Levi's is, without a doubt a classic brand. Originally produced by a Bavarian immigrant in the dying years of the battle for the American West, Levi's jeans now have an iconic significance across the globe.
Indeed in many ways Levi's have come to define the very essence of the word "Brand" better than any other product. As advertising journalist Bob Garfield has written "in literal tearms, it's damn near the only true brand out there, burned into a thong of leather and stitched to the waistband".
In it's September 2002 edition, the UK version of Esquire magazine heralded Levi's as the ultimate clothing brand and a staple to the worldwide wardrobe.
The secret behind enduring magic and sucess of Levi's has been it's ability to symbolise both ubiquity and uniqueness simultaneously. No other brand has managed to become part of the system (part of the President's wardrobe even) while retaining a defining element of rebellion, revolution and counter-culture. Levi's are both fashion and anti-fashion. Just try to name someone you know who dosen't own at least one pair.
However, despite it's continued ubiquity the Levi's brand has had a rocky ride in recent times, having watched sales slip from US $7.9 billion in 1996 to US $4.3 billion in 2001 and then further dip to $4.1 billin in 2009.
As with most brand crises, the problem for Levi's have been numerous. To understand them fully, it is necessary to appriciate the company's branding strategy. Levi's CEO Roberth Haas told The Financial Times in 1998 (ironically one of the most uncomfortable of years for the brand)
"We are in the comfort bussiness. I don't just mean physical comfort. I mean we are providing psychological comfort - the feeling of security that when you enter a room of strangers or even work colleagues, you are attired within the brand of acceptablility. Although what a consumer defines as psychological comfort may vary from sub-segment to sub-segment."
The key phrase here it the last one, "from sub-segment to sub-segment." In it's attempts to be sensitive to various fluctuations of taste among the denim-wearing public, Levi's has diversified it's brand by creating a wide range of jeans styles. Most significantly, it has branched out beyond it's traditional "red label" jeans and introduced a new sub-brand called "Silvertab". The company has also producend a cheaper range of jeans with orange tags.
Futhermore the advertising campaign used to promote the Silvertab range in 2001 was among the most hated in recent history. Ad Age called the campaign "insulting" and claimed it "lacked branding". Similarly, in 2002 the ads to promote Levi's low-rise jeans achived an equally negatice reception among certain critics.
However not all the problems have been of Levi's maknig. For instance it could do little to curb the rise of designer jeans such as those produced by Calvin Klein, Diesel and Tommy Hilfiger. All Levi's could do in the face of such competition was to try to preserve the integrity of it's brand. Even here the brand ran into difficulty. In the UK the start of the new millennium saw Levi's become engaged in a very public battle with Tesco's supermarket. Tesco's claimed that consumers were paying too much for their Levi's and the supermarket wanted to sell Levi's in it's own stores with a narrower profit margin. Levi's refused to sell it's premium jeans such as 501s via the supermarket and went to court to stop imports from outside Europe.
"Our brand is our most important asset", explained Joe Middleton, Levi's European president. "It's more valuable than all the other assets on our ballance sheet. It's more valuable than our factories, our buildings, our wearhouses and our inverntory. We must have the right to control the destiny of our brand."
Even the UK governmnet joined in attempting to persuade the European Union to allow supermarkets like Tesco's to import goods from anywhere in the world. However, Levi's insisted that Tescos's was missing the point, confusing the cost of making the jeans with the cost of marketing them. "The important point" said Middelton, "is that all these costs are an investment in the brand. The true costs of making this jean is not just the factory element. It's much more than that." The UK governmnet keen to eradicate the image of "Rip-off Britain" was remained on the supermaket's side, and it looks like Levi's will eventually lose the battle.
Despite all these unfortunate external factors, there is no escaping the fact that the real threat to the Levi's brand is generated from Levi's itself. Now that it is locked in an endless quest to appear "innovative" and "youtfull" by launching a growing number of new styles, Levi's is now proving the law of diminishing returns. The marketing expense continues to grow, while the true brand value diminishes.
The view within the business world has been articulated by Kurt Barnard, publisher of Barnard's Retail Trend Report, in The Financial Times in 2001. "Levi's is basically a troubled company" he said. "Although their name is hallowed in American history, few people these days wear Levi's jeans" In 2000 the company failded to make the top 75 global brands by value according to the Interbrand 2000 Brand Valuation Survey.
Sources: Brand Failures - The biggest 100 branding mistakes of all time. The Financial Times. Esquire Magazine. Levi's Press Releases.
