Marketing Study Cases For People Who Want to Improve Their English Language Skills. Volume III: Marketing study cases for People who want to improve their English language skills., #3

Chapter 01 - LEVI’S Marketing and Corporate Efforts.

Summary: Levi’s started as a small manufacturer in 1858 and one of its customers was a tailor who was an expert in mending jeans. He introduced unique copper rivets to add strength at points of stress. This tailor joined Levi’s adding his expertise to Levi’s products. Jeans were popular among hard-working field workers like miners and railway track and road workers etc. This became popular among defense workers during WWII. Later the number of products and designs were added using designers’ talent and manufacturing it like used clothing including stone-washed style.

Manufacturing also involved laser technology to save labor costs and to reduce manufacturing time boosting sales as well as company profits. In later years manufacturing was planned in developing countries and closing regular jeans-dress manufacturing in the USA. During the years Levi’s also had a tough time facing factory closures, COVID-19, and competitors but the company managed to do profitable business by making smart choices. It is therefore, still a running business making progress day and night over the years.

Levi’s Marketing and Corporate Efforts - Origin and formation (1853–1890s)

Levi Strauss was a German immigrant who started his trading business in San Francisco in 1858 as Levi Strauss & Co running a wholesale house. One of the company customers Jacob Davis, a Latvian immigrant, was a tailor who used to buy bulk goods for repairing torn pants using his innovative copper rivets at the points of strain. Later in 1873 Jacob Davis and Levi Strauss together got a USA patent from the Patent and Trademark Office. Later, the patented rivet was also incorporated into Levi’s jean design and advertisements. The commercial making of denim overalls, however, began in the 1870s. In 1890, the rivet patent went into the public domain.

Growth in popularity (1910s–1960s)

During the period jeans were popular among the working-class people when people visited ranches and saw there the hard-wearing pants. Later during and after WWII, it was declared as an essential commodity for defense-related people. During the period 1950s-1980s, these jeans became popular among a wide range of youth, like the greasers, rockers, mods, and mostly the hippies. Levi's popular shrink-to-fit 501s used to sell in a unique sizing procedure; the indicated size was referred to the size of jeans before shrinking while the shrinkage was significant, Levi’s though still offers unshrunk jeans. During WWII, the use of the waist cinch and the crotch rivet were banned as advised by War Production Board for conserving metal people see these again even after the war. Moreover, the rivets on back pockets were also removed after complaints that these rivets were scratching furniture.

The Blue Jeans Era (1960s–1980s)

The 1960 to 1970s era was most favorable for resulting in good growth in business as casual looks became a fashion. The company expanded its business by adopting new looks, models, and fashions and that specially added stone-washed concept. This was a serious happening as the company acquired a Canadian clothing manufacturer, Great Western Garment Company (GWG). This acquisition helped to initiate the modern stone washing system by Levi’s. The year 1964 to 1974 was the period when jeans manufacturing units increased from 16 plants to plus 63 plants only in the USA while there were 23 plants overseas. Levi’s asserted on pay-for-performance to the working people right from a sewing machine operator to upwards. Resultantly, Levi’s plants are considered to be the cleanest and the best organized. In 1946, the company position could be obvious when they had only 15 salespersons, running two plants while there was almost no business in the Eastern part of the USA. In the next 30 years, the same company had more than 22,000 persons in salesforce, connected to 50 plants and offices in 35 countries. A hard time caught the company and they had to shut down 60 of their manufacturing factories during the 1980s to handle financial difficulties and the fierce and strong competition. Levi’s had launched the Dockers brand in 1986. This product was sold mostly via the chains of department stores and this was a fresh breath in business helping the company to regain its strength through the mid of 1990s because denim sales began to fade. In 1996, Dockers brand was unveiled in Europe by Levi’s CEO Jorge Bardina. The company, however, attempted to sell its Dockers division in 2004 for relieving part of the outstanding debt amounting to $2.6 billion.

The year 2000 and Onwards

In 2002, Levi’s rethought its sales strategy and began a close business relationship with Walmart after starting a special brand line Signature jeans together with other clothing to be sold exclusively from Walmart Stores up till 2006.

Levi’s suffered losses during the last ten years but in 2007, Levi’s could record profits again showing sales beyond $4 billion. In 2010, the company entered into a partnership with C.C. Filson, an American outfitter and manufacturer of goods for the outdoor enthusiasts, to produce a high-end line of jackets and workwear. In 2011, Chip Bergh was hired as the president chief executive of the brand. The same year, more than 20 different waterless techniques were adopted that reduced the exceptional exorbitant amount of water while making denim. Levi's, therefore, becomes the most sustainable brand globally when water consumption is considered.

On May 8, 2013, Levi’s purchased the naming rights to Levi’s owned new stadium in California. Due to the naming-rights deal Levi's pledged to pay $220.3 million to Santa Clara City and the 49ers who compete in the National Football League (NFL) over twenty years, having an option for extension for another five years for around $75 million.

As of 2016, Levi’s Signature jeans were going to 110 countries, with reported revenues as $4.6 billion. The next year in 2017, the company released smart jacket, apparel they manufactured in partnership with Google. After two years of this teamwork, the denim jacket price reached $350.

In March 2019, Levi's became public with the New York Stock Exchange (NYSE) using the ticker LEVI, valued at $6.6 billion being its IPO. Further, in the same year, Levi's won the legal case on infringement of a trademark in China. The case was based on the arcuate design on two pockets at the back of jeans, which remained protected in China in 2005 when it was registered. The company also won damages together with costs in adding a ban on future similar infringements.

In 2020, Levi’s has more than a century ago, invented blue jeans. Now, in an effort to automate its making, planned to use lasers for creating holes, fading, and fraying to give its typical worn look. It used to be a labor-intensive process requiring the workers to brush the fabric using sandpaper, some chemicals using rotary tools. The laser-way needed only 90 seconds, compared to 20 minutes to do hand-finishing. This addition of laser technology brought the company the Golden Halo Award (the Year 2020) for making advancements for their corporate social impact. Further in 2021, Levi’s acquired Beyond Yoga, to enter the activewear market. They expect that the joint venture will bring more than $100 million towards net revenue each coming year.

Levi’s Made Cultural Impact

All walks of people have started wearing Levi's brands from miners to actors and those winning Nobel Prizes too. People like Albert Einstein and Marlon Brando also happened to wear Levi's by choice. Levi's uses several techniques for keeping its competitors away from its field - its garments, its advertising, and even its storefront presence. Levi’s kept itself away from its competitors using its different sewn patterns, garment labels, etc.

Corporate Culture and Staff

The company is famous for promoting progressive causes supporting areas like LGBTQ (lesbian, gay, bi-sexual, and transgender) causes. During the 2016 campaign for presidential elections, the company donated $1 million for supporting immigration together with the rights of LGBTQ. In 2018, Chip Bergh, CEO of Levi’s published an Op-ed in Fortune magazine condemning gun violence.

Current Products

As of now, a vast majority of Levi's are manufactured overseas in various developing countries, like India, Vietnam, Sri Lanka, and Indonesia. This is because of cheap raw materials and low-cost labor. In parallel to production in developing countries, some high-end styles like Levi's Vintage Clothing and Levi's Premium are, however, being produced in the United States. The company, in a way, produces much more than just jeans, jackets, including full lines of shirts, sweaters, socks, underwear, eyeglasses, accessories, dresses, shoes, skirts, and some leather products too. All jeans and pants have been categorized as big & tall, flare, fit, relaxed, taper, bootcut, straight, slim, and skinny — as identified using trademarked three-digit numbers. The 501, the company's original modern design, is available in styles for both men and women. The rest of the 500 series is designed for men, and the 300, 400, 700, and 800 series are designed for women.

Bad Patches and the Competition

By the 1990s, had an uphill situation while facing competition as cheaper products flooded the local and overseas markets. This forced Levi’s to proceed closure of some factories in the USA. In 1991, the company became involved in a scandal about its pants prepared in the Northern Mariana Islands that some 3% of its sold jeans were carrying Made in the USA label but those were actually manufactured in Chinese factories by their laborers while it was considered as slave-like conditions according to US Dept. of Labor. As of 2016, almost all Levi's jeans are prepared outside the USA whereas just a few higher-end, and expensive styles are made in the USA. The scandal pointed out