Brand Failures

288 Brand failures
As with most brand crises, the problems for Levi’s have been numerous.
To understand them fully, it is necessary to appreciate the company’s
branding strategy. Levi’s CEO Robert Haas told The Financial Times in 1998
(ironically one of the most uncomfortable of years for the brand):
We are in the comfort business. I don’t just mean physical comfort. I
mean we are providing psychological comfort – the feeling of security
that, when you enter a room of strangers or even work colleagues, you
are attired within the brand of acceptability. Although what a consumer
defines as psychological comfort may vary from sub-segment to subsegment.
The key phrase here is that last one, ‘from sub-segment to sub-segment’. In
its attempts to be sensitive to the various fluctuations of taste among the
denim-wearing public, Levi’s has diversified its brand by creating a wide range
of jean styles. Most significantly, it has branched out beyond its traditional
‘red label’ jeans and introduced a new sub-brand called ‘Silvertab’. The
company has also produced a cheaper range of jeans with orange tags.
Furthermore, the advertising campaign used to promote the Silvertab
range in 2001 was among the most hated in recent history. Ad Age called the
campaign ‘insulting’ and claimed it ‘lacked branding’. Similarly, in 2002 the
ads to promote Levi’s low-rise jeans achieved an equally negative reception
among certain critics.
However, not all the problems have been of Levi’s making. For instance, it
could do little to curb the rise of designer jeans such as those produced by
Calvin Klein, Diesel and Tommy Hilfiger. All Levi’s could do in the face of
such a competition was to try and preserve the integrity of its brand. Even
here, the brand ran into difficulty.
In the UK, the start of the new millennium saw Levi’s become engaged in
a very public battle with Tesco’s supermarket. Tesco’s claimed that consumers
were paying too much for their Levi’s and the supermarket wanted to sell
Levi’s in its own stores with a narrower profit margin. Levi’s refused to sell its
premium jeans, such as 501s, via the supermarket, and went to court to stop
imports from outside Europe.
‘Our brand is our most important asset,’ explained Joe Middleton, Levi’s
European president. ‘It’s more valuable than all the other assets on our
balance sheet. It’s more valuable than our factories, our buildings, our