Birth of Levi Strauss



Levi’s

Revitalization of the Brand

NCCU IMBA Marketing Management Course

Professors: Charles Trappey,

Betty Wu 94933001

Joyce Liu 94933013

Cathy Chan 94933015

Dennis Lin 94933023

Charles Ok 94933027

Table of Contents

➢ About Levi’s®

← Levi’s® History

← Company Profile

← Company Transformation

← People’s Brand

← Milestone of Levi’s®

➢ Levi’s® US & Taiwan Markets

← Brand

← Distribution & Pricing

← Promotion

➢ The “Stay True“ Campaign

➢ Customer Survey Analysis

← Demographic Profile

← Ownership of Levi’s

← Consumer Purchasing Behavior

← Brand Loyalty

➢ Conclusion

Birth of Levi Strauss

Levi Strauss, an immigrant from Germany, used canvas to make into waist overalls for miners who went to California for gold mining in mid of 1850’s,. The name of denim came from “serge de Nimes” , named from the place of “Nimes” in French. Its “strong enough to last” pants were designed and patented by cooperation with Mr. David Jocobs. The day that Levi Strauss and David Jocobs obtained a U.S. patent on the process of putting rivets in the men’s working pants for the very first time. This day, May 20, 1873, was the birthday of blue jeans.

Holding this process patent, rivet pants were solely manufactured by Levi Strauss & Co from 1873 to 1890. During this period, an entire generation of people grew up with this notion, which still has strong image in people’s mind. Years later, ever since the

patent went into public domain, the company differentiated their products from others by endowing them with lot numbers. This was an innovative idea that gave Levi’s the strong image of origin of jeans.

Near the end of 19th century, the demand of waist overall was so great that the company needed to secure fabric they needed. Taking advantage of the opportunity ,the company stopped making the garments out of cotton duck. Due to customers preference, customers wanted the garments with more lasting as well as comfortable. So the company focused more on improving the quality of jean. The denim pants, dyed with ingot to make them blue led the company to be expanded quickly.

The two horse brand leather patch is first used on waist overall. Its purpose is to demonstrate the strength of the pants and reinforce our status as originator of patent riveted clothing. The company knew that the patent would go into public domain around 1890 and decided to reinforce their message of originality and strength graphically.

Levi Strauss & Co.

The company is the world’s largest branded apparel manufacturer which has its presence in more than 110 countries with 53 production facilities in worldwide, with number of employees over 10,000 covering 3 continents..

The company sells and manufactures jeans and casual wears as well as sportswear under its various brand names. The products are sold through more than 55,000 retails location, including 65 company owned stores in nine countries.

At Levi Strauss & Co., the company markets their products under the most successful apparel brand in world ; Levi’s ,is one of the most recognized brands in the history of apparel industry, whose range of products cover tops, sweaters, jackets, foot wear, kid’swear, hosiery, eyewear, luggage and home bedding products..

Levi Strauss & Co’s commitment to quality , innovation manifested in many ways throughout history still continues today

Levi’s

Levi’s is the authentic and original jeans for men, women and kids. This brand and design captured the attention , imagination and loyalty of generation of diverse individuals. The brand of Levi’s continue to define the widest range of products available from classic style up to modern and custom made design.

Dockers

In 1986, Dockers was introduced for the brand of casual wears which was at forefront of business casual trend in the U.S.A. and now is leading stylish and comfortable casual wear, which attracts the individuals who seek for versatile and unique styles. This brand was introduced as alternatives to jeans and dress pants. The lines were expanded to men, women , kids, luggage and home bedding products in more than 50 countries in the world.

Levi Strauss Signature

In emergence and success of the mass channel, Levi Strauss Signature was launched in 2003 for value conscious customers. The brand provides customers with high quality, affordable and comfortable casual wear.

Levis® US & Taiwan Markets

Levis®® brand is supposed to be brand for people and with great quality. However, due to the culture and consumer profile’s differences between US and Taiwan, how Levis®® positioning their brand are very different. We will discuss in detail for through the four P analysis –

Product / Brand

Levi Strauss Co. carried total three product lines available both in the US and Taiwan. They are Levis®®, Dockers and Levi Strauss Signature brand.

For these three brands, Levis®® currently is going for the stylish denim clothes brand strategy to differentiate itself from the regular jeans brand. The target customer are the young generation age between 15 to 25 years old with market position as premium level. As for Dockers, it is a casual wear series of line for Levis® and target with 25 and plus people with more khaki fabrics and the price are in the medium range. For Levis® Strauss Signature, it is the cheaper product line among the three to create the jeans for everyone and stay with the original “ People’s Brand” spirit target with the same range of age as Dockers. ( See exhibit 1 as below )

Exhibit 1

|Brand |Levis® |DOCKERS |Levi Strauss Signature |

|Current Brand Strategy |Stylish Denim Clothes |Casual Wear |Jeans for Everyone |

|Target Customer |15 to 25 year old young |25 and plus |25 and plus |

| |generation | | |

|Market Position |Premium |Medium |Low |

Even though the product lines are same between Taiwan and the US, however, in terms of design, it’s difference depends on consumers taste and preferences. Normally in Asia, Levis® consider it as more leading the innovation and new items while US is more rely on their flagship product 501® and remaining Red Tab line.

From the branding map as exhibit 2 , we can find how Levis® positioning their brand in Taiwan market and using it’s existing values to leverage with the trend. Also we can see how Levis® using different influencers to bring up the market’s attention.

Exhibit 2

|Brand Culture |Customers Prospects |Influencers |Current Brand Strategy |

|Brand Story | | | |

|Reputation Influence |Old jean brand reborn from |Hiroshi Fujiwara, KENJI |To have the trend setter using|

| |1990 | |their brand first then |

| | | |influence the mass |

|Relationship Influence |A pair of jeans that will not|Young generation actors &|Keep on innovating their jeans|

| |disappoint you |actress |base on their archives |

|Experience Influences |Stylish yet comfortable |Edison, BOA |To have celebrities wearing it|

| | | |and create the premium value |

|Symbolism Influences |Authentic, original jeans |American cowboy |Emphasize on it’s American |

| |brand | |heritage with vintage items |

Distribution/Place & Pricing

In the US, the distribution of Levis® majority is through wholesaler while in Taiwan, Levis® is moving towards to a 50-50 split in between wholesaler and retailers. The channel between US and Taiwan is also very different, in the US, major selling channel is through hypermart such as Walmart or Costco which carry Levis® Strauss Signature brand and DOCKERS. Another place will be department store which majority display with the Levis® denim series.

In Taiwan, Levis® did try the hypermart at the beginning of 90’s. However, due to the pricing level between two countries are too different, Levis® in Taiwan can not afford to have their brand in hypermart and decrease its “imported goods” image, they took back all the hypermart display and now focus on department store, jeanery and some of the own boutique shop as well as franchised shop.

For pricing, based on research company’s findings, US consumers willing to pay only $25 per pair (above $25 is too expensive and below that should have quality issue) as an optimum while consumers in Taiwan saying that a $90 one is a quality one. Surely, the people’s definition of quality is different everywhere and all depends on how they use the products and depends on occasions.

In Taiwan, people perceived Levis®® is an American brand with heritage and strong with Vintage item and at the same time with strong linkage with youth on innovative fashion and street wear. This is evidenced by how and who wear this brand. In USA , it’s people’s brand and every generation wear it.  So, the youth image probably is not that clear and since it’s a brand for people, it’s hard to identify as a “fashion” label.

Promotion

The promotion strategy between the US and Taiwan is also different due to the consumer buying habit is quiet different between two places. In the US, due to the distance to the shop, people usually will have their decision made up in their mind before walk out of their house. Therefore, the purchasing behavior is heavily influenced by the previous recognition on the brand. However, in Taiwan, due to people are out on the street all the time, impulsive buying behaviors are more often to be found.

Due to the different consumer buying behavior, there are different advertisement and promotion focus need to be developed. For the US, TV commercial and print ad are heavily influence the consumer selection. Therefore most of the advertisement efforts are being spent on TV and print ad. In Taiwan, TV is less important when it comes to promotion, but print ad, outdoor ad as well as the influencers playing a significant role on impacting consumer’s buying decision. To promote the right product on the right print media become very important comparing with the States.

While the promotion focus in the States still on TV ad and print ad, in Taiwan, point of sales training is currently the main focus. Since jeans is a very customized product and the selection in Taiwan being so diversified, a well trained sales person at the shop will be the key impact factor to the buying decision. Levi’s in Taiwan is more focus now on how to train their POS representative to attract the customer and how to encourage the buying behavior.

From exhibit 3, we can see how Levi’s Taiwan using different print media to promote their product base on different market segmentation.

Exhibit 3

The Stay True Campaign

Levi’s Original 501 jeans were the first Levi jeans named with their style series number. The design was originally developed by Levis Strauss around 1872. With an almost 135-year of history, 501 has become the world’s most successful manufactured article of clothing. In 1964, a pair of Levi jeans entered into the permanent collection of the Smithsonian Institution in Washington DC. Early 2006, Levis Strauss & Co. was the highest bidder for an authentic pair of original Levi’s 501 blue jeans, paying up to $100,000 for this particular item (Economist, 2006). The Levi’s 501 nowadays just one of thousands of brands and lines of jeans, but it continue to remain the classic version and the inspiration of all its designer imitations.

Backed in 2004, 501-line was selling around 1% of total Taiwan Levis’ products. For Levi’s, it was a disappointing sales figure as they positioned this line as their top promotional item. Management here in Taiwan was aware the line could be a bit distant for the youth and it was the right time to reintroduce their Red Tab 501 line with the global “Stay True” Campaign theme.

The objective for this campaign was simple, to strengthen Levi’s original jeans proposition and make it relevant to the youth. The strategy carried out for this campaign was endorsed by celebrities with “True to Yourself” attitude using simple English “Stay True” to communicate. Target audiences were coverage to both male and female, mainstream and fashion forwarders with the age group between 15-34 years old. The marketing plan was 360 º holistic integrated campaigns covered from Word-of-Mouth, Advertising & Key Visuals, , PR and Publicity, Products, Packaging, and Retail.

This comprehensive campaign started out in Spring/Summer 2004 with Word-of-Mouth, Celebrating Seeding to set the trends, followed with Slogan Sticker Teasers lasted to Spring/Summer 2005. The comprehensive launch didn’t take place until October 2005 with Stay True TVC Campaign, Outdoor Advertising, Print Ad, Media Trip Clippings, 501 limited editions, PR Editorials, Shopping Bag, Retail Display & Window, Internet Blog, eDM, and Department Store Promotion. The tonality of the campaign was based on famous music producers as they symbolized “Original Riveted” just like the Levi’s 501 line. Artists Hiroshi Fujiwara, Kenji Furuya, Bird, Dragon Ash, Edison Chen, and Mavis Fan were introduced at appropriate time of the campaign. Currently, the campaign is still on going with spokesperson Edison Chen to carry out the visibility.

EXHIBITS 4 Spokespeople for Levi’s 501 360 º Holistic Integrated Campaigns

|M&W, age 15-34 |Mass |Leading edge |

|High Awareness |Edison Chen |Kenji |

| |Mavis Fan [w] | |

|Some Awareness but Strong fashion |Kenji |H. Fujiwara |

|influence [perceived as fashion | |Bird [w] |

|icon] | | |

Word-of-Mouth: Stickers Teasers, Celebrities Sampling, and Blog

Awareness campaign was an early important milestone as it can create buzz and mystic on the “Stay True” campaign. For youth, stickers were cool and liked as they utilized them as a fashion item. Stickers were also designed like graffiti with campaign slogan on it to give an artistic appeal. Further more, celebrity shadowing and music features were incorporated to match the overall theme.

One another good way to promote the 501 line was the use of celebrities sampling. Levi’s invited different local media figures and featured editorial articles on what they loved about their 501 jeans and how they incorporated it into their lives. Different aspects of the denim were introduced from individual perspective. Masked advertising was also used to relate jean wear into every practicality. All models were presented with a white or black Levi’s top to present one’s genuine appeal and never to compromise with their true values.

Wretch Blog is by far the most popular blogging site in Taiwan with over 2 million members. Levi’s spent $5000 TWD for its blog site and introduced their “Stay True” promotion. With 300-word limit, bloggers needed to express what their “Stay True” inspiration is and how they applied it to their lifestyles. With it on air for 18-day, it reached over 141,000 visitors and created 83 interesting topics and dialogues. This event was by far one the most cost effective promotions.

Advertising Campaign & Key Visuals: TVC and Print & Outdoor Ads

In order for youth to relate to the key spokesperson for this campaign; famous Cantonese pop star Edison Chen was chosen as the main local ambassador. Edison appeared popularly in TV commercials and on .tw site. Impressively, Edison joined Levis’ design team to introduce Clot Unionrail 501 line to strengthen his passion for this product. In October 2005, the most popular Zhongxiao Fuxing MRT station was chosen as outdoor ad location. Vast “Stay True” images were exposed along the one-minute escalator area with daily traffic of approximately 450,000 commuters.

LEVI’: e-DM, Website and Wallpaper / Screensaver

Levi’ aggressively sent out over 16,000 emails to its members to inform them about the new 501 “Stay True” line featuring new cuts based on its new 501 fit test. Washes such as Roadster, Blackstone, and Restricted were introduced as they were already a hit in Japanese market. The “Stay True” front page featuring Edison had been on going from October 2005 up-to-date. Wallpaper and screensaver were also readily available for enthusiasts to download and share. Levi’s was penetrating its slogan into target audiences’ daily means with great success.

PR & Publicity: Media Trip to SFO (Heritage Trip), TV Feature Stories and Interviews and Product Editorials

Media trip was long recognized as the best way to buy journalists’ hearts and presented them a real connection to the product or company. In 2005, Levi’s Taiwan brought journalists to Levi’s birth place San Francisco for a heritage sharing trip. During the trip, journalists had first-hand experience toured Levi’s museum and the flagship store. Interviews were held with Lynn Downey – a historian Levi’s writer, Caroline Calvin – Levi’s Creative Director, and Amy Gemellaro – Levi’s Publicity Director to obtain exclusive insights. Media were also extremely delighted to be introduced to 501 vintage collections which most were one of a kind. The responses from the trip were overwhelming. 58-page of printed newspaper and magazine clippings, 3-coverpage of leading fashion magazines, and 2 one-hour TV program were generated amount to over U.S. 3 million in media value.

The Product

Levi’s 501 was officially launched in 1890, and across three centuries, it is still in the market. What is so unique about the product itself?

Symbols of Brand:

It has Levi’s three symbols of brand: arch stitching, red tab, & leather patch.

Product characteristics:

The color breaks in after wearing and washing and leaves the product a very natural look. The fabric used for 501 is XX17 denim from Cone Mill. Cone Mill is a large American textile company which manufactures quality denim. XX17 denim means extra heavy denim which is extra durable. Until today, Levi’s still use XX17 denim from Cone Mill.

Product design:

The cutting is anti-fit with straight back riser, so it goes well with most figures. The Cone Mills denim is meant to shrink to fit yet comfortable. Throughout 120 years, Levi’s did not do any alteration to the design, regardless the changes of fashion trend. This further enhances the originality of Levi’s 501.

Of course, it is not easy to revitalize a-hundred-year old product. In order to impress the niche market, Levis’ has come out a collection—Levi’s Vintage Collection(LVC). Levi’s targets LVC at the extremely upscale market. The sailing price is NT10,000 per pair. The purpose of LVC is to push Levi’s to the much higher market segment.

The package

The package for Levi’s 501 is also tailor-made for the campaign. The hangtags not only contain product features but also product story to educate consumer why 501 is so different. Even the shopping bags have Stay True 501 logos printed on the surface. To reinforce the upscale position of LVC, Levi’s uses wooden box as the package for LVC.

Retail channel

Retail channels are very important to the campaign because it’s the first line to face customers directly. Levi’s produces window displays and floor stickers to display in Levi’s retail stores to impress walk-in customers. In department stores, they also have display spots and transparent bookmarkers to give away. In jeaneries, they hang banners to attract customers.

To sum up, through the 360 degree holistic Stay True campaign, Levi’s has successfully increased 501’s market share by 66 times.

Customer Survey Analysis

To evaluate how well did the Stay True campaign do to revitalize the 501 product line and re-polish the Levi’s brand in Taiwan, our group has done a field customer survey. We have selectively picked the respondents in our working environment, on the street, and in the jeans shops. The total number of survey received is 104, among them are 97 valid, all of the respondents are Taiwanese.

• Respondent demographic profile

We got a fairly equally distributed gender group, which is 54% female and 46% male. The age groups varied from 18-24 to above 45, and the majority is 25-38, which accounts for 73% of the total respondent body (detail see the exhibit 1). Personal annual income groups varied from under NT$249,999 to $2,125,000-$2,749,999, and the majority is $250,000-1,249,999, which accounts for 80% of the total respondent body. 88% of the respondents are with College/University or above educational background. 96% of the respondents are Employed Full-time. The career groups were a bit more diversified but with a majority of 55% Computer/Electronics.

• Customer Purchasing Behavior

A key aspect we want to probe before getting to know the 501 campaign performance is to get to know the Taiwan jeans customer’s behavior. We want to know which feature(s) are the most important to affect customer’s jeans buying decision, in other words, which feature(s) are the ones that Taiwan jeans buyers most care before buying a pair of jeans.

In the survey, we listed down all the features we can think of a jeans, which are Price, Fit, Style, Quality, Color, Brand, and Trend, and asked the respondents to check those which they care the most when buying jeans.

The result was quite surprising; we thought that Brand should definitely one of the most important affecting factors, but form the survey result, only 3% of our respondents thought that Brand is amongst the most important jeans buying factors. In contrary, four more practical factors: Fit, Style, Price, and Quality, are the most important features to consider when buying a pair of jeans (see the detail in Exhibit 2).

The stunning result not only indicates that Taiwan jeans buyers are rather more practical, but also aroused a big question mark within our group: If only 3% of Taiwan jeans buyers care the Brand, then would it be worthwhile for Levi’s to spend so much money and efforts on promoting the 501 series and the Levi’s brand? The question has been answered in our next section of study.

• Brand Awareness & Loyalty

To test customer’s jeans brand awareness, we put the most popular jeans brands (see the detail in Exhibit 3) on the Taiwan market in the survey and asked What Is Your Favorite Jeans Brand. Levi’s got the highest score in this question and outperformed its peers like Lee Jeans, Miss Sixty, and Polo Jeans.

Our assumption is that a good branding campaign can link the brand image with the factors which the customers care the most. In this case, we believe the Stay True campaign successfully link Levi’s with Good Fit, Cool Style, High Quality, and Reasonable Price.

As a result, among the 97 respondents, 51% already own at least one pair of Levi’s, 70% would like to buy a pair of Levi’s in the near future. One figure best describes the loyalty of Levi’s customer: 92% of current Levi’s owner would like to buy Levi’s again in the future.

Conclusion

• Market Share Expansion

Through the Stay True campaign, Levi’s successfully revitalized the brand.

Reflecting in numbers, we can find that 501 product line’s market share in Taiwan jeans market has increased from single digit to nearly 16% after the campaign. And with the 501’s help, Levi’s has become the leading share jeans brand in Taiwan market.

• Brand Image Establishment

More important than just sales numbers, the Stay True campaign was believed to re-establish Levi’s brand image in Taiwan customer mind. To probe what is Levi’s brand image, we ask our respondent: What do you think of Levi’s brand image? Please use one word/sentence to describe it. We got bunch of positive quotes such as:

□ Cool & Stylish

□ The authority of jeans

□ Strong personality

□ Evergreen brand

□ Health, young, cowboy, expensive

But they are no more than following sample which can better show us what Marketing can do to a company…A 32-38 male said Levi's: Very expensive, unreasonably expensive, expensive enough that only blind young people would buy… But in fact, this smart old gentleman not only owns pairs of Levi’s, also he would buy more in the future. Furthermore, his favorite jeans brand is Levi’s!

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