MA Marketing Communications
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The intention of this essay is to present a marketing case and supporting evidence for the brand repositioning of Levi Strauss (Levi's) in the UK. The campaign will target 16.3 million of consumers in the age groups 15 – 34, both male and female (ONS, 2010). The overall purpose is to increase Levi’s UK revenue by 15%. This is equal to £9,940,200 million, from £66,268,000 million in 2010 to £76,208,200 million within a one-year campaign period (FAME, 2010).
The plan identifies the potential opportunity to generate £2.1 billion a year in the denim jeans market. (Guardian, 2010) The repositioning campaign will spend £5 million on marketing communications activities such as advertising, public relations, sales promotion, and direct marketing. As the figure, one below showed that Levi’s have struggled to maintain their revenue levels in the last 5 years. This could be boosted with the launch of a large marketing campaign with the established budget of £5 million. Levi’s peak revenue was 71,000,000 in 2006. This was a year where they spent £1,009,000 on advertising. Since then, revenue has reduced, this may be partly due to the recent economic conditions, but it may also be because the marketing of Levi’s products has reduced considerably (Mintel, 2010). Levi’s past indicates that they have had higher revenues when they have allocated a larger budget towards marketing and advertising. Digital marketing is an exciting implement with which to realize those advertisement priorities. Experts in various advertising fields have to be hired to pioneer this new chapter in the advertising division of the company. Well-seasoned advertising experts will possess wide-ranging sales experiences and be aware of the difficulties of circulation. An advertising specialist will comprehend the psychology of the advertising procedures. The consultant will identify the inner operations in an advertising outfit and possess innumerable sources and contacts that are available to deal with any difficulty. Although advertising consultants’ costs may seem high, the interim benefits can be considerable. With there now being more competition than ever before, a higher allocation maybe necessary to influence the market and gain enough attention to affect Levi’s revenues. Marketing costs have also likely increased over the last 6 year and consequently a larger budget has been allocated for this campaign.
Levi's Strauss & Co. (Levi's) brand has been pioneering since 1873 whilst continuously being committed to their quality and corporate citizenship that contributes to the reputation of the Levi brand. Through their commitment Levi’s became one of the most widely recognized authentic “American” brand in the apparel industry. The broad range of products appeals to all ages of consumers and their different lifestyles. Levi’s is a licensed trademark in many countries in the world (Company Website, 2011).
Levi’s products range comprises of jeans, informal attire such as dress pants, shirts, skirts, coats, shoes, and slippers as well as other related accessories. Across all the product range, Levi jeans (jeans, casual pants, and dress pants) represent approximately 84%, 85%, and 85% of Levi’s total sales in each fiscal year for the last three years (2008 to 2010). (Company annual report, 2010) In the UK, the company operates as Levi Strauss UK Limited (Levi’s) which markets only jeans wear under the trademark, Levi's. The company distributes the product range through department stores, specialty retailers, franchises, and retail stores in the UK (Mintel, 2010)
Levi Strauss UK saw a 10.2% decline in revenue from 2006 to 2007 where their turnover has remained until 2010 that saw a slight increase of 2.9% year on year from 2009. Levi’s faced new intense competition from high street retailer brands, which focused on re-branding their jeans, as well as value retailers’ brands and supermarkets also introducing low price jeans alongside their other products in the last 3 years (Mintel, 2010).
Levi’s is stepping up in this strong competitive market by opening their re-crafted Levi’s flagship store on Regent Street in London during March 2010 (Datamonitor, 2010). The new storefront is unlike the old-fashion idea of putting clothes in the window; they now use the front as exhibition space for “Levi’s craft workers”, group musicians and artists to be brand ambassadors (The Guardian, 2010).
According to Mintel’s consumer research on the topic of Consumer Attitudes to Buying and Wearing Jeans – UK (2010), the consumers’ demand of jeans is shifted from endurance to fashion and individual appearance. Even though Levi’s remains a classic iconic brand in the jeans market, they have lost the sense of trendsetting and cutting-edge style compared to its competitor such as Diesel that has become popular among young men and which is now perceived as a trendy street-smart brand. Calvin Klein conveys aspiration and prestige fashion ability. Therefore, to become the first choice in the consumers mind, Levi’s need to focus on developing the brand positioning by using related communication strategy and marketing activities to promote, attract and engage with young consumers and new customers in the UK. Additionally, Levi’s UK should adopt an integrated online store operating system that is identical to the American. It will encourage online purchasing from customers and simultaneously create a long-term relationship with them.
Levi Strauss & Co. (Levi Strauss or Levi’s) is a privately held brand apparel company; the world’s first and largest maker of pants especially blue jeans since 1873. (A&E Television Networks Website, 2009) The company designs and markets jeans and other casual wear for men, women and children under Levi's®, Dockers®, Signature by Levi Strauss & Co.™ and dENIZEN™ brand names. Levi has store outlets in Latin America, Europe and a smattering of Asian nations. The corporation has its centre of operations in San Francisco, California and provides work for about 16,200 individuals worldwide (Datamonitor, 2010) According to Fame (2010), Levi Strauss (U.K.) Limited registered as incorporation in 1966 and employs 656 people in 2010.
Levi Strauss & Co. four core values are empathy, originality, integrity, and courage. The four values are linked and become a competitive advantage in doing a business. Levi Strauss & Co. believes that people have worn their products as an emblem of liberty and expressiveness in the face of hardship, difficulties, and societal change. The relationship between the values and consumers and the brands is the basis of success and drive the core business purpose (Company website, 2010). The company’s vision is to be a first-rate establishment, one that becomes a point of reference for other organizations in the clothing design trade. The corporation is also keen to empower its workforce so they are not forced to spend many days in countless meetings trying to comprehend the objectives while the crucial work is delayed.
Levi Strauss & Co. believes that clothes can make a difference. From across the company, Levi Strauss & Co. is combining innovative designs and craftsmanship that inspires consumers to show their individual style leaving their mark on the world (Company annual report, 2010).
The long-standing objectives are to fortify the brand internationally in order to convey sustainable profit growth and continue to generate strong cash flow and reduce debt (Company Annual Report, 2010).
To create trend leading products and marketing programs that appeal to existing customers and providing a solid foundation to enhance an appeal to under-served consumer segments.
To be central to wholesale success by using their brands and strength in their produce development and advertising to compel customer traffic and demand to their outlets.
To provide a compelling and brand-uplifting consumer experiences in dedicated retail stores around the world.
To identify global consumer trends, adapt successes from one market to another and drive growth across their brand portfolio and balancing the power of global reach with local market insight.
To increase the business operations efficiency and effectiveness to drive growth and continue to build sustainability a social responsibility into all aspects of operations.
It is also the mission of Levi’s jeans corporation to ensure that expert customer support is offered wherever and whenever it is required. As a corporation, Levi’s is proud to present workers with individual learning and development opportunities. The firm recognizes that groundbreaking and creative difficulties can be experienced by members of staff and seeks to solve them at every level. They extend to the staff members the same courtesy that the workers are expected to exhibit to the clientele.
Gain-sharing is just one of numerous activities that are in the pipeline at Levi's to approve of the contributions from workers. Other proposals vary from presenting colleagues with coffee mugs or T-shirts for their high-quality efforts as well as giving them vouchers that can be redeemed for currency or gift tokens.
The company’s key products include jeans, casual and dress pants, tops, skirts, jackets, footwear, and related accessories that provide to consumers of all ages and lifestyles (Company Annual Report, 2010). Levi Strauss’s products are sold in nearly 55,000 retails in more than 110 countries. Included in this list are 2,300 dedicated retail stores, which are franchised and or company-operated stores (Datamonitor, 2010).
The brand represents classic American style and effortless cool style. It is positioned as the original and definitive jeans brand. Consumers are able to instantly recognize the distinctive traits of the brand from the double arc of stitching (Accurate stitching design), red tap scheme, and a fabric tab stitched into the back right pocket. Levi's® product range includes Levi’s® Red Tab™ and Premium Products such as Levi’s Engineering Jeans, Levi’s Blue, Levi’s Redloop, Levi’s Lady Style, Levi’s Capital E Products, Levi’s Vintage Clothing Line and Levi’s Curve ID Jeans for women.