Levi,s Final Project (Updated)

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Marketing Project Report

Transcript of Levi,s Final Project (Updated)

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Marketing Project Report

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To: Jawad Saleem

From: Group members mentioned below

Subject: Final Project

Course: Principles of Marketing (MBA-Exe)

Date: 25th April, 2011

Group Members:

Imran Butt

Iraj Sohail

Jawad Raza

Ahmad

Rohafa Babar

Teacher’s Comments:

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Table of Contents PageExecutive Summary 4About Levi’s Strauss and Co. 5 Vision 6 Value 6The Brand 7Understanding the Marketing Environment 8 Microenvironment 8 Urban Growth 8 Retail Evolution 9 Industry Overview (Pakistan) 9 Suppliers 10 LS&Co. Code of Conduct 10 Implementation 11 At the Factory 11 Industry Collaboration 11 Intermediaries 11 Customers 12 Ethical Standards 12 Legal Requirements 12 Environmental requirements 12 Community involvement 12 Competitors 13 Macro Environment 15 Natural Environment 15 Other Raw Materials 16 Political Environment 16 Cultural Environment 17 Demographic Environment 17 Technological Environment 17 Economic Conditions of Pakistan 18Analysis - SWOT 19 Strength 19 Weakness 19 Opportunities 20 Threats 20Customer Driven Marketing Strategy 21 Product 21 Price 21 Pricing Strategy 21 Place 22 Promotion 22

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Current Segmentation, Targeting, and Positioning Strategies 23 LS Signature Positioning 23 Market Segmentation 23 Target Market 23 Market Segmentation and consumer profiling 24 Demographic Segmentation 24 Geographic Segmentation 24 Psychographic Segmentation 24Holistic Marketing Approach In Perspective Of Ansoff Matrix 25 Suggested Growth Strategy 25 Market penetration strategy 25Suggested Marketing mix Strategies 26 Product Strategy 26 Pricing Strategy 26 Promotion strategy 27 Placement/ distribution Strategy 27 Proposed Distribution 28Proposed P&L 2011 29Suggestions and Recommendations 30Conclusion 30

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Executive Summary

Levi’s Strauss and Co. is a brand known for quality and prestige. It strives to provide the world's

casual workday wardrobe, inside and out. LS&CO., a top manufacturer of brand-name clothing

globally, sells jeans and sportswear under the Levi's, Dockers, and Levi Strauss Signature names

in more than 110 countries. For its 12 years in Pakistan, it stands proud as a market leader in

denim and non-denim garments and is the first preference for especially the youth. Its superior

quality products are known for innovation in style and fashion with an utmost focus on comfort

and image. Its target market consists of Upper, Upper middle and Middle class consumers. They

have a wide range of products with constant seasonal and occasional improvements happening

every now and then. Focal point being the youth!

This report will take you through the “marketing” direction of Levi’s Strauss and Co. with

respect to the market in Pakistan. The brand of focus in our report is their recently introduced

line; Signature, which is especially designed to reach out to the Middle income class who could

not previously afford the Levi’s Strauss products. Without any compromise on quality, the brand

has very successfully penetrated into the targeted group, providing them more value at just the

right price!

We hope that after studying the report, you will be able to understand and comprehend the

marketing plan, strategies, ideologies and strategic direction of Levi’s Strauss and Co.’s

Signature.

Special thanks to Mr. Jawad Saleem for his support and guidance so far.

Thank You.

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About Levi’s Strauss and Co.

It was founded in 1853 when Levi Strauss came from Bettelheim, Franconia, (Kingdom of

Bavaria) to San Francisco, California to open a west coast branch of his brothers' New York dry

goods business. Although the company began producing denim overalls in the 1870s, modern

jeans were not produced until the 1920s.

Levi Strauss & Co. (LS&CO.) strives to provide the world's casual workday wardrobe, inside

and out. LS&CO., a top manufacturer of brand-name clothing globally, sells jeans and

sportswear under the Levi's, Dockers, and Levi Strauss Signature names in more than 110

countries. It also markets men's and women's body wear and loungewear. Levi's jeans --

department store staples -- were once the uniform of American youth, but LS&CO. has been

working to reconnect with the niche and expand outside the US. It has transformed its products

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LVC Tribute

The stories of a specific era, craftsman, or tradesman from the early decades of Levi’s® in America, 1873-1940s. Interpretations of each season’s theme remain consistent with authenticity and quality.

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portfolio to include wrinkle-free and stain-resistant fabrics used in making some of its Levi's and

Dockers slacks. The Haas family (relatives of founder Levi Strauss) owns LS&CO.

Vision

”We believe that business can drive profits through principles, and that our values as a company

and as individuals give us a competitive advantage”.

Values

Empathy — walking in other people’s shoes

Empathy begins with paying close attention to the world around us. We listen and respond to the

needs of our customers, employees and other stakeholders.

Originality — being authentic and innovative

The pioneering spirit that started in 1873 with the very first pair of blue jeans still permeates all

aspects of our business. Through innovative products and practices, we break the mold.

Integrity — doing the right thing

Integrity means doing right by our employees, brands, company and society as a whole. Ethical

conduct and social responsibility characterize our way of doing business.

Courage — standing up for what we believe

It takes courage to be great. Courage is the willingness to tell the truth and to challenge

hierarchy, accepted practice and conventional wisdom. It means standing by our convictions and

acting on our beliefs.

We are the embodiment of the energy and events of our time, inspiring people from all walks of

life with a pioneering spirit. Generations have worn Levi’s® jeans, turning them into a symbol of

freedom and self-expression in the face of adversity, challenge and social change. Our customers

forged a new territory called the American West. They fought in wars for peace. They instigated

counterculture revolutions. They tore down the Berlin Wall. Reverent, irreverent — they took a

stand.

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The Brand

The Signature by Levi Strauss & Co™ brand, launched in 2007, demonstrates that distinctive

products, with premium fabrics and finishes, can be available to people from every walk of life.

The brand offers high-quality, fashionable jeans at affordable prices to value-conscious

consumers at international value departmental stores such as Wal-Mart, Target and Kmart

internationally, Metro, Makro and a number of standalone stores nationwide in Pakistan and

abroad.

With denim and casualwear for men, women and children, Signature by Levi Strauss & Co.™

apparel is the ideal fit for families who know the value of quality craftsmanship and

quintessential style — the very things that have made Levi Strauss & Co. brands world famous

for generations.

The Signature by Levi Strauss & Co.™ brand includes a collection of denim and non-denim

pants, shirts, skirts and jackets for men, women and children. “Superior Fit, Comfort and Style”

are the words emblazoned on the patch of every pair of our Signature jeans.

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Understanding the Marketing Environment

The Marketing Environment

Microenvironment

In microenvironment Levi Strauss Signature is affected by Suppliers, Intermediaries, Customers

and Competitors. These four groups affect the company in many different ways and exert

pressure and effects differently. In 2005 textile was given a tax exemption and was made “0”

dbase. Now in 2011 that exemption has been withdrawn and a 6% tax has been in posed on the

local textile sector; however textile exporters are exempted from this tax.

Urban Growth

It is estimated that in 2008, about 6.8 million of the 50 million people living in urban Pakistan

belonged to the upper and upper–middle class and this segment is projected to grow to 17 million

people by the year 2010.

Per capita income grew by an average rate of 13.5 percent per annum during the last three years

– rising from $736 in 2007 to $831in 2010

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Retail Evolution

Three years of strong economic growth complemented by record – low interest rates and the

ongoing structural shift of many households in Pakistan toward higher consumption have

injected new life into domestic spending. Despite inflation the invisible arm of the economy

continues to be strong, reflecting positively in the consumer disposable income.

Over the last decade the retail sector in urban Pakistan continues to evolve rapidly. The

emergence of new formats such as superstores, VISS and shopping plazas catering to the urban

middle class and upper disposable income groups is accelerating.

Signs of modern retail presence are emerging. Global mass retailers such as German Metro,

Dutch Makro and the French Carrefour have announced entry the Pakistani market. Local player

Q-Mart has already opened its first 10000sqft store as a part of 100+ chain. The entry of such

firms is going to profoundly alter the retail landscape further. Retail demand is modernizing the

retail landscape.

Industry Overview (Pakistan)

• Non Denim market fragmented and more competitive than Denim.

• Numerous non denim competitors with specialization in casual pants, tops, sweaters are

available in the market.

• Growing presence of VISS brands like Hang Ten, Cross Roads, Bonanza, Oxford,

Cambridge ;Wrangler® etc. who have stand alone stores.

• Retail channels remain fragmented and highly dependent on MBO’s and street markets.

• Textile manufacturers interest in local retail market increasing ( Stone Age. Etc).

• Competition remain fragmented and no leadership is evident in the standard and value

segments.

• Parallel imports and factory over runs creating interest for the consumer and unbranded

Chinese product available at attractive prices and quality.

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• Stores selling export quality and imports reflect a consumer opportunity for standard.

• Department stores & MBO`s are expected to grow and represent a distribution opportunity

for the Signature brand.

Suppliers:

For more than 155 years, Levi Strauss & Co. has worked to honor the pioneering spirit of hard

work, individuality and authenticity in how we’ve made our products, and how we’ve run our

company. They have dedicated themselves to elevating the dignity of the people who work to

bring their clothing to market. And they’ve invested our time, energy, heart and resources in

improving the future of those sourcing communities.

LS&Co. Code of Conduct

Almost two decades ago, in 1991, they were the first multinational apparel company to establish

a comprehensive workplace code of conduct for their manufacturing suppliers. Their “Terms of

Engagement” spell out labor, health and safety, and environmental requirements. It is based on

United Nations documents such as the Universal Declaration of Human Rights and International

Labor Organization (ILO) Core Conventions. Over the years, many companies have adopted

similar codes of conduct, and today most of those reflect their original Terms of Engagement. In

1995, they added strict water quality standards as part of our environmental requirements. And in

1999 and 2005, they strengthened protections of workers’ rights to form unions and conduct

collective bargaining.

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Implementation

Over the years, LS&Co has established a strong program to assess how well their suppliers are

meeting their code and, when we identify problems, how to improve. They have also learned that

monitoring their suppliers is only one part of improving working conditions.

In addition to working directly with their suppliers, they have programs in the communities to

strengthen worker rights. Levis also work with governments to strengthen labor laws and their

enforcement. Ultimately, improving working conditions in their supplier factories requires the

involvement of their suppliers, local organizations, governments and other buyers that may be

sourcing in those factories.

At the Factory

Levis employ full-time factory assessors, located around the world where their suppliers are.

These experts understand the scope of our labor and environment, health and safety standards

and know the local languages, laws, culture and business context of each country in which Levis

operates. They conduct regular assessments of every factory contracted to manufacture our

products. These assessments are based on standards found in their “Social and Environmental

Sustainability Guidebook”, which all Levis suppliers receive in their local language.

Industry Collaboration

LS&Co. is a member of the “Fair Factories Clearinghouse” along with brands like adidas,

L.L.Bean, Starbucks, Timberland and VF Corp., which are dedicated to improving workplace

conditions.

Intermediaries

Levis is mainly operating through a franchise channel and same is the structure for Signature.

However there is a wholesale component to it as well. There is a natural contrast of working n

the two channels, franchise maintains a lower forward inventory cover and works on

replenishment while the whole sale sellers maintain a broader inventory cover. The margin % as

well as the product line is different for the two channels/intermediaries. The company has one

single distribution center/warehouse which furnishes product throughout the country. Two years

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back the company shifted to the state of the ask SAP system for financial controls which has

proven to be extremely efficient from all aspect including inbound and outbound shipments.

Customers

Before we move any further we should clarify the terms customer and consumer. At Levis

customer is the franchise partner and the consumer is the end user. From a customer stand point

Levis as an organization puts a lot of emphasis on the choice of right king of business partners.

Business Partner Terms/ customers standards

LS&Co. business standards assist them in selecting business partners that follow work place

standards and business practices consistent with their Company's policies. As a set of guiding

principles, they also help identify potential problems so that Levis can work with their business

partners/customers to address issues of concern as they arise.

Specifically, they expect their business partners to operate workplaces where the following

standards and practices are followed:

Ethical Standards: They identify and utilize business partners who aspire as individuals and in

the conduct of all their businesses to a set of ethical standards not incompatible with Levis

standards.

Legal Requirements: They expect their business partners to be law abiding as individuals and to

comply with legal requirements relevant to the conduct of all their businesses.

Environmental Requirements: Levis only does business with partners who share their

commitment to the environment and who conduct their business in a way that is consistent with

Levi Strauss & Co.'s Environmental Philosophy and Guiding Principles.

Community Involvement: They will favor business partners who share their commitment to

contribute to improving community conditions.

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Competitors

Being a global company Levis has two sets of competitors local and international. Some of the

top competitors for Levis are.

-Guess Jeans

- Diesel

- Seven Jeans

- Citizens of Humanity

- True Religion Jeans

Competition in retail channels is fragmented but emergence of mass channel players and some

local brands has changed the landscape in the last 2 years. The Standard Jeans market in

Pakistan. Major competitors in the market place are as follows.

1. Stone age

2. Cross Road

3. Outfitters

4. Few other local brands ( having very low market share)

While its competition some of these channels also represent an expansion opportunity. Stores

selling export quality and imports reflect a consumer preference ad if addressed can be persuaded

to sell Signature. Department stores & MBO’s are key channels for Selling Imports & export

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jeans wear and represent a distribution opportunity for the Signature brand for volume

generation. Having said that, Standalone Signature stores will be critical to establish brand

authenticity.

2008 2009 20100%

20%

40%

60%

80%

100%

35% 38% 39%

15%

17%17%

30%

15%11%20% 14% 9%

16%24%

Market Share

OthersCross RoadsOutfittersStone ageSignature

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Market Share

  2008 2009 2010

Signature 35% 38% 39%

Stone age   16% 24%

Outfitters 15% 17% 17%

Cross Roads 30% 15% 11%

Others 20% 14% 9%

Total 100% 100

%

100%

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Macro Environment

In macro level environment; Levi’s Signature is being affected by number of factors which

include natural, political, cultural, demographic, technological and economic conditions of

Pakistan and the world. Like other successful companies, Levi’s Signature also has realized that

the marketing environment presents a never-ending series of opportunities and threats. The major

responsibility for identifying significant changes in the micro and macro environment falls to a

company’s marketers.

Many opportunities are found by identifying trends (directions or sequences of events that have

some momentum and durability) and mega trends (major social, economic, political and

technological changes that have long-lasting influence).

Within the rapidly changing global picture, the marketers of Stone Age are monitoring the

following six major “Environmental Forces”:

Natural Environment

Political Environment

Cultural Environment

Demographic Environment

Technological Environment

Socio economic Environment

Natural Environment:

Cotton

Cotton is the foundation of Levi Strauss as an organization and its products. Cotton accounts for

40% of the world’s fiber production and generates a $40 billion a year textile market. It is grown

in more than 100 countries, with China, India and the U.S. accounting for nearly two-thirds of

global output. More than 40 million farmers and 290 million farm workers make a living by

growing cotton. About 80% of the cotton farms are small, many are family owned. About 70%

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of the industry is labor intensive, especially outside the U.S. and it typically uses a lot of

pesticides and water.

Though Levis is a big consumer of cotton, they use less than 1% of the world’s annual cotton

crop. Trying to promote more sustainable practices in an industry that is so fragmented is a

challenge. By creating alliances with other big cotton consumers, Levis leverage the power of

their brands in support of more sustainably produced cotton which uses less water and fewer

pesticides. They have joined forces with other brands and retailers, including The Gap, Marks &

Spencer, Adidas and IKEA, as well as other groups like WWF, Pesticide Action Network UK,

and farmers’ organizations such as the International Federation of Agricultural Producers to form

the “Better Cotton Initiative”

Other Raw Materials

Less than 5% of the raw materials in our supply chain are from sources other than cotton. A

small fraction of that percentage is material derived from animals. Levi Strauss & Co. strives to

be responsible when sourcing materials from animals and our goal is to ensure that wherever

animals are used in the production of their products, their health and welfare is protected.

Political Environment

Political environment in Pakistan continues to be challenging. The democratic government of

Pakistan peoples part which came in power approximately three years back has been

unsuccessful on delivering its of basic promise of food, clothing and shelter.

The Pakistani government is actively encouraging foreign investment, but faces formidable

challenges in its attempts to improve the operational environment. Corruption remains endemic

at all levels and officials often demand kickbacks. Bureaucracy is slow and obstructive, and the

infrastructure falls well short of desirable standards. Inconsistent policy implementation also

poses problems. The government's anti-corruption and privatization drive has slowed down

significantly amid severe political and security instabilities, which has left numerous sectors such

as power, agriculture, and financial services in dire need of reform.

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Cultural Environment

Cultural environment in Pakistan continues to be challenging as there is a natural resistance

towards the west especially in women clothing area. Local dresses still dominate the apparel

industry for both men and women; Bareeza, generations, gul Ahmed, Junaid Jamshed, and Amir

Adnan etc are examples of this statement.

However the recent trends have extended some optimizes to this cultural scenario due to an

influx of information through liberated media which has significantly increased general public

exposure. When it come to western fashion, Pakistan follows the US for casual and Europe for

formal fashion trends. Levis was present in Pakistan long before it was formally launched here.

Demographic Environment

Pakistan is the sixth largest country in the world in terms of population. With a population base

of over 180million people, 60% of the population of Pakistan is between 15-20 years of age. This

makes Pakistan one of the most lucrative jean market in the world, as it fits perfectly in the target

age bracket.

Technological Environment

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Pakistan seems to be doing better in the tech sector which includes telecommunication, IT,

textile technology. Here we are primarily focusing on the textile sector only.

Pakistan is ranked as the world’s fourth largest producer and the third largest consumer of

cotton, with a spinning capacity of 2.89 million kg of yarn and weaving capacity of 8.94

million sqm of cloth. The textile industry of Pakistan contributes over 50% to the

country’s total exports with an investment of US$ 7 billion over the past six years. Textile

exports in the last fiscal year were US$ 9.48 billion. There are more than 4000 textile

related industrial units operating in Pakistan out of which 90% of the units are using latest

machinery and imported parts. In order to facilitate the local textile industry, the

Government of Pakistan has allowed duty free import of a wide range of textile machinery

and equipment.

Economic Conditions of Pakistan

The economy of Pakistan is the 27th largest in the world (in absolute dollar terms). Pakistan has

a semi-industrialized economy, which mainly encompasses textiles, chemicals, food processing,

agriculture and other industries.

The World Bank (WB) and International Finance Corporation's report “Ease of Doing Business

Index” 2010 ranked Pakistan 85 among 181 countries around the globe. Pakistan comes highest

in South Asia but also ranks higher than China, Russia and India which are at 133. The top five

countries are Singapore, New Zealand, the United States, Hong Kong and United Kingdom.

The “Government of Pakistan” has granted numerous incentives to technology companies

wishing to do business in Pakistan. A combination of decade-plus tax holidays, zero duties on

computer imports, government incentives for venture capital and a variety of programs for

subsidizing technical education, are intended there.

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Analysis - SWOT

Strengths

Strong company name Levi Strauss &Co. to back the brand, giving it credibility and

authenticity.

Strong brand awareness.

Global support in term of technology, research and product design.

First mover advantage, since Levis has been operating in Pakistan for the past 12 years.

Best business partner for retailing and manufacturing.

Experienced, motivated and experienced operational team.

Weakness

Low penetration in the smaller cities.

Absence of online shopping option.

Just one warehouse in Pakistan (in Lahore) which sometimes results in delayed shipments to

Karachi and other distant areas.

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Opportunities

Population base of 180 million people with 60% below 20 years of age.

Opportunity to penetrate into smaller cities and Azad Kashmir.

Introduction of kid’s range which is already being produced here in Pakistan for Europe and

US.

On-line shopping solution is a big opportunity as the internet penetration in Pakistan is

growing at a very fast pace.

Threats

Vertical brands local brands with low operating cost and high penetration in tier 2/3 cities posing

strong competition.

Political instability and security situation in the country can result in retail prolonged

market closure with can cause heavy losses.

Increasing inflation can result in increased input cost.

Weak legislation against intellectual property rights.

Parallel imports and counterfeit product from china and Thailand can impact Signature

brand proposition.

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Customer Driven Marketing Strategy

Marketing Mix

Product:

Currently Pakistan is sourcing over $50 M Signature for Europe and North American

market.

The local business leverages this manufacturing capability to a great extent especially in

the core bottoms (jeans) and knits (T-shirts) area.

The local business has a independent leverage points for woven tops and non-denim

bottoms.

Product sourcing strategy relies on domestic contractor base.

Local sourcing options allow Signature to achieve strong MGP objectives.

Product design will be 100% adopted from the global range giving it the global style

supremacy over the competition.

Basic product attributes revolve around styles, colors, fits, fabrics and denim finishes.

Price:

Affordability and style is the foundation of the Signature brand. There to keep the brand

inclusive foe masses relevant price range for LS Signature is Rs.899 -1299. This has been

determined after taking in considering the competitors prices including Levis brand.

Pricing Strategy:

Average costs for Knit tops (t-shirts) and bottoms (jeans) must are such that they can

support the sweet spot price and also maintain healthy gross margins.

Acceptable price range for bottoms can be between US$16-20, based on consumer/

market information.

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Local Sourcing improves landed cost substantially due to lower import duty & freight

cost (approximately 25-30%).

Competitive Retail margin & credit period terms in the standard segment is critical for

brand success.

Place:

The business will need to create footprint which has an integrated & controlled retail

brand presence.

Need to establish geographic footprint with appropriate Franchise, SIS & Shelf presence

in relevant markets.

Create specific product distribution models and criteria for different channels, including

direct to retail option as appropriate.

Optimize seasonal inventory investment at the affiliate level by focusing on a sell-in

process based on made to order.

Promotion:

Adopt and adapt global/regional communication to create brand authenticity.

Create brand awareness for Signature® by adopting mass communication channels e.g.

Outdoor, print, electronic (TV& radio) and in-store.

Consolidate our communication in limited mediums and create optimal presence instead

of spreading out thin.

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Ensure product range and communication is aligned with the target age group and profile.

(i.e. Price & Brand Conscious consumers).

Ensure standardization and uniformity in Store format and VM & merchandizing display

to create brand recognition and top of mind awareness.

Current Segmentation, Targeting, and Positioning Strategies

Market Positioning and Segmentation

LS Signature Positioning

LS Signature is positioned as an international affordable brand which stands for quality,

craftsmanship; comfort & everyday wear which is casual, easy going and simple.

Market Segmentation

Signature has a two pronged approach. Segmentation strategy means products are focused on

specific, selected and focused market. In the form of Levi Strauss Signature brand the company

(LS&Co) has created the product to suit the tastes or demands of a specific market. For Signature

this market constitutes of youth belonging to middle and upper middle class. This segment is

discussed in more depth further along in the presentation.

The other strategy adopted is the Cost leadership Strategy. This strategy pertains to mass

production of standardized products to lower the cost. Denim fabric and finished product is

manufactured in high volumes to lower the costs of the product because fixed costs are

maximized and economies of scale are achieved.

Target Market:

The target market for Signature in Pakistan is youth men and women en 15-24 years of age who

possess international fashion awareness. These are sensible choosers looking for affordability,

yet staying with the running trends locally and internationally.

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Market Segmentation and Consumer Profiling

Demographic Segmentation

o Behavioral Segmentation15-24+ year olds, early & late adopters & regulars, they

live with his/her parents.

o Living in B & B+ residential areas of top ten metro-cities of Pakistan.

o Average Household Income ranging from $250-$500 per month.

o High School & University students and job beginners starting their professional

careers on entry level positions.

Geographic Segmentation

o Signature covers Pakistan urban population.

o Primarily top 5 urban cities Karachi, Lahore, Gujranwala, Sialkot, Islamabad,

Rawalpindi, Faisalabad and Multan,

Psychographic Segmentation

o They are fun loving, confident and expressive.

o They are young mobile users who like to switch cell phones frequently.

o They like to hang out with friends in hip restaurants and café.

o Likes to spend money and has excess to credit cards.

o They like music, sports current affairs and have knowledge about the global

trends.

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Holistic Marketing Approach in Perspective Of Ansoff Matrix

Suggested Growth Strategy

Market penetration strategy

Levis has been in the business of selling jeans and denim products for the over 150 years, the

product strategy for Levi Strauss Signature is based on this fact. Signature brand in Pakistan and

though out the world is adopting market penetration strategy. This strategy is suggested to

achieve the following objectives.

Increase present buyer’s usage or consumption rates of the offering.

Attracting buyers of competing brands.

Stimulating product trial among potential consumers.

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The Strategy is supported by the following product marketing mix.

Suggested Marketing mix Strategies

Product Strategy

Product forms the basis of this strategy. Here the competition is quite complex which also

includes Levis brand along with other local brands mentioned above.

There should be no compromise on product quality inn Signature as well all other

LS&Co products when it comes to Levi Strauss as the over arching company name. The

cost can be rationalized through a number of other factors such as fabric weight, finishing

techniques, bulk purchases of raw material and usage of standardized sundries.

Pricing Strategy:

Signature brand is firmly rooted in affordability and value for money. The pricing should support

and prove it:

Rationalize cost of product to enable the brand/company to deliver the market right

pricing.

This price should be strategically kept slightly below or at par with the competition. This

would deliver the customers true value for money as they are ready to pay some extra for

the international brand

Sweet Spot Pricing

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Promotion strategy

Signature is continuously offering deals to its consumer to keep their interest intact in the brand.

But still more aggressive and focused campaign could help it re-inforcing its “low-priced”

attribute.

Mass marketing could be improved by the total amount of “marketing” budget being

spent on the promotional activities in below mentioned proportions:

Device sales promotions which are tactical in nature. We suggest introductions of better

bundle deals on t-shirts, cross promotions between tops and bottoms category, etc.

Online shopping option strategy to be introduced. Could use forums on the Signature

website. Huge potential!

Placement/ distribution Strategy

Customer traffic is the name of the game. Higher the foot fall the better will be the sale; it does

not matter if it is a high profile or low profile market, mall or bazaar. They should never lose

sight of the fact that the size of the prize/market is 180 million people.

Signature is following the mass spread model of distribution which is spread it as far as

you can…jean for everyone, its basic clothing. To live up to this they need to penetrate

into pother high potential markets, by entering other major cities of Pakistan, which are

still virgin.

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Also, penetration into Middle class is also another strategy which can be used, as

considering the price, they are very much a potential market, especially the youth, who

may not be frequent in buying Levi’s but it would be their “first” choice when they have

the capacity to buy it. More smaller stores in Mass markets could reinforce this.

Proposed distribution

• Continue to expand footprint in Metro cities through franchise network.

• Need for deeper penetration in tier 2 cities with value added deals and products.

• Expand into these markets through distributor/wholesale channels to manage dist cost.

• Concentrate more on multi-brand apparel stores in tier 2 locations.

• Recommended cities Wah Cantt, Jehlum Kentt, RYK, Abottabad, Azad Kashmir

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Proposed Profit and Loss Statement for the period 2011

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Suggestions and Recommendations

After closely analyzing the Levi Strauss Signature’s marketing approach, we can state the

following recommendations for the better future of their brand:

1. Increase penetration in other major cities of Pakistan. Huge potential!

2. Designed to target the “middle income” consumer group, the marketing team could have

done better promotion of the “low-priced” attribute for this specific brand, due to which

the positioning was not much different from that of the parent brand.

3. Considering the world of globalization today, Signature should introduce the online-

shopping option for its products.

4. Increase the number of warehouses. Currently there is only one warehouse for the entire

production in Pakistan (which is in Lahore), so the products produced in Karachi have to

be brought back to Lahore and then sent back. This increases their selling and

administration expenses.

Conclusion

We conclude the project by saying that it has been an excellent learning

experience to conduct this research and analysis. Levi’s Strauss and Co. is

undoubtedly one of the best organizations in the world, proving excellent

customer value and quality products to its consumers and stands out as a market

leader, and rightly so !

It’s truly the brand for the youth!!

Thank You.

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