Mkt 600 levi


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  • Emily
  • Emily
  • Emily
  • DenisMaybe he could read a direct quote from the qualitative analysis at the back
  • DenisProduct Life CycleConsists of 4 phases that a product goes through from release to removalIntroduction – Initial entry into the marketGrowth – Steady increase in sales and popularityMaturity – Plateau of sales and popularityDecline – Decrease in sales until final removal from the market
  • Emily
  • Kristy
  • Kristy
  • Kristy
  • Tony
  • Evan
  • Kristy
  • Kristy
  • Denis
  • Denis
  • Tony
  • Tony
  • Emily
  • Mkt 600 levi

    1. 1. Tony Chu, Kristen Cummings, Evan Eom, Emily Gregoire, and Denis Vinarev November 4, 2013
    2. 2. • • • • • • • Issue(s)/Problem Statement Application of Theory Alternatives Decision Criteria Recommendation Implementation Plan Assumptions and Missing Information
    3. 3. 1. The main problem we at Levi Strauss Canada (LSC) are facing is that our GWG brand is underdeveloped. The significance of this problem is that the GWG brand is in the declining stage of the product life cycle. Therefore, it is significant to our investors due to the financial risk associated with the decision to revive an existing brand. 2. Julie Klee, Director of Marketing, along with the marketing team at LSC need to decide whether to renew the licence agreement with Jack Spratt or go with another alternative and try to revitalize and reposition this dying brand. This issue is also due to the lack of any marketing strategy for the GWG brand. 3. Our year-end falls in February which means we need to have a decision ready by May. This problem is very urgent due to the major impact it will have on Jack Spratt, and LSC. Making an informed and well thought out choice will be the deciding factor of whether GWG will see a re-emergence into the jean market.
    4. 4. Brand Equity • This concept refers to the added value endowed to goods and services (Kotler, Keller, Sivaramakrishnan, & Cunningham, 2013). • Brand equity takes into account how a consumer feels and thinks about the brand, as well as its price, market share, and profit in which the specific brand, like GWG, commands. • GWG has low brand equity as most people do not associate with the brand. • LSC on the other hand holds a much higher brand equity, this is also clear after our qualitative consumer analysis. • High brand equity can enable companies to charge a higher price for products and still anticipate sales to occur.
    5. 5. •The product life cycle refers to the change in which a company’s positioning and differentiation strategy must change as the product and competitors change Kotler, Keller, Sivaramakrishnan, & Cunningham, 2013. •The GWG brand has now reached the decline stage and is no longer considered a viable brand through the eyes of consumers. With lack of support from the licensing manager this is not a surprise.
    6. 6. Alternative #1 End the licence with Jack Spratt, revive and reposition the GWG brand under the full control of LSC • • • We based this decision upon many factors including the success of our current brands, Levi’s and Dockers. Gain access to LSC’s distribution and manufacturing capabilities. The GWG brand is in need of a full make-over and under this alternative LSC would be able to utilize their current marketing experience and distribution channels to make GWG profitable.
    7. 7. Alternative #2 Renew the licence with Jack Spratt and hire a Licensing Manager to solely focus on the GWG brand by creating a strategic marketing plan • Licensing manager would be able to produce a creative and effective marketing strategy which in turn will increase brand awareness and revenue. • Control over product improvement • Cost efficiency the only cost for LSC is the manager salary
    8. 8. Criteria End the licence with Jack Spratt and reposition GWG product under LSC control Renew the licence with Jack Spratt and hire a Licensing Manager solely for the GWG brand Product Improvement 10 9 Management Dedication 6 10 Distribution/ Manufacturing Capability 10 3 Cost Efficiency 8 10 Sales Growth Potential 7 4 Total 41 36 Scale Used: where very weak = 1 and very strong = 10
    9. 9. Problem • The GWG brand is currently underdeveloped End contract with Jack Spratt and revive and reposition the GWG brand under LSC control • Bring back to the introduction stage and re-enter market • More has access resources including employees, materials, technology, and equipment • Less expensive to train existing employees on one new brand rather than hiring new employees
    10. 10. • Distribution capability is significantly greater • LSC employees already have a working relationship with distributors, cutting out the cost of expanding our distribution network • Sales growth potential is higher • Since the GWG brand is already increasing in sales under Jack Spratt, LSC will continue to increase the sales by expanding into the larger international market further growing our market share
    11. 11. 1. 2. 3. 4. 5. 6. 7. Target Market Product/Service Strategy Pricing Strategy Distribution Strategy Integrated Marketing Communication Sales Strategy Financial Analysis and Budget
    12. 12. Demographic: • Blue Collar male and female, aged between 25-50 years old • Examples include, construction worker, outdoor workers and more. Psychographic: • People who value quality, comfort and functionality over design when purchasing jean apparel. • Hard working, manual labour workers who are used to working in severe conditions.
    13. 13. • Focusing on quality, durability and functionality • Showcase the jean’s for tougher weather while also offering competitive price – Jean that could stand up to the severe Alberta winters • Good for rough work sites, mountain terrain, suburban area and forestry • Extended product line – Extend the cuts and fits for female consumers
    14. 14. • Set price at the levels of competition to attract consumers based on the added value of our product • Match Wranglers price point of 29.99 • Consumers in our target market willing to pay Wranglers price will pay same price for higher quality product • Providing a low price for a high quality product will attract new customers
    15. 15. • Expand the distribution channel beyond smaller mass merchants – Department stores – Jeaneries – Large Mass merchants – Other Retail Outlets • Leverage LSC’s existing networks and resources
    16. 16. • LSC has limited funds to allocate towards the marketing of the GWG brand – In-store presence and display will be a form of marketing itself – In-store sales associates with jeans on display to encourage consumers to try on • Media – Banner advertising to create awareness – Print Media (Flyers, posters, catalogs) – TV and Radio spots (in the future with more marketing funds) • Target Areas – Neighborhoods that have construction sites – Blue collar and manual labour sites.
    17. 17. • This strategy does not apply to LSC as we are focused on business to consumer sales.
    18. 18. • Variable Cost – Min cost to manufacture a pair of jeans is $15/unit – Shipping Cost: $0.35/unit – Total Cost to manufacture the number of pair of jeans estimated: $15.35 * 244,444 = $3,752,215.40 • Fixed Cost – Point of sales materials (2% of Revenue) = $146,666.40 – Tax Expense = [Revenue - (Product Cost + POS Material + Cost to update fits)] * 40% = $1,349,775.28 • Total Expense – Total Expense = Product Cost + POS Material + Cost to update fits + Tax Expense = $5,308,657.08 – NET PROFIT = $2,204,662.92 • Assumption – No other expenses are incurred, and no return or discounts to customers
    19. 19. • We assume that the year-end for LSC is in February. As the case states “In early February 2002, Julie Klee is considering whether the GWG brand should be taken back from the licensee” which by the end of the next quarter would be May. • We assume that LSC is still one of the world’s largest jean manufacturers • We assume that Jack Spratt operates and distributes its product just in Canada • We assume that the sales growth rate will stay constant