Individual Report (Levi’s)
Individual Report (Levi’s)
Levi Strauss & Company is an American clothing firm acknowledged for its wide range of clothing and jeans, including Denim wear. Levi Strauss founded the company in 1835 when he moved from Germany to the U.S. to help his brothers develop their business in New York (Downey & Lynch, 1995). The firm, headquartered in San Francisco, has made significant transformations in its activities over the years, with major changes taking place between the 1910s and 1960s when the group ventured into the production of a wide range of modern jeans and other wears. The team has paid close attention to the strategies it adopts over the years; although, the level of competition increased in the 1990s when other brands started developing cheaper products that attracted more consumers. Presently, the team focuses on expanding its portfolio, with its revenue of $4.553 billion a positive indication of an improved future performance. Furthermore, the production of a wide range of products, including trousers, jackets, T-shirts, socks, skirts, accessories, and shoes, restores confidence that the team may improve its revenues in the coming years. Embracing an effective operational and marketing plan will allow Levi’s improve its activities.
The Brand Values of Levi’s
Companies now consider branding to be a crucial marketing methodology and corporate strategy enables them outperform competitors. Firms in all industries have adopted the technique of marketing their identity using their brand and products. The idea of branding, nevertheless, goes beyond the concept of marketing; it is perceived as the role of organizational management in collaboration with the marketing team (Vrontis & Vronti, 2004). Organizational leaders and marketers have come to know the increasing power of brand image and reputation, and have begun nurturing the organizational brand through various ways like hiring brand ambassadors (Downey, 2016). Levi’s is an example of an organization that places significant attention on building its brand value with the motive of attracting more consumers. The team understands that building the brand’s power and using it as a driver to advance returns requires strategic planning in the most effective manner.
Levi’s embraces various techniques to improve its brand value. One way it does this is by emphasizing the use of innovative ideas to conduct business operations. The group believes in the development of attractive wears, as well as the development of new ideas of working that makes the services more effective (Levi’s, 2018). Other than being innovative in the company’s activities, the group strives to enhance sustainability in all company operations. As a result, the company became part of the Better Cotton Initiative which is dedicated to producing cotton in a manner that is not harmful to the environment and communities (Levi’s, 2018). The team also engages in the production of water less jeans which are developed using a considerably low amount of water. Also, as a way of building brand value, the team is dedicated to achieving progress in all it does. The group has made significant strides over the years in increasing the various aspects of its activities to match its competitors.
The initiatives to develop the brand’s value have put the company in a better position in the jeans global market. Levi’s initiatives to develop attractive jeans places it number one among other companies developing jeans wear. The company had a market share of 11.1% in 2012, which fell to 10.6% by 2015 (Downey, 2016). Even though other companies like Wal-Mark, Wrangler, American Eagle Outfitters, and Old Navy have increased their share of the market in recent years, their capacity does not match that of Levi’s, which still dominates the sector (Downey, 2016). Levi’s dominance in the area suggests that people believe in the brand name and highly value the products and services they offer.
Challenges Chip Bergh faced when he Entered Levi’s
One of the major challenges the company’s CEO had to tackle upon entering the company was the development of a tagline that would make it easy for consumers to identify with the company. The CEO gained the idea to develop a tagline following his interaction with customers who highly valued the company’s products. The leader once interacted with a 29-year-old woman who lived with her parents in India and had jeans from various labels including Calvin Klein, Guess, Hudson, among others (Bergh, 2018). The woman displayed her favorite trousers and confessed that despite having outgrown some of the trousers she acquired from Levi’s, she still keeps them because of her love for the brand. She mentioned that “You always wear other jeans but you always live in Levi’s” (Bergh, 2018, p. 4). The words interested the CEO who settled on the phrase “Live in Levi’s” as the advertisement tagline. The CEO, from the conversation, learned the values of listening to customers’ views because they can be equally important in deciding the running of the company.
The other issue the leader had to address was the lack of an appropriate strategy that would guide the firm to act in a way that would improve its activities. Bergh (2018) stated that developing a suitable tagline was not enough to transform how the company functions and sells to consumers. The CEO liaised with the finance department to settle on a plan that would help the company improve revenue generation (Bergh, 2018). Four months after joining Levi’s, the CEO began working on the development of a plan that would comprise four major tenets. One of the areas the leader saw the need to develop was to build on the strong area earning the company much returns compared to other areas. The team realized that nearly 80% of its revenues come from men’s jeans and Dockers, making it necessary to improve on the areas with more potentiality (Bergh, 2018). The team also saw the need to expand its activities and products to acquire a wider market share and advance the brand value. The team realized that its investment in women’s apparel was inadequate; yet, the demand from female buyers was quite high.
The team also realized the essence of expanding to other nations such as Russia, Brazil, China, and India. The team leader developed a plan that would allow the firm to function as a leading omnichannel retailer to provide the goods over a wide area (Bergh, 2018). The group leader knows that offering the opportunity for buyers to acquire products in the various stores and online will offer the chance to acquire improved returns. The leader also focused on improving operational excellence by cutting cost, driving cash flow, and becoming more financially disciplined. The CEO knew that developing the strategy would not be an easy task and would require additional effort and resources to be successful.
He also realized that the team lacked urgency in the way it addressed the business matters, as well as financial and data discipline, which are key aspects the organization must address. The leader realized these weaknesses when he held a meeting for a group of employees in which he explained to them why he believed the team was not performing according to expectations (Bergh, 2018). The CEO learned that lack of proper leadership at the organization was the major reason some workers displayed evident signs of lack of discipline when handling the critical areas of the organization. Bergh (2018) mentions that he was shocked by the number of team members he had to change to meet the organizational demands. He had, within 18 months, changed nearly nine staff believed to be the primary reason behind the company’s poor performance (Bergh, 2018). The leader believes that his initiatives to build a world-class executive team played a key role in dealing with the lack of discipline exhibited by the workers at the various capacities. Bergh knew that failing to deal with the weaknesses at the financial department may subject the firm to imbalances and deficiencies that may have significant repercussions on its operations.
Recommendations to Bergh and his Board
Levi’s must embrace effective marketing methodologies to add to the adopted strategies. Adopting proper marketing methodologies according to the description by Premkanth (2012) offers the chance to compete effectively with other players who are equally interested in acquiring a larger portion of the market. The team should consider applying the idea of market segmentation to understand how to meet the desires of the various groups of consumers. The group, while applying the marketing strategy, should consider dividing the market using demographic features which requires the sellers to look into factors such as the consumers’ gender, age, occupation, nationality, and income (Premkanth, 2012). The marketing team should realize that some buyers depending on their gender would require different jeans. The marketers, while going about their practices, should also consider geographic features like buyers’ countries, regions, states, and cities, and understand how these differences may result in variations in the buyers’ tastes and desires (Premkanth, 2012). The seller may realize that the buyers of a particular region prefer specific deigns to others which may require the manufacturers to design the products in specific ways.
The marketers, while applying the market segmentation approach, should also consider categorizing the consumers based on their psychographic and behavioral features. The team, while looking into the psychographic features, should consider the consumers’ social class, lifestyle, and personal traits that are likely to influence how the buyers acquire the company’s products (Premkanth, 2012). Knowing the consumers’ social class, for example, helps to make decisions whether to develop costly or affordable products for a particular group of consumers. Also important is looking at the buyers’ behavioral features which entail their attitude towards the products, knowledge on the products, and response to the goods (Premkanth, 2012). Understanding the behavioral features will enable the marketing team know whether the buyers would appreciate the items developed by the company. The chart below provides a general overview of how the marketing segmentation framework works.
Source: Getmerit, 2015
Apart from using the market segmentation approach, the marketing team at Levi’s should consider utilizing the marketing mix framework also known as the 4Ps model. The marketing teams, while approaching the consumers, should consider developing products that meet the consumers’ desires and expectations. The team may also add value on the products by adopting attractive product design and assortment methodologies (Chaffey & Smith, 2008). The group may also embrace an effective branding approach that would entice the buyers to acquire the company’s products. The group should also contemplate setting a price that would favor both buyers and the organization in such a way that buyers do not feel overcharged and the firm does not sell at a loss. The team, while developing the suitable price for the products, should consider applying concepts such as price strategy, price tactics, price setting, as well as offering discount and allowances to loyal consumers (Chaffey & Smith, 2008). Another important factor for the marketing team to consider is the place the buyers would get the products. The place should be accessible via various ways. The team while applying the marketing mix approach should contemplate developing a promotional program that would enlighten consumers on the products issued by the company. The team, for example, will conduct marketing using various platforms including its website, media avenues such as TV and radio adverts, and through print media like magazines and newspapers (Chaffey & Smith, 2008). The marketing team should also consider other ways of promoting the product which include placing posters and billboards in strategic places. The presentation below provides an overview of how the 4Ps model work;
Source: Shutterstock, 2018
Also, part of the organizational plan is to adopt the concept of brand positioning which allows the consumers to visualize the organization in a particular manner. Creating a brand position would require the marketing team to embrace a logo or any other symbol or color associated with the company. Brand positioning and branding is particularly helpful when the buyers identify with the group in a particular manner.
The group should also pay attention to the different online methods of reaching out to consumers, as this is becoming an important way of reaching consumers. The team should carry out continuous improvements to its website to make sure it boosts communication with the consumers, and do away with any breakdowns that could affect how the system functions. The website is a good platform through which the organization may reach out to the consumers.
Measuring the Success of the Plan
The company should embrace effective ways of measuring the effectiveness of its plan to be certain it is heading in the right direction. The team will majorly rely on the feedback it receives from consumers to identify whether they are satisfied or not. The group shall receive the consumers’ feedback via avenues like email and calls, and will get the consumers’ perception of the goods. Positive feedback from the buyers would suggest that the company’s plan is working well, while negative feedback would suggest that the plan requires some adjustment to become effective. The team will also apply the approach suggested by Olson and Hoover (2006), which entails evaluating the returns the company generates from its undertakings. Higher returns after implementing the plan would suggest that the structure is effective while reduced returns may create the impression that more need to happen to make the framework more profitable. The organization will also measure the success of the plan by the increased number of people who use the group’s social media avenues to interact with the marketing group. An increased number of people who access the various social media initiated by the company shall signify that the plan is having a significant impact.
The leader of Levi’s would record better results by making transformations that would make the firm more appealing to the buyers. Other than developing effective solutions to the challenges the leader faces at the place of work, the team should embrace effective marketing techniques which include marketing segmentation, marketing mix, and brand positioning. The marketing team should have enough knowledge on how to utilize the various approaches to be in a good position to achieve successful application of the frameworks. Most importantly, the team should know how to monitor whether the practice is heading towards the right direction or not. Developing effective ways of measuring the outcome will also help the team know the areas requiring more improvement. Failure to embrace proper marketing methodologies may give the competitors the opportunity to take over the market share.
Bergh, C. (2018). How I did it: The CEO of Levi Strauss on leading an income brand back to growth. Harvard Business Review, 1-8.
Chaffey, D., & Smith, P. (2008). E-marketing excellence, planning and optimizing your digital marketing. Oxford: Butterworth-Heinemann.
Downey, L., & Lynch, J. (1995). This is a pair of Levi’s jeans: The official history of the Levi’s brand. San Francisco: Levi Strauss.
Downey, L. (2016). Levi Strauss: The man who gave blue jeans to the world. Amherst: University of Massachusetts Press.
Getmerit. (2015). Market segmentation. Retrieved from https://getmerit.wordpress.com/2015/10/18/market-segmentation/
Levi’s. (2018). Levi’s. Retrieved from https://www.levi.com/US/en_US/
Olson, N., & Hoover, D. (2006). Levi Strauss and blue jeans. New York, NY: Capstone Press.
Premkanth, P. (2012). Market segmentation and its impact on customer satisfaction with especial reference to Commercial Bank of Ceylon PLC. Global Journal of Management and Business Research, 12(7), 33-40.
Shutterstock. (2018). Marketing mix. Retrieved from https://www.shutterstock.com/image-vector/business-concepts-illustration-marketing-mix-4ps-1034727943
Vrontis, D., V., & Vronti, P. (2004). Levi Strauss: An international marketing investigation. Journal of Fashion Marketing and Management, 8(4), 389-398.
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