintaining close ties with Levi’s other products.
- 18. 18 Distribution Levi’s manufacture will ship 501 jeans to retailers throughout the United States, but plans to sell the jeans directly to a selective group of retailers in overseas markets. By doing so, we believe that it’ll give our team the opportunity to better capture the attention of our overseas target market, which will lead to increase sells. Secondly, we will implement an exclusive distribution method, which means that we plan to allow only certain outlets to carry Levis 501 jeans. By doing so, this will make our jeans more desirable by our target market. Rather than selling to lower end retailers such as, Kohl, Sears, and JC Jenny’s, the product will be sold in upscale stores like Nordstrom’s and Macy’s. As an incentive for our channel members to purchase more Levis 501 jeans, there will be a point system put in place that would allow distributors to earn credit for every order that they place that can be redeemed for cash. This opportunity will make the intermediaries more likely to take a chance on keeping the jeans in stock.
- 19. 19 Promotion Our advertising plan is to create advertisements and continuous promotions in order to target a new market. Our new target market is white males and females from the age of twenty to twenty four all around the world who want the Classic American Style. We plan to advertise continuously using social media such as Instagram, Facebook, and Twitter. Levis advertising will include International icons such as soccer superstars, music artists, actors and actresses showing off the Classic American Style. Advertisements will also be shown on television with the intention to reach a wide number of persons in our new target market. Levis will be showing commercials on ESPN, Rai TV, Foxsports, Eurosport and Goal TV. Appearing in Levis commercials are soccer stars such as Cristiano Ronaldo and Lionel Messi. Levis commercials will also be shown on MTV and during popular shows such as Breaking Bad, Mad Men, The Voice, Broke Girls, and Modern Family. Levis is going to hit the target market hard with social media. Pictures of popular artists, actors and actresses wearing the Levis product will be found in posts on Instagram and Facebook. Pictures of Brad Pitt, Kanye West and Emma Watson wearing the Levis product will increase followers of Levis on social media. Advertising through social media is an inexpensive but effective marketing plan. Levis will sponsor athletes in sports like hockey, basketball, soccer, football and baseball. This advertising tactic can be expensive but extremely effective among fans. Levis will also sponsor events such as walks for cancer and other diseases. Positive exposure like walks for a good cause will lead to positive exposure within the community. On holidays such as Veterans Day, Memorial day and the Fourth of July Levis will be running promotions internationally two weeks prior to the event. During the promotion an exclusive pair of Jeans will be available for sale in stores at a discounted price. Online purchases will be discounted thirty percent. The unique pair of jeans will be embroidered with an American flag in order to advertise the Levis Classic American Style. Throughout our advertising campaigns and promotions Levis plans to reach a new market on an international level. Levis’ buzz marketing strategy has been implemented to penetrate the market hard and increase sales. The advertisements were created to catch the interest of young people who want the Classic American Style. Levis style is simple and attractive. It provides a break from the flashy expensive trendy styles.
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