Levi Strauss - Rejupenation

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Levi Strauss CanadaHolding An Ember : The GWG Brand

Syndicate RejupenationBawono Adhi Mutia Safrina Husna Kesumawati Dian Gita Utami M. Satiadharma Gumbira Safrinanda

Company History : Levi Strauss Levi Strauss & Co was founded 1853

Levi Strauss & Co. is one of the Co. world's leading branded apparel

1873

Levi Strauss & Co. patent riveted jeans and begin selling them.

companies with sales in more than 100 countries worldwide. worldwide. Over the years, Levis jeans have

Company sales reach $1 billion 1974

become more popular, initially due to its durability. Jean products expanded,

1998 2002

Downturn in sales as high-end and also private-label brand attract market

targeting different consumers. The primary lines are Levi's jeans

2002

Employed more than 23,000 people Operated in more than 150 countries

and Dockers casual pants, and now added Levis Strauss Signature

Company History : GWG1911 1927 GWG started producing shirts, overall, heavy outdoor coat, and first denim

1930 1961

Expanded in womens wear workforce It has dynamic growth and Levis Strauss purchase GWG 75% ownership

GWG offers limited line of products that focuses to the segment of men by offering 4 fits, 4 finishes: stonewash, stone bleach, rinse and black, and 16 sizes from 28 waist to 42 waist with two different lengths. Regarding the licensee agreement of the company to Levi Strauss Canada, in 1998, 8% of its net wholesale goes to Levi.

19721980

Levis bought remainder of the company GWG sold in most clothing outlets

1992 2001

Company by GWG introduced GWG licensed to Jack Spratt

Case Background Levi Strauss & Co. purchased 75% of Edmonton's Great Western Garment Co. 75% Company (GWG) in 1961. Levi Strauss Canada decided to license GWG to Jack 1961. Spratt Manufacturing Inc. in 1998. Inc. 1998. Jack Spratt was not giving a good performance and Levis company thinking of taking the license and revive GWG brand. brand. Both Levi's and GWG brands have been affected by the popularity of designer label jeans, private label jeans, specialty retailers and new trendier brands. brands. With competitors like Wrangler, Wal-Mart, Zellers and premium brands that Walpopular among younger age groups like The Gap, Calvin Klein, Tommy Hilfiger, Diesel, and Guess. Guess.

Why do consumers buy jeans? What is the buying decision based on? How do you segment these consumers?

#1

Buying Reason Utilitarian reason Fashion Showing owner character Reflecting own personal independence and style Comfort, ease and compatibility Practical and strength

Buying Decision: Brand name Design Price Fabric quality/fit Distribution Channel Advertising

Why do consumers buy jeans? What is the buying decision based on? How do you segment these consumers?

#1

Geography

National International

Demography

Sex Age Economic state

: female and male : teens, adult : low, middle and high

Psychographic & Behavior

Fashion Conscious Quality Conscious Fit & comfort Reflecting personal independence & style Follower / Peer pressure

TYPE OF JEANSFlare jeans for Fashion-Conscious consumers

Relaxed Fits for older consumer

Ultra Baggy for Younger consumer

What are the leading

#2Brand Orange Tab Red Tab

attributes of the competitors? How does this match or not match the consumer buying decision?

Price

Dist. Channel

Attributes

Segment

GWG and Levi s Jeans $42.99 $69.99 Bay, Sears, Zellers, Original Levi s Store Classic, Quality, Originality, Fit, and Independent, Five main fits with three finishes, frequently differentiate the finishes Classic, Quality, Originality, Fit, and Independent, 12 fits, constantly updated new fits, frequently differentiate the finishes Quality, Comfort, and Price, four fits, four finishes 15 -24 male & female market

$49.99

Bay, Sears, Zellers, Original Levi s Store

15 -24 male & female market

GWG VF Corp Wrangler Rustler

$18-$22

Small mass merchants, selected Mark s

Male

$29.99 $19.99

Wal-Mart, Zellers Wal-Mart, Zellers, Saan, Giant Tiger

Western and Country, five main fits with three finishes Similar level of ruggedness with Wrangler, Western Style, five main fits with three finishes

Male customer Male customer

Brand Specialty Retailers Denver Hayes

Price

Dist. Channel

Attributes

Segment

$34.99

Marks Work Warehouse Thrifty s

Medium to high quality fabrics, five main fits with three main finishes, offered other products in the store Medium to high quality fabrics, five main fits with three main finishes, seasonal specialty offer based on innovations in higher segment Medium to high quality fabrics, five main fits with three main finishes, seasonal specialty offer based on innovations in higher segment

25-50 years old males, suburban strip 15 24 years old male and female 18 35 years old

Bluenotes

$39.99

GAP

$49.99

The Gap store

Private Label Nevada Rockland Originals Cherokee and Truly Reitman s Cotton Ginny s $24.99 $16.99 $19.99 $19.99 $25-$30 $25-$30 Sears Costco Wal-Mart Zellers Simulating branded style, 30-40% price cut Aggressive pricing Placing side by side with branded promotion Simulating branded style, Placing side by side with branded promotion, weekly sales flyer Simulating branded style Simulating branded style Male & Female Male & Female Male & Female Male & Female Female Female

Brand Premium Brands Silver Guess Tommy Hilfiger Polo Ralph Lauren Calvin Klein Diesel

Price

Dist. Channel

Attributes

Segment

$69.99 $79.99 $89.99 $89.99 $79.99 +$100

Dedicated store, Apparel store Dedicated store, Apparel store Own line store, Apparel store Dedicated store, Apparel store Dedicated store, Apparel store Own line store, Apparel store

Unique lifestyle image, catwalk fashion collection Unique lifestyle image, catwalk fashion collection Unique lifestyle image, catwalk fashion collection Unique lifestyle image, catwalk fashion collection Unique lifestyle image, catwalk fashion collection Unique lifestyle image, catwalk fashion collection

Male & Female, Premium consumer Male & Female, Premium consumer Male & Female, Premium consumer Male & Female, Premium consumer Male & Female, Premium consumer Male & Female, Premium consumer

#3

What is happening in the overall market place? What is happening with channels?

Me 's ea s 15+ (1996)ev 's Tota S W n'

Me 's ea s 15+ (2000)ev 's Tota S W n'

W u h f y'W

W u h f y'W

Market Share Comparison on Men segment

#3

What is happening in the overall market place? What is happening with channels?

Women s eans

Women s eans

S ar

S ar Lev s otal r a -Mar man S Thr ap r r

Lev s otala -Mar

manS Thr r

ap

Market Share Comparison on Women segment

What is happening in the overall market place? What is happening with channels?

#3

Market Place was ChangeSince 1996 to 2000, competition in jeans fashion category has change. Levis with its product line was a market leader in 1996 and had significant gap with its competitor. In 2000, their market share was drop up to 12.3% while in other hand some of the competitor had rise their market share. New competitors brand in men and women has pop up and get a significant market share. Promotional pricing by department stores increase and entrant were pushing down the average paid for jeans. This cause the fallen of price paid for jeans. Industry observers believed the market place had moved from jeans to casual with the popularity of the khaki pant from 1998-200. In 2001 the denim cycle was believed to be beginning again.

#3Changes in Distribution ChannelDepartment Store Eatons was absorb by the Bay and Sears Specialty Store Aggressive expansion plan by The Gap Continued presence by chains such as Thriftys and Marks Work Warehouse New entrants such as American Eagle Outfitters and Old Navy Mass Merchant Woolco acquisition by Wal-Mart (1994) Kmart closed half of its stores and the other half was purchase by Zellers (1998) Wal-Mart rapid expansion Other Channel New entrants such as Winners and Costco

What is the context in which Klee needs to make a decision?

#4

Overcrowded Marketplace Some distribution channel create their own private-label brands more competitive products in the market. Changes to the retail landscape the average price paid for jeans had fallen. Significantly sales drop of GWG brand (Exhibit 3) Priorities of the parents company with Levi s and Dockers brands no guarantee that GWG would be any growth beyond Jack Spratt.

He is doing absolutely nothing with the licensee hasn t invested any money into it, hasn t updated any of the fits, hasn t tried to build it.

Is there enough of an ember to bring back the brand? Does the brand have strong enough cache? What are the channel considerations? What are the financial considerations?

#5

GWG BrandImage and Attributes Strong Brand Awareness Functional Image Poor Distribution Channel Body Fit Uncool Brand Quotes 50 years ago jeans synonymous with GWG Popular brand, well known company More functional than stylish GWG are rough, rugged and durable I don t know which stores I could find them Haven t seen them around here for years I just don t like GWG fit The pockets make my butt look big Wayne Gretz