Not by Jeans Alone -- Enterprise -- 1981 -- (Levi Strauss & Co.)

Summary

The video script details Levi Strauss & Co.'s venture into the tailored clothing market with its 'Tailored Classics' line, an attempt to diversify from its traditional jeans. It explores the company's market research, product development, and the challenges faced in repositioning its casual brand image to appeal to a more conservative, quality-conscious consumer segment. Despite initial struggles with pricing and perception, the company persists, reflecting the risks and rewards of innovation in established brands.

Takeaways

• 👖 The script discusses Levi's, the world's largest apparel manufacturer, attempting to diversify from jeans into the tailored clothing market.
• 📈 Levi's had a history of strong growth in jeans sales, but recognized the need to diversify due to market saturation and changing consumer preferences.
• 🔍 The company conducted extensive market research, identifying distinct consumer segments to target with their new product line, 'Tailored Classics'.
• 🎩 The new product targeted the 'Q2' segment, known as 'Classic Independents', who preferred traditional, high-quality clothing and often shopped alone.
• 📊 The Tailored Classics line included slacks, sport coats, and three-piece suits, priced higher than traditional Levi's products to reflect the higher quality and market segment.
• 🤵 The suits were designed to be traditional and non-faddish, with an emphasis on quality materials and a traditional cut to appeal to the Q2 segment.
• 📉 Initial sales of Tailored Classics were slow, with high prices and the casual image of the Levi's brand posing challenges to acceptance in the tailored clothing market.
• 📉 Despite a price rollback and aggressive sales tactics, the line did not meet its sales goals, leading to internal doubts and a shift in focus within Levi's.
• 📻 Plans for a television commercial were canceled, and the marketing approach was adjusted to include newspaper ads and a gradual introduction to retailers.
• 👔 There was an internal debate about the impact of the Levi's brand name on the perception of the new tailored clothing line, with some suggesting the brand was too casual for suits.
• 🔄 Key personnel changes occurred within Levi's, with some resigning and others taking on new roles, reflecting the challenges and strategic shifts in response to the Tailored Classics launch.

Q & A

What was the historical context of jeans in the 1950s and 1960s as mentioned in the script?

In the 1950s, jeans were worn primarily by farmers and laborers as work clothes. In the 1960s, jeans emerged as a symbol of rebellion, worn by figures like Marlon Brando and James Dean, and became a uniform for a generation, even being banned from schools due to their association with nonconformity.

Who is Eric Severide and what is his connection to the history of jeans?

Eric Severide is the narrator of the script. He mentions that he predates the blue jean era, implying that he has been involved in or has observed the industry for a long time, possibly since before jeans became popular as casual wear.

What was the significance of Levi Strauss and company in the 1980s according to the script?

Levi Strauss and company was the world's largest apparel manufacturer in the 1980s, with over 50% of its revenue coming from jeans. The company was known for producing its 2 billionth pair of jeans and was looking to diversify its product line to continue its growth.

What was the role of Peter Haas Jr. in the introduction of Levi's new marketing division?

Peter Haas Jr., a Harvard MBA and the great-great grand nephew of Levi Strauss, became the general manager of a new marketing division created to introduce more formal and expensive clothing under the Levi's brand.

What was the strategy behind Levi's introduction of the 'Tailored Classics' line?

The 'Tailored Classics' line was introduced as part of Levi's strategy to diversify and extend into a different and lucrative segment of the menswear market. It targeted the 'classic independent' consumer segment, offering traditional, high-quality clothing that did not require tailoring.

What were the key features of the 'Tailored Classics' product line?

The 'Tailored Classics' line included traditional, not faddish, clothing made of wool and wool blends in conservative colors and patterns. It featured slacks, sport coats, and three-piece suits that could be selected by the customer in their correct size, eliminating the need for tailoring.

What was the consumer segmentation study conducted by Levi Strauss and what did it reveal?

Levi Strauss conducted a market segmentation study involving over 2000 consumer interviews to understand different segments within the men's market. It revealed five basic segments, including the utilitarian jeans customer, trendy casual, price shopper, mainstream traditionalist, and the classic independent, with the latter being a significant target for the 'Tailored Classics' line.

What challenges did Levi's face in launching the 'Tailored Classics' line?

Levi's faced challenges such as high wholesale prices, which were higher than anticipated by retailers, leading to slow sales. Additionally, the Levi's brand was too closely associated with casual wear, making it difficult for consumers to accept the brand in a formal clothing context.

How did Levi's address the issue of high prices for the 'Tailored Classics' line?

Levi's made a desperate move by reducing wholesale prices by four to seven percent in an attempt to boost sales and make the products more competitive in the market.

What was the outcome of the 'Tailored Classics' launch according to the script?

The launch of 'Tailored Classics' was not as successful as Levi's had hoped. Despite a price rollback and mixed consumer response, the line did not meet its sales goals, and the company shifted its focus to other products with more immediate profit potential.

What were some of the lessons learned from the 'Tailored Classics' experience according to the script?

The script suggests that taking risks is part of business, and not all new products will succeed. It also highlights the importance of understanding consumer perceptions and the challenges of changing a brand's image in the market.