6-MONTH MARKETING PLAN
CAITLYN TOUT U1805496
Contents Page: Executive Summary .................................. Macro Environment (PESTEL) ................... Market Analysis ........................................ Consumer Analysis ................................... Internal Analysis ....................................... Analysis Summary (SWOT) ....................... Marketing Strategy & Value Proposition .. Product Pricing Promotion Place Extended Elements .................................... Implementation, Schedule & Budget .......
Executive Summary This 6-month marketing plan displays the development of the strategy of an upcoming concept store, located in Shoreditch, London. It combines an existing recycling scheme wih new technologies to revolutionise the retail industry in a new consumer collaboration collection. The document analyses all relevant areas of the denim market, Levi consumers and internal summaries. Completed by PESTEL, SWOT and TOWS analysis. There is also an in-depth review of the marketinf mix. Followed by a clear presentation of budget and implementation for each stage.
Macro Environment:
PESTEL Analysis
Political
Economic
- Brexit – Still in the transition period and will be for several years How will movement of goods be affected? Import tax/ Business rates? New regulations to meet, could affect product lead times and cost - US trade agreements – with Mexico (5% tariff increase) and China (trade war) - Government attitudes to Covid-19 - Brands trust issues with changing legislation and regulation
- Sourcing from Mexico & China – 15/20% of Levi’s US imports Proactively managing down sources - Record high unemployment rates in US - More than 2 million expected by June in UK - Declining economy in both US and UK - UK faces worst recession in history - British pound down 10% post Brexit (Jan 2020) - Inflation drops as retailers discount (1.3% in Dec 2019 UK) - UK has a failing high street (year sale growth 0.9%
Social
- UK/ London is very multi-cultural/ diverse - Increasing costs of living, especially younger consumers (Gen Z) - Attitudes towards sustainability changing Consumer demand encourages brands to adapt - Rising e-commerce – must stand out online Engage with consumers through social media - Consumers want a community – how does the brand give back/ help loyal customers Schemes during Coronavirus like ‘buy one, donate one’
Technological
- Investing in sustainable innovation – creating new fabrics Technology to reduce waste - Extended reality – customers virtually trying on clothes - Robotics – improve inventory control Cashier free (post Covid)
Environmental
- Sustainability agreements within the company’s values, national and global agreements (Paris agreement) - Becoming more transparent with customers – where products are sourced/ supply chain etc.
Legal
- Data protection regulation – the reach of data and its uses limited Giving consumers the power over information they give - New trade barriers – UK leaving the EU and US new agreements with Mexico and China May force product pricing to change
Market Analysis: Denim Market:
- The end of 2019 saw a predicted a growth of $14 million by 2024 with opportunities to innovate sustainably - Market is dominated by legacy brands offering nostalgia as well as new brands which are bringing innovation and immense advertising - Denim previously struggled in 2014 due to the rise of athleisure. Nostalgia and streetwear helped combine the two to bring the demand back -Covid-19 has led to an increase in demand for sweatpants/ joggers due to working from home. Also having an increase in stretch jeans and comfort denim (as seen with Topshop/ Madewell) o Prices are still seen to rise showing that there is still a competitive market Men’s up 46% (from 2018) Women’s up 16% (from 2018) - A growth of eco denim has been seen due to the climate emergency. Brands Lee and Wrangler are using ‘indie good’ foam dying which uses no water and limited chemicals
Market Trends: Men
Women
Future Trends
- - - -
Men’s fit – less restrictive slim and straight (up 30%) Shirts, giving a utility look Longer length shorts, with raw hems Light wash colour and white denim
- Women’s fit – relaxed styles such as wide leg (up 108%), straight leg (up 55%), flares (up 80%), cropped and mom jeans still very popular - High rise is one of the most converted shapes, with elastic and paper bag waists - Miniskirts, high rise and A-line silhouette - Light wash colour and white denim o o o
Slouchy silhouettes Lighter denim dominate Reworked denim
Competitors:
High price
Low Quality
High Quality
Low Price
Consumer Analysis: Levi’s UK Target Market Using STP
Segmentation Gen Z
Demographic
Age Gender Occupation Status Life Stage
Geographic
Urban/ Rural Region
Behaviour
Buying pattern
Brand/ Product Expectations
Psychographic Values
Personality
Millennial
Gen X
24 & under M&F Student or Young Professional Most likely single, living in house share with friends Urban South East England
25 - 38 M&F Working Professional Most likely married with young kids or without Urban/ suburban South East England
39 - 55 M&F Working Professional, High Position Most likely married with kids
Buys regularly from stylish brands they trust, open to new brands Authenticity, transparency, stylish, multi-purpose (night/day), comfortable Vegan, financially motivated, aware/ care for social issues e.g. climate change, BLM Fashion forward, confident, independent, social
Conscious buying from a budgeting perspective, buying more practical Reliability, durability, well lasting, timeless, online shopping
Discounts but like quality
Sub urban/ rural South East England
Clear marketing message, durability, brand loyalty
Saving/ money, Strong work ethic, health and wellness, stability, active career driven Optimistic, well con- Laid back, sense of nected, desire work- family, balance life balance
Target This campaign will primarily be targeting Gen Z and Millennials, specifically between the ages of 15-35. There will be a mix of students and young professionals that share the values of sustainability, authenticity and a love for the brand. Our marketing
Position By using the brand’s core values in all areas of the campaign it will set Levi’s position to be sustainable, innovative, progressive and creative brand. It will show that Levi’s can adapt for its range of customers whilst keeping on trend and in competition with the rest of the denim market.
Internal Analysis: Financial Recap: First Quarter “- First-Quarter Reported Revenues of $1.5 Billion, Up 5%; Constant-Currency Revenues Up 6% - First-Quarter Diluted EPS was $0.37; Adjusted Diluted EPS was $0.40 - Cash at Quarter End of $0.9 Billion and Total Available Liquidity of $1.8 Billion - Announces Second Quarter Dividend of $0.08 per Share” (Levi Strauss & Co., 2020) - These figures include the benefit events like ‘Black Friday’ and others from 2019. Although, experienced huge drops of revenue in Asia part way through the quarter due to the Covid-19 outbreak and political unrest in Hong Kong. There is an estimated $20 million loss
Company Objectives: Mission Statement - “To sustain responsible commercial success as a global marketing company of branded apparel” - Aims to balance goals of superior profitability with return of investment superior products and services and leader market position - Business to be conducted ethically to demonstrate leadership. Workers will recieve; fair treatment, opportunity and open communication
Vision Statement - “We are the embodiment of the energy and events of our times, inspiring people with a pioneering spirit” - Recognising tradition but filling the gaps etween principle and practise. Along with company values being updated, reflecting contemporary circumstances - A commitment to offer products to every generation, so the voices of many comminities are reflected
Objecives: Corporate: - Targeting global success, product excellence and empower ment of the people - Showing leadership through creative, innovating and profitable products - The target market involves satisfying both the community and society. Using ethical conduct and social responsibility to moti vate customers trust and loyalty with the brand Marketing: - Collaborations will continue to be unexpected and innovative to evolve the customer experience - 2019 collaborations generated 12 billion global impres sions with $100 million in immediate value - Pop up stores used to showcase the best of the brand - Interacting with innovative technolohy and collaborations - To show exclusive products at events
Analysis Summary (SWOT): Strengths: - Customer loyalty - Brand heritage - Strong distribution network and reliable suppliers - Well performing portfolio of brands (Levi’s, Signiture, Denizen and Dockers - Global presence (in 110 countries) - Connected with multiple age groups - Successful market strategies - The leading denim brand - Investing in sustainability
Weakness: - Products have high duplicity, affecting the brand name and sales - Lost small amount of market share to nich catagories - Higher rate of missed opportunities compared to their competitors, demand forecasting for example - Uncertainty of the brand’s state post Covid-19, in terms of financial state and consumer loyalty (how can they ensure their position won’t be deeply affected?)
Opportunities: - Online presence investment, social media and e-commerce which are popular with younger consumers - New trends in consumer behaviour which can build revenue streams and diversify their products further - Stable free cash flow to invest into other segments and product development - Increase in consumer spending (pre Covid-19, how will attitudes differ after?) - Covid-19 giving the brand a chance to make more severe changes that would’ve been harder to make previously
Threats: - Covid-19 uncertainties including the economic state post Covid-19 and changes the company has been forced to make (will they stay in place?) - New technology competitors have developed, which is both a threat to the brand and the industry long term - New regulations due to changes in trade deals with UK, Mexico and China - Changing consumer habits towards online affecting physical stores (the UK’s failing high street for example), also due to unemployment levels as a result of Covid-19 - As a global company they are exposed to the political climate - Intense competition
Analysis Summary (TOWS): Strengths & Opportunity: - The sustainable fashion market is in high demand with consumers but also an innovative sector. Levi’s strength in investment into innovation of their products allows them to be one of the leaders for sustainable denim - Covid-19 has given the brand a chance to re-evaluate what they are doing and what needs to change. By using this positively customer loyalty will increase and encourage others to follow. For example by implementing new incentives for their employees. - By keeping up with new consumer behaviour trends the brand will be able to further connect with the different age groups that they attract. It will enable differentiation of products suitable for these groups.
Strengths & Threats: - Uncertainties like the economic state of countries and populations post Covid-19 is something to be considerate about. Take time to assess the situation globally and act accordingly in terms of releases and sales etc. Also be mindful to those who have been affected by donating to charities that help with relief - Competition is intense in the denim market with many developing new technologies which are a huge threat to the company. By investing hugely in innovation of technology the brand will be in a similar position to these front runners - As a global company exposed to the political climate it is important to develop so that it doesnt damage the brand too much. The talks of new trade deals with UK, Mexico and China must be kept in mind when dealing with sourcing, production and disribution. How will they differ from each other and how can we maximise profits?
Weaknesses & Opportunity: - Products have high duplicity however by constantly looking for what consumers need it will show that Levi’s are ahead of other brands. If products are made well and surely focus on these needs then consumers won’t look to these cheaper alternatives - A loss of market share to other niche catagories can be solved by investing into what is clearly missing. What is the reason for these loss of shares? How can the brand adapt so that this doesn’t continue to happen?
Weaknesses & Threats - The rate of missed opportunities could have been as a result of competitors having access to new technologies and innovations. If more investment is put into this sector then the brand will be in a better position to avoid this from happening again - Covid-19 has put every company in an unusual position, it will have deep financial impacts but yet to know how deeply it will affect. By ensuring that the brand is constantly putting in measures and changing what is neccessary, it will be in a good position coming out of this
Marketing Strategy: After analysing each element of our market we have created a campaign which is unique, on trend and suitable for our target. We will be providing a new service to our customers post Covid-19. This will combine current retail trends with being forward thinking. Following a revamp of the recycling scheme currently in place, we will launch a rework collection. The ‘By You’ campaign will be names ‘Recycle, Redesign, Rework’ Shortly after announcing the collection we will state that it is a customer collaboration as they will be able to design their own product. Our social media will take our customers through the journey of the new technology involved in this collection. This will be followed by the announcement of our concept store in Shoreditch. At this time our current paid ads with change to advertise the event. In Shoreditch and surrounding areas will display promotional boards and posters, to show direction towards to store. To launch the store we will host an influencer-led PR event. This was chosen to be able to expand our reach beyond our customers and followers, through to their following. Throughout the time of our opening we will continue all elements of our advertising. Once the store closes, thank you posts will be launched to share our thanks to our new and loyal customers for taking part in this exclusive collection. We will also continue to promote the recycling scheme once the event has finished.
Marketing Strategy: Product: The pop up store will present the rework design on 3 different jean styles for Men and Women’s jeans. The reworked styles will allow one jean to be made up of several colours/ washes and materials of Levi prodcts. Giving the customer an opportunity to make the jeans personal to their own style. Customers will have several template options for reworking a jean and are able to choose the fabrics that they desire. This collection is inspired by the vintage stores and their reworking techniques with vintage Levi products. Also in keeping with the a/w 2020 trends. Available styles:
Men Women
- 501 Original Fit - 562 Loose Taper Jeans - 514 Straight fit - 501 Crop Jeans - 311 Shaping Skinny - Ribcage Straight Ankle Length
The products will be 100% recycled using the recycling scheme currently in place in stores to source materials as well as using factory offcuts. The aim of this collection is to reduce waste and for the company to integrate becoming more circular. The materials life will be extended by creating it into a new product rather than discarding it as waste. Recycled fabric will be cleaned and cared for before being used for new products. They will only be used if deemed acceptable to standards.
This will be a debut for new technologies developed in the industry. The scan to fit technology will enable customers to buy jeans with the perfect fit. Achieved by a machine scanning the customer’s body to make accurate measurements which can be tailored for the jean style to give the desired fit. Another positive of this technology is that the products life should be extended. As it is developed for a specific customer, it is unique to them. Alongside the digital design process, customers will be able to virtually try on their designs. Allowing them to see if they like the fit of the jean and styling that they have selected. It gives them a chance to make any alterations before it is made. This is another way to minimise waste.
The 4 templates: Fabrics and colours can be changed for the consumers desired style
Marketing Strategy: Pricing Jean Type
Original Price
Altered Price
- 501 Original Fit
£75
2 Fabrics 3 Fabrics
£85 £90
- 562 Loose Taper Jean
£90
2 Fabrics 3 Fabrics
£100 £105
- 514 Straight fit
£90
2 Fabrics 3 Fabrics
£100 £105
- 501 Crop Jean
£90
2 Fabrics 3 Fabrics
£100 £105
- Ribcage Straight Ankle Length
£95
2 Fabrics 3 Fabrics
£105 £110
- 311 Skinny
£80
2 Fabrics 3 Fabrics
£90 £95
Shaping
Each design template will offer different pricing for each jean style. The new pricing reflects the amount of ‘new fabric’ used. For example template 1 is the cheapest because there are 2 whole leg fabrics rather than template 4 which uses 2 or 3 fabric colours in several parts of a jean. Included in this new price is a service charge for the use of the new technologies. The price will increase from the original price by £5 per fabric addition. The reason behind the higher pricing is because this is an exclusive collection which uses new technologies. Although there are no discounts on this collection, for example student discount. When a customer recycles a Levi’s item in store, they will recieve a 15% discount off their next putchase with no minimum spend. However, a percentage of profits from each jean sale will go to a social cause charity. The charity is yet to be decided.
Marketing Strategy: Promotion Promotion Goals The main goal of this promotion is to drive footfall to the concept store, to promote the service and revolutionary technology. Promotions will share that this is a consumer collaboration, enabling them to ‘create their own product’. One of the key promotions will be the recycling scheme, as this is important in enabling this collection to happen.
Advertising Social Media This will be both paid and owned media on Instagram and Facebook. The paid ads will be targeted at young adults between the ages of 15-30 who are both male and female, mainly students and young professionals. These ads will also appear is a user is interested in smilar fashion brand pages. Levi’s socials will share the first announcements of each stage of the campaign; the recyling scheme, the rework collection and the concept store. These posts will take place on the UK Levi’s account only as this is an exclusive event that will take place in London. The recycling scheme is something already in place but will be pushed further. This phase of promotions will be 6 months before the concept store takes place. This is to allow the scheme to build and ensure that there are enough recycled fabrics to support the demand of the collection. Later social media posts will share what the collection is, as well as hints to the concept store and the links with the collection. In the run up to the event, posts will be very regular showing behind the scenes of the store and what customers can expect. Each post will provide links to where more information can be found. Email newsletters will also be used to share more exclusive details with subscribed members. They will recieve news before non-members.
Promotional Boards 1 month before the launch of the concept store promotional boards advertising the campaign will be placed in Shoreditch, surrounding areas and central London. The concept store will be located in Shoreditch, where most of the phycial promotions will be placed in order to create a buzz and give direction towards the pop up store. Others will be located in parts of central London witht he aim to increase awareness and footfall to the store.
Marketing Strategy: Sales Promotion Whilst the product itself won’t recieve any reductions in price, customers can recieve discount vouchers when any Levi product is recycled in the scheme.This incentive carries another motivation for previous customers to recycle their products. When between 1-5 products are donated they will recieve a 15% discount voucher and any number above that will recieve a 30% voucher. However, it will be stated that these can not be used at the concept store but hase no minimum spend at any other Levi store. They can recieve this as a paper voucher or it can be emailed. By email shoud encourage more sign ups to the Levi’s newsletter subscription.
Public Relations A PR event will take place to announce the opening of the concept store, as well as to generate extra awareness of the campaign surrounding the collection. Due to our target audience there will be a number of ‘infuencers’ attending largely from fashion/ beauty backgrounds. But also those who have shown interest in the brand or previously promoted. These influencers will be paid for posting any content surrounding the product they have made. Other ‘celebs’ will also attend who share the values of the campaign, again to further our reach. Their content will be an opportunity to have the product demonstrated to another audience. Along with the content creator sharing their experience at the store.
Personal Selling We understand that this concept may not be the easiest to follow as it will be unfamiliar. The staff that are working at the store will be there to help customers through their concept store journey, to explain the process. We would expect them to explain how this collection is possible and further encourage the recycling scheme which will continue after the store closes. They will talk to the customer to see what kind of design they are looking for and assist if needed without aggressive sales techniques. Employees MUST explain the pricing strategy clearly as well as the collection/ postal options. If asked, they will explain the reasoning behind there being no discounts on this collection. The reason being that a percentage of profits go to charity and that you can recieve a discount on other Levi products when you donate to the scheme. All employees at the store will recieve a complementary jean of their creation to wear whilst they are in store (and to keep). They will essentially be a ‘walking model’ for the product that customers could create.
Marketing Strategy: Place We have chosen to host our conecpt store in Shoreditch London, the reason being that it matches that of our target audience and the collection itself. Shoreditch is known for its creativity, vibrance and is home to many vintage stores which sell vintage Levi products. Many vintage store sell reworked products which was part of the inspiration for this collection. It is located on Shoreditch High Street, surrounded by many creative agencies and retailers. Also just a short walk from Shoreditch Hight Street tube station and Old Street station providing multiple easy travel links.
There is 2300 spft of pace split over 2 levels, the shop floor (1100 sqft) and basement level (1200 sqft) for staff and stock. Costing £21,021 in total for 33 days between 12th October and 13th November. This price entails £17,768 for the 33 days, a £995 monthly discount, £834 service charge and £3,503 VAT charge.
The space as shown by a previous tenant
Extended Elements: People Our employees are the face of the Levi’s brand, they ultimately make the customer experience. At this store the employees won’t necessarily use their typical selling techniques but rather be there for assistance. They should explain each aspect of the collection to the customer clearly, including how it is possible, the scanning technology, the design process, pricing and collection/ posting. They should follow the core values of the brand of courage, empathy and creativity. By following these values they will ensure that every customer recieves the best experience in the store and are cared for well. Good customer service is how we expand our market and ensure brand loyalty.
Process This concept store is centered around the technology being unveiled. It is highly important that these technologies are used corectly and with care. To ensure this the staff at the store will be trained in how to use them and will always assist customers to avoid errors. Next to the relevant stage of the design journey will be instructions of how to process the design.
Physical Evidence As this collection will take place in a pop up store and not general Levi stores, it is important that we carry the same branding. Not to lose touch with the brand itself. This will be acheived by using the same materials, colour scheme and visual theme. The difference will be the layout of the store as there will be no physical products on sale. It is an activity based store which will follow a structure of moving between technologies and through to the cashier as you would in a normal store. One section of the store will share the journey of this collection by sharing the recycling scheme, technology innovation development, through images and fabrics etc on a display. Around the store will also be relevant posters showing the collections marketing and other Levi branding.
Implementation, Schedule & Budget Summary:
Implementation, Schedule & Budget Summary:
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