Levis Brand Audit

Levi’s Strauss is one of the world’s largest brand name apparel companies and one of the prominent leaders in the jean industry. The company designs jeans casual wear, and accessories for men, women, and children. It has a massive global presence selling products in 110 countries encompassing the Levi’s, Dockers, Signature by Levi’s & Co, and Denizen brands. Since their inception many years ago, they have been pioneering the jean and denim industry.

Levi’s created the first blue jean almost 145 years ago, invented by Levi Strauss and his partner Jacob Davis. Strauss moved to New York City and started working in his brothers wholesale dry goods company named Strauss Brother & Co. While Strauss was in San Francisco trying to make his fortune in the Gold Rush he was contacted by a customer, Jacob Davis. Davis was a tailor who had started creating pants in a new way, which consisted of Davis using metal intertwined into the fabric. This unique technique allowed for pants to last longer for men. Once Strauss heard Davis’s revolutionary technique he immediately wanted to patent the idea. On May 20th 1873 Strauss and Davis successfully received the patent, and created the world’s first blue jean.

Levi’s is extremely proud of their history of inventing as they did with blue jeans over 140 years ago. Levi’s is strongly rooted in its values of integrity, empathy, originality, and courage, promising that these core values drive every company decision. Along with a dedication to creating superior products and service, they also maintain safe and fair work conditions for all employees. This has created a history of success for Levi’s and motivates them to stay ahead of the competition. Levi’s is very proud of their history as innovators and leaders in the denim and jean industry. This pride motivates them to continue to revolutionize the industry through both their products and the way they manufacture goods.

Innovation, sustainability, and progress are the three motivating factors for the entire company. From inventing blue jeans originally, implementing revolutionary design techniques, and new ways to work, they always want to be at the forefront of innovation and lead their industry. They are also fully committed to build sustainability throughout the entire process. They have several initiatives designed to reduce negative impacts and improve the environment. For example, they joined the Better Cotton Initiative, which is committed to growing cotton in a way that reduces harmful effects on communities and the environment. Their Water<Less Jeans initiative, uses significantly less water when manufacturing the jeans to help conserve water for the environment. Lastly, progress and constant motion to be proactive in a constantly changing environment is extremely important. Levi’s values their ability to constantly improve and better the surrounding community. With these values at the forefront of every decision, Levi’s prides itself on this tradition of innovation and an industry leading role.

Sales

Levi’s has not published their annual report for 2017, but their annual report for 2016 showed that seventy-two percent of Levi’s products were bought through wholesale and twenty-eight percent were sold directly to a consumer. Geographically, fifty-six percent of their products where sold in America, twenty-four percent were sold across Europe, and only seventeen percent were sold throughout the Middle East and Africa.Throughout the four brands that Levi’s owns the brand Levi’s generates eighty-five percent of the company’s profit, Dockers generates ten percent, and Denizin Levi’s and Signature Levi & Co. generates only five percent. Overall Levi’s generated $4.6 Billion in profit in 2016 and is projected.

Best Sellers

When Levis was first established, their 501 jeans earned the title as the “best selling item of clothing in the world.” Levis best- sellers for the month of January most recently was as follows: 511 Slim Fit Stretch Jeans, 511 Slim Fit Stretch Jeans, 505 Regular Fit Jeans, 721 High Rise Skinny Jeans, 710 Super Skinny Jeans and the 711 Skinny Jeans. Levi’s top selling products are all variations of jean styles that have continued to be the primary source of revenue throughout Levi’s continued success.

Competitors

Calvin Klein is one of the main competitors of Levi’s. They have been gaining traction in this market through celebrity endorsement and advertising themselves as a higher-end manufacturer of jeans. Wrangler is another competitor who also specializes in the toughness and durability of their products. They are another American icon and blend their durability with fashion as well, mostly targeting to the working class.

Marketing Strategies

Levis utilizes a “profits through principles” approach and relies on brand recognition as an American icon and the originator of American jeans to create value. Their product positioning and target market of both upper class and upper middle class individuals has created increased differentiation in their consumer base. As consumer demand shifted from the durability of jeans to the fashion of jeans, Levis positioned its product with these changing times by adding more “fashionable” jeans to their product line by creating various styles and features for their jeans. Additionally, Levis are widely considered acceptable attire for both streetwear and professional workplaces. As a result, they noticed an increase in profits and sales from both markets while keeping their existing customer base. Their current target group involves those who are looking for a “blend of style and comfort,” which includes a wide range of demographics from teenagers to grandparents as well as various professions and interests.

Challenges

One challenge Levis has faced in recent years is the success competitors have had cutting into their market due to heavy advertising and branding. An example of this is the way in which Calvin Klein has been advertising heavily toward high-end consumers who may desire fashion over durability. Another challenge Levi’s faces is the rapidly shifting market itself. More so than ever before, information is easily accessible among consumers and fashion trends are shifting quickly. It will be significant to not only continue producing quality products in line with their brand image, but to be able to stay on top of rapid changes in the market as well. A third challenge may be their failure to join the premium jeans trend, which had surfaced in the early 2000s and is something Levi’s management themselves had admitted to missing the boat on. If this market continues to develop, Levi’s could very well find themselves losing market share.

Pest Analysis

Political- Levi’s is positively affected by political factors because of their high involvement in several initiatives and campaigns aimed at ethnic, religious, and socio economic equality. Their “profits through principles” campaign is centered around the idea of not only becoming successful economically, but also around becoming a force for positive social change in the conduct of their business. An example of this exists in their 2006 Eco clothing line, in order to appeal to the more environmentally conscious.

Economic- Levi’s long lasting economic success is largely a result of their strong brand recognition. Since their inception, Levi’s has worked to establish themselves as a frontrunner in the denim industry, becoming a “top-of-the-mind” brand with a name recognizable seemingly everywhere. They utilize global outsourcing and distribution channels which keep costs low enough to allow for continuous innovation as the market shifts.

Socio Cultural- Levi’s is also positively affected by socio cultural factors, because of the popularity of jeans in every outfit. Jeans are worn by both celebrities as well as everyday people. They are a wardrobe staple for all people, making it a product that appeals to a wide demographic of consumers. As a result, customers are more likely to purchase Levi’s because of their involvement in popular culture.

Technological- Levi’s has always focused on the durability of their products while adjusting production to meet market desires. In their early years, Levi’s was able to differentiate themselves from competitors through technological innovation by use of the rivets in the jeans. This allowed for the increased durability which they were able to build their brand around. Fast forwarding to 2006, Levis shows the ability to adjust production again without sacrificing any of their durability in the aforementioned Eco clothing line, where they produce this line with 100% cotton and sustainable production processes.

The Expectation Economy

Levis was the first company to invent blue jeans in 1873. Not only did they invent the first blue jean but the jean they created was widely popular. Because Levi’s has been around for so many years they have learned that they must change and adapt their jean models as well as their other apparel to accommodate and the needs of consumers for each new generation and the ever changing trends that come with that. Levis needs to understand what consumers are going to want next. For a company to be successful in the competitive and fast paced market planning for the future is important and vital to a company’s success. To do so Levis can track consumer trends, insights and innovations in order to stay up to date.

Future Outlook

Levis has secured themselves a strong place in the denim industry because of their invention of the blue jean in 1873 however, over the course of the past five years Levis gross profit has fluctuated with a low of $2,199,331 in November 2012 and a high of $2,350,471 in November 2013. Although this past gross profit was $60,031 higher than November 2015, it was still $21,460 lower than Levi’s highest gross profit sales in 2013.

We have confidence that Levi’s will be a successful company five years from now. Levi’s has secured themselves a strong place in the denim industry because of their unique creation of the blue jean in 1873 and continued innovation. Levi’s 2016 annual report showed the positive direction the company has been moving in since 2013. In 2013 the Net Revenue was +1.8%, in 2015 it dropped .6 to +1.2%, but in 2016 reached their highest percentage of Net Revenue. With the current political, economic, socio economic, and technology environments all in favor of Levis we predict a positive future. If Levis continues to stick to it’s core values that have generated success in the past, it will be well positioned to have continued success in the future.

Works Cited

Bhasin, Hitesh.“Marketing Mix of Wrangler — Wrangler Marketing Mix.” Marketing91, 13 Jan. 2018, www.marketing91.com/marketing-mix-wrangler/.

“Calvin Klein.” PVH, www.pvh.com/brands/calvin-klein.

“Levi’s® Jeans, Jackets & Clothing | Levi’s® (US) Official Site.” Boys 8–20 511™ Slim Fit Performance Jeans, www.levi.com/US/en_US/.

“The History of Levi’s.” The Idle Man, 28 Sept. 2016, theidleman.com/manual/arrivals/brands/the-history-of-levis/.

“Who We Are.” Levi Strauss, www.levistrauss.com/who-we-are/#message-from-the-ceo/.

Zigu. “Levi Strauss & Co (Levi’s) SWOT Analysis | USP & Competitors | BrandGuide.” MBA Skool-Study.Learn.Share., www.mbaskool.com/brandguide/lifestyle-and-retail/2436-levi-strauss-a-co-levis.html.

“2016 Annual Report.” Levi Strauss, www.levistrauss.com/investors/annual-reports/2016-annual-report/.