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In 1986, Levi Strauss & Company found that the best way to stay true blue to
its customers was to change its colors. Riding high on the results of a recent
back to basis campaign with its flagship 501 brand, Levi's was enjoying
reinvigorated jeans sales. But the good news was followed by bad. Research
showed that baby boomers, the core of the company's customer franchise,
were buying only one or two pairs of jeans annually, compared to the four to
five pairs purchased each year by 15 to 24-year-olds.
Born between 1946 and 1964, the baby boomers had adopted jeans as
a symbol of their break with the tastes and traditions of their parents. They
had, in the words of Steve Goldstein, vice president of marketing and
research for Levi's, helped turn the company into an international global
colossus in the apparel industry.

Now, however, the baby boomers were

looking for something different.

They still wanted clothing that was

comfortable and made from natural fabrics, but fashion had become more
important. Many worked in environments with relaxed dress codes, so they
sought clothing that combined style and versatilitysomething appropriate
for both professional and leisure activities.
We set ourselves out to answer the big question, Goldstein says.
How could we keep the baby boomer generation in Levi's brands when they
weren't wearing so many pairs of Levi's jeans? And the answer was Dockers,
something between the jean that they loved and the dress pants that their
parents expected them to wear when they got their first job.
Dockers created a product categorynew casuals.

Blue denim was

out; cotton khaki (in brown, green, black, and navy, but mostly traditional
tan) was in.

Positioned as more formal than jeans yet more casual than
dress slacks, Docker's satisfied an unfulfilled need.

They were the right

pants for a variety of occasions, an unpretentious alternative to dressy,

tailored slacks.
The challenge in marketing Dockers was to leverage the Levi's name
and heritage while establishing the independence of the new brand, and to
do so without detracting from Levi's core jeans focus.

According to

Goldstein, the company briefly considered not using the Levi's name at all,
but realized that this would be sort of like trying to put a space shuttle up
without any launch rockets. So the original theme for Dockers was Levi's
100 percent cotton Dockers.

If you're not wearing Dockers, you're just

wearing pants.
Response from retailers and from the target market of 25- to 49-yearolds was everything Levi's hoped for. All the top menswear accounts across
the country placed the new product in their stores, and in only five years,
Dockers became a $1 billion brand. Brand awareness among men 25 and
older was 98 percent, and 70 percent of target consumers had at least one
pair of Dockers in their closets.
With the new brand sailing along smoothly, Levi Strauss & Company
began to dissociate Dockers from the company brand name. In 1993, the
Levi's name and the words since 1850 were removed from the Dockers
logo. Robert Hanson, vice president of marketing and research for Dockers,
claims the change was needed to allow the Levi's brand to be focused on
the core teen target becauseit's the quintessential icon of youth culture.
Still following the baby boomer market, Levi's in 1996 brought out
Slates, an extensive line of wool, polyester microfiber, and fine-gauge cotton
dress pants.

We thought there was room in a man's closet for a third
brand, says Jann Westfall, president of the Slates division.

That's why

Slates was created to [fill the gap] between khakis and suits.

To Levi

Strauss & Company, it seemed a natural evolutionthe guy who wore Levi's
in the '70s and Dockers in the '80s would be ready for Slates in the '90s.
Slates would be the high end of casual, neatly filling the lunch with
client/salary review with boss role in the Docker man's wardrobe.
Consumer research told Levi's that consumers found shopping for
dress pants a chore: slacks departments were dreary; finding the right size
was difficult; and getting alterations was frustrating.

Consumers wanted

cash and carry, off-the-rack dress pants. So Levis devised a carefully crafted
strategy to overcome the typical male distaste for dress pants shopping.
Slates were sold in scientifically tested selling areas consisting of mahoganytoned circular store displays that allowed easy access to the various styles
and sizes.

Levi's also responded with off-the-rack pants that require little

altering. Whereas most dress pants come only in even waist sizes, forcing
alterations for off-size men, Slates also come in odd sizes.

All Slates are

hemmed and cuffed and have double pleats in the front. For customers with
larger waist sizes, the pleats are more kindly placed.
Levis backed Slates with $20 million in advertising, beginning with
television ads at the opening of the National Football League season.


charm potential customers, Levis agency designed ads such as one showing
a guy springing up from lunch with his partner to tango with his waitress.
The ads are stylish but they are not over [the market's] heads, said Nancy
Friedman, vice president of research and development. The trick is to rein it
back in so it isn't so chi-chi that people can't relate to it.

A year later,

everyone agreed that Slates was a dynamite brand. Levis had turned on the
Dockers customer to dress slacks just when corporate casual started to
dress up. Noted one industry insider, Slates and other labels have pushed
the envelope.

This has created a tremendous consumer awareness for

slacks in general. Some retailers found that their tailored pants business
was up 15 to 20 percent.
However, just like the good news about Levis back to basics move a
decade earlier, the good news about Slates has been accompanied by bad
newsplummeting market share in the core jeans market.

Although Levi

Strauss had 30.9 percent of the U.S. blue jeans business in 1990, it had only
18.7 percent seven years later. Worse yet, Levi's sales to teens, the core
blue jeans buyers, had dropped from 33 percent in 1993 to 26 percent in

Once the darling of the 15- to 24-year-old buyer, Levis now faces

indifference in this segment and an attitude that Levi's are your dad's

The bottom-line message:

Levi's are uncool.

Male teenagers

increasingly prefer brands like Tommy Hilfiger and Old Navy. Even the young
women who have been more inclined buy Levi's are moving toward brands
such as Calvin Klein, Gap, and Guess. Levi's is being squeezed by upscale
brands like Tommy Hilfiger and Ralph Lauren on one end and private label or
store brands on the other.
Its a classic marketing goof:

Levi's lost sight of the market that

launched it to success. By concentrating on Dockers, and more recently on

Slates, executives were distracted from the threat to the core jeans business.
They missed all the kids and those are your future buyers,
says Bob Levi, owner of Dave's Army & Navy Store in New York. It's very
important that you attract this age group, says Gordon Hart, vice-president
of the Lee brand at VF Corp.

By the time they're 24, they've adopted
brands that they will use for the rest of their lives. Moreover, the younger
segment sets fashion trends that influence older shoppers. The mistake has
been costly:

falling sales and market share forced Levis to lay off 1,000

salaried workers in February 1997, and to shutter 11 plants and lay off onethird of its North American workforce in November of that year.
What is Levi's doing to fix the problem? Its pumping up the Silver Tab
brand, an eight-year-old jeans line considered more stylish among young
consumers. Silver Tab has a baggier fit and uses non-denim fabrics. The
median age of a Silver Tab buyer is 18, compared to 25 for Levi's other
products. Levi's plans to expand the line to include more tops, more trendy
styles, and new khaki pants.

The company also plans to boost Silver Tab

promotional spending fivefold for events such as concerts in New York and
San Francisco, for up-and-coming bands playing music known as Electronica,
and for outfitting characters on hot television shows such as Friends and
Beverly Hills 90210.
Levi's is also taking action on the retail front.

In 1998, Levi's will

introduce jazzier, more colorful packaging aimed at giving its products a

more exciting, youthful look. It has dropped plans to open 100 new stores in
malls across the country in favor of NikeTown-type stores, which will serve as
the company's flagship outlets in large cities.
Holding nothing sacred in its quest to reposition itself in younger
segments, Levi's is also searching for a new ad agency to replace Foote,
Cone and Belding, which has been the Levi's agency for more than sixty
years. And the company is recruiting more outside managers. [Levi Strauss
& Company] has always been insular, paternalistic, and, quite frankly, a little
smug says Isaac Lagnado, president of Tactical Retail Solutions.

All that

appears to be changing.
Will the new strategy work? Many industry insiders think that Levi has
the money and market clout to pull it off. But didn't we just read that some
of those trendy new styles for Silver Tab include khakis? Doesn't that sound
like Dockers? And speaking of Dockers, Levi's may have a problem making
that brand relevant to the next generation of young men.

Baby boomers

who are aging out of the Dockers' target market have refused to leave the
brand behind. Consequently, the Dockers brand that has been positioned for
consumers just moving out of their core jeans-wearing years may now be
thought of as my dad's brand by the next generation of young men moving
into this segment. Thus, the dad's brand problem that hit Levis in the blue
jeans segment now threatens the Dockers market. Even as Levi's is working
to get its core jeans business back on track, it will have to contend with a
similar problem with Dockers.
Questions for Discussion

What actors and forces in Levi Strauss & Company's microenvironment

and macroenvironment have affected its marketing position?


Why was Levi's so successful in designing products for the baby



How and how well has Levi's responded to changes in its marketing


Evaluate Levi's strategy for the Silver Tab brand. Is the strategy likely
to succeed? Does it meet the concerns of younger buyers? How does
Silver Tab compare with the competition?


What marketing







Sources: Elaine Underwood, Levi's New Dress Code, Brandweek, August

19, 1996, p. 22;
Denim Dish: Dream Jeans for Teens, Womens' Wear
Daily, December 11, 1997, p. 12; Becky Ebenkamp, Slates Speaks Directly
to Men, Adweek, September 8, 1997, p. 5; Stan Gellers, Tailored Slacks
Follow the Mainfloor Leader: Slates Boom Trickles-Up to Better Makers in
Casual Fabrics and Golfwear, Daily News Record, September 24, 1997, p. 3;
and Linda Himelstein, Levi's Is Hiking Up Its Pants, Business Week,
December 1, 1997, pp. 70, 75.