Levi Strauss Marketing Strategies Analysis
What marketing strategy was Levi Strauss using until the early 2000s? Why did this strategy appear to work for decades? Why was it not working by the 2000s?
Before the mid-2000s, Levi Strauss was sticking to the marketing strategy that can be called one-size-fits-all approach. Due to the lack of understanding the differences between markets and the importance of those differences, the company's market mix was standardized. Products, as well as advertising messages, did not differ around the world. Levi Strauss managed to gain profit with the help of its trademark name while the diversity of markets was not clearly defined. As soon as the situation changed, the competition became fierce, and the differences of the markets stood obvious, Levi Strauss had to admit the need of changes within its market strategy.
How would you characterize Levi Strauss's current strategy? What elements of the marketing mix are now changed from nation to nation?
When Levi Strauss realized the importance of marketing strategy changes, it went through three steps. Firstly, the company had to reduce production costs by closing American factories and moving production to offshore where an opportunity to reduce the cost was easier to accomplish. Secondly, the company broadened the product line and managed to become more competitive, selling jeans by the lower prices. Thirdly, Levi Strauss allowed national managers to tailor the products range to the nation it was offered to.
Levi Strauss's new strategy involved producing various jeans models according to different body types, socio-cultural differences, climatic differences, and others. The company realized that countries differ in their tastes. Cultural dimensions and norms were taken into account as well when producing jeans models; that is why jeans models and colors differed over the world. Taking into consideration physical differences, Levi Strauss began producing jeans with shorter leg length for Asia and jeans with wider backsides for South Africa. Therefore, standardized approach to jeans production was replaced by the approach that fit local market needs, reflecting regional differences. The promotion of products also changed. Pricing was done on each market as the result of the competition in each market.
What are the benefits of the company's new marketing strategy? Is there a downside?
Levi Strauss's new marketing strategy works successfully. Profits seem to grow in developing markets. The autonomy of national managers gave an opportunity to the company to understand unique characteristics of the markets from region to region and meet consumers' demands better than with the standardized marketing strategy used by Levi Strauss in the 1990s. The new marketing strategy is based on production flexibility and responsiveness to consumers' requirements. However, the differences between local markets may become an issue in the future. The company may lose its uniqueness of 501 jeans by producing unique jeans models that differ from each region.
What does the Levi Strauss story tell you about the "globalization of markets"?
Taking into consideration that consumer preferences become more global, the standardized marketing strategy may be the norm. However, the similarities, for example, in the same age group of different nations do not exclude the cultural preferences existing within the market. Those similarities may be too broad for the producing companies to stick to using standardized marketing mix from one country to another.