Levis' Case
Levi’s case – marketing test
1) Brand decline
Until the mid-1990s LEVI’s had benefitted from a growth in sales and in 1996 a record sales of $7.1 billion was reached.
The decline in sales was due to a change in culture. It roots back to 1992 when rap music came up as a new culture and “baggy trousers” were starting to become more popular.
LEVI’s simply missed the opportunity to get into this business and stay popular among young customers. Competitors such as Gap, Diesel and Wrangler on the other hand managed to connect with young people very well.
The 501 five-pocket Jeans by Levi’s had been launched in the mid-1980s with a large TV campaign. This was very successful and sales began a twelve year rise for LEVI’s. But in the 1990s this cash cow (501 Jeans) was milked out. It was not considered cool anymore and young people preferred other brands.
The number of US teenagers who considered Levi’s to be cool dropped from 21% in 1994 to only 7% in 1998. Since Levi’s focuses on young people aged 15 to 25 years this had a major impact on sales.
Levi’s simply didn’t manage to keep young people thinking that it was a cool brand.
While it was still fairly expensive the brand was considered being uncool and something that is “for the older generation” by teenagers.
So summing up the major problems were that Levi’s… * … didn’t manage to stay responsive to consumer changes (rap culture) * … didn’t manage to connect with young people any more * … relied on the cash cow 501-Jeans for too long * … was still an expensive brand but people didn’t want to spend the money since the brand wasn’t considered cool any more
2) Brand Naming
Advantages and disadvantages of using a different brand name for re-launch
Another way to restore Levi’s brand positioning could have been re-naming the brand of Levi’s.
There are some advantages and disadvantages in re-naming a famous brand like Levi’s:
Advantages | Disadvantages | * People
1) Brand decline
Until the mid-1990s LEVI’s had benefitted from a growth in sales and in 1996 a record sales of $7.1 billion was reached.
The decline in sales was due to a change in culture. It roots back to 1992 when rap music came up as a new culture and “baggy trousers” were starting to become more popular.
LEVI’s simply missed the opportunity to get into this business and stay popular among young customers. Competitors such as Gap, Diesel and Wrangler on the other hand managed to connect with young people very well.
The 501 five-pocket Jeans by Levi’s had been launched in the mid-1980s with a large TV campaign. This was very successful and sales began a twelve year rise for LEVI’s. But in the 1990s this cash cow (501 Jeans) was milked out. It was not considered cool anymore and young people preferred other brands.
The number of US teenagers who considered Levi’s to be cool dropped from 21% in 1994 to only 7% in 1998. Since Levi’s focuses on young people aged 15 to 25 years this had a major impact on sales.
Levi’s simply didn’t manage to keep young people thinking that it was a cool brand.
While it was still fairly expensive the brand was considered being uncool and something that is “for the older generation” by teenagers.
So summing up the major problems were that Levi’s… * … didn’t manage to stay responsive to consumer changes (rap culture) * … didn’t manage to connect with young people any more * … relied on the cash cow 501-Jeans for too long * … was still an expensive brand but people didn’t want to spend the money since the brand wasn’t considered cool any more
2) Brand Naming
Advantages and disadvantages of using a different brand name for re-launch
Another way to restore Levi’s brand positioning could have been re-naming the brand of Levi’s.
There are some advantages and disadvantages in re-naming a famous brand like Levi’s:
Advantages | Disadvantages | * People