Essay Title: 

Customer Analytics

March 24, 2016 | Author: | Posted in finance, mathematics and economics

Levi

Expanding Target Markets

Levi

Expanding Target Markets

In 2003 , Levi Jean ‘s were suffering from a continual downturn of business fortunes , with sales dropping from a high of 7 .1 billion to 4 .5 billion (Kim Girard 2003 . As part of a recovery program , it decided to look to the mass-chain seller Wal-mart to increase sales Historically Levi ‘s products are at the high end of the price scale from 85 upwards , whereas Wal-Mart sell jeans at around 25 (Sally Beatty 2002 . Therefore , the question is , will this tactic work [banner_entry_middle]

? Can the company compete in two distinctly different market segments in this manner ? This addresses that question and concludes that the answer is affirmative

As Anderson and Kerr (2002 ) point out in the introduction to their book business is about customers , therefore one needs to seek them out understand their needs and react to those needs by providing what they want , at a quality and price they want . In other words , a business needs to target its market . Levi ‘s had already done this at the high end of the market . However , to survive as a business , the company needed to expand into new markets

When looking at entering the mass chain market , Levi had to consider a number of questions . Firstly , was there a customer base that it could sell to and was there a sufficient demand for its products within that segment of this new marketplace ? Secondly , it needed to consider whether such a diversification would adversely affect its existing quality market share . In other words , by the seeking or new customers would it lose any of its existing customer base ? It also needed to be aware that it could produce within the price band of this new market

To answer these concerns the company considered a wide range of research . One element of that research was the consumer within marketplace . This provided details of the consumer in terms of age demographics , buying patterns and economic reasons behind buying decisions . The research relied upon by Levi , revealed that Wal-Mart had a customer base of over 160 million . The research also revealed that less ten percent of these customers also shopped at high-end ‘ quality stores (Sally Beatty 2003 . Most are attracted to the store because of its low-price policy . As a result , it was apparent that there was a separately identifiable consumer segment (Marco Vriens 2001

Next , the company needed to look at the business ethos of the partner it would be working with , in this case Wal-Mart . Research showed that the sale of jeans produced 3 billion in revenue for Wal-mart . It also revealed that the clothing range that Levi has specialized in retails at Wal-Mart for around 25

From all this research , the company ascertained that there was the market segment , it would not significantly affect Levi ‘s traditional market and it offered the potential of a major increase in revenue . The only disadvantage at that stage was that Levi ‘s did not have the… [banner_entry_footer]

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