The Jeans market is fiercely competitive with many different companies fighting for people to be wearing their product. ‘Lee’ Jeans constantly manage to stay ahead of the game and are the market-share leaders in many different products. But how does ‘Lee’ ensure that they create and maintain a competitive advantage?
In this study, I shall identify the ways that ‘Lee’ have used in the past and present to ensure their competitive advantage in the market. I shall be studying various techniques that ‘Lee’ uses, including Product Differentiation, Strategies, Market Targets and many more.
A (Brief) Background
Henry David Lee founded ‘Lee’ in 1889 when he identified that there was a need for reliable workwear. He found that denim proved to be most suitable as it was extremely durable.
The very first ‘Lee’ Jeans were designed for farmers but over the years have developed into casual wear even though the design has remained mostly the same. These new products include ‘Originals’, ‘101s’ and ‘Icons’.
Defining The Problem
‘Lee’ constantly researches into what the consumer needs and current fashions in order to make sure that they are providing the best product. They do this using a few different techniques. These include surveys and focus groups (primary data), as well as studying secondary data colleted form other market research companies. As a result of this, ‘Lee’ found a changing trend in the early 1990’s.
‘Lee’ found that in the 80’s, consumers were generally willing to go along with the masses, following the trend. But now consumers were looking for brands targeted specifically for them and their needs. In 1994 ‘Lee’ began their sub-branding in order to target individual markets. This market segmentation saw the launch of ‘Lee Pipes’ for boys aged 8-12, and ‘Riveted Lee’s’ for women aged 25-35. But most importantly, ‘Lee’ launched their dungarees for their most desired target group – 14-24 year old males.
In 1998, ‘Lee’ acquired the help of ‘Fallon Brand Consulting’ because they felt that they were facing an image problem. ‘Fallon’ carried out research into this, using proprietary techniques and concluded the following:
* ‘Lee’ Jeans were not seen as “cool” but did have a strong reputation for being durable. They were widely respected for being “indestructible”.
* The “ideal” Jean was seen as something that would make the wearer feel “confident” and “indestructible”.
* The 18-24 year old perception of “cool” was significantly different from the typical people “posing” listlessly in Jean ads at the time.
‘Fallon’ decided upon the use of an old friend, the “Buddy Lee” doll, the promotional item used for displaying ‘Lee’ garments in miniature back in 1920. They felt that this doll created “a new voice of cool” and were sure that it would solve the problems identified earlier.
‘Lee’s’ introduction of market segmentation produced the following results:
* ‘Lee’ Dungarees were a huge success and ‘Lee’s’ market share grew from just 9% in 1998 to 18% in 2002.
* All sub-branded products are growing fast and constantly increasing in market share.
‘Fallon’s’ research paid off and their solution proved enormously affective.
* Market share among 18-24 year-old males shot from 2% to 20% in 12 months.
* Sales goals were exceeded by 333%.
* Brand awareness went from 29% to 54% among 17-24 year-olds.
* In one year, Lee’s brand imagery showed dramatic improvement:
– Lee is “on its way in” went from 16% to 33%.
– Lee is “cool to wear” went from 22% to 34%.
– Levi’s “favourite” brand status dropped 10% while Lee’s rose 5%
* The Lee management team won Brand Week’s “Marketers of The Year” in their category.
* Today, Lee is the fastest growing denim brand among youth.
‘Lee’s’ success shows how invaluable market research is. If ‘Lee’ had not conducted this research they would have been at a huge disadvantage. Market research is incredibly important to ensure that you are providing the best product that is what the consumers want.
In the 1990’s, ‘Lee’ found the problem that they were not providing enough products for specific groups. They then used the following methods to collect primary data for their market research:
1. Focus Groups – these are groups of people that ‘Lee’ has found that fairly represent their target market. These groups will share opinions and ideas about the product and hopefully ‘Lee’ will find out more about what they need to change.
2. Surveys – these can be questionnaires or questions that are asked to people about what they think about ‘Lee’. This data can then be collated to show all the things that ‘Lee’ might consider changing or adding to their product.
The conclusion from this research was that ‘Lee’ needed to consider market segmentation.
Before this research, ‘Lee’ Jeans were aimed at a mass market, meaning that they had a wide range of consumers. But as the trends were changing, this was not suitable. ‘Lee’ then began to create products that were aimed at specific age groups and sexes.
By subdividing their market, ‘Lee’ were able to pinpoint more closely the type of customer demand. This also allowed them to concentrate on meeting the demand of their most desired target group (14-24 year old males).
Because these new markets were not niche markets, ‘Lee’ still faced a lot of competition so it was imperative that they maintained meeting the needs for these groups.
Nuffield Economics & Business – Student’s Book