Introduction
True Religion is an American designer jeans and denim brand. The brand was founded in 2002 in California. At the dawn of the new century, when the fashion industry was undergoing dramatic changes, and many brands were trying to figure out where to go next in a rapidly changing trend, designers Jeff Lubell and Kim Gold decided to start their premium brand. The move is undoubtedly risky, especially considering that the market is still dominated by the “cheap trends” from Asia that migrated from the 90s. Clothing and footwear of low quality and at the same time at affordable price were still a priority for many.
Lubell and Gold put all their efforts into creating an elite brand that would cater to the needs of celebrities and socialite fashion aficionados. They did not stop only at the denim assortment, but the brand did not. Soon the designers added various knitted products to the catalog of goods. And after some time, the collections were replenished with stylish shoes, hats, glasses, swimwear, and even their perfume line. The brand has become a natural religion – a style that covers all aspects of life.
The ups and downs in the premium denim industry and the constant fluctuation of threats to the industry have made it interesting to see how the denim lines react. The history of True Religion begins long before the creation of the brand itself. Luxury jeans were created back in the 1970s by Calvin Klein, who created expensive skinny jeans that celebrities used to advertise the product. Because they were more expensive than the common, regular, cheap blue jeans sold by famous brands like Lee and Wrangler, they were meant to serve as a fashion statement, not comfort. They started well in the early 1980s but fell into decline after just a few years.
Identifying the Problem
True Religion Jeans was an unknown young company that faced many obstacles on its path to the cutthroat denim market. The challenge was positioning True Religion as a competitor in this ruthless and crowded retail segment. To make this campaign successful, two difficult hurdles had to be overcome. Since the jeans cost between $150 and $350 a pair, the first hurdle was to get the consumer to pay a high price for the jeans and choose a new favorite brand in a seemingly saturated market. The second problem was the reversal of trends and the threat of replacement that came with it.
Problem Analysis
The threat of replacement doesn’t necessarily mean other high-quality, premium, and more expensive jeans. Substitutes may include any type of jeans; given the change in trends, which constantly had to be monitored, the business could not have time to meet the needs of customers. Throughout the case, there are references to skinny jeans, skinny jeans, straight-leg jeans, low/medium/high-rise jeans, and many others that have come and gone. These threaten premium jeans, including True Religion Jeans, because consumer perceptions of fashion constantly change. Recently, more and more people are sticking to the casual look, simple and concise with a relaxed fit. It is mainly different from what was in vogue before the economic downturn in 2008. People then leaned more towards the “trendy avant-garde” or “desirable shopper” described in the case. So the general implication here is that all types of jeans are a threat of substitutes.
Another layer of substitutes that threatens True Religion can be any trousers. Although jeans are an attribute of everyday life, most, for example, prefer to wear sweatpants around the house. Women nowadays tend to wear many dresses and skirts, leather pants are a trend, and almost everyone wears shorts depending on the season or geography. Each of the above examples is a substitute threat for True Religion Jeans. Additionally, it is important not to forget about other high-quality products that people can spend money on. Perhaps consumers would prefer to spend their money on expensive accessories such as a new watch, handbag, or scarf if they are products of the same brand.
True Religion operates in a limited market, and sales rely heavily on the ability of designers and managers to predict future fashion trends. The company did not stop only at the jeans assortment of the brand. After some time, the collections were replenished with stylish shoes, hats, glasses, swimwear, and even their perfume line. The brand has become a natural religion – a style that covers all aspects of life. The replenishment of the catalog by designers with a variety of knitted and knitted products increases the brand’s reach, but at the same time, the company’s costs for developing and distributing new items increase.
Consumption Problem
The target audience for the brand is middle-class buyers whose income is 75,000-150,000 dollars a year and who are ready to buy high-end luxury jeans. True Religion was unable to bring its prices in line with consumer expectations, and as a result, the market has changed due to intense competition, which has driven the product’s price down. Accordingly, the main problem was the inability to convince customers that these characteristics have timeless value. In addition, the company had the opportunity to set some trends, such as introducing a ruined look.
True Religion jeans are costly, but many consumers are not willing to spend more than $100 on a pair of jeans: this reduces the number of potential consumers and their market share and can create a niche market (only for wealthy customers). Moreover, for some people wearing such a brand may be associated with conspicuous consumption. That is consumption, which is carried out mainly for its reading and decoding by others.
On the other hand, many middle and upper classes are characterized by such behavior as conspicuous consumption. It goes hand in hand with the Veblen effect, where the demand for expensive, high-end goods can rise when the price goes up and fall when the price goes down, meaning that the brand can benefit from it. However, all the time, modern youth talk about awareness and protection of the world around them, which reduces mindless consumption and threatens brands that specialize only in the product, not showing any social responsibility.
Options
The decisive factor in the commercial success of a product in a competitive market is its competitiveness. Since competitiveness is the key to market success, and solving the problem of competitiveness is the most challenging task, the firm’s development of strategic approaches to solving this problem is a special focus. Particular attention in the development of competitiveness strategies is paid to the creation of competitive advantages. Another important direction in the strategy of competitiveness is the achievement of economic superiority over competitors by reducing the costs of production, marketing, and transportation of products, increasing the effectiveness of advertising, and marketing activities in general.
The expansion of brand products is a key factor in the development of a brand operating in a highly competitive environment. True Religion has long focused not only on producing high-quality jeans for the middle and upper class but also offering customers knitted and woven sportswear, accessories, and perfumes. In connection with the expansion of products, the business and its production also grow, with it the responsibility. True Religion Jeans must show interest in customers and increase their awareness of the brand’s position on trends, which also include environmental conservation, social support, and more.
Socially Responsible Brand
Corporate social responsibility can become one of the options for developing a business and strengthening its position in the market. It is a voluntary contribution of business to the development of society in the social, economic, and environmental spheres, directly related to the company’s main activities and going beyond the limits specified by law. Conspicuous consumption can work here as well as with any well-known brand. Consumers accustomed to buying a product mainly because of its recognition will be even better at buying it, knowing that these are things from a brand that cares about the world around them. It will allow them, and other fighters for a better world, to show their position on various social issues, whether it is support for the poor or sustainable production and consumption. In the case of corporate social responsibility, a company becomes more attractive to shareholders and investors and may even receive incentives and benefits from the state. True Religion can increase its influence in the market and form a positive image. As a result of increasing customer loyalty, sales and brand awareness will grow, gaining a reputation as a responsible business.
Recommendations
The global market will help expand the community of potential customers willing to pay a hefty amount for branded clothing. By entering new markets, True Religion increases its global visibility and opens up opportunities for revenue growth. They could further improve their global awareness by penetrating deeper into European and Middle Eastern markets. In addition, foreign markets are less saturated than the domestic market. Retail store expansion can be a significant growth driver for a company that will help boost global brand awareness. Moreover, opening more stores will create more jobs and allow people who need them to find work.
Use of Eco-Friendly Materials
Every stage of clothing production, from fabric and labeling to packaging and sale, impacts the environment, making the fashion industry one of the most dangerous and planet-damaging industries. Brand compliance with the principles of sustainable development (sustainability) is becoming increasingly crucial for the market every year. Consumers, in turn, are beginning to value sustainability and business consciousness instead of chasing quantity and fast trends.
One option could be to create things from sustainable fabrics and alternative materials. Natural fabrics only seem harmless but, in fact, cause serious harm to nature. Viscose production destroys forests, while cotton requires a lot of water and is grown with the help of pesticides. The way out of the situation is to use alternative eco-friendly fabrics and materials. The disadvantages and advantages of choosing each option must be assessed comprehensively. Sustainable fabric indeed costs more, but the brand will be able to tell its customer that they choose organic fabrics with certification, which indicates a conscious approach to doing business. As a result, this approach may prove to be more profitable for True Religion Jeans and even allow it to justify the high cost of production.
Alternative Energy Sources
Improving production processes is the most complex and costly but, at the same time, the critical way to reduce the negative impact on nature. It is essential to choose factories that use alternative energy sources instead of fuel – they do not emit huge amounts of gases into the atmosphere. It is also essential to make sure that the factories that True Religion Jeans cooperates with provide decent working conditions:
- The working day is normalized.
- Child labor is excluded.
- The salary corresponds to the duties performed.
Employee satisfaction plays an important role in building the company’s image, so a healthy atmosphere in the team and the workplace should be practiced.
Conclusion
The True Religion Jeans campaign features one of America’s greatest success stories. From a retail perspective, True Religion has become a highly sought-after brand among retailers. The higher quality and cost were accepted, turning the company into one of the most successful and profitable brands in the retail clothing sector. However, possible threats to further stable business development still need to be prevented, and sustainability developed. True Religion’s actions must be supported by a company culture based on social responsibility that will expand and strengthen the brand’s position in the market. The recommendations must be applied simultaneously, as this will increase the productivity and efficiency of the organization by reducing costs and enhancing a key competitive advantage.