EVEN LEVI CAN MAKE MISTAKES

During the 1980s, Levi’s US division was looking at ways of diversifying away from its heavy dependence on a jeans market that appeared to be saturated. It had already introduced Levi’s shoes, shirts and socks, which sold quite well among people who were already buying Levi jeans. Now it wanted to move into the market for higher priced clothes, in order to attract a new type of customer to the Levi Strauss brand. As menswear had always been its biggest seller, it decided to concentrate on the male market first. To decide how to meet this objective, a market research company was commissioned to investigate men’s purchasing habits and attitudes to clothes through a Usage and Attitudes Study. A large quantitative survey was conducted among a quota sample of 2000 men who had recently spent at least $50 on clothing. When analysed, the survey revealed that the entire menswear market could be segmented into five types of buyer: Type 1: Traditionalist – typically over 45; department store shopper; buys polyester suits and trousers; shops with his wife/girlfriend; 20% of the market. Type 2: Classic Independent – a ‘real clothes horse’; 21% of the market; buys at independent stores; prefers wool blend suits; expensive taste. Type 3: Utilitarian – wears jeans for work and play; 26% of the market; loyal to Levi. Type 4: Trendy Casual – buys designer, high fashion clothes; might buy Levi’s 501 jeans, but usually considers Levi to be too mass-market orientated; 19% of the market. Type 5: Price Shopper – buys anything at any place where the prices are low; no potential for Levi; 14% of the market. As the Type 2 Classic Independent matched Levi’s objective, the research company was asked to analyse the findings so that the behaviour and attitude of this specific group could be split from the rest of the sample. The large total number of interviews made it possible to have confidence in the reliability of the data from this sub-sample. It emerged that Type 2 men wanted traditionally styled, perhaps pinstriped suits and that they liked to shop alone, whereas others liked to have their wife/girlfriend with them. To tackle this segment of the market, Levi decided to introduce ‘Tailored Classic’, a range of high quality wool suits, trousers and jackets. The research showed that these buyers valued quality and fit rather than low prices, so Levi decided to price the range 10% above that of the competition. To avoid direct product comparisons – and to ensure that not too large a sales force was needed – Levi chose to distribute through department store chains. Having decided on this strategy, its acceptability in the target market was tested via a series of group discussions. These were conducted by a psychologist, who was to look for the real motivations behind respondents’ opinions or behaviour. The psychologist reported that Type 2 men had two reservations: first, they were concerned that the garments would be in standard fittings and so would not provide the tailoring they wanted; second, although they believed that Levi could make a good suit, they still felt uncomfortable about the Levi name. One said: “When I think Levi, I think jeans. If they’re making suits, I have to be convinced.” Another commented that: “If I went to work and someone said, ‘Hey, that’s a good suit, who’s it by?’ I wouldn’t feel comfortable saying Levi…” The company’s marketing executives responded to this by deciding to concentrate on the separate jackets and trousers in the launch advertising, and let suits ‘slipstream’. The Director of Consumer Marketing felt certain that: “…The thing that’s going to overcome Levi’s image for casualness, as no other thing can, is a suit that’s made by Levi that doesn’t look like all the other things we’ve made. Once that gets on the racks, people will realize that Levi can also make a good suit when they put their mind to it…” Soon after this decision, salespersons started contacting retail buyers. After four months of selling to the trade, it was clear that the sales target for the range would not be met. Even a price cut did little to redeem the situation, and Tailored Classics achieved only 65% of its modest sales targets. There was a chance that Levi could salvage the situation – if it could identify where it was going wrong. The company decided to hire a consultant for professional help…