BSB119 T W 9

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Management and Human Resources
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1 BSB119 – GLOBAL BUSINESS TUTORIAL 9: GLOBAL MARKETING Please read “Levi Strauss Goes Local”, the opening case in chapter 12 (pp. 464 to 465) of your textbook and answer the questions below. 1. Why did Levi Strauss change its marketing mix? What effect did the change have on the company’s overall strategy? Levi’s once had an international marketing mix. This meant Levi’s sold the same product world wide which enabled the company to realise economies of scale and cheaper advertising. However, it was forced to change its marketing mix as a result of:  A decrease in sales, which saw sales almost halved between 1996 and 2004  Fashion trends had changed  The company had high production costs and a stagnant product line. The company changed its marking mix to allow nation regions to better tailor the product to the local conditions. As a result, the product was changed to reflect different body types and regional preferences. The company also changed its distribution channels and pricing strategy to reflect the market where it was being sold. 2. How did Levi Strauss engineer its turnaround? Prior to implementing its turnaround strategy, Levi was contending not only with a stagnant product line, but also high costs. One of the first issues Levi’s addressed as part of the turn -around strategy was the cost of creating the product. Costs were reduced by closing American factories and moving production to other nation’s where the product could be created cheaper. Secondly, Levi’s sough to give more responsibility to national managers, allowing them to tailor the product and the marketing mix to local conditions. As a result, the product was altered to reflect the size, climate and cultural conditions of the country where it was being sold. 3. What does the decision to give national managers more autonomy mean to the company’s overall strategy? The decision to give national managers more autonomy meant that the company lost the benefit of economies of scale in advertising and production that it had previously had. In addition, the new strategy meant that differences between national markets became more pronounce
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