Consumer Behavior

1. Question 1

Discuss the relevant aspects connected with consumer behavior that Levi's should have taken into consideration so that the company could have maintained its position in the marketplace.

There are five major aspects relating consumer behavior that Levi's should have noticed:

1.1 Competitors

Although Levi's was the market leader of Jean's market, they should have kept track on the actions of their competitors. Levi's should also have kept updating on who were the new entrants in this market. By doing this research, Levi's will be able to notice the aspects that they have neglected for a long time: fashion and price.

Before 1990's, Levi's had few competitors and fewer that can compete with them. They dropped their guard off and let other new entrants took the opportunity in attracting customers of Levi's. According to Tactical Retail Monitor (cited in UKessays), more than 48% of men chose Levi's when they wanted to buy jeans in 1990. However, in 8-years-time, this percentage has been reduced to 25% and 10% of these customers went to Lee and Wrangler, 17% of them went to Gap. The percentage in teenagers' boys also has dropped to only 7% in 1998 from 21% in 1994.

In 1990's, there were two types of competitors who noticed the two aspects respectively. Consumers who focused on fashion were attracted by the companies which came out products that in keeping with the fashion trend such as high end retailers like Diesel or Calvin Kelvin and high end designer jeans manufacturers such as Donna Karan, Tommy Hilfiger, Ralph Lauren and Versace (Perman,1997). Fashion-conscious customers were willing to pay a premium price to buy more much hipper jeans. (Annasandgren, 2011) Levi's should have changed their design according to the fashion trend at that time as clothing is the products that needs to keep up with fashion trend to be successful. According to Mayumi Mendoza, most clothing retails failed because of poor management, tough competition from department and discount stores and poor evaluation of fashion trends. The relationship among these three reasons why they failed actually is interrelated. Failed to evaluate fashion trends will give chance to other competitors and worsen the tough competition. Other than high-end competitors, there were some from middle vertically integrated retailers such as Gap and American Eagles and private-label brands like Target and Wal-Mart. (123helpme.com). The other type of competitors focused on lower price jeans which attracted teenagers included J.C. Penny's and Sears. (N.GregoryMankiw, 1998). Levi's should have created high barriers to entry when they found out that more new entrants were entering this market. And the barriers can be in terms of fashion and price. And by doing this, Levi's will be able