Text c Why New Products Are Needed

Why, with such a record of success, would any comрапу be worrying about making new-products? Part of the answer, obviously, is the sheer riskiness of depending so heavily on a single-item. The boom in jeans was in many ways a historical accident, and what history has given it can also take away.

Then, too, the demographics of the marketplace were already beginning to change. Jeans were no longer the exclusive province of youth: baby boomers¹ who had grown up on Levi's kept on wearing them. But they would no longer be wearing them everywhere and all the time, as they did when they were teenagers. And the next generation of adolescents was not so numerous. The birth rate had peaked in 1957; by 1964, demographers agreed, the baby boom in the United States was over. The bulge in the population that the boom had created would soon be moving into a world of casual slacks, leisure suits, and coats and ties. From a marketing point of view, that's where the action would be.

Finally, the competition had been gearing up. Levi’s had always shared the market with Blue Bell's Wranglers and other national brands: Blue, Lee. But now everyone seemed to be selling jeans. Back in 1970 Levi probably couldn't have foreseen the popularity of "designer" jeans. But they could certainly anticipate that cut-rate models will become unpopular. To sell their wares, Levi knew, retailers would have to slash prices. The profit outlook in a competitive marketplace like this was bleak.

Note:

1. U.S. citizens born immediately after World War II (a period of high population growth).

Levi Strauss & Co. Product History

1. The Creation of Levi Jeans A. Levi Strauss's Early Years 1. New York 2. San Francisco B. A Business Opportunity 1. Brown canvas 2. Blue denim 3. Rivets C. The Business Grows 1. New customers 2. New products

2. Other Levi Strauss Products A. Flops 1. No-iron slacks 2. Bathing suits 3. Sheets and towels B. Successes 1. Women's sportswear 2. Growth rate 3.Men's moderately dressy slacks and suits C. More Product Ideas 1. Men's dressy slacks and suits 2. Other dressy apparel

3. Why New Products Are Needed A. Single-Item Risk 1. Jeans B. Demographic Changes in U.S. 1. Aging baby boomer generation 2. Lower birth rate C. Increased Competition 1. National brands 2. Designer brands 3. Cut-rate brands