Levi Strauss Canada Holding an Ember: The Gwg Brand

BRANDING CASELET:

LEVI STRAUSS CANADA HOLDING AN EMBER: THE GWG BRAND

By Group 2

Abhinav Tripathy SMBA12002

Kaushal Shah SMBA12015

Setu Sharma SMBA12030

Abhishek Gupta SMBA12040

Nadia

Introduction

GWG® was considered as the first jeans’ brand that was founded in Edmonton, Alberta, in 1911 and dominated the Canadian landscape, until the late 1960s when the competition with the Levi’s® jeans started. In 1982, the two companies merged, when both of the brands were already selling more or less 8 million units of jeans and other apparel products. Levi’s® was the first brand that had been recalled by the customers in top in mind, and considered as the leader in the men’s jeans market, owning 16.1%, while GWG® has 1%. Due to the popularity of jeans, there are other companies that have entered the market, thus created huge competition. The major competitors of the two companies are: Wrangler, Rustler, Nevada, Rockland, Originals, Cherokee and Truly, Reitman’s, Cotton Ginny’s, Denver Hayes, Bluenotes, The Gap, Silver, Guess, Tommy Hilfiger, Polo Ralph Lauren, Calvin Klein and Diesel.

GWG® offers limited line of products that focuses to the segment of men by offering 4 fits, 4 finishes: stonewash, stonebleach, rinse and black, and 16 sizes from 28 waist to 42 waist with two different lengths. From the limited consumer research, it had been found out that GWG® was considered by the customers as a brand with leading attributes such as having a high quality and comfortable to wear, and most of all it has a reasonable price, or cheaper compare to other brands. The sales of the company had increased by 22.22 % by 1999 to 2001; from 180, 000 units in 1999, 200,000 units in 2000, and 220,000 units of 2001. The sales had been expanded by selling through an independent commissioned sales force of 15 people, where in the price ranged from to , for wholesale and .50 for retailer. The company had a listed price of .99, but because, most of the jeans in the retail industry were sold in discount, the price fall to per jean.

Most of the promotional efforts and programs were based on early payment discounts and returns as well as allowances that are equal to 3%. Regarding the licensee agreement of the company to Levi Strauss Canada, in 1998, 8% of its net wholesale goes to Levi.

Q1.Why do consumers buy jeans? What is the buying decision based on?

Sol. Jeans were invented in 1873 by Levy Strauss. Consumers’ perceptions about jeans are following:

1. Durable and extra strong-In terms of durability Jeans are considered more durable than other fabric pants .This extra strong image attracts customers for the feel of rough and tough personality.

1. Symbol of rebellion :Blue jeans were adopted as a workers’ jeans and in the 1950 they became a symbol of rebellion when stars such as Marilyn Monroe and James Dean began sporting variations of the Denim bottom

1. Manual Labor through High Fashion: In modern time a blue jeans is considered as an everyday common garment for varied occasion’s .It has a fashion relevancy as well as it is a casual wear of daily use.

1. It reflects own Personal independence and style. It reflects the utilitarian image. People wear jeans for work, relaxation, to be themselves, to attract others and to feel good.

1. Jeans are considered as ‘Cool’, they are famous for comfort, ease and compatibility factor.

Many a times the buying decision of a consumer is based on the modern fashion relevancy. Jeans are very famous as Casual cloths , which can be used in College or even offices, workplaces .For younger generation, youth are often spurred on by ‘image’ and peer pressure, hence these factors influence their buying behavior in purchasing jeans. A wide variety exists of jeans for diverse lifestyles, for example relaxed fit for comfort, ultra baggy, low waist for younger generation. So jeans have attracted all age group, all ethnicities. Denim is universal. How people are influenced for buying jeans, apart from fashion and trend, jeans appeal for purchase because of their longer durability and even after a long time they are usable as they considered better as they fades. Most of the very good brands are affordable for middle class income group they are not considered as luxury clothing.

Q2. What are the leading attributes of the competitors? How does this match or not match the consumer buying decision?

Sol. The competition comprises of brands such as VF Group, specialty retailers, private labels and premium brands. VF corp includes brands such as Wrabglers, Rustler and so on with price ranging for such brands for, $20 to $30. These brands distributed in stores like Wallmart and Zellers. These brands mainly target a particular segment, which are men. They are mainly dependent on the lifestyle of the consumers and have have created products which are more contry and western. Speciality retailers such as Neveda and Rockland, which cost between $20 to $25 mainly targeting both males and females. These shops mainly distribute in outlets ranging from sears to wallmart. They are highly dependent on the brand name and support this by aggressively pricing its products. Then we have brands such as Silver, Guess, Tommy Hilfiger, Ralph Lauren, CK and diesel. All these brands have different approaches and are priced above $70. All these brands are targeting consumers who enjoy a unique lifestyle and are influenced by the latest fashion. They promote their products through catwalks and try to create their products as the ‘New Thing’ in the market. They have targeted premium consumer base without any gender based targeting, which basically means that they catered to both males and females.