Aug 25, 2010

Brand in focus - Levis

The Company was founded by Levi Strauss in 1853, San Francisco, California. Later on a tailor named Jacob Davis thought of an idea to use copper rivets to reinforce the points of strain on pants. Hence, Davis and Strauss purchased the patent of the idea of using copper rivets in clothing on May 20, 1873.
The innovation of the rivets in the jeans is differentiated from others jeans because of its increased durability. Over the years, Levi’s jeans have become more popular, initially due to its durability. Jean products  are expanded and targeting different consumers. Since the patent of the rivets in jeans in 1873, the company achieved monopoly power. With the lapse of time, Product differentiation and barriers to entry allowed the company to gain more popularity market share. 

Department stores and boutiques sell Levi’s products which are additional channels of distribution for the company. Levi’s provides a wide range of products that target different market segments and capture demands. 
After the release of the 501 product line, Levi’s enjoys worldwide market dominance in the denim jean market. Levi Strauss and Co. maintains its image as an American Icon and the originator of American jeans. Other branding strategies are included; the positioning of the product, created increased differentiation and contribution to the company’s market power. The firm positioned its products with changing times and changing demands, keeping existing customers and capturing new markets. Increases in sales ultimately increased profits.
Competitors successfully were able to take from Levi’s market due to heavy advertising and branding. Branding was especially effective for companies like Calvin Klein that targeted end consumers. Some of the marketing strategies that competitors like Calvin Klein used to differentiate their product and brand included: One is Celebrity endorsements such as Calvin Klein and Brooke Shields. Second is up-to-date world class product designs like low—rise and tighter. In addition to the idea of branding, Levi’s largest consumer market was Baby Boomers and by the time competitors increased in the 1980s, the Levi’s brand was perceived to be “mommy jeans”. This reinforced the more youthful perception of other brands. 
In order to maintain revenues, the company releases the Levi’s signature jeans. This product line appeals to the end consumers. In 2002 Levi Strauss  & Co. makes an agreement with largest retailer Wal-Mart as a supply chain strategy to mass-market consumers. Levi’s Signature brand is sold in Wal-Mart stores exclusively.
Continuing on the approach of profits by principles, in 2006 Levi Strauss & Co. launches the Eco clothing line. Over the years, the company maintained profits by providing a wide range of products, capturing new markets and increasing its market shares. The company created barriers to entry by patents and trademarks, and by differentiating its product from generic jeans.
However as more firms entered the market, the company started losing customers and incurring losses. The upstart companies captured niche market shares from Levi’s immense market domination. Despite these reductions in sales, Levi Strauss & Co. has maintained its corporate responsible image and progressive stance on social, labor, and environmental issues, which may have long-run profit opportunities in the future. 

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