2. To: William McComb, CEO, Liz Claiborne Inc.
By: Dan Gruenberg, Senior Vice President, Marketing, Lucky Brand Jeans Division
KEY ISSUES
To develop a promotional plan, starting in January, 2010, that will result in a 5% increase
by the end of 2010. Lucky Brand Jeans generated a total of $85 million in revenue. The
promotional strategy must result in a $4,250,000 increase, totaling $89,250,000 of revenue.
In these tough economic times, we have to analyze and discover a way to stay ahead of
the consumer curve, offering a unique brand of jeans at an affordable price. In order to discover
the quality product that the consumer is ultimately looking for, we will look at different research
tactics, as well as, the demographics and psychographics of our target consumer. We will look
into the possibility of changing our advertising technique, while looking at all of the benefits that
various communication mediums offer the Lucky Brand Jeans Division. With advertising, we
will look closely at the Unique Selling Proposition and the positioning of our ad. We hope that
we show the customer the great benefits that we offer and why they must choose our jeans over
the competitors’. Lastly, we will analyze the other strategies, outside of advertising, that will
also have an effect on our future plans and relationship with our loyal customers.
ANALYSIS
The first step to developing this promotional plan is to research our customer, and figure
out who our customer is and where they normally shop. To start, we are going to use both types
of commercial research: industry and consumer. By doing industry research, we will be able to
determine where we are in comparison to the entire jean industry, and more specifically, where
we are compared to our competitors. Then we can improve by looking at what our competitors
are successful at, and how they are attacking the consumer market. More importantly, we need
2 2
3. to conduct a thorough investigation of our consumer. We have to determine their attitudes, their
preferences, as well as look at the demographics and psychographics of our target consumer.
When analyzing demographics, we have seen that our normal customer is usually
between the ages of 16 to 60 years old (Founders). To get even more specific, we currently
focus our efforts on the 16 to 34 year olds; however, we do have jean apparel for anyone, ranging
from little kids up to senior citizens (McClure). In order to understand how income affects our
customers, we must look at the price range for our product compared to other companies and
brands. On the website, Lucky Brand Jeans (for men and women) are advertised anywhere from
$100 to $130 each, with a few outliers on each side (Tune Into Spring). That is above the
industry average, but is still a relatively decent price for quality jeans. Regardless, this shows us
a little bit about the type of customer we need to target, along with the area that we should
market to. We need to concentrate our efforts toward the slightly higher-than-average income
holder. We also have to look at customers that are concerned with status, because they
understand that the quality and brand name comes with the price tag. That is what we are
selling: the image and name that is associated with Liz Claiborne and Lucky Brand Jeans.
Next, we have to look at psychographics. In order to even further understand our
consumer, we have to look at how the demographics and culture play a role in our customer’s
values, attitudes, and tastes. We have to understand what is motivating our younger target
audience to continue buying from us, considering our higher prices. As previously discussed,
people are motivated based on the social status that they want to obtain; they want to “stand out,”
However, we need to do more research to determine the other motivations, outside of just status.
Before looking at actual types of studies, we know we have to do both primary and
secondary research studies. Primary will cost more, but by doing our own research projects, we
3 3
4. will gain insight into our own customer’s mind. We will also take full advantage of secondary
research, where we will use other sources as a guideline for our own research. We will learn
about the average customer for the entire industry, and then we can learn more about what
separates us in the customers’ point of view.
When conducting our primary research, we are going to concentrate more on qualitative
research. With our “Qual” studies, we will conduct focus groups, with 12 people in each. In
each group, we will attempt to get a variety of people, including various ages, incomes, and both
men and women. We will ask research questions, consisting of things such as: What could we
do to improve our jean quality? What things do you think we should do differently? Then we
could generalize our questions even more, just so we do not include any bias, and ask questions
such as: What do you like about these and what do you not like? Why?
While quantitative research can be very detailed, for our particular purpose, we should
hold off on doing any kind of a “Quant” study. Right now, a “Quant” study would not provide
enough value to be worth the extra expenses. By sticking to qualitative research, we can look
more at specific motivations. So we should continue with some of the research that we are
already doing. We are gaining considerable knowledge about our customer’s psychographics
and motivations by asking questions in our current studies, like: “where they live and shop, what
magazines they read, what they do in their free time, and what television shows they watch. This
gives [us] insight into [the] consumers’ sensibility and what motivates them” (Shearin).
By using several different research tactics, we will also better understand where
consumers are more likely to purchase their jeans. We will be able to understand whether or not
we should centralize our efforts around a few types of stores, or keep the current plan of
expanding as far out as possible. Currently, we distribute Lucky Brand Jeans in both upscale and
4 4
5. regular department stores, owned and operated specialty stores, independent specialty stores,
through e-commerce, and factory outlets (Lucky Brand Jeans). However, we have focused our
efforts mainly on upscale department stores as well as high fashion retailers. With the current
trend moving away from department stores, it is in our best interest to stick with that plan. Still,
we must constantly look for other areas to expand to, in order to ensure that our name and image
continues to grow. Because we promote the style of our brand, we have to look into various
geographic areas that will fit that image. We own and control stores all over the world, but
within the U.S., we have to focus our efforts toward cornering the “big cities.” We have to look
at personalized strategies for cities such as Los Angeles and New York, beginning with places
like Long Island. We should first start in the New York area, where we already have name
recognition because of the stores that we own on Fifth Avenue and Madison Avenue (Shearin).
By researching and concentrating on certain strategies, we should begin to understand
where the consumer is most likely to purchase their jeans, which should give us more insight into
whether or not we are able to stick with the upscale department and retail stores. By doing
research, we should find out that we are more likely to succeed and grow near “malls, lifestyle
centers [or at] street locations. [In other words, we want to be selling in] high-traffic, high
fashion locations” (Shearin). We want to be around stores that have a similar upper-class brand
idea, which will draw more consumers into our market.
After thoroughly going through the necessary research, we should address the mediums
to promote Lucky Brand Jeans. First, we are only going to do limited advertising in the
newspaper. Since our target market is 16 to 34 year olds, the newspaper is not a good medium
for Lucky Brand Jeans. With the invention of television and radio, the daily newspaper is a
dying breed among the younger generations. We will limit our newspaper and print production
5 5
6. to coupons twice a week. We will include coupons in the Sunday and Monday newspaper. We
will use Sunday since it is the biggest day for newspaper sales, and Monday to capture part of the
work market. We expect our research to show that the majority of people start their work week
by settling back in with a newspaper and a cup of coffee, making Monday a good day to
advertise. This will allow us to capture that segment, but by sticking to only two days, we will
limit our costs. We will keep some of our current coupons in the newspaper, like the 50% off
select items, twice a year (Coupons). We will also add various coupons such as: Buy Three Pairs
of Jeans, Get One Free; and various coupons for 20% off.
After concentrating on limited print production, we will focus our efforts on radio and
television production. These are more vital because of the younger audience that makes up our
target market. With radio production, we will develop a normal 60-second advertisement for
Lucky Brand Jeans, where we will discuss the quality associated with our image. We will set
our ad to play at core times, such as: between 6 and 7 AM when people are leaving for school
and work; between 2 and 3 PM when students are getting off of school; and 5 to 6 PM when
adults are getting off of work. The cost for those prime times will be a little more expensive, but
in the long run, the extra advertising will pay off. After looking at various research throughout
the industry, the coupons, print production, and radio advertising will increase sales
approximately 2% during 2010, a combined $1,700,000 increase. The extra sales are based on
the extra traffic the coupons will provide, along with targeting a consumer by using specific
radio stations that promote Lucky Brand Jeans. See Exhibit A.
The most important medium for us will be our television production. We can really zone
in using the new technology, and even try to center our efforts in core markets, like Los Angeles
and New York. We will develop a standard 30-second ad, using images like the ones on our
6 6
7. main webpage, along with the ones for Lucky Brand Jeans (Liz Claiborne and Tune Into Spring).
It will give us the opportunity to show off the style that we offer, as well as to use several
celebrities that have promoted our product in the past to create general appeal (Founders). We
will stick to the 30-second ad to keep costs reasonable, while getting valuable air time to
promote our name and image. After much deliberation, we will avoid using the Super Bowl to
get our name out, even though it provides an excellent time for advertising. The cost for that
advertisement would not provide the value that some would hope for. That is partly because of
the base market that is watching the Super Bowl. We would take advantage of the reach factor,
but not necessarily to our core customers. We need to concentrate more on frequency to our
select customers, and the Super Bowl is not a good time for us to achieve that goal. We would
be forgotten in the Super Bowl Sunday advertising mess.
The last big medium that we will use is the internet. Just like television, the internet is
rapidly growing in the younger market. We have already begun to use Facebook, which was one
of the best advertising inventions (Discover Liz). We will continue to advertise on the internet,
using it as a way to be more selective with our target market. We will look into pop-ups on
various search sites, as well as purchasing advertising spots on websites for big-name retail
stores. We want to create a positive brand, and to do that, it will help to associate ourselves with
other big name companies. This will become easier since we are already established, but we
now need to strengthen our market even further, while keeping the loyalty of our current
customers. With the two fastest growing mediums, we will ultimately get a 3% sales increase
from the combination of television and internet. That is equivalent to a $2,550,000 increase in
our 2010 sales. See Exhibit A.
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8. When looking at the various mediums that we plan to use, we have to carefully identify
our Unique Selling Proposition and how we want to position our ad. Through our television ads,
we can really use the USP both in a broad sense and in a specific sense, in order to show why our
product is unique. We can advertise in a broad way by including sexual innuendo. Face it, sex
sells! We can include beautiful models that walk by wearing Lucky Brand Jeans, showing that
guys immediately flock to them. More specifically, we can use the USP to create both an
informational rational appeal and an emotional appeal. We can show why our product is quality
and why the consumer would be “smart” to make an investment in our jeans. We can use the
emotional appeal to make people desire our jeans, not based on the price or quality, but just the
image of beauty that we provide.
Next, we will concentrate heavily on the positioning of our ads. We will make our ad
stand out and highlight something that the consumer will remember. An example of a possible
positioning phrase would be:
Lucky Brand Jeans: The Hollywood Lifestyle You’ve Dreamt About
Since Lucky Brand Jeans has been founded, numerous Hollywood celebrities like Ben Affleck,
Halle Berry, and Brad Pitt have endorsed our product (Founders). By using a position like the
one previously stated, we can attach ourselves to those celebrities and create the emotional
appeal that the consumer desires. Make them feel like a celebrity in their own right.
Besides Advertising, in order to obtain the results we want, we need to look into the other
promotional strategies including: PR, Sales Promotion, and Direct Marketing. With PR, we need
to make sure people understand who we are as a company. We need to continue our efforts of
helping disabled children through the Lucky Foundation (Founders). By doing so, we not only
give back to the community, but we develop a good name and one that consumers and
8 8
9. companies will gladly work with. We will target other “publics,” to talk about product benefits,
not just community activities. That way we can take on both sides, the “emotional caring” side,
as well as the “straight to business” consumer that just wants their product information. With all
of the celebrities endorsing our product, we should be able to get the product into various
movies, clearly showing the logo on the seam promoting Lucky Brand Jeans. That way, we
attach our brand to a celebrity, and to (hopefully) a successful movie.
For Sales Promotion, we will use various coupons, as discussed before, to get extra
customer traffic. We will also use a reward-based system, where customers get money off after
spending a certain amount at one of our stores. For example, after a customer spends $1000
cumulative at our stores, they get a $100 certificate to use at any one of our stores. We will also
concentrate more on the retail-driven efforts of Consumer Sales Promotion, instead of Trade
Sales Promotion. With Direct Marketing, we will use direct mail to send out advertisements and
coupons. However, we will try to influence buzz marketing, because that will ultimately be
cheaper and more believable. Through the other promotional strategies, we will see an increase
of 2% in our sales, which is equivalent to $1,700,000. See Exhibit A.
RESULT
After the entire promotional strategy, by year-end 2010, we will experience a 7%
increase, eclipsing the goal of 5%. See Exhibit A. The total increase will be approximately
$5,950,000, leading to total sales revenues of $90,950,000. After thoroughly researching our
customer, we will better understand how to market to them, which will allow us to keep
customer loyalty and build on an already expanding customer base for Lucky Brand Jeans.
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10. Work Cited
Discover Liz. Liz Claiborne Inc. 8 March 2009 http://www.lizclaiborne.com/brand/discover_liz.
Founders – Gene & Barry. Lucky Brand Jeans. 6 March 2009
http://www.luckybrand.com/about_gene_barry.aspx.
“Liz Claiborne Logo.” Fashion Notebook. 8 May 2008. 8 March 2009
http://brandmediaweek.typepad.com/fashionnotebook/images/2008/02/14/logo_liz.png.
Liz Claiborne: New York. Liz Claiborne Inc. 8 March 2009 http://www.lizclaiborne.com.
Lucky Brand Jeans. Liz Claiborne Inc. 8 March 2009
http://www.lizclaiborneinc.com/ourbrands/brand_lucky.asp.
Lucky Brand Jeans Coupons, Promotions & Lucky Jeans Coupon Codes. Coupon Mountain. 6
March 2009 http://www.couponmountain.com/Lucky_Brand_Jeans-coupons-deals.html.
McClure. Notes. Marketing 755M. Schoenbaum Hall, The Ohio State University, Columbus,
OH.
Shearin, Randall. “Liz Claiborne Finds The Right Fit.” Shopping Center Business: Leading The
Way Through The 21st Century. May 2007. 7 March 2009
http://www.shoppingcenterbusiness.com/articles/MAY07/story1.shtml.
Tune Into Spring. Lucky Brand Jeans. 6 March 2009 http://www.luckybrand.com.
10 10
11. Exhibit A
Total Increase of 7%
6000000
5000000
4000000 TV and Internet
Print and Radio
3000000
Other Promotional Strategies
2000000 Total
1000000
0
Amount of Increase
* Total Sale Increase will equal out to approximately a 7% increase over the revenue total of
$85,000,000
* That total comes out to roughly a $5,950,000 increase, resulting in a year-end revenue of
$90,950,000
11 11
