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INTRODUCTION

Marketing strategy helps organizations to focus their attention to complete resource utilization to increase sales and win over their competitors. Every company applies some kind of marketing strategies to maintain existing customers, attract potential customers and also to maintain and enhance their reputation in the market.

When designing a marketing plan, first a marketing strategy is taken into consideration. The marketing plan consists of steps to be taken so as to attain success in the implementation of the marketing strategy chosen. Big projects involve selection of different strategies at different levels. Usually a strategy consists of well-sketched tactics. They are meant to meet the needs and finally reach marketing objectives.

Each of the strategies has pre-calculated results because when a particular strategy is chosen at a particular level, its outcome becomes the goal of that particular level. If there is an absence of a well thought strategy in a marketing plan means it is supposedly lacking a good foundation. A reasonable marketing strategy should not only facilitate marketing goals, but also the action sequence of a campaign.

At regular time intervals the firm should analyze the marketing decision. This is done with the help of strategic models and the 3C’s model is considered for this purpose. To calculate the company’s strategic position, Ansoff matrix is used. The 3C’s model determines the factors, which leads to the success of a marketing campaign. There are three key parties involved in this model the corporation, the customer and the competitors. The involvement of all the three key parties leads to positive results and this involvement is known as the 3C’s or strategic triangle.

The role of the corporation is to increase the strength of the company in the success critical areas, when compared to that of the competitor. The customer and his interest form the basis of any strategy. The competitor also plays a vital part. The competitor-based strategies are based on the functioning of business competitors like design and engineering, sales and servicing, and purchasing.

When making a marketing plan depending on some particular strategies known as mix strategies are used. 4P’s model is used to calculate whether the plan is sticking to the strategies or not. The four Ps stand for product, price, place and promotion. Products are goods produced by the company on a huge scale for the purpose of selling them and earning profit. Price is the money paid for a product by the customer.

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The price is based on many factors like competition, market share, customer perception and product identity. Place where the product is sold can be either physical store or store on the Internet. It is also known as distribution channel. To make the customer knowledgeable about a product, the marketer does promotion. It involves advertising, public relation and point of sale.

There are different types of marketing strategies based on some criteria. Challenger, Leader and Follower are types of market dominance strategies. Market dominance strategies are used to dominate the market. Cost leadership, Market segmentation and Product differentiation are types of porter generic strategies. Porter generic strategies are built on strategic strength or competing abilities and strategic scope or market penetration.

Close followers, late follower and Pioneers are types of innovation strategies. Innovation strategies are meant to trigger the rate of product development and model innovation. It helps the firm to incorporate latest technologies. Intensification, Diversification, Vertical integration and Horizontal integration are types of growth strategies. Growth strategies facilitate the growth of the organization. Marketing warfare strategies are conjunction of marketing strategies and military strategies.

A marketing strategy or a mix of them is chosen only after thorough market research. A marketer should always be ready to face any kind of situations like if the strategy is changed in the middle, he should be able to perform another market research so as to choose the proper strategy, within a short period of time. This can be done easily if you have experience.

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MARKETING STRATEGIES

Marketing strategy is a process that can allow an organization to concentrate its limited resources on the greatest opportunities to increase sales and achieve a sustainable competitive advantage. A marketing strategy should be centered on the key concept that customer satisfaction is the main goal.

Marketing strategies may differ depending on the unique situation of the individual business. However there are a number of ways of categorizing some generic strategies. A brief description of the most common categorizing schemes is presented below:

STRATEGIES BASED ON MARKET DOMINANCE

In this scheme, firms are classified based on their market share or dominance of an industry. Typically there are four types of market dominance strategies:

o Leader o Challenger

o Follower

o Nicher

PORTER GENERIC STRATEGIES

Strategy on the dimensions of strategic scope and strategic strength. Strategic scope refers to the market penetration while strategic strength refers to the firm’s sustainable competitive advantage. The generic strategy framework (porter 1984) comprises two alternatives each with two alternative scopes. These are Differentiation and low-cost leadership each with a dimension of Focus-broad or narrow.

o Product differentiation (broad) o Cost leadership (broad)

o Market segmentation (narrow)

INNOVATION STRATEGIES

This deals with the firm's rate of the new product development and business model innovation. It asks whether the company is on the cutting edge of technology and business innovation. There are three types:

o Pioneers o Close followers

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o Late followers

GROWTH STRATEGIES

In this scheme we ask the question, “How should the firm grow?”. There are a number of different ways of answering that question, but the most common gives four answers:

o Horizontal integration o Vertical integration

o Diversification

o Intensification

AGGRESSIVENESS STRATEGIES

This asks whether a firm should grow or not, and if so, how fast. One scheme divides strategies into:

o Building

o Holding

o Harvesting

WARFARE BASED STRATEGIES

This scheme draws parallels between marketing strategies and military strategies. There are many types of marketing warfare strategies, but they can be grouped into:

o Offensive marketing warfare strategies

o Defensive marketing warfare strategies

o Flanking marketing warfare strategies

o Guerrilla marketing warfare strategies

A more detailed scheme uses the categories.

Prospector Analyzer

Defender

Reactor

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3C's Model

The 3C's Model is a business model, which offers a strategical look at the factors needed for success. It was developed by Kenichi Ohmae, a business and corporate strategist.

The 3C’s model points out that a strategist should focus on three key factors for success. In the construction of a business strategy, three main players must be taken into account:

1. The Corporation 2. The Customer

3. The Competitors

Only by integrating these three C’s (Corporation, Customer, Competitors) in a strategic triangle, a sustained competitive advantage can exist. Ohmae refers to these key factors as the three C’s or strategic triangle.

1 The Corporation o 1.1 Selectivity and sequencing

o 1.2 Make or buy

o 1.3 Cost-effectiveness

2 The Customer

o 2.1 The Customer

o 2.2 Segmenting by objectives

o 2.3 Segmenting by customer coverage

o 2.4 Segmenting the market once more

3 The Competitors

o 3.1 Power of image

o 3.2 Capitalizing on profit- and cost structure differences

o 3.3 Hito-Kane-Mono

T H E C O R P O R A T I O N

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The Corporation needs strategies aiming to maximize the corporation’s strengths relative to the competition in the functional areas that are critical to achieve success in the industry.

Selectivity and sequencing

The corporation does not have to lead in every function to win. If it can gain decisive edge in one key function, it will eventually be able to improve its other functions which are now average.

Make or buy

In case of rapidly rising wage costs, it becomes a critical decision for a company to subcontract a major share of its assembly operations. If its competitors are unable to shift production so rapidly to subcontractors and vendors, the resulting difference in cost structure and/ or in the company's ability to cope with demand fluctuations may have significant strategic implications.

Cost-effectiveness

Improving the cost-effectiveness can be done in three ways. First by reducing basic costs, second by exercising greater selectivity (orders accepted, products offered, functions performed) and third by sharing certain key functions with a corporation’s other businesses or even other companies.

T H E C U S T O M E R

The Customer

Clients are the base of any strategy according to Ohmae. Therefore, the primary goal supposed to be the interest of the customer and not those of the shareholders for example. In the long run, a company that is genuinely interested in its customers will be interesting for its investors and take care of their interests automatically. Segmentation is helping to understand the customer.

Segmenting by objectives

The differentiation is done in terms of the different ways that various customers use a product.

Segmenting by customer coverage

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This segmentation normally emerges from a trade-off study of marketing costs versus market coverage. There appears always to be a point of diminishing returns in the cost versus coverage relationship. The corporation’s task is to optimize its range of market coverage, geographically and/ or channel wise.

Segmenting the market once more

In fierce competition, competitors are likely to be dissecting the market in similar ways. Over an extended period of time, the effectiveness of a given initial strategic segmentation will tend to decline. In such situations it is useful to pick a small group of customers and reexamine what it is that they are really looking for.

A market segment change occurs where the market forces are altering the distribution of the user-mix over time by influencing demography, distribution channels, customer size, etc. This kind of change means that the allocation of corporate resources must be shifted and/ or the absolute level of resources committed in the business must be changed.

T H E C O M P E T I T O R S

Competitor based strategies can be constructed by looking at possible sources of differentiation in functions such as: purchasing, design, engineering, sales and servicing. The following aspects show ways in order to achieve this differentiation:

Power of image

When product performance and mode of distribution are very difficult to distinguish, image may be the only source of positive differentiation.

Capitalizing on profit- and cost structure differences

Firstly, the difference in source of profit might be exploited, from new products sales etc. Secondly, a difference in the ratio of fixed costs and variable costs might also be exploited strategically. A company with lower fixed cost ratio can lower prices in a sluggish market and hence gain market share.

Hito-Kane-Mono

A favorite phrase of Japanese business planners is hito-kane-mono, standing for people, money and things. They believe that streamlined corporate management is achieved when these three critical resources are in balance without surplus or waste. For example: Cash over and beyond what competent people can intelligently expend is wasted. Of the three critical resources, funds should be allocated last. The corporation should firstly allocate management talent, based on the available mono (things): plant, machinery, technology, process know-how and functional strength. Once these hito (people) have developed creative and

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imaginative ideas to capture the business’s upward potential, the kane (money) should be given to the specific ideas and programs generated by the individual managers.

THE ANSOFF MATRIX

The Ansoff Product-Market Growth Matrix is a marketing tool created by Igor Ansoff and first published in his article "Strategies for Diversification" in the Harvard Business Review (1957). The matrix allows marketers to consider ways to grow the business via existing and/or new products, in existing and/or new markets – there are four possible product/market combinations. This matrix helps companies decide what course of action should be taken given current performance. The matrix consists of four strategies:

MARKET PENETRATION (existing markets, existing products): Market penetration occurs when a company enters/penetrates a market with current products. The best way to achieve this is by gaining competitors' customers (part of their market share). Other ways include attracting non-users of your product or convincing current clients to use more of your product/service, with advertising or other promotions. Market penetration is the least risky way for a company to grow.

PRODUCT DEVELOPMENT (existing markets, new products): A firm with a market for its current products might embark on a strategy of developing other products catering to the same market (although these new products need not be new to the market; the point is that the product is new to the company). For example, McDonald's is always within the fast-food industry, but frequently markets new burgers. Frequently, when a firm creates new products, it can gain new customers for these products. Hence, new product development can be a crucial business development strategy for firms to stay competitive.

MARKET DEVELOPMENT (new markets, existing products): An established product in the marketplace can be tweaked or targeted to a different customer segment, as a strategy to earn more revenue for the firm. For example, Lucozade was first marketed for sick children and then rebranded to target athletes. This is a good

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example of developing a new market for an existing product. Again, the market need not be new in itself, the point is that the market is new to the company.

DIVERSIFICATION (new markets, new products): Virgin Cola, Virgin Megastores, Virgin Airlines, Virgin Telecommunications are examples of new products created by the Virgin Group of UK, to leverage the Virgin brand. This resulted in the company entering new markets where it had no presence before.

The matrix illustrates, in particular, that the element of risk increases the further the strategy moves away from known quantities - the existing product and the existing market. Thus, product development (requiring, in effect, a new product) and market extension (a new market) typically involve a greater risk than `penetration' (existing product and existing market); and diversification (new product and new market) generally carries the greatest risk of all. In his original work [1], which did not use the matrix form, Igor Ansoff stressed that the diversification strategy stood apart from the other three.

While ansoff are usually followed with the same technical, financial, and merchandising resources which are used for the original product line, diversification usually requires new skills, new techniques, and new facilities. As a result it almost invariably leads to physical and organizational changes in the structure of the business which represent a distinct break with past business experience.

For this reason, most marketing activity revolves around penetration.

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COLOR PLUS

RAYMONDS

Raymonds was formed in 1925 to take over Wadia Wollen Mills plant situated in Thane in Maharashtra. In keeping with the growing business demand, Raymond’s commissioned plants also at Jalgoan and Chindwara in Maharashtra Mr.Vijaypat Singhania is the Chief Managing Director of the company Their present turnover is around 2000 crores. They have 250 union’s worker and 150 officers working in their company. The company’s subsidiaries include JK Chemicals, JK Helene Curtis and Raymond’s Calitri Denim. Raymond’s textile division accounts to about 57.5% of the companies revenue. Raymonds main product are 100% wool worsted suiting fabrics and blends of polyester wool and polyester viscose. In a market where branded sales command 80% shares, the company’s Raymond brand is well established as a mark of premium quality fabric. Raymond’s also markets a range in premium menswear like Park Avenue brand name. 

Mission Statement: To become a world class suiting manufacturing by 2010 and explore opportunities outside Maharashtra.

Color Plus is an initiative of Raymonds.

HISTORY

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ColorPlus is the brainchild of Viju Mahtaney and Rajan Mudaliar who were determined to create a global brand for the global Indian. Backed by two decades of experience in manufacturing garments for major international labels and recognising a virgin market opportunity, they took a pioneering step that became a trailblazer. The founders were confident that given their core competence in manufacturing and understanding fabric, they could create a global brand of even better quality than being offered by international majors. Right from the beginning, the company was clear on two basic premises: ColorPlus would target the up market, trend-savvy, highly exposed Indian consumer and that the brand would compete with international majors.

Attracted by the potential of Colorplus, 75-year old suiting giant Raymond acquired a majority stake in the company in February 2003. This strategic partnership has facilitated quicker retail expansion of the brand. It has also helped the young brand leapfrog into the global arena.

PRODUCT DIFFERENTIATION STRATEGY OF COLOR

The marketing strategy followed by the company is product differentiation strategy

Color Plus has always been known for its product innovation. Highest quality of fabrics and product engineering techniques set it apart from any other apparel brand across the globe. Since the inception, Color Plus has been in the forefront of product innovation.

All their garments are hand crafted to perfection. There ''chinos'' use patented wrinkle free processes ''6030'' to give that extra comfort and our XLA range with revolutionary fibers offers comfort stretch and crease retention. The shirts in Color Plus are manufactured from one of the finest fabrics and thus impart a very soft hand and feel to the product.

Color Plus follow a set of stringent quality norms to ensure a sound quality product before it reaches to customers. To eliminate the problem of button breakage, they follow thermo fusing of buttons which ensures the buttons of the garment stay intact for a longer time. Their stain free and wrinkle free trousers are Teflon coated which helps repel liquids and also ensures that stains wash off easily without the garment losing its brightness even after subsequent washes.

With such practices followed in their factories the customer is bound to get a quality and lasting product.

PRODUCTION MANAGEMENT USED BY THE COMPANY

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Premium Indian casual wear brand Colorplus recently implemented Lawson’s Fashion Product Lifecycle Management web-based system designed to facilitate product management from design to production.

With an increasingly competitive landscape and with future expansion opportunities in mind, ColorPlus needed a more efficient and standardized product lifecycle management system.

ColorPlus Fashions Limited is a subsidiary of Raymond Apparel Limited and is one of the largest premium-category smart casual wear brands in India. ColorPlus embodies the core values of quality, innovation and sophistication with superior fabric, unique processes and styling. To complement these values, ColorPlus selected the Lawson Fashion PLM solution.

Ptex Solutions, a Lawson channel partner, implemented the system at ColorPlus. The implementation process enabled ColorPlus to relook at its business processes, reduce leads time and improve controls leading to greater efficiencies. In addition, Lawson Fashion PLM enables more parallel activities to take during product development, easy accessibility to a central data repository and seamless sharing of important information across business functions. Automatically generated email notifications now keep users up to date on any modifications made to the styles, enabling them to provide instant feedback to the relevant people, thus avoiding critical delays and shortening time to market.

Lawson Fashion PLM facilitates the generation of product Specification Packs for the production of different styles, which are available online to the internal team at ColorPlus and can be easily shared directly with external vendors. Earlier, ColorPlus developers spent significant amounts of time using a combination of Microsoft Excel and Corel Draw applications to develop and manage multiple versions of the product Specification Packs.

SEGMENTATION, TARGETING AND POSITIONING OF THE

COMPANY

SEGMENTING

Segment market for the brand is the people with higher income group. Caters to upper middle

class of the society. It is both for men and women. They have also planning to enter into the

kidswear segment.

TARGETING

The brand caters to outgoing business professionals. It caters to upper class of the society.

They are the people who have high disposable income to spend on their clothing and

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apparels. Thet want to look different and unusual from the society. These are the clothes that

can be worn daily.

POSITIONING

Color plus positions itself as premium brand. It is known for smart casuals all over the

country. It uses no celebrity appeal for its endorsement. It is positioned in the minds of the

consumer using press launch release.

TOTAL REVENUE

The Company's turnover for the year ended March 2010 was marginally higher at Rs.154.28 crores (Previous Year: Rs.148.32 crores). The net loss for the year after taxes, was at Rs.3.40 crores (Previous Year; Net loss after taxes and exceptional items Rs.15.05 crores).

The performance of the Company was affected by the adverse consumer sentiments resulting in consumer down trading. In spite of this, the Company continues to be the market leader in the premium casual wear segment. During the year this Company exited from the women's wear and the kids wear segments, as a part of its rationalising initiatives.

With a view to consolidate this subsidiary's market leadership in the premium casual segment, various structural and strategic initiatives are under implementation. The Company is confident that these strategic measures will enable this subsidiary to report improved performance going forward.

SWOT ANALYSIS

STRENGHTS

Value creating partnership with customers and suppliers. Brand Management. Channel and supply chain management for competitive advantage. Celebrity advertising campaigns. Prime Locations. Well defined customer segment and lovely range of colors.

WEAKNESS

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No Provision for kids wear Lack of showrooms in mini-metros

OPPORTUNITIES

Wide market E-Branding Franchising Strategic Alliance

THREATS

Competition Trends

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Tommy hilfiger

COMPANY PROFILE

As one of the world's leading premium lifestyle brands, Tommy Hilfiger delivers superior styling, quality and value to consumers worldwide. The brand celebrates the essence of Classic American Cool and provides a refreshing twist to classic, American fashion.

Tommy Hilfiger Corporation markets menswear, womenswear, and childrenswear designed by Tommy Hilfiger. Hilfiger sells a complete line of clothing from socks to shirts, swimwear, jackets, pants, belts, wallets and ties, as well as sleepwear, golf clothes, eyewear, cosmetics, bedding, and home furnishings. The company operates 15 specialty stores, ten Tommy Jeans stores, a Tommy Hilfiger Children's store, and a dual concept store. Hilfiger also operates 102 company outlet stores that offer branded products as well as out-of-season merchandise. Tommy Hilfiger products, which bear the well known red, white, and blue logo, can also be found in department stores and are marketed in over 55 countries across the globe.

Tommy Hilfiger is one of the world's most recognized premium lifestyle brands and one of the largest designer apparel brands globally. For over twenty years, Tommy Hilfiger has offered consumers around the world a range of high quality product lines including men's, women's and children's casual apparel, sportswear, denim, and a range of licensed products such as accessories, fragrances and home furnishings. Tommy Hilfiger has been built upon a powerful design philosophy - Classic American Cool - which brings a fresh perspective to traditional, all-American styling by giving time-honoured classics an updated look for today. Distributed in over 65 countries, the Company's products can be found in its network of nearly 800 dedicated retail stores, as well as in leading specialty and department stores around the world. The brand is supported by approximately 8,000 employees from around the world who share the Tommy Hilfiger values: those of quality, respect, entrepreneurship, optimism and the spirit of youth.

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From the blacktop to the greens, Tommy Hilfiger Group (THG) has it covered. The famous designer's namesake casual wear is worn by rap, rock, teen, and sports stars and fans. THG designs, sources, makes, and markets men's and women's sportswear and denim wear, as well as athletic wear, children's wear, swimwear, and accessories. Through extensive licensing deals, THG also offers products such as fragrances, belts, bedding, home furnishings, and cosmetics. Its clean-cut clothing is sold in about 950 major department and specialty stores and Tommy Hilfiger shops and outlets.

COMPANY PERSPECTIVES

The Tommy Hilfiger Corporation is dedicated to living the spirit of the American dream. We believe: the spirit of youth is our greatest inspiration; resourcefulness is the key to value and excellence; in making quality a priority in our lives and products; by respecting one another we can reach all cultures and communities; and by being bold in our vision we continually expand our boundaries.

KEY STATISTICS ABOUT TOMMY HILFIGER

Tommy Hilfiger Headquarters Address

Stadhouderskade 6

Amsterdam, Kowloon 1054 ES

Netherlands Phone: 0031 20 5895576

Secondary Phone: 0031 20 5899801

Headquarters Amsterdam Area, Netherlands

Industry Apparel & Fashion

Type Privately Held

Status Operating

Company Size 1,000 employees

2009 Revenue 1,600,000,000 [EUR]

Founded 1985

Website http://www.tommy.com

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KEY DATES

1977: Tommy Hilfiger's first company, People's Place, declares bankruptcy. 1984: Mohan Murjani contacts Hilfiger to design a clothing line for his firm. 1985: The Tommy Hilfiger clothing line debuts. 1987: Retail sales of the line reach $70 million. 1988: Tommy Hilfiger Co. Inc. is established. 1992: The Company goes public. 1996: The women's line debuts at over 400 major department store shops. 1998: Hilfiger launches its bed and bath line; the firm acquires its Canadian licensees and a portion of Pepe Jeans USA for $1.15 billion. 2001: Sales and net income falter.

SEGMENTATION AND TARGETING OF TOMMY HILFIFER

CUSTOMER PROFILE

Demographic Segmentation

Age: 20 to 35 years

Gender: male (since we are concentrating on menswear)

Income range: Rs. 30, 000 and above monthly income

Psychographic segmentation

The store caters to consumers who are individualistic, fun-loving, informed and also impulsive. These individuals are educated and are aware of the latest trends and fashions around the world. They enjoy wearing good quality clothes and are fashion conscious. They are impetuous and full of fun. This age group’s motto is not to save and they feel consumer spending can make them happy.

Therefore, to cater to its customers, the brand offers clean-cut, simple and recognizable designs which have led to it being considered one of the highest-ranked publicly traded clothing companies.

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MARKETING MIX OR 4P’s OF TOMMY HILFIGER

PRODUCT LINE

Tommy Hilfiger, including men's, women's, children's, Footwear, swim, fragrance, accessories, and home. It also has Hilfiger Denim for men and women. Hilfiger Sport, including fitness, golf, sail, ski, and swim. Tommy also offers products such as fragrances, belts, Bedding, home furnishings, and cosmetics. The Company’s clean-cut clothing is sold in major department and specialty stores as well as some 165 Tommy Hilfiger shops and outlets.

Tommy offers almost 40 product line

Three categories Tommy Hilfiger Hilfiger Denim Hilfiger Sport

TOMMY HILFIGER

•Target audience: 25- 45 years of age.•Tommy Hilfiger label appeals to those seeing new interpretations in classic American styles•Tommy collection consists of casual sportswear n accessories for men, & women that reflect the classic American brand mission.•Tommy includes products for men, women and children

HILFIGER DENIM

•Hilfiger denim speaks to a younger target of 18-28 year old denim oriented customers.•The label consists of casual sportswear with a focus on premium denim-related, separate for men & women.•The collection is slightly more “fashion forward” than the main TOMMY HILFIGER Label.•Designs are inspired by American classics & finished with a modern edge & fresh spirit.•The products are sold at dedicated retail stores, department stores, & specialty store

HILFIGER SPORTS

•Targeting the 18-45 year old Customers, Hilfiger sportswear consists of high performance active wear for men & women including apparels for fitness/ training, golf,swimming, sailing, skiing.

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•Hilfiger sportswear are sold at dedicated retail stores, department stores, & specialty stores in Europe and Japan

PLACE

The place refers to placement (usually managed by sales or OEM) , such as having the product available when and where targeted cutomers want to buy it.

Hilfiger in 98 cities in India through about 1,000 stores covering metros and semi metros

SOME OF TOMMY HILFIGER’S ADVERTISEMENTS

From the below Tommy Hilfiger advertisements, we see that a Tommy customer has the following lifestyle:

He belongs to either well-established business segment or has a well paying job.

This segment of consumers is brand conscious.

They are sophisticated, at the same time elegant in their way of dressing.

They are focussed, goal-directed and self confident men.

They are young men whose taste in clothing combines the classical with the contemporary.

Thus, Tommy Hilfiger is a brand that bridges casual wear and formal wear. It is a good mix of silhouettes and styling.

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MARKET PENETRATION STRATEGY OF TOMMY HILFIGER

Since the market is in the international orientation, the advertisers should keep in mind the differences that are distinct between and among the target market from different cultural backgrounds which may significantly affect the affectivity of the campaign. The fact is, there may be ideas that will not be applicable across the diverse target market population. Studies on the relationship of consumer behaviour and their personal values and cultural orientation as well as their beliefs on certain principles, the dispositions they hold and side they take on political, gender and social problems and issues should be duly accorded.

Most successful international brands can clearly define their target consumer without a reference to nationality or ethnic background. Tommy Hilfiger is targeting a consumer that is international in nature and is cosmopolitan to an extent. It does not necessarily mean that they attract only the younger crowd. Many retail brands like Brooks Brother and Austin Reed attract consumer from an elder age group across countries for their classic and sophisticated fashion items. Tommy Hilfiger is engaged in principally one industry segment, the design, importation and distribution of men’s sportswear and children’s wear. 

Tommy Hilfiger, through its subsidiaries, designs, sources and markets designer men’s sportswear and boys wear, including woven shirts, knit shirts, pants, swimwear, sweaters, outerwear and athletic wear. These offerings are complemented by collections of men’s tailored clothing, dress shirts, denim products, neckwear, socks, underwear, belts, small leather goods, sleepwear, robes, golf wear, foot wear, sunglasses, prescription eyewear, women’s casual wear and men’s and women’s fragrances, among others, bearing the Tommy Hilfiger ® trademark, which are produced and sold pursuant to certain licensing arrangements. Tommy Hilfiger is the company’s principal designer and provides leadership and direction for all aspects of the design process. The company’s sportswear is designed to combine classic American styling with unique details and fit to give time honoured basics a fresh and updated look for customers who desire high quality, designer clothes at competitive prices.

 In addition to continuing to expand the in-store shop program, the company plans to grow by broadening its range of product offerings, both in-house and through licensing arrangements, and by expanding its channels of distribution. Through the expansion of its product lines, the company believes it will serve a wider variety of customer needs.  The company has introduced new products, a women’s fragrance pursuant to its license with Aramis, Inc., a division of Estee Lauder Companies, prescription eyewear with Liberty Optical, footwear with the Stride Rite Corporation and women’s casual wear marketed under a license with Pepe Jeans London Corporation.

Wholesale distribution is centralized in a 360,000 square foot New Jersey facility to which all products are shipped. The facility is operated and principally staffed by an independent contractor who charges the company on the basis of the number of items processed, subject to

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a minimum annual fee. The company has the right, at any time during the contract period, to terminate the distribution agreement by making a specified payment. In addition, the company leases a 200,000 square foot facility in New Jersey for retail distribution. The company believes that these distribution facilities are adequate for the company’s current level of sales, and provide the company with enough space and flexibility to support the continued growth of the company’s business.

In July 1991, the company was granted an exclusive license to sell the company’s products in Canada. The term of the agreement is 10 years and is renewable at the option of the licensee subject to specified volume limitations and other conditions. In addition, the company has granted an exclusive distributorship to an unaffiliated Panamanian company to distribute the company’s products in Central America, Venezuela, Columbia, Chile, Ecuador and most of the nations of the Caribbean basin, and even to India. In May 1995, the company was again granted the license to distribute its products in Mexico for 3 years term and is renewable at the option of the licensee. On February 1, 1997, the company entered into an agreement with Pepe Jeans London Corporation to distribute the company’s men and boy’s sport wears (excluding jeans wear and jeans related apparel) throughout the European Market (2003).

All pricing decisions are made at the Company's corporate headquarters. The Company's pricing strategy is designed to provide superior quality and value appeal by offering competitive prices on fashion from better national brands. The Company has effectively been able to generate sales from promotions with special pricing of limited duration. The Company's management information systems provide timely sales and gross margin reports that identify sales and gross margins by item and by store and provide management with the information and flexibility to adjust prices and inventory levels as necessary. Tommy Hilfiger products are available in the range of $40-$500 globally. Tommy Hilfiger products are mainly sold in the US market through leading retail chains such as Macy’s. Tommy Hilfiger has a huge 20,000-sq ft retail space in some Macy’s chains in the US (Bryant, 2003).

Most fashion pundits will agree that the secret to developing an upscale brand begins with creating a luxury-priced collection that sets the pricing, segmenting and targeting of the lower-priced labels below it. Many argue that by developing a mid-range street wear collection first, Tommy created a consumer perception of the brand as a more expensive street wear collection, but not necessarily a designer label. Tommy’s strategy may have worked better by creating a black label luxury collection first, getting it into high-end retail stores, generating a strong designer positioning and creating a certain luxury feel. Once established, the company would have been well positioned to develop lower-tiered labels targeted to other audiences and retail stores. This was further compounded by Tommy’s struggle with global trademark infringement and counterfeiting issues. These problems gave Hilfiger that “sold everywhere to everyone” mindset that tends to erode a brand over time (Associated Press, 2003).

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SWOT ANALYSIS OF TOMMY HILFIGER

Strengths 

High R&D  Innovation Loyal customers Strong brand equity Strong financial position

 Weaknesses 

Not diversified Not Famous

Opportunities 

Acquisitions Innovation Product and services expansion

 Threats 

Competition Economic slowdown Lower cost competitors or imports Increase in demand of suppliers makes drop sales of Tommy Hilfiger

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LEVI STRAUSS & CO.

COMPANY OVERVIEW

Levi Strauss & Co., together with its subsidiaries, operates as a branded apparel company. It

designs and markets jeans and jeans-related pants, casual and dress pants, tops, jackets,

footwear, and related accessories for men, women, and children under the Levi’s, Dockers,

and Signature by Levi Strauss & Co. brand names. The company licenses its trademarks for

an array of products, including accessories, pants, tops, footwear, and home products. Levi

Strauss & Co. distributes its Levi’s and Dockers products primarily through chain retailers

and department stores in the United States, and through department stores, specialty retailers,

and franchised stores internationally; and Signature by Levi Strauss & Co. products

principally through mass channel retailers in the United States and Canada, and through mass

and other value-oriented retailers and franchised stores in the Asia Pacific. It also distributes

Levi’s and Dockers products through its online stores, and Levi’s, Dockers, and Signature

products through company-operated stores. As of November 29, 2009, the company had 414

company-operated retail stores located in approximately 26 countries; and approximately

1,500 franchised or other licensed stores. Levi Strauss & Co. markets its products in the

Americas, Europe, and the Asia Pacific. The company was founded in 1853 and is

headquartered in San Francisco, California.

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They have been the innovation leader in apparel since 1873, the year they created the world's

first blue jean.  They didn't stop there.  They have had an impact on every decade since, from

active-wear for women in the early 20th century, to leading the casual business-wear

revolution of the 1990s with the Dockers® brand, to providing everyday values with the Levi

Strauss Signature® brand. 

Being a leader in corporate citizenship is just as important to them as being an apparel

innovator. Levi Strauss himself started this tradition and they are keeping the spirit of his

commitment to corporate citizenship alive.  They opened integrated factories in the American

South before it was mandated by the government, they were one of the first to create

responsible product sourcing guidelines and pioneered policies to help employees with

HIV/AIDS.

Throughout their long history they have driven change in the marketplace and in the world,

offering products that are right for every generation.

Levi Strauss & Co. (LS&CO) is a privately held clothing company known worldwide for its

Levi's brand of denim jeans. It was founded in 1853 when Levi Strauss came from

Buttenheim, Franconia, (Kingdom of Bavaria) to San Francisco, California to open a west

coast branch of his brothers' New York dry goods business. Although the company began

producing denim overalls in the 1870s, modern jeans were not produced until the 1920s. The

company briefly experimented (in the 1970s) with employee ownership and a public stock

listing, but remains owned and controlled by descendants and relatives of Levi Strauss' four

nephews.

KEY STATISTICS

ADDRESS:

1155 Battery Street

San Francisco, CA 94111

United States

Founded in 1853

11,800 Employees

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Phone: 415-501-6000 begin_of_the_skype_highlighting              415-501-6000      end_of_the_skype_highlighting

Fax: 415-501-7112

www.levistrauss.com

KEY EXECUTIVES

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LEVI’S VALUES & VISION

We are the embodiment of the energy and events of our times, inspiring people with a pioneering spirit.

We believe that business can drive profits through principles, and that our values as a company and as individuals give us a competitive advantage.

Empathy — walking in other people’s shoesEmpathy begins with paying close attention to the world around us. We listen and respond to the needs of our customers, employees and other stakeholders.

Originality — being authentic and innovativeThe pioneering spirit that started in 1873 with the very first pair of blue jeans still permeates all aspects of our business. Through innovative products and practices, we break the mold.

Integrity — doing the right thing Integrity means doing right by our employees, brands, company and society as a whole. Ethical conduct and social responsibility characterize our way of doing business.

Courage — standing up for what we believeIt takes courage to be great. Courage is the willingness to tell the truth and to challenge hierarchy, accepted practice and conventional wisdom. It means standing by our convictions and acting on our beliefs.

They are the embodiment of the energy and events of our time, inspiring people from all walks of life with a pioneering spirit. Generations have worn Levi’s® jeans, turning them into a symbol of freedom and self-expression in the face of adversity, challenge and social change. Their customers forged a new territory called the American West. They fought in wars for peace. They instigated counterculture revolutions. They tore down the Berlin Wall. Reverent, irreverent — they took a stand.

SEGMENTATION, TARGETING AND POSITIONING OF LEVI’S

MARKET SEGMENTATION

Market segmentation is the selection of groups of people who will be most receptive to a product. The most frequent methods of segmenting include demographic variables such as age, sex, race, income, occupation, education, household status, and geographic location; psychographic variables such as life-style, activities, interests, and opinions; product use patterns; and product benefits. Much segmentation involves combinations of these methods.

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No matter how segments are defined, however, they are characterized by considerable change over time. The readings in this section exemplify areas of rapid change.

Basis of Market Segmentation:

Demographic segmentation Geographical segmentation Psychographic segmentation Behavioural segmentation

TARGET MARKET

501® JEANS targets its market by evaluating the wants of customers. Mostly Levi’s targets its market among the following classes.

Upper Class Upper Middle Class

TARGET MARKETING STRATEGY

Target market strategy adopted by Levis is basically on having long-term relations with their customers and to provide them with better product.

BENEFITS OF SEGMENTATION

Levis has got customer oriented approach by segmentation. Company is promoting its products effectively within segments by print media as well as electronic media, e.g. Newspapers, Signboards, Television commercials, Internet, etc. Company is providing their customers with stylish better quality and different product keeping in view its cost

POSITIONINGLevis position itself as a rugged jeans wear brand. Advertising professionals realize that the heart of any campaign is the product and the position it holds in people’s minds. Products and their brand names are newsmakers themselves. Understanding the complexities of a brand identity and its position is no easy task. One of the most controversial areas of product concept is the brand extension. A new product gets to share the name of an older, established brand. Early suggested that brand extension would sap market clout from the established product, but these fears proved groundless. Today brand extension occurs not only within the company, but companies are

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licensing their brand names to all kinds of products in the hope of increasing brand awareness.

MARKETING MIX or 4p’S of levi’s

PRODUCT LINE

Product means set of tangible and intangible attributes which may include packaging, color, price, quality and brand plus the seller’s services and reputation. A product may be a place, service, good or promotion.

BRANDS Brand is a name, term, sign, symbol or design that adds value to the products. LS & CO.

Their brands are among the most celebrated names in the history of apparel. They are recognized for their quality, originality and integrity.  

The brands they market clothe the world.   Around the globe, the names Levi’s® and Dockers® represent the original, authentic and peerless standard for denim and khakis.  More recently, their Signature by Levi Strauss & Co.™ brand has set a new benchmark in family clothing known for quality craftsmanship, premium fit and exceptional value. And now, dENiZEN™ joins the family as a global jeans brand for a new generation.

The Levi’s® brand epitomizes classic American style and effortless cool.  Since their invention by Levi Strauss in 1873, Levi’s® jeans have become the most recognizable and imitated clothing in the world – capturing the imagination and loyalty of people for generations. Today, the Levi’s® brand portfolio continues to evolve through a relentless pioneering and innovative spirit that is unparalleled in the apparel industry.  Our range of leading jeanswear and accessories are available in more than 110 countries, allowing individuals around the world to express their personal style.

“Wear the Pants” — the new brand platform celebrates the reemergence of khaki as a masculine, everyday way for men to distinguish themselves. The intent of the campaign is to put forth a new definition of masculinity, one that embraces strength and sensitivity and ultimately encourages men to once again “Wear the Pants™.”

The Dockers® Brand has defined authentic khaki for more than 20 years. Since its introduction in 1986, the Dockers® brand has been perfecting khakis — and the essential

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goods to go with them — for men and women all over the world. No compromises in quality. Just versatile, essential style. We have taken an enduring, admired brand and made it stronger. Last fall, Dockers® embarked on a journey to reinvigorate the khaki category, with a new and improved Signature Khaki line and Soft Khakis collection in stores across the United States, as well as a global marketing campaign, “Wear the Pants.” More styles. New fits. Bold colors. And a debate about the modern definition of masculinity that is helping to reignite the khaki category. We have taken the category we owned and reinvented it for today.

Khaki is back.

Signature by Levi Strauss & Co.™ jeans are sewn from premium heavy-weight denim for exceptional durability, then carefully detailed with vintage-inspired finishes — leaving you with a one-of-a-kind pair that truly lasts.

The Signature by Levi Strauss & Co.™ brand, launched in 2003, demonstrates that distinctive products, with premium fabrics and finishes, can be available to people from every walk of life.

The brand offers high-quality, fashionable jeans at affordable prices to value-conscious consumers at stores like Walmart, Target and Kmart.

With denim and casualwear for men, women and children, Signature by Levi Strauss & Co.™ apparel is the ideal fit for families who know the value of quality craftsmanship and quintessential style — the very things that have made Levi Strauss & Co. brands world famous for generations.

The Signature by Levi Strauss & Co.™ brand includes a collection of denim and non-denim pants, shirts, skirts and jackets for men, women and children. “Superior Fit, Comfort and Style” are the words emblazoned on the patch of every pair of our Signature jeans.

The dENiZEN™ brand has a modern focus that takes everything you love about a classic pair of jeans and makes them relevant to trends right now.

dENiZEN™ was created by Levi Strauss & Co. as a global jeans brand for a new generation. 137 years after outfitting the American West with jeans that became the uniform of the pioneering spirit, Levi Strauss & Co. is outfitting the new global citizen for a bright future, supplying jeans and other essentials for an on-the-go, engaged life.

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dENiZEN™ means “inhabitant”: living in a place, living on earth, just being. Denim is in the name, the heart of the brand. And dENiZEN™ has another great meaning too: the idea of someone who frequents a particular place, the idea of belonging to a community of friends and family.

dENIZEN™ takes this generation’s motivated and forward-thinking mentality and combines it with Levi Strauss & Co.’s iconic jeans-making heritage to make quality jeans that are fit for everybody.

dENiZEN™ now available in China, Korea and Singapore.

PRICE LINE

It can be simply defined as: The currency value charged to a Client by the company for a product or service. Is one of the most important elements of the marketing mix, as it is the only mix, which generates a turnover for the organization, the remaining 3p's are the variable cost for the organization. It costs to produce and design a product it costs to distribute a product and costs to promote it.

List Price:

Levis all products are sold at listed price, which are settled by the Company (Singapore). There is no discount to offer.

Credit Sales:

Company also deals with credit sales, but don’t overcharges to the customers, company pay it our self to the bank (3%). Products are only sold for cash or on credit cards. Discount:

Levis don’t give the discount to customers, even to the employees of the Levis. Company prices are fixed.

Payment Period & Credit Terms are settled by the company

Price Determination:

During the determination of the price company not considered the competitors, but the standard that is used is considered. Company’s price is influenced by the following factors:-

Cost of the product

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Affordable for the target market Demand of the product Uniqueness and innovative features of the products

PLACE

Placement objectives:- To equalize the demand and supply of products at all places.

To provide desired products at proper place. To fulfill the requirements of every locality according to the taste of the people To increase the brand equity by reaching every corner of the world

PROMOTION

For the promotion of sales Levi Strauss & Co. adopt a very effective but comprehensive strategy. Levis pays attention to the publicity of its products. The major source of promotion of Levi’s is done by creating public relations. The sales promotion of LEVIS targets the end consumers. Since the Levi’s JEANS are in growth stage in India, therefore, the promotional Strategy is based on persuading of prospective buyer.

Levi’s uses the following promotional strategies to promote its product:

Personal selling- Personal selling by the representative of the organization takes place face to face with final consumers. Mass selling- Levis does mass selling to inform a bulk of persons by advertising.

Advertising Medium The advertising media used by the company are

Television Fashion Magazines, Newspapers Internet Bill boards, banners etc.

1. Advertisements of Levi Strauss & Co. are very innovative and eye-catching. Buyers are attracted towards the product. The advertisements are placed at the international level 2. For fashion magazines and newspapers LS&Co. is a target due to its grand brand equity, it has become a benchmark for all the others to follow. The newspaper gives coverage to the social events in which LS &Co takes part with great interest. Whereas fashion magazines are always dealing with the gorgeous models working with LS& Co and the unique outfits of the model.

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3. Levis provides up-to-date information to their customers through electronic media i.e. from their website.4. Billboards and banners are also used for the advertisement purpose.

Levi's marketing style has often made use of old recordings of popular music in television commercials, ranging from traditional pop to punk rock. Notable examples include Ben E King ("Stand By Me"), Percy Sledge ("When a Man Loves a Woman"), Eddie Cochran ("C'mon Everybody!"), Marc Bolan ("20th Century Boy"), Screamin' Jay Hawkins ("Heart Attack & Vine"), The Clash ("Should I Stay or Should I Go?"), as well as lesser known material, such as "Falling Elevators" by MC 900 Ft. Jesus and "Flat Beat" and "Monday Massacre" by Mr. Oizo.

Many of these songs were re-released by their record labels as a tie-in with the ad campaigns, resulting in increased popularity and sales of the recordings and the creation of iconic visual associations with the music, such as the use of a topless male model wearing jeans underwater in the 1992 adverts featuring "Wonderful World" and "Mad about the Boy" and the puppet, Flat Eric, in the ads featuring music by Mr. Oizo.

Some of Levis Print Advertisements

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PATH BREAKING INNOVATION (PIONEERS & MARKET LEADERS) STRATEGY BY LEVI’S

Close followers, late follower and Pioneers are types of innovation strategies. Innovation strategies are meant to trigger the rate of product development and model innovation. It helps the firm to incorporate latest technologies.

LEVIS ADOPTS INNOVATION MARKETING STRATEGY AND THEY ARE THE PIONEERS. THEY POSITION THEMSELVES AS THE MARKET LEADERS IN THE INNOVATION STRATEGY.

There are five significant strategies to consider when planning your marketing approach. Position yourself as a market leader, challenger, follower, and niche marketer or form an alliance to attack the market with increased power. Consider a mix of strategies to make the most of your strengths and take advantage of your competitors' weaknesses.

According to a white paper published by Iowa State University, maintain your position as market leader in one of three ways.

First, expand the total market by increasing the total number of users. Lead the way by finding a new market or creating a new use for an old product. Look for new markets in other demographics or expand into more locations.

Second, defend your current share of the market. You can enhance your product offerings, as in as a supermarket adding banking services or video rental. Another option is to reduce weak products or services and build up the strongest ones.

Third, expand your market share by aggressively attacking your competitor through a variety

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of strategies. Offer coupons promote sales and advertise benefits your competitor doesn't have, such as longer shop hours or more personalized service.

Levi’s, one of the leading denim wear companies across the globe, has once again come up with something new and innovative. This time it has nothing to do with the likes of unbuttoned jeans or for that matter, any kind of new product innovation. It has now come up with a unique marketing strategy which could take the apparel market into an all-new era. We have heard about EMIs for houses, cars and other white goods; but has anyone heard about EMIs for jeans? This idea has been conceptualised by Levi’s. Downturn market, cost cutting everywhere and empty pockets is the present situation; and here to curb all these hindrances, Levi’s is now, for the first time ever offering EMI facilities on its apparel wear in India. Simply shop for more than Rs. 1500 and you can avail this offer. This amount will be set off through your credit card in three equal instalments. They have also tied up with ICICI Bank for the credit card settlement. This idea is still in its early stage and is being experimented in Bangalore and a few other cities. Once successful there, the same will be implemented across India.

On the basis of my understanding and going through an interview of Mr. Shumone Chatterjee, MD of Levis Strauss India, I have jotted down the reasons for this strategy, its impact on Levi’s and its competitors and also on its customers.

Objectives behind the strategy:-

1. To increase the sales of premium jeans wear category that is worth more than Rs. 4000 per denim.

How will this objective be achieved: The premium jeans wear market is completely driven by the high income group people, which do not contribute to a large customer base. Hence, to induce the upper middle class to buy this range of products, some incentive needs to be given. By bringing in this strategy, Levi’s has shifted the one time burden of Rs. 4000 to EMIs. Therefore, this strategy will bring in a new customer base for its premium products.

2. To ensure sales throughout the year irrespective of seasonality.

How will this objective be achieved: Indian market for apparels is highly driven by seasonality (maximum purchase happens during the festive season across India). Hence, there is excessive cash with these apparel brands during festivals like Diwali and Durga Puja. At the same time, there is a cash crunch during off seasons. Also, a huge percentage of service class people buy products during the first half of the month when they receive their salary, due to which sales at the end of the month decline. This further deepens the problem of cash crunch or rather working capital crunch, during off season and second half of the month.

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Working capital as we know is the key to success in any business, especially in sectors like FMCG, hospitality and lifestyle (which include apparels). This strategy may be to ensure a steady cash flow throughout the year, so that the problem of healthy working capital can be ensured.

3. To ensure better conversion ratio.

How will this objective be achieved: Two types of customers have been identified by the apparel brands which are tough nuts to crack. First being those for whom purchase of jeans and other apparels depends on impulse. By providing EMI on jeans, Levi’s will ensure that there is an added reason by which these impulses can be generated by the company rather than waiting for the consumers to activate and act upon their impulse. The second set of customers is not customers per se but is termed as ‘window shoppers’. Even for this set of customers, Levi’s (through EMI) will make its jeans more lucrative and at the same time will not be a big cut on their pockets.

Outcome of this strategy for its competitors:-

1. It will pressurize other premium apparel brands to contemplate a ‘me too’ strategy.2. It will provide direct competition to unbranded jeans wears companies. Those consumers who want to wear branded clothes but cannot afford spending Rs. 1500- Rs. 4000 at a time will now have better options in hand.

Outcome of this strategy on customers:-

1. Lower income group and middle income group can now afford branded and premium apparel.2. Those customers who want to buy apparels on certain occasions such as birthdays or other festive occasions and even those who want to buy them to gift to others, but could not afford to do so because of tight purse strings, can now be relieved of spending too much at one point of time.3. This strategy will be pocket friendly. However, this may increase per capita spending of the consumer as the payment is delayed. The strategy will simply make these premium brands look more affordable to bring in new sets of customers. However this lucrative offer may simply increase total spending, as it now looks affordable.4. These sets of consumers may no longer feel Levi’s is a premium brand as it will now be affordable to all the income groups and they may not like to be associated with Levi’s anymore. This strategy may back fire on Levi’s as it may lose its upper middle class and upper class consumers.

So, where do we go from here? Which other product category will come up with such lucrative offers for the middle class group?

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This is a great way to get different income groups closely knit. However, this may as I mentioned, backfire also. So let us wait and see how successful this strategy will become. Who all will follow the same strategy and which other categories will get into it? Let’s wait and watch.

SWOT ANALYSIS OF LEVIS

Levi Strauss & Co is world’s most successful brand of clothing. Founded in 1853 by Bavarian immigrant Levi Strauss, Levi Strauss & Co. is one of the world's largest brand-name apparel marketers with sales in more than 110 countries. There is no other company with a comparable global presence in the jeans and casual pants markets. Its market-leading apparel products are sold under the Levi's®, Dockers® and Levi Strauss Signature® brands.

STRENGTHS

Levis' are the original, authentic jean. They were a hit with baby boomers decades ago when they were in their teenager years. Another is that they stood for something beyond profit.   The family took pride in providing quality products, personal service, and fair treatment.   The family name and tradition was associated with respect for people—customers, employees, and the community.   • Market share: Having been around for one hundred and fifty years, Levi’s has been able to gain and hold a specific share of the clothing industry. Other companies do not come close to its jean sales.• Financial strength: Levi Strauss & Co. brings in billions of dollars in revenue each year and continues to be very strong

WEAKNESSES

The company began to rapidly lose market share to newer, trendier, more aggressive brands and designer labels. The Levi brand lost luster and relevance to the younger generation. Levi's jeans are perceived to be their “parent's jeans.” For that reason they will wear anything else but a pair of Levi's. This perception is an ongoing marketing problem and the company is struggling to find a way to reverse the brand's fortunes. Their tradition of promoting within may have started their dark side.   Long-term managers became used to doing things a certain way, and kept new ideas and new blood at a distance. Since the company was so committed to its employees, it kept the younger recruits with new ideas from finding a place.   They were so inwardly focused, that they missed the great changes occurring in the fashion world.   Their main flaw was that they did not have a clear developmental strategic plan, did not pay attention and learn new technologies, and did not keep track of the competition, market and consumer tastes.  

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OPPORTUNITIES

In today’s society, the consumer is becoming more leisure oriented, and wears jeans more often. Levi’s is still on top, and hold the majority of the market share in jeans sales.   Their biggest opportunity is to expand their market.   Mega retailers like K-Mart, Wal-Mart, and other large retailers do not currently sell Levi’s.   It would be a great opportunity to increase sales and find a new market with a younger generation.  

THREATS

Although Levi’s has experienced many opportunities and much growth throughout its history, the company must be aware of potential threats. One critical threat that the company faces is the decline of global cotton production. Cotton prices have increased since global cotton production decreased in 2009. Denim is made entirely out of cotton. Therefore, increased cotton prices affect higher raw material cost and lower company margins.

UNITED COLOR OF BENETTON

COMPANY PROFILE

United Color of Benetton is an Italian Company formed by three brothers and a sister. Luciano was in charge of marketing, Guiliana directed the design department, Gilberto administration and finance and Carlo production. Luciano Benetton lost his father in 1945 he used to sell newspaper but in the sixties he and his sister Guiliana opened a small pull-over company.

Benetton Group is present in 120 countries around the world. Its core business is fashion apparel: a group with a strong Italian character whose style, quality and passion are clearly seen in its brands, the casual United Colors of Benetton, the glamour oriented Sisley, the leisurewear brand Playlife.

The Group produces around 115 million garments every year. Its network of around 6,000 contemporary stores around the world, offers high quality customer services and generates a total turnover of over 2 billion euro.

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Established in 1965, Benetton is now controlled by Edizione Srl (a holding company wholly owned by the Benetton Family) with a 67% stake. It listed on the stock exchange in Milan in 1986.

Benetton Group’s corporate headquarters is located at Villa Minelli in Ponzano, about 30 km from Venice. The villa was acquired by Benetton in 1969, from the mid 1980s Villa Minelli became the headquarter of the Group and home of all the strategic functions. Benetton has an international style that combines color, energy and practicality. In 1963 Benettons opened their own shops, creating a network of exclusive distributors and using sub-contractors.

STRATEGIC STATEMENT

Core purpose: Color the World.

Mission: “To allow families and individuals an easy access to relevant world class fashion products for every occasion of their life in an inspiring retail environment”.

Vision: “Benetton in Every Wardrobe”.

Core Values: Passion Execution Entrepreneurial Spirit Value for people Collaboration

Benetton’s core business is fashion apparel: a group with a strong Italian character whose style, quality and passion are clearly seen in its brands, the casual United Colors of Benetton, the glamour oriented Sisley, the leisurewear brand Playlife.

ABOUT THE BRAND

A global brand, and one of the most well known in the world, United Colors of Benetton has an international style that combines color, quality and fashion. Each season the women’s wear, menswear, children’s wear and underwear collections offer a total look for everyday, for work and for leisure, in the city and outdoors. The Benetton Baby label is a new product line dedicated to the prenatal and the under-fives world.

The brand is present in many other sectors, from the elegant accessories to the eyewear lines and perfumes, from the home collection to baby products. The above products are available in selected specialized shops worldwide.

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SEGMENTATION, TARGETING AND POSITIONING OF UNITED COLORS OF BENETTON

SEGMENTING

The brand segments to the higher income group people who have high disposable income. They can afford to spend a huge amount of money on apparels, clothing and accessories. They are the upper class of the society.

TARGETING

Popular brand in the 18 -22 age group - increased focus will deliver incremental value 93% spend less than Rs 5000 on a single purchase at UCB T shirts cut across all age groups

Perceived as a casual brand

Focus on MRPs between Rs 1000- Rs 3000

Average bill amount peaks in age group 22-26 and then declines

Ranked highest in terms of fit, style and quality

Sales staff and the store front team are a comparative advantage

3 million young earners in the age group 20-24 annually in India

UCB is a brand for youth they have very few styles especially targeted at them

Knits and denim have below average sell

Merchandise targeted at the youth has the potential to improve company sales

POSITIONING United Color Of Benetton positions itself as a

global brand. Different ad campaigns are

used for this purposeCreati

n g added value for the brand: this is the aim of United

Colors of Benetton corporate communication. It contributes to creating

the image of a global enterprise that invests in research, is modern and projected towards the future, emphasising its principal and most

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important characteristic: uniqueness.Today the adventure continues; Fabrica, Benetton Group's Communication Research Centre promotes

the brand, consistent with Luciano Benetton's belief that 'communication should never be commissioned from outside the

company, but conceived within its heart'.MARKETING MIX OR 4P’S OF THE COMPANY PRODUCT RANGE Every

organization has a structure formal or informal as well an offerering that may be a product or service so is UCB. UCB is a mid segment

contemporary casual wear brand that offers value for money products. UCB is known for its best quality and trendy Apparels and accessories

whereas its strength lies in the innovative color palette. It serves merchandise for all three categories i.e. Men Women & Kids.UCB’s

Merchandise mix includes: Apparel – Denim –Bottoms, Jackets, dresses, Tops/Blouses, Shirts. Woven- Shirts, Jackets &

Blazers, Bottoms, Tops & Blouses, Dresses. Knits –Blouses, Sweatshirts, Dresses, Scarves, Bottoms, T-shirts etc.Accessories –

Bags, Sun glasses, Umbrellas, Belts, Wallets, shoes, fragrances, etc.PRICE RANGE The price range for the brand is much higher than the normal brand. The brand has the minimum starting range of rupees

800 in the accessory section whereas in the women’s wear and men’s wear section the starting range is from rupees 1400. Shoes and

fragrances also possess a superior and costly range. There is no such maximum limit defined by the company.PLACE The company has its

headquarters in Italy. The complete address is as follows:Benetton Group Spa

Villa Minelli31050 Ponzano, Treviso

ItalyTel. +39 0422 519111 ; +39 0422 519111      

Fax +39 0422 969501Benetton Group is present in 120 countries around the world. The Group produces around 115 million garments

every year. Its network of around 6,000 contemporary stores around the world, offers high quality customer services and generates a total

turnover of over 2 billion euro.PROMOTION Benetton’s communication can be divided into two macro departments within the

company: The corporate and fashion press office and the advertising department. The press office, with headquarters in Ponzano, coordinates thirty press offices in

thirty countries around the world, which handle the product communication and the corporate image of the Group in each country.

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The advertising department develops the institutional and product campaigns for the international market through an internal media planning structure which directly buys media spaces both for Italy and the rest of the world.

Aligns the communication activities and the local commercial needs. Communication, as a whole, develops projects and activities together with Fabrica,

the Group’s communication research centre, that since 1994 hosts young artists

ADVERTISEMENT PROCESS FOR THE COMPANY

A trademark that became the driving force behind the “United Colors” message, which formed the basis of the advertising visuals designed to create a growing network of “United People.” These images showed youth of both sexes and every skin tone who exuded integration, energy and joie de vivre. They suggested a somewhat abstract universe ruled by the easy straightforwardness of relationships and feelings.

At this point, the process of building value for the brand took place in three separate phases:

The cycle of difference The cycle of reality

The cycle of free speech and the right to express it

PRODUCT DIFFERENTIATION STRATEGY OF UNITED COLORS OF BENETTON

The type of marketing strategy followed and used by United Color Of Benetton is the PRODUCT DIFFERENTIATION STRATEGY.

PORTER’S GENERIC STRATEGY is based on the dimensions of strategic scope and strategic strength. Strategic scope refers to the market penetration (Ansoff’s Matrix) while strategic strength refers to the firm’s sustainable competitive advantage.

Product differentiation (also known simply as "differentiation") is the process of distinguishing a product or offering from others, to make it more attractive to a particular

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target market. This involves differentiating it from competitors' products as well as a firm's own product offerings.

Differentiation can be a source of competitive advantage. Although research in a niche market may result in changing a product in order to improve differentiation, the changes themselves are not differentiation. Marketing or product differentiation is the process of describing the differences between products or services, or the resulting list of differences. This is done in order to demonstrate the unique aspects of a firm's product and create a sense of value.

United Color Of Benetton is a global brand that has an international style combining color, energy, and practicality, the United Colors of Benetton sells in addition to a range of male and female clothing for several occassions, a magazine, a perfume line, and accessories. The core product of Benetton is the clothing line that has a strong Italian character in design and style.

The company is known for sponsorship of a number of sports, and for the provocative and original "United Colors" publicity campaign. The latter originated when photographer Oliviero Toscani was given carte blanche by the Benetton management. Under Toscani's direction, ads were created that contained striking images unrelated to any actual products

The recent development of product line states lifestyle of the wearer;

UCB men's collectionsUnited Colors of Benetton has consolidated the product range and expanded the assortment in its men's collections, a segment that now accounts around 20% of UCB sales.

Sisley Limited EditionA new premium collection for men and women – under the new Sisley Limited Edition.

Sisley YoungIt's product of young collection for 8-12 years old.

SWOT ANALYSIS

The SWOT analysis includes the Opportunities, Threats, Strengths and Weaknesses.

STRENGTHS:

Customers are brand loyal. Benetton is enjoying competitive edge vis-à-vis competitors in Italy. Benetton is maintaining good company relationship with labor.

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Benetton is having soundness in financial management. Benetton system procedures, structures, processes are consistent with designed

industry standards.

WEAKNESSES :

Benetton needs improvement in re-inventing vision, mission and strategic objective and goals.

Marketing improvements are needed in marketing management. Improvements are needed in Human resource Management.

OPPORTUNITIES :

Economics conditions including all its indicators reflect positive health of Italy economic conditions.

Benetton is reasonably equipped to internalize the social shift. Benetton is implementing all the related laws and its article/clauses. Apparently Government policies are supportive towards industry. Benetton is reasonably equipped to maintain the pace of technological changes. International components namely economics, political, technological, legal exhibit

normally in USA.

THREATS:

Italy is experiencing social shift in terms of customers. Customers are seeking value and they have become savvy also.

Legislations are being passed frequently related to apparel (textile) industry. The industry is subject to technological changes and having a high vulnerability. Benetton is facing fierce competition in USA and their counterparts dominating the

market. In USA due to cultural diversity customers have different taste, preferences and they

see out different values from their transactions.

45

BIBLIOGRAPHY

1. http://www.articlealley.com/article_679444_62.html2. http://www.ehow.com/about_5367099_types-marketing-strategies.html3. http://www.businesspme.com/uk/articles/marketing/6/Types-of-marketing-

strategies.html4. http://www.apparelsearch.com/names/L/Levi/Levi_Strauss_Company.htm

5. http://investing.businessweek.com/research/stocks/private/snapshot.asp?privcapId=30773

6.