Positioning For nearly 30 years since World War 11, LS&Co. had serviced a seemingly "bottomless" jeansmarket.

Through the 1950s and 1960s, the company doubled sales every three to four years. By the end of the 1960s, the company's operations slacks, and sportswear for men, as well as a rangeof apparel for women and children. In 1968, new divisions for youth wear, sportswear, andaccessories were created. The Levi's for Gals marketing unit was expanded into a full-fledgedwomen's wear division. In addition, Levi Strauss International was formed as a subsidiary,enabling the company to parlay its legend All-American image to foreign consumers eager toown a piece of Americana. With all this growth activity, LS&Co.'s worldwide sales in 1969totaled $251 d o n. The rapid expansion necessitated further capital. In 1971, the company wastaken public with an initial public offering of $47.50 per share. Sales continued to experiencerapid growth as baby boomer teens entered college. By 1975, sales had reached $1-bdhon, androse to $2 billion in 1979. During this time the company's flagship product, 501 jms, remained itstop-selling product, continued to hold nearly a thud of the U.S. jeans market. Productionexpanded locally and broad to meet continuing demand. Nonetheless, given the slow growthamong its primary market, 1224 year olds, cash-rich LS&Co. considered alternative actions tohedge against an expected decline in the jeans in the 1980s. In the early 1980s, LS&Co. adopteda strategy to expand beyond the core jeans lines to utilize the Levi's name on non-jeans. "We are,not going to forget the gal we brought to the dance Robert Haas, then the company's Executive. Other marketing strategies, like the position of the product, other created increaseddifferentiation, contributing to the companies market power In 1930s, the company survived the Great Depression due to increased interest in Westernculture.Jeans were positioned as being worn by cowboys. Cowboys. Levis jeans were issued to employees in the defense industry (including veterans) during WorldWar II(II.Post World War II, veterans that went to college wore Levi Post Levis jeans oncampuses, increasing popularity. WWII veterans were regarded as heroes.Jeans were shown tobe suitable for casual wear, rather than wore Jeans work. During the Baby Boom era, Levi duringLevis targets younger consumers and positions product as cool. Cool. Early movie stars wore Levi Early Levis jeans. An example of celebrity endorsementsendorsement Consumer demand shifts from durability of jeans to fashion of Consumer jeans culturally, jeansbecame symbol of youth and rebellion culturally, rebellion In 1960s, student protesters worejeans as a uniform In 1970s, company sells bellbottom jeans In jean The firm positioned its products with changing times and changes the changing demands,keeping existing customers and capturing new markets. Increases in sales ultimately increasedprofits Increases Th reats to company y Threat of Entry y

Threat of Rivalry y Threat of Substitutes y Threat of Suppliers y Threat of Buyers Th reat of Entry In the apparel industry, the threat of entry is moderate given a variety of increasing factors.However, the low growth statistics makes it less attractive to new entrants. Increasingtechnological advances including the internet and the production process enable entry with verylittle capital. This makes the barriers to entry low. Often times because there are small amountsof capital needed to enter, it becomes very attractive for individuals and partnerships to form.According to statistics, about 10% of apparel retailers operate as a sole proprietor.Another increasing factor is the economies of scale. Since the apparel industry is comprised of very large manufacturers and retailers it increases the economies of scale since the larger manufacturers and retailers are able to cross continents and build grand brand loyalty and image,thus adding value to its apparel. Included in the apparel industry are manufacturers and retailersas a result of technological advances. Many manufacturers of apparel harness the power of theinternet which also creates an avenue for the manufacturer to double as a retailer, bypassing thedistributor. Sole proprietors and smaller entrants have a tougher time entering the apparelindustry because the large players have authority and are able to bid down its costs fromsuppliers. Since the apparel industry is mature, the early firms have benefited from the learningcurve. Th reat of Rivalry In the apparel industry, rivalry is moderate to high. The apparel industry is comprised of severalmain rivals of equal size. When consumers establish brand loyalty, it is typically the designer (specific brand or line of apparel) rather than the retailer. This shows that the small number of large apparel firms that compete on a grand scale show signs of rivalry. When rival firmsthreaten existing firms it reduces their economic profits. Examples of rivalry among existingapparel firms are frequent price cutting, intense advertising campaigns, and frequentintroductions of new products.Often times in the apparel industry, celebrities and models areused to influence customers to purchase products. According to Data Monitor, the apparelindustry is a slow growth industry. When there is a slow growth industry rivalry tends to behigh. In 2005 and 2006, the United States apparel industry grew 2.3% and 2.4% respectivelythe compound annual growth rate (CAGR) is similar to that of the United States apparel industryrates at 1.9% for 2002-2006. The United States is similar to that of competing apparel industries fore example Europe, 1.2% and Asia-Pacific, 4.4%.22 since the apparel industry is slow growth,firms seeking to increase their sales must acquire market share from established competitors Th

reat of Substitutes Essentially there is no substitute for apparel or clothing. However, there are substitutes for garments. Examples of substitutes for garments would be a short instead of a pant given therelativity of the situation, similar price point, and comfort. The short would meet approximatelythe same customer needs, but do so in different ways.In some cases the short would not satisfythe pants characteristics if the climate was cold, but if the customers needs were to havepockets, it would satisfy them.Another form of a substitute of apparel is consumer preference. Not every customer is the same;some might prefer pants in the summer over shorts. Customers also might substitute brand for their preference such as fit, color, design, and price point. As long as the approximate needs of the customer are met, substitutes play an increasingly important role in reducing profit potentialin a variety of industries. Th reat of Suppliers Two raw materials that are crucial to the success of the apparel industry is the dependence oncotton and labor. The apparel industrys demand for cotton is unlikely to keep pace withconsumption and the price of cotton in highly likely to rise in the future, which would increasethe raw material cost for the apparel industry.Since the apparel industry is a global process, obtaining the highest quality labor at the lowestprice possible is difficult. It is difficult because of technological advances such as the internet.Customers and potential customers are able to blog and research the company to find outcompany practices. One topic customers desire to know is by whom it was made by, such as achild worker in a sweat shop. Consumers are able to find out this information and pictures on theinternet. These intimate views on the supplier can threaten the performance of the firm.29 Th reat of Buyers The apparel industry buyers are as limitless as the population. Every reasonable consumer is abuyer of the apparel industry. Primarily the buyer dictates the type of product sold, often timesfashion trends in the apparel industry. Given the industry, apparel products have littledifferentiation. Because there is little differentiation, the threat of buyers can be greater.Buyershave small to none switching costs between brands or retailers. This also poses a threat to theapparel industry and increases buyer power. The large firms in the apparel industry shouldntconcern themselves with vertical integration, as buyers dont pose a successful or equal threat toa large apparel firm, given the barriers of entry. Advertising Strategy The advertising challenge was to build product and brand awareness for Levi'sDockers so that they would be seen as an unpretentious alternative to traditional dressing for almost every occasion. Thus, advertising had to achieve two goals: 1) because there was noconsumer terminology for Dockers-type pants, the ads would have to educate its audience aboutthe new product itself and create brand awareness; and 2) an image for the new product had to becreated that leveraged the positive Levi's brand associations but also established a certain amountof autonomy or distance to signals the inherent product differences. The target audience for theadvertising was defined demographically as white collar working. Mere between the ages of andwho lived in major metropolitan areas in the united States These target men were expand their wardrobes to include more casual apparel made from natural fibers that were suitable for a rangeof informal occasions.LS&Co. conducted a series of focus groups with men in its target market. The men were shownpictures representing a variety of leisure situations and asked to select the pictures that bestdescribed when they were "most comfortable and. Relaxed."The most common scenes chosenincluded: a man sitting on top of a hill alone, two men walking together on a golf course, and agroup of men hanging out and laugh on the beach. Even

though many of the men said they didnot tend to I partake in these events once they were older and married, they s d thought fondly inreminiscing about them. Based on the results of the focus groups, LS&Co decided that the adsshould create an image for the brand based on an emotional appeal. The ads were to create asingular and relevant image for the brand that elevated Dockers above all other possiblealternatives. Given the target customer, the attitude of the advertising needed to becontemporary. It was important, however, to ensure that the style of the pants be per Give astimeless and classic. The men wearingDockers were to be real, approachable and attractive, but not fashion models. The ads were toshow Dockers as appropriate attire for a variety of occasions-for work and for weekends. Theywanted Dockers to be seen as a way to be comfortable and casual in any setting. Therefore, theadvertising was to emphasize the sociability of men wearing the pants. It was also important for the ads to convey the k h quality of the Dockers pants. And maintain the to the Levi's brandname and! Heritage, the Levi's name would help give the new pant credibility and captivate onthe tremendous loyalty of the target group to the Levi's brand. Finally, the ads would use thereality-based advertising style and imagery begun with the 501 ',Blues ads that LS&CoCompetitors

Calvin Klein

Jeans Gap VF Corp (Lee, Wrangle) Tommy Hilfiger