KEY PEOPLE:
THE MAKER OF THE BRAND LVMH BERNARD ARNAULT:
Bernard Arnault (born 5 March 1949) is a French businessman. He is the founder, chairman, and CEO of , a large luxury goods conglomerate consisting of over fifty luxury brands, including , , and . According to , Arnault is the world's 4th and Europe's richest person, with a 2011 net worth of $41 billion.
MARC JACOBS CREATIVE HEAD FOR LOUIS VUITTON:
Marc Jacobs (born April 9, 1963) is an and the head designer for Marc Jacobs, as well as the Marc by Marc Jacobs. Jacobs is currently the Creative Director of the French design house . In 1997, Jacobs was appointed Creative Director of luxury French fashion house, , where he created the company's first ready-to-wear line. Jacobs has collaborated with many popular artists for his Louis Vuitton collections. Vuitton has worked in conjunction with , and most recently American artist and rapper . As of 2011, Jacobs remains the Creative Director for Louis Vuitton.
Marc Jacobs has the midas touch and an innate ability to design clothes that people want to wear. Whether he designs a satchel or a shoe it's always something everyone wants. From grunge to prom, from private jet to Tokyo nightclub, he has an outfit that suits. His workload includes Marc Jacobs, Marc by Marc and Louis Vuitton - a titanic selection of back to back collections but he still has time to build a world class contemporary art collection and dress in pigeon costumes at his annual fancy dress party. He has caught the fitness bug like so many male fashion designers. His muses include Sofia Coppola, Charlotte Rampling, Winona Ryder, Dakota Fanning, Victoria Beckham all have been photographed by Juergen Teller for Marc Jacobs ad campaigns (Mrs Beckham was hidden inside a Marc Jacobs shop bag after Juergen persuaded her that she was "just a product").
CHAPTER 4.
THE BRAND STRATEGY
John Stuart, former CEO of Quaker, once said, if this company were split up, I would give you the property, plant and equipment and I would take the brands and trademarks and I would fare better. This commonly held belief illustrates the immense value of the brand today, but how do you create and manage a star brand? Perhaps this question is relatively easy for marketing and brand managers, but what about at board level, where the buck really stops? Bernard Arnault, Chairman of LVMH (Louis Vuitton, Moët Hennessy , the world’s largest maker of luxury goods), appears to have some of the answers.
LVMH is a paradox in itself. A company that makes and sells products that nobody actually needs. A recipe for disaster? A manager’s nightmare? Far from it – LVMH’s combined revenue was estimated at $11 billion in 2001, with a market capitalization of $27 billion. With Arnault at the helm, this organization has gone from a small clothing manufacturer on the verge of ruin to a conglomerate of nearly 50 star brands including Dom Perignon, TAG Heuer and Christian Dior.
According to Arnault, one key to success is his management technique. The process of creating a star brand begins with radical innovation and, for that, artists must be totally free from financial or marketing concerns. He firmly believes that “If you think and act like a typical manager around creative people – with rules, policies, data on customer preferences, and so forth – you will quickly kill their talent.” It is only later, when the product is being manufactured, that he introduces the strict, almost militant processes that ensure profitability.
Take, for example, John Galliano and his dresses made out of newspaper surely the most impractical product imaginable. But when they were sent down the cat-walk, Arnault did not bat an eyelid. Consequently, when Dior sold dresses in newspaper-printed fabric for a considerable profit, Arnault was proved right. Star brands, in his opinion, are in themselves a paradox. They must simultaneously be timeless, modern, fast-growing and highly profitable. Arnault is keenly aware of the crucial role he plays in creating such an entity. He observes how “many brands have the potential to be stars but they are poorly managed”, and by this we are not talking of the marketing manager alone – the problem often runs through the heart of most major organizations.
Branding for the board:
In evaluating whether to enter, exit or expand a market, there are a myriad issues that must be addressed. However, here are some key pointers to ensure that any non-marketing specialist can independently weigh up the pros and cons of a branding decision:
(1) Look at and constantly monitor “brand fitness”. This comprises three categories of questions that must be asked:
Static brand hygiene factors – does it keep itself up to date?
Deteriorating brand hygiene factors – is it losing its reputation?
Corporate hygiene factors – is the company behind the brand becoming manipulative? Is it delivering exactly what it promises?
For example, when Stella Artois (a Belgian lager) was analyzed, it was seen to have a very good overall brand fitness. However, upon closer inspection, its average static hygiene score was only 50 per cent. Although Stella was delivering a liked brand promise, it was failing to deliver the actual basic requirements of the brand. Obviously, this minor concern could have huge implications further down the line, had it not been identified so early.
Massive problems:
If you continually pose these questions to consumers and analyze the findings, it becomes increasingly simple to pick up on small irritations or concerns that, in the future, could present massive problems for your brand.(2) See the brand as both an object and a person. Viewing the brand as an object increases the value of analysis and plays a fundamental and consistent role – you are selling something to people. On the other hand, the brand as a person enables you to understand the delivery of this role and how well it fits into your corporate culture. This way you can become involved with the projection and promotion of the brand without ever losing sight of the bigger picture. (3) Look at “brand promise” to enable successful advertising. This helps show people’s motivation behind buying a brand and can be analyzed using the following four areas of consideration:
power – offering a function;
explorer – enabling a person to do something they couldn’t otherwise do;
identity – to associate with a group of people/an ideal; and
icon – a major brand that is a dream.
Common language:
When asked about the brand, Stella, apart from being essentially functional, people saw it as offering “identity”. By discovering the category in which consumers most see your product, it is possible to construct an effective brand promise around the same framework. And because such information is so simple to obtain and disseminate, this type of assessment creates a common language between board members and marketing executives, ensuring that everyone has the ability to participate in meaningful discussions regarding advertising strategies.
(4) But remember that there is more to brand than promise. Although it is easy to get carried away by the image or identity of your brand, never lose sight of what the product is actually delivering and especially whether it is living up to consumer expectations. Promise counts for little, if there is only disappointment with the end product.
(5) Study the potential for brand personality. The “personality of a brand” will determine what sort of a relationship it has with a consumer. In forming any relationship you would consider how they relate to us, what their character was and what their world beliefs are. Thus it is the same with brands. Not convinced? In recent research, consumers were asked personification questions about the brands Stella and Guinness (an Irish stout). Whilst Stella was a young, up-market, city-living person, Guinness is a deep thinker, patient, serious and reliable. Whether this is advertising informing people or merely reflecting their views on the product, it is a clear testimony to the power of branding.
Image is nothing, management is everything:
The creation of a star brand is not always down to good management – you must have a certain amount of something else, something intangible (or, as Arnault terms it, “a gift”). But managing this entity is another story – a story which inevitably includes senior management in some of the leading roles and one in which not all members of the board are necessarily aware of the plot.
Comment:
My review is based on: “The perfect paradox of star brands: an interview with Bernard Arnault of LVMH”, by S. Wetlaufer, originally published in Harvard Business Review, Vol. 79 No. 9, 2001; and “An innovative unified brand and market measurement system for strategic investment decisions” by M. Callingham and T. Baker, originally published in International Journal of Market Research (UK), Vol. 43 No. 3, 2001. The Wetlaufer article is a fascinating read. Arnault offers useful tips on how to create, market and maintain a star brand, and the extensive list of world-class, luxury products managed by LVMH stands as a testimony to his success. Once you get over the technical nature of the Callingham and Baker article, you will find a multitude of useful hints on marketing for non-marketers. Whether you are a marketing manager attempting to meaningfully discuss brand management with somebody from a non-marketing background or vice versa, this piece introduces a common language through which to communicate.
CHAPTER 5.
THE LOUIS VUITTON PRODUCTS
Accessories:
Bags:
Fashion: Ready to wear
Handbags:
Jewelry and Watches:
Leather goods:
Luggage:
Shoes:
Travel bags:
Wallets:
Mission Statement:
LVMH must continue to be synonymous with both elegance and creativity. Our products, and the cultural values they embody, blend tradition and innovation, and kindle dream and fantasy. Five priorities reflect the fundamental values shared by all Group stakeholders:
- Be creative and innovative
- Aim for product excellence
- Bolster the image of our brands with passionate determination
- Act as entrepreneurs
- Strive to be the best in all we do
"The mission of the LVMH group is to represent the most refined qualities of Western 'Art de Vivre' around the world.
Target Market:
LV uses demographic targeting strategy to target their customers
Both men and women
Age: ranging from young adults to seniors (22- 65 yrs old)
Income: around $5,500 or above per month.
Selling Point:
Fashionable
Durable goods
Good quality product
Long product life ‡ Exclusivity
Prestige image
Feel good
Fit into high-class society
Practice ego and power
Chapter 6
MARKETING MIX
Strategy of the single Louis Vuitton luxury brand into the four Ps (Product, Price, Place, and Promotion). To extract the rules or principles of its brand marketing that differ from that of general consumer goods. In other words, the object is to distill the rules and principles of success strategies for luxury brands as well as to derive a business model for success. Showing that the current rise of Louis Vuitton is not a coincidence but rather something achieved through strategy will surely b e of interest to firm s struggling with lack of brand power or those looking to boost brand power.
1. Introduction
Consumers like brand items, while researchers like brand theory. Although scholars also use the word “brand” to refer to the likes of Coca-Cola and McDonald’s, there is a vast gulf between these brands and the luxury brands we e explored in t he p previous book. I n researchers’ brand m management theories, one r rarely finds mention o f representative luxury brands like Louis Vuitton or Dior, or of LVMH. Based on this awareness, we carefully scrutinized the ecology of the unique LVMH firm, considering the nature of the brand as distinct from commodity markets, although small in scale. This time let us focus on the grand champion of the LVMH empire: the Louis Vuitton brand. By systematically breaking down the strategy of the single Louis Vuitton luxury brand into the four Ps (Product, Price, Place, an d Promotion), our aim of this study is to extract the rules or principles of its brand marketing that differ from that of general consumer goods. In other words, the object is to distill the rules and principles of success strategies for luxury brands as well as to derive a business model for success. Showing that the current rise of Louis Vuitton is not a co incidence but rather something achieved through strategy will surely b e of interest to firms struggling with lack of brand power or those looking to boost brand power .
2. Set of Principles for PRODUCT
Let us first turn our attention to the first of the four Ps of marketing: Product. General marketing seeks “adequate product quality.” Quality control en tails so -called “fitness for use” and “conformance to requirement,” and excess quality can be “undesirable” because it raises costs. For a handbag, this means that things fit in it and it is easy to carry. A 500 yen or 1,000 yen tote bag is suitable for these functions in terms of cost performance (Yen Value). However, a Louis Vuitton handbag offers a “product of distinguished quality” and “attention to detail,”
1373as well as “one with a story behind it.” Furthermore, while general marketing p laces importance on “relative quality,” for Louis Vuitton the concept seems to be “absolute quality,” which prompts consumers to insist on “Louis Vuitton or nothing,” rendering comparisons of Louis Vuitton bags with competing products meaningless.
Many of the principles for products originated with the particular preferences and policies of the House of Louis Vuitton, as well as th e creativities of Mark Jacobs, the artistic director of Louis Vuitton since 1997, and have been shared and carried on by the business corporation. Louis Vuitton observes the following 6 Principles for Products.
PRODUCT 1: Principle to Eliminate Counterfeiting - Part 1: Enlightenment Campaigns. Excellent goods are being counterfeited. LV does not neglect the care and upkeep needed to protect its brand! The history has also been a history of fighting counterfeit goods as well. LV is carrying on with the fight against the increasingly sophisticated counterfeit goods, namely imitations, in Japan, which is the company’s largest market. By way of enlightenment campaigns aimed at the general public, the LVJ Group has conducted seminars and symposiums related to intellectual property from time to time since the age of LV Japan from before.
PRODUCT 2: Principle to Eliminate Counterfeiting – Part 2: Distribution of Warning Notices. LV knock-offs? Unforgivable! So says this principle. As for the distribution of warning notices to companies, the fact that a warning notice was distributed to the major Internet-related firm of Rakuten that was dated April 2000 is commonly known. Even today companies from all over undoubtedly grow pale upon receiving a warning notice for using a “mock monogram” which combines dark brown colors with the characters L and V, as well as the company logo, flowers, and stars without permission (LVJ absolutely cannot provide licensing for this).
PRODUCT 3: Principle to Eliminate Counterfeiting – Part 3: Registration of Trademarks and Designs. LV allies itself with the law! This is to remark on the fact that LV creates highly original lines which are difficult to imitate and then register the trademarks and designs. It would not be an exaggeration to say that the design of LV travel bags, particularly their arrangement, has evolved in order to do away with counterfeits. The history of the evolution of the complex and distinctive patterns for the Monogram Canvas resembles that of the evolution which the currencies of countries around the world have gone through in order to prevent forgery.
PRODUCT 4: Principle to Eliminate Counterfeiting – Part 4: Activities through the Union Des. Fabricants Union des Fabricants is a French public interest incorporated association which carries out trademark protection activities. In addition, it also operates the Musee de la Contrefacon (Museum of Fakes) located near the woods of Boulogne on the outskirts of Paris, which was fascinating for the cavalcade of forgeries here. The author headed over to Un ion des Fabricants Tokyo, a limited liability intermediary company, to have talks with Di rector General of the Secretariat Takayuki Tsutsumi, which proved to be of great interest. However, due to the nature of the discussions and for the sake of facing off against the shadowy world of organized crime, the majority of what was said unfortunately cannot be committed to writing.
PRODUCT 5: Principle Prohibiting Appraisal of Authenticity – Part 1: Second-Hand Store Version. The reader must not simplistically think that counterfeits are flourishing because appraisals of authenticity are not performed. Rather the opposite is the right thing. The theme of this principle revolved around who verifies genuine articles. None other than LV’s officially sanctioned stores alone verify whether an article is genuine or not. As imitations are a violation of the Trademark Law and can not be purchased o r sold, dubious goods a re rooted out and ultimately the phrase “We cannot handle this at this store” comes into use.
PRODUCT 6: Principles Prohibiting Appraisal of Authenticity – Part 2: Mass Media Version. 1374You’ve probably come across special reports like “Appraise whether LV goods are genuine or fakes! Do not miss these points!” in places like television programs and weekly magazines for women. Such conduct runs counter to the protection of trademarks and causes nothing but harm for both LV and the industry of recycle shops dealing in brand goods. There are probably a great many people that think the primary concern is over imparting those who manufacture imitations with inside information and material. But rather, the author considers it unappealing and awkward to invite novices to perform appraisals of authenticity just by reading a magazine.
3. Set of Principles for PRICE
Next we consider Price (pricing). General marketing demands “low prices.” This is achieved by reducing costs and off-shoring production to China and elsewhere. Louis Vuitton handbags, on the other hand, are priced high. Such high p rices are unnecessary for merely stowing and carrying things. In essence, t he Louis Vuitton difference is value, not price—this being absolute value, not relative value. Many of the principles for Price were innovations that came about after Kyojiro Hata became president of Louis Vuitton Japan and that subsequently went global. Louis Vuitton observes the following 8 Principles for Price (pricing):
PRICE 1: Principle Prohibiting Exorbitant Pricing
Given t he circumstances in which exorbitant pricing and differences i n p rice de pending o n t he store a rose, former President and CEO Hata came out with a policy of keeping prices in Japan down to 1.4 times those in France; what essentially amounted to a 40% increase. As a result of this policy, the prices which were kept down to a 40% increase of local prices were widely accepted by modern women, while simultaneously allowing LV to create the trust which serves as the key to brand business. LV was successful in permeating the brand of “trust” which the LV family has carefully cultivated throughout Japan.
PRICE 2: Principle of Proper Pricing. LV has held the disparity with local prices down to 1.4-fold by means of doing away with parallel importers who used pricing that was three times the disparity with local prices and establishing official sales routes instead. As such, LV has come to layou t proper pricing including customs duties and distribution costs. This is a policy of policies and corporate efforts of each respective brand and company. It is no wonder then that LV has achieved a proper rate of 1.4-fold.
PRICE 3: Principle Prohibiting Bargain Sales. Taking a sidelong glance at markets in which bargain sales run rampant, you will see that one brand has a history of not once holding a sale where it reduced its prices in 154 years. That brand is LV. For the question of the sort of guideline under which sales are n ot conducted, the answer would have to be because of t he commitment to quality. Throughout a long history, LV has not held a bargain sale a sing le time out of a sin gle-minded devotion to quality. This is because the core of LV’s pricing strategy lies in selling products to all o f the customers at the same price.
PRICE 4: Principle Prohibiting Sale in Value Sets. First of all, throwing in added bonuses with the products is just one variation of a price discount. This is because if the amount of money paid is the same for cases w here added bonuses are included and cases where they are not included, then including these extras amounts to the same as providing a p rice discount for the cost of the added bonus. LV does not include such added bonuses. LV al so does not engage i n set sales. LV does not acknowledge set sales since they lead to price discounts.
PRICE 5: Principle Prohibiting Surprise Price Changes. Over the past 25 years LV has raised prices 14 times and lowered them 11 times, making the price revision from November 2006 the 26th price change. Price cuts are also conducted, and a consistent approach of setting retail prices in Japan at 1 .4-times t hose of t he pa rent country of France is evident. Labels and advertisements indicating an increase in prices are presented at store fronts, while at the same time postcards providing notice of the price increases are sent out in advance to people whose names are listed in the customer registry. LV method is to not conduct surprise price hikes.
PRICE 6: Principle of Philosophy that “Louis Vuitton Products are Money”. This principle states that LV bags have a high trade-in price, and are equivalent to money. It is said that the prices of LV goods do not collapse even when recycled. The reason for this is that if LV does not furnish them with a good price then the customers will slip away to other stores and Internet auctions. It would app ear as if so me customers first size up the product at an officially sanctioned store, then leave the store temporarily so that they can confirm the trade-in price at a recycle shop that deals in brand goods before returning to the shop to make their purchase.
PRICE 7: Principle Prohibiting Pricing in Odds Prices. LV does not adopt pricing in odd prices. In addition, most of the other luxury brands are the same way. If brands providing luxury products get hung up on impressions from odd pricing, then this will take the edge off of the sentiments of consumers who a re all worked up to bu y brand products. LV sets its prices in denominations of 1,000 yen. The appending of odd pricing is done purely through the consumption tax.
PRICE 8: Principle of Prestige Pricing. The notion of prestige pricing shows up in the pricing strategy. This is also referred to as premium pricing. This means that in the case of products with a low purchase frequency and where it is difficult for consumers to judge quality such as luxury and high-end products, price is one means of making a determination. The claim could be made that pricing by LV, which reigns over the top range of luxury brands, re presents prestige pricing to consumers even though it is proper pricing for LV.
4. Set of Principles for PLACE
Let us now look at Place (distribution), t he third of t he four Ps . General m arketing seeks t o create “broad distribution channels,” opening more stores or selling through non-department store outlets, such as mail order and volume retailers. On t he o ther hand, Louis Vuitton bags are only offered through limited distribution channels. One might go as far as to say Louis Vuitton innovated a method of selling that amounts to “controlling Place” and “ not using channels that cannot be controlled.” As in the case of Price, many of the principles for Place were innovations that cam e a bout after Kyojiro Hata became president of Louis Vuitton Japan and that subsequently went global. Louis Vuitton observes the following 8 Principles for Place (distribution):
PLACE 1: Principle of Proper Sales Routes. LV branch stores in Jap an were established in March 1978, and the luxury brand market o f the time w as accompanied by parallel importers and traders making imitation products. The situation was one of exorbitant 1378prices as well as sales prices that were all over the place depending on t he store. Under such circumstances, the brand of “trust” which the LV family has carefully cultivated could not be conveyed within Japan. Righting the sales routes for LV products being sold via improper pricing and putting LV products up for sale in the Japanese market at the proper pricing and through proper sales routes served as a major objective and challenge for Hata.
PLACE 2: Principle of Business Practice Reform. For the legitimately imported goods fro m that period the going market rate was 2-2 .5 times their local price. Faced with this fact, Hata boldly set out to re form traditional business practices in Japan. Hata believed that while there was nothing that could be done about the addition of customs duties and shipping fees, products could be sold at proper pricing through a sales route structure which eliminated intermediary costs. As a result of introducing a system of company stores, pricing for LV products within Japan was successfully preserved to a certain degree and the recognition that brands equaled trust began to be imparted to customers.
PLACE 3: Principle of Store Establishment in Prime Locations. Brands are attracted to urban areas which are suited to their brand image and establish stores there, which in turn create a virtuous cycle whereby the area’s image improves further and the establishment of stores accelerates. In order for luxury brands to succeed internationally it is essential for them to be successful in Japan, which has a large proportion of sales. The major grounds where this battled is waged are in Ginza, Omotesando, and Aoyama. Brands do not establish stores in prime locations because they have made a profit, or attempt to open stores in such locations when they do make a profit. They establish stores in prime locations in order to make a profit.
PLACE 4: Principle of Brand Enhancement through Flagship Stores. The establishment of large-scale flagship stores endows LV with bases from which to transmit a more prestigious and clearer image and to thoroughly ensure a sense of high added value. T his acts as a measure to further enhance LV as a top brand. If LV is to attempt to cover an even greater number of customers through a smaller number of stores while avoiding tarnishing the image through excessive exposure, then it would necessarily have to make every single one of the stores into flagship stores. This is a tried and true tactic for luxury brands, with LV’s global flagship store strategy serving as an excellent example of this. LV is preparing a number of strategic moves and setups against this backdrop.
PLACE 5: Principle of Flagship Store Setup. What constitutes the importance of the role o f flagship stores like the one in Omotesando is their element as bases for transmitting the image in order to elevate the brand’s added value. The growth of the brand stores to enormous proportions has powerful implications for the image policy more so than it does for the sales. This is because it is t he greatest point in term s of whether or not the transmission of t he brand identity calls out to customers. The significance of and effects from t he L V Omotesando st ore, which continues t o convey information with the mission of thoroughly ensuring the image strategy, are returned to the LV brand unchanged.
PLACE 6: Principle of Flawless Repairs. LV’s repair service is famously renowned as a ser vice which wins over the trust o f customers an d provides a sense of stability to the brand strength. LV knows full well that the more a person favors LV products and is a repeat customer, the more exacting are their demands when it comes to repairs. LV believes that providing such customers with satisfaction and having them use its products over a long time period will result in raising brand loyalty. As such, LV has laid out and put into practice its own repair policy.
PLACE 7: Principle of Store Concept Individualization. 1379 Both the Nagoya Sakae store and Matsuya Ginza store have taken up the challenge of distinctive design, and the Omotesando store is a symbol of the strategy o f rebuilding in major capital cities all over the world. The Kobe store utilized the group strength to become the first composite store, and the Kochi store serves as a pilot shop for regional hub cities by abiding by the LV method. LV worked out the façade of the Roppongi Hills store in the spirit o f an urban cultural city, while the Ginza Nam ikidori store serves to re transmit both tradition and innovativeness. The one feature which they all share is a design that upholds their individuality while taking harmony with the urban areas around them into consideration.
PLACE 8: Principle of Store Placement Strategy Growth. Naturally, it goes without saying that LV has not made it through the 29 so me years since entered the Japanese market with just a sing le store con figuration. The stores must develop into suitable stores according t o t he environment, as well as the brand’ s growth stages and strategy. T he best sales routes for the age are to be selected. This principle is one that is in dispensable for brand cultivation. The Omotesando Store, which is the biggest of the large-scale stores, was not necessarily required from the time that LV entered the Japanese market, but it was created at an essential period corresponding to factors like brand growth and strategy.
5. Set of Principles for PROMOTION
In our systematic analysis of the four Ps of Louis Vuitton marketing into principles that summarize its strategy, we finally turn now t o Promotion. General marketing look s to “mass advertising” in its efforts to sell at high volume. Television commercials typify that approach. Louis Vuitton, however, does not advertise on television. While Louis Vuitton does advertise in newspapers and magazines, these consist mainly of image ads rather than “aggressive” sales ads, and more focus is given to publicity (being taken in the media). The age of the House of 1380Louis Vuitton can not b e said to have been rabid about promotion, meaning that most of the principles for promotion likely originated with t he luxury brand strategy o f t he holding company LVMH. However, such principles as the Principle of Extravagant Parties can be said to have been given special emphasis in Japan. Louis Vuitton observes the following 9 Principles for Promotion.
PROMOTION 1: Principle Prohibiting Television Commercials. What is th e reason for LV refusing to select television commercials as a means o f advertising media? To start with, there is the reason that television commercials themselves are not suitable. Next, there are the problems of “reach” and “ richness.” LV values the fullness of information talked over in rich detail by sales persons and customers, such as discussions of how to care for ba gs, the features of the latest creations, and over Takashi Murakami and Mark Jacobs.
PROMOTION 2: Principle of Emphasis on Publicity. LV conducts paid advertisement in the same way t hat other luxury brands do. However, it emphasizes publicity (PR through mass media) in which brands and products are taken up by the media, such as magazines an d newspapers, more than the average brand does. For ex ample, prior to the opening of on e of LV’s large-scale stores various fashion magazines put together major special features and t he magnificent opening party was reported on extensively. The reader should consider that everything was intentionally arranged so that the matter would turn out this way.
PROMOTION 3: Principle of Brand Muse (the Danjuro Ichikawa Principle). Speaking in terms of LV’s muses (celebrities who have taken a liking to an d use a brand or personages that epitomize the brand; particularly women), the truth is that there are many. Empress Eugenie, Maharaja of Baroda in India, Coco Chanel, Audrey Hepburn, Luchino Visconti an d Al ain Delon, Lindbergh, Sharon Stone an d Shojiro Goto, along with Danjuro Ichikawa, Ebizo Ichikawa and etc.
PROMOTION 4: Principle of Enchantment with Legend. Legend is one element of a product’s appeal which tends to be overlooked. Lineage, origin, and history provide anesthesia for the “pain of spending.” As far as luxury brands are concerned, the excellence of the sheer quality, exceptionalness o f design, and appeal o f fashionable t rends due t o t he contemporary efforts of t hose in t he management ranks, artisans, and designers are important elements. In addition to these, the previous history of the house brand and mythical episodes a re also valuable components of a brand’s appeal. If fictitious accounts are also permissible then there is the Titanic episode as well.
PROMOTION 5: Principle of Having Customers Lined up at Stores
The people lined up at a popular ramen shop invariably eat the ramen once their turn comes. But people who are just window shopping without necessarily buying anything an d people who just w ant to see a talked -about building also line up at LV stores in a well-behaved manner. They do this without growing angry and just for the pleasure of entering the store. Would you view such a scene as pitiful, or would you be impressed by their loyalty? From LV’s standpoint, would it view this with gratitude, or would it look on and think ‘Gotcha!’?
PROMOTION 6: Principle of Extravagant Parties. As part of LV’s promotional strategy, LV hold extravagant parties with calculated timing. But just because they have a small budget does not necessarily mean that it settles for cozy little p arties which are dismissed by the mass media. Since they are put on in such a spectacular manner the extravagance itself and the large number of famous celebrities become topics o f conversation which are rapidly picked up o n by t he m ass media. Eve n 1381though LV must pay if it is to hold these, the advertising results attained far surpass those that would be achieved through the same amount of direct advertising costs.
PROMOTION 7: Principle of the Excuse of Supply Shortages. There are some customers who get angry over exceedingly commonplace matters, proclaiming things like “Why don’t you have this product in the store?!” an d “No, no t this color, I want that color!” To such customers LV salespersons kindly and politely exp lain t he situation b y saying “The reason for this is because the products cannot be mass produced.” Such scenes c an be found all over Japan. While saying “they cannot be mass produced” is an excuse, at the same time it also serves as excellent PR and effectively serves to stir up a sense of hunger in the customers.
PROMOTION 8: Principle of Pledging Allegiance. At LV the main stars are th e products themselves, and it encourages customers to pledge their allegiance to the products. The photographs and text in LV advertisements position the products in the starring role. “LV trunks are solid.” “Vernis and monogram mini-bags are adorable.” “How functional is the business briefcase?” “Who should you entrust the repair of your bag to?” Talk of matters aside from LV products does not appear.
PROMOTION 9: Principle of Limiting Advertisements to Those that are Newsworthy. On occasion LV has advertised and drawn attention to the fact that there are products which it does not handle. At th e same time that the affair involving fake Hermes neck ties occurred in November 1978, the re were also incidents in which imitations of LV neckties were see n to appear on the market. LV at the time did not handle neckties, and so L V Japan went o n the offensive against the appearance of these mysterious products by expressly taking out advertisements which said “LV does not make neckties.”
6. Conclusions
Aimed to be an executive summary of the luxury brand strategy of Louis Vuitton, which breaks this marketing strategy down into the four Ps and each of the viewpoints on branding, attempting to distill the rules or principles of brand marketing, as distinct from those for general consumer goods. In conclusion, the principles of Louis Vuitton (i.e. typical luxury brand marketing) are quite different from those and almost opposite to those of general marketing (i.e. conventional marketing or mass marketing).
Chapter 7
SWOT ANALYSIS OF LOUIS VUITTON
- Louis Vuitton
- Consumers are stylish, fashionable, aware of designer's brands and look for quality and after sales services
- - Most of the users are mature (25+), female, working population with stable financial background
- - There is an increasing number of young LV users, who are fashionable trend-followers
- - LV users are usually less price-concerned
- LV products are frequently used by the rich and famous, celebrities, models all over the world
- LV also produces series of leather goods for the business world, including briefcases, organizers, palm-cases... all could be easily found in business meetings and offices.
- SWOT - Analysis
- Strengths
- Louis Vuitton is not only one of the oldest, but also one of the most legendary houses of fashion in the world
- - Leading the avant-garde of fashion without compromising traditional craftsmanship
- Fashion – Marc Jacobs as LV’s artistic director has touched new heights
- Craftsmanship – LV products known for their skilled handiwork and exquisite material - 17 production workshops, an international logistics center
- Brand Logo, Visual Identity, Monogram Canvas on LV products
- - All of the company's products exhibit the eponymous LV initials – strengthening and protecting the Brands identity and image
- Heritage – along history of more than 150 years
- SWOT - Analysis
- Strengths
- Website as an authorized channel to market its product and build brand associations
- Biggest luxury Brand in the World
- - It has presence in world’s leading commercial hubs of the world including China, Malaysia, Japan, Hong Kong..etc More recently in Norway and Aruba.
- - popular, loyal customers in Japan , Europe and US
- Exclusivity - Since the 19th century, manufacture of Louis Vuitton goods have not changed: Luggage is still made by hand, utilize the signature brown Damier and Monogram Canvas materials, both of which were first used in the late 19th century.
- SWOT - Analysis
- Strengths
- Its advertisement features world famous celebrities, sportspersons and politicians like - Steffi Graf, Andre Agassi, Gisele Bündchen and Catherine Deneuve shot by Annie Leibovitz
- Models and Actresses like Jennifer Lopez and Madonna have also lend their face to the brand -
- Offering Custom made products - It created a toiletry case specially for opera singer Marthe Chenal, which can hold bottles, brushes, mirrors, powder boxes, and other toiletries.
- SWOT - Analysis
- Weaknesses
- Limited customer base – LV can be afforded only by the elite and rich who want to make a statement and want to be distinctive from others
- It has restricted retail opportunities compared to other luxury brands like as the company markets its product through its own stores only
- It doesn’t have discount sale on its products – reducing the chances of bulk purchases, or attracting customers who can afford more economical products
- Business largely depends on the economic condition - if economy was depressed, its sales growth slows down sharply like it did in 2002, since demand for luxury goods declines markedly when recession or depression happens.
- SWOT - Analysis
- Opportunities
- LV leverages its strong brand equity to products – Fashion, Accessories, Jewellery line, Shoes, Time Pieces, Architecture (Geneva, NY etc.)
- Revamping LV’s image from time to time, to meet contemporary tastes and styles of its elite consumers
- Custom made products for Prominent figures – can exclusively order Louis Vuitton luggage for e.g.- Congo explorer Pierre Savorgnan de Brazza , who ordered a combined trunk and bed from the company, and American conductor Leopold Stokowski (for his travels), whose traveling secrétaire was designed by Gaston-Louis Vuitton
- Movie Actors and Actresses can advertise by using LV products in their movies - In 1963 - Audrey Hepburn is seen carrying the bag in the film Charade
- SWOT - Analysis
- Opportunities
- Exhibitions and Events – In 1867, LV entered the Universal Exhibition at the World's Fair in Paris and won the bronze medal
- Expansion of the Brand throughout the world – Macau One Central, Australia (Melbourne)
- Website offers - LV City Guide 2010, LV Sound Walk, A journey Beyond – Jim Lovell, Buzz Aldrin, Sally Ride.
- SWOT - Analysis
- Threats
- Counterfeiting – Louis Vuitton is one of the most counterfeited brands in the fashion world due to its image as a status symbol - imitation of quality, expertise and innovation – sued Britney Spears, Darfur Charity infringing LV”S intellectual property rights
- Collaboration with Nazi Germany
- - The French book Louis Vuitton, une saga française ( Louis Vuitton: A French Saga ) tells how members of the Vuitton family actively aided the puppet government led by Marshal Philippe Pétain, increasing their wealth from their business affairs with the Nazis
- Animal Rights group – campaigners staged a noisy protest outside a Louis Vuitton store on Paris' famed Champs Elysees avenue in 2006 for using real fur in decoration and accessories.
- SWOT - Analysis
- Threats
- Current Global economy – Economic Recession – financial crisis
- Changing trends – year to year
- Fashion Marketing can’t be the same in Asia than in Europe because the target audience in Europe is above the age of 40 yrs old where as in China the Consumer group ranges from 18 – 39 yrs old
- Competitors - Christian Dior, Chanel, Gucci, Prada, Salvatore Ferragamo
- Varied taxes and Market plans in different countries across the world
- Industry Analysis
- Research in the early 2000’s showed that a staggering 94% of Tokyo women in their 20’s owned a Louis Vuitton piece
- Louis Vuitton products are sold exclusively in selected Louis Vuitton boutiques found in chic locations in wealthy cities worldwide - to maintain and increase the perception of luxury relating to their products
- Louis Vuitton fakes accounted for 18% of counterfeit accessories apprehended in the European Union in 2004
- The Private equity funds for Luxury industry in India is on an upswing.
- Global luxury brands are acquiring or investing in small Indian brands and Indian manufacturing companies. Global mega brands like LVMH are looking at investing large sums of money in India in terms of capital.
- Most of the consumers of luxury goods in India are women and it is a sophisticated market where there is a strong awareness of authentic luxury products.
- Present situation in Global Economy
- To maintain and increase the perception of luxury, relating to their products – opening new stores in Australia, organizing the Louis Vuitton Pacific Series, a friendly match racing event
- Louis Vuitton brand is also implementing its worldwide battle against counterfeiting
- LV’s outstanding brand development strategy distinguishes them from other luxury brands
- China might again drive sales growth next year. Chinese people make up around 18% of Vuitton sale
- Luxury sales declined 8% decline in 2009,FORECAST - sales could grow by only 1% next year
- - No strong rebound in Europe, the US and in Japan which still accounts for the bulk of the spending.
- COMPETITORS
- DOLCE & GABBANA
- GUCCI
- HERMES
- PRADA
- CHANEL
Advertising/Marketing:
A. Do not advertise on TV and newspapers.
B. They promote the brand through local events to reach a wider audience.
C. The company, made the opening of their Mumbai store coincide with
the 150-year celebrations of the brand Louis Vuitton. The Chairman and CEO
of Louis Vuitton, Yves Carcelle, came down from France specially to host
this event, which was a tremendous success.
D. They have unique business strategy where in they do not believe in hiring
any one person to represent the brand. LV treats each client as its
brand ambassador.
E. Moreover, they are registered on various search engines and have their
own website.
TVC Advertising:
In 2008, Antoine Arnault, director of the communication department, decided to enter the world of television and cinema: The commercial (90 seconds) is exploring the theme "e Where will life take you? And is translated into 13 different languages. This is the first Vuitton commercial ad ever and was directed by renowned French director Bruno Aveillan.
Tagline – Some journeys can change mankind forever!
PHARRELL WILLIAMS FOR LOUIS VUITTON
MADDONNA FOR LOUIS VUITTON
SCARLETT JOHANSSON FOR LOUIS VUITTON
Chapter 8
LOUIS VUITTON IN INDIA
Dilip Kapur, founder and president of the Puducherry-based company, is now straddling the upmarket, luxury end of the business with Louis Vuitton buying a stake in his company and also wooing the value-conscious Indian shopper with Holii, his partnership with Kishore Biyani’s Future Group. He talks to Mint about building a brand and selling genuine leather handbags in the time of synthetic rip-offs. Edited excerpts.
What is Hidesign about now? Is it high-end Louis Vuitton or affordable Holii?
Louis Vuitton happened because we were a very lonely brand. When I started becoming successful, all kinds of people began to approach me and say we want to buy a stake in the company, we want to make it big, you have a great brand but you are not doing a good job with it—which is still true. But that’s a price we were always willing to pay, we didn’t want to sell out at the cost of our independence. But Louis Vuitton was an offer we couldn’t refuse, in a way. There is a big difference in saying we are an international brand in the sense that we are available internationally and saying that we are an international brand that is recognized internationally. How do you move from this to that? I think we need partnerships for that. We don’t have the knowledge and would have taken too long to find our way. That’s why we decided to accept this offer of help, in a way, from Louis Vuitton.
How do you expect the luxury market in India to unfold?
For international luxury brands, India is a tiny market right now. When I talk to the CEOs of these companies, they say India is going to happen from 2015 onwards. Their huge hope is that India will be like the Far East where they are completely oriented towards European luxury brands. But is India going to go that way? I have no idea. I think it’s way too simplistic. Emporio (the Delhi mall that houses luxury brands) is the best thing that happened to Indian luxury brands. They are in the same place as Western luxury brands and suddenly the consumer goes upstairs (to stores of Indian designers) and sees this amazing stuff with incredible work with a price tag of Rs3 lakh. Then she comes downstairs to the international luxury stores and sees something that seems much less value— in her eyes—lot less work and it is priced even higher. So they go back upstairs and buy.
The stores in India
Anne-Marie Idrac, the Minister of External Trade, France inaugurated the retail outlets of two most leading luxury brands - Louis Vuitton and ChristianDior in New Delhi on September 16, 2008. Both the upend stores arelocated in the DLF Emporio Mall situated at Vasant Kunj in south Delhi. Speaking to the news persons, the French Minister said that over the years India has been growing as the potential market for luxury segment. The minister also promised enhanced support and supply of excellent luxury products into Indian market on the behalf of France. Idrac seems to be quite hopeful regarding the collaboration of both the countries on luxury segment.
RENT A LOUIS VUITTON:
Cookie singh. She is all set. Flaunting her Louis Vuitton bag, sporting chic Gucci shades and wearing a dapper designer outfit, Suzy frequently dons the role of a top socialite hobnobbing with others of her tribe. But Suzy guards a secret fiercely? most of her 'branded' look is borrowed. Not wanting to spend a bomb every time on luxury goods but still desiring variety on all occasions, she opted for extravagance on rent. While this may have been an unheard of service even a few years back, today you can look indulgent at dream costs. So rent it to flaunt it!
Luxury on rent, a popular concept abroad, is still a nascent concept in India. Newer categories such as bags and clothes are now beginning to find takers, in addition to luxury car rentals. So you have services such as Bag4aday and Bagsutra which offer you princely bags for a wonder cost after registration. You can hire a Mercedes for yourself from Avis India which is in the business of renting out premium cars. And you can even wear the most stylish designer outfits if you are in the show business ? all on rent.
Cookie Singh started her luxury online rental bag service, www.bag4aday.com in August last year as she was 'obsessed with bags.' Together with a business partner in Dubai, she started this service which boasts of stocking bags from 10-12 top luxury brands. There is a lifetime membership fee of Rs 7,000 after which you can hire the brand of your choice. While the average rental would be Rs 400-Rs 500 a day, Singh says that Louis Vuitton is a little higher at Rs 700 owing to its immense popularity. And her client list? "That's confidential. But our clients typically understand the brand and aspire to own better brands. We do a complete check of clients through a proper verification process," she says.
In similar footsteps is Bagsutra, a Mumbai-based rental service for bags. An extremely exclusive service, their membership fee is Rs 10,000 after which only the 'invitees' can avail of this service. It includes top of the line luxury brands such as Chanel, Tod's, Jimmy Choo and Bottega Veneta among others. However, the identity of the owner is a well guarded secret and even the website is accessible only to those who have a username and password!
There are many who are willing to pay extra for premium service. Our clients mainly comprise CEOs, MDs or guests staying in five star hotels." Going a step forward, the company also recently launched the 'Avis Self Drive Holidays,' which offers Indians travelling abroad a self drive opportunity to experience the destination from close quarters.
Besides services for corporates and socialites, there is something to make the lives of celebrities easy too. Fashion designer duo Shantanu-Nikhil will be launching their rental model for celebrities in Fall-Winter this year. "We will be looking at the rental model for celebrities who may need it for shows and events which follow specified budgets. It could range anywhere between Rs 30,000-Rs 80,000 depending on the duration and garment. It's a different business model but we feel it will succeed here," says Shantanu Mehra optimistically. The good life is now just a handbag away. Go ahead and rent it.
Saris and Louis Vuitton: Luxury Brands Eyeing India for Future Growth,
Immediately upon stepping into this city’s sole Louis Vuitton store, a quiet boutique in the lobby of the lavish Oberoi hotel, her eyes are on Vuitton’s new monogrammed cherry bag collection. Within minutes, she’s swapped the luxe black leather handbag she carried in for the fruit-emblazoned Speedy model, checking herself out in front of the mirror with a wide smile. The red details on the bag almost exactly match the color of her bright, floaty sari.
Welcome to the world of fashion in modern India, where traditional styles like the sari and brand new luxury must-haves are starting to coexist. It’s an interesting mix not seen in many other places in the world, and retailers couldn’t be happier: After all, India is considered by many to be “the next China” as far as luxury consumption and development, and the next few years are expected to bring in a rush of foreign brands hoping to establish themselves before an expected retail boom.
Expansion into the country is happening already. Louis Vuitton, frequently among the first luxury brands to enter a potential market (they had the foresight to open in China 13 years ago), now has two stores in India: the two-year-old shop at the Oberoi and a boutique that opened in September in the swank Taj Mahal hotel in Mumbai, the city formerly known as Bombay. Chanel opened its first India store last month in New Delhi’s Imperial Hotel. And Donatella Versace just made a splash on the front page of the country’s national newspapers when she announced, during a visit to Mumbai in March, that Versace would be opening five boutiques in the country next year.
“As soon as [China’s market] started to grow, everyone began looking at India’s population and demographics and realized that they needed to include us in their global plan as well,” said Superna R. Motwane, editor in chief and publisher of Indian versions of L’Officiel and Seventeen magazines. “A lot of people are banking on India as the new China, and we’re all just keeping our fingers crossed that it actually happens.”
A Merrill Lynch report issued last fall predicts that India, which currently has around 5 million luxury consumers, is about a decade behind China right now as far as market development. The past few years in China have seen many companies scrambling to open stores and establish a presence before the country’s retail market explodes, as it’s expected to do in the next five to 10 years. Now that India is being identified as the next big place to watch, many foreign brands have already started looking into expansion options there so they’re not forced to rush in at the last minute once again.
These alluring traits have positioned India and China as prime retail spots, and foreign brands are beginning to salivate over the potential success in both markets in the next few decades. But despite the basic similarities, the two neighboring countries have many differences that will shape the way foreign luxury brands many of which are now established in China will start to approach the Indian market in the next few years.
The main distinction between China and India is possibly most obvious on the streets of each country’s main cities. China, which was closed off to the outside world for decades under the Communist regime, had long abandoned fancy fashions for the dark, simple suits that are still daily attire for many in Beijing, Shanghai and elsewhere. When Western brands began trickling in about 15 years ago, their colors and styles were seen as a breath of fresh air for fashion lovers who previously had to work with the dowdy shapes and gloomy palettes sold at home.
India, on the other hand, has never lost its sense of traditional style even as its wealthier consumers have developed an interest in Western designers, travel and luxury brands. A walk through the busy streets of New Delhi or Mumbai shows that women regularly wear saris or the salwar kameez, a three-piece outfit consisting of pants, a tunic, and a long scarf. And although many women, particularly younger ones, have begun embracing a very Western style of daily dress, they still have closets full of these traditional Indian designs, which are still the standard formal attire for the country’s frequent, wedding-heavy social functions.
The result has put foreign retailers in a position where, unlike China, they need to meet the need for Western goods while still being somewhat mindful of India’s own fashion history. “This is a culture that still needs Indian clothes a lot,” said Motwane. “I could never have a wardrobe of all Western clothes. But what we’re seeing is that the Western clothes are starting to blend in very well. A woman can wear a suit to the office and then a sari in the evening to go out. Or she can wear a salwar kameez to the office and then a short dress to go out. We have been able to keep our traditional clothes and mix our wardrobes with Western styles.”
“The Indian customer is very individualistic,” said Prasanna Bhaskar, India retail manager for Louis Vuitton. “You will not see 30 people carrying the exact same bag in this market. Unlike a place like Hong Kong, where you do not need to remember what bag you sold to a customer’s sister-in-law, in India you do. They do not want to be sold the same design.”
“We do think the market in India is going to explode in about five years, but there are still plenty of challenges here,” acknowledged Bhaskar of Louis Vuitton. “Infrastructure is probably the biggest challenge in India. There are no roads here that you could easily walk on in Louis Vuitton shoes, and that’s an issue. Location has always been a challenge. There are no luxury malls here yet, and even if there were, there are not yet enough [high-end] brands to fill them. We are still waiting for the day when there are at least 10 luxury brands here who can move into a luxury lifestyle mall, like Pacific Place in Hong Kong.
Taxes on imported luxury goods in India have, in fact, raised prices in the country by up to 30 percent more than stores abroad. Companies like Louis Vuitton absorb some of the taxes to keep their prices closer to the world standard, a practice they also maintain in other countries with high import tariffs, like China. But the difference in cost isn’t much of a sticking point for shoppers who have the money to spend, Bhaskar said.
“I think Indian customers are much more comfortable shopping in our stores and are willing to pay a premium for the service they get,” she said. “Our Indian customers lead lives of royalty. They do not like to queue up. They do not like the idea of going to a busy store where they’d be one of 700 customers at a time waiting to see a bag. I have heard this time and again from clients who say that they prefer to come [to our local stores] because a bag will be reserved for them or because they can easily come often and spend an hour in the store. They are very conscientious of service, and they become very loyal if you offer them good service.”
In fact, unlike China, where many brands have to work on increasing their recognition, most Indian consumers are well aware of Western labels and the products they’re known for. A growing number of local magazines has helped, and there are four dedicated almost solely to fashion: Indian versions of international titles L’Officiel, Cosmopolitan and Elle, and locally owned magazine Verve.
“Right now, India is a country where you cannot walk out in the morning and buy a Gap T-shirt, or a Prada suit, or a pair of Diesel jeans,” Motwane said. “Now, I think every brand is probably going to be here in the next two years. It will be exciting to see what happens.
Marc Jacobs's limited edition, ready-to-wear sari dresses.
Louis Vuitton lights up for Diwali.
This year our Diwali spirit will reach the glitzy high streets of the world's most important cities, courtesy of luxury design house Louis Vuitton. Luxury brand Louis Vuitton, synonymous with stylish travel, will be paying homage to India's biggest and brightest religious festival through specially-designed store windows, to be unveiled this week across the world.
Diwali goes global:
Rajeev Sethi, a New Delhi-based artist and scenographer known for bringing contemporary relevance to the work of traditional artists and craftsmen, collaborated with Louis Vuitton to design the Diwali-themed window displays.
From November 5 to mid January, all of Louis Vuitton's 454 stores spanning five continents will feature columns of trunks made of banana leaves, which will glow softly like lanterns and are "aimed to give passers-by the feeling of gaiety and festivity," says the company in a press statement.
This is the first time in the store's 156-year history that it will be celebrating a single festival on this scale.
Louis Vuitton also confirmed that the store windows will reman unchanged throughout Christmas, a bold move in Western cities where shops compete for the best seasonal display.
Louis Vuitton sari dress debut
Couture sari dress: Invented by Marc Jacobs, branded by Louis Vuitton.
What's more, Marc Jacobs is designing a limited edition of ready-to-wear sari dresses, using vintage sari material sourced from New Delhi, Mumbai, Bangalore, Madras and other cities in India. The pieces, which the company says form a collective tribute to the country's long tradition of craftsmanship and splendorous fabrics, will be sold exclusively (in size 38 only, mind you) at the Louis Vuitton Paris Montaigne store.
Priyanka Chopra appears on the cover of this month's Vogue India in a colorful dress from the collection, called Louis Vuitton & Diwali. Supermodel Christy Turlington was also spotted wearing a dress from the long-awaited collection at the Biennale des Antiquaires, a rarefied antique art fair held in the grand palais in Paris.
The couture company has also created a new "Louis Vuitton fabric" especially for the occasion of Diwali. Designed by the Louis Vuitton studio, the fabric features a mix of Monogram flowers and Indian traditional motifs, and has been carefully woven by Indian craftsmen.
These fabrics will be transformed into three existing Louis Vuitton ready-to-wear pieces and a scarf, which represent a "delicate marriage of Indian heritage, know-how and Louis Vuitton creativity," and will be available for purchase worldwide says the company.
Courting India
Indian designer Rajeev Sethi's trunks, made of banana leaves.
Louis Vuitton's Diwali celebration is yet another sign that India is commanding global respect due to its formidable economic performance in the past decade. In many ways, this India-focused store theme and collection represents a peak in its relationship with the country, which dates back to the 1920s when Maharajas placed special orders for their luxury leather trunks.
Despite the historical link with Indian clientele, the first Louis Vuitton shop in the country only opened in 2003. Within seven years, the local network has grown to five stores in three major Indian hubs, and is still expanding. Despite the company's retail presence in India being nascent, the Diwali celebration signals clearly that Louis Vuitton is committed to us!
"Louis Vuitton has always endeavored to be as close and involved with the India of today, the emerging economy that occupies an increasingly important place in the globalized world, as with traditional India, the country of exceptional arts, crafts and the written word," says a company statement.
It adds: "The decision to celebrate Diwali, the most joyous and vibrant Hindu festival, in all its stores across the world, was taken to specifically honor the common values that Louis Vuitton shares with India, the respect for tradition and the passion for innovation."
Chapter 9
WHY ONLY LOUIS VUITTON?
Why you must get yourself a Vuitton:
It's an investment of a lifetime. Here we go:
1. In bag world, nothing beats Vuitton when it comes to quality. There are many other great designers out there who make great quality bags, but Vuitton is top of the range. And has been for decades.
2. Vuitton bags are easy to recognize because of their unique shape. They have a solid appearance and have firm curves and tend to be able to stand by themselves. This partly comes from the design and also from the tough material they are made of. So if you're looking for a bag that's not floppy, Vuitton is the best bet.
3. Vuitton bags come in great variety. There are shoulder bags, hand bags, waist bags, you name it, and they have it. It means you can have a whole set of Vuittons to suit different occasions.
4. Vuitton makes bags for both men and women - not many designers do that. So if you're looking for a special bag for your man, a Vuitton is a sure solution. They make great shoulder bags as well as grip bags and will make your man look like he has great fashion sense.
5. They have unisex bags as well. So guess what, you can buy a single bag that both you and your significant other can get to enjoy depending on whose turn it is..
6. They last for years. Vuitton as a label has been around for decades and that's because the brand has not failed its customers. If you buy a Vuitton, you can expect to have it around for the next ten years at least. Isn't that worth something? You may be wondering, what if it goes out of fashion? Well, Vuittons are not fad bags. They are made to be stylish and chic and stand the test of changing fashion. So don't worry, you can change your wardrobe but your Vuitton will faithfully stand by your side.
7. More on durability: they are both water proof and fire proof. This comes from the combination of materials that are used to create them - canvas for waterproofing and PVC for fireproofing. That's not a quality you'll find in many goods, let alone bags.
8. All Vuittons are handmade. This is actually a company policy, so that they can control the number of bags that get into the market. In fact, did you know that you can only buy one bag of one type of Vuitton per client? That tells you about quality as well as the designer's interest in making sure that his clients only get the best.
LVMH AND THE ENVIRONMENT
The relationship between LVMH and environmental protection is a long-standing one, both natural and sustainable. As in any human activity, we use the air, water and land around us. These are universal assets, but they are not unlimited. They form a capital that we are borrowing from future generations. For individuals and for businesses, this commitment implies certain duties. Protection, prudence, care are the principles that must be applied if we are to reconcile economic development with the overall well-being of humanity.
For LVMH, an environmentally sound approach is closely linked to our values and our businesses. Indeed, the style of life that we strive to uphold and the humanity in each of us that we strive to enhance, are forged in the name of these very traditions. Our worldwide presence, from Rio to Kyoto, certainly makes it easier for us to appreciate the fragility of our planet, the expectations, hopes, and dangers felt by six billion men and women. Rare essences of fragrances, grapes from the sun-drenched Cognac vineyards, precious leathers that become fine leather goods, and the fabrics woven with gestures repeated across the ages. Such traditions instill a profound respect for nature that translates into efforts to preserve beautiful landscapes, protect biodiversity and ensure consumer health, harmless production methods, and the impeccable quality of proven products.
Faced with these constant changes, rekindling dreams and pleasure does not absolve us of our responsibility, of our duty to think clearly. Indeed, the luxury industry, which is more synonymous with beauty than any other, must aim to be an example. We assume this responsibility.
First of all, we need to provide a framework for this goal. On behalf of the 56,000 LVMH employees, we have drawn up a global charter that defines environmental protection criteria and goals. As part of LVMH core management organization, an Environmental Affairs Department works every day to spread the special culture of the environmental impact assessment, coordinates actions and encourages all of our subsidiaries to adopt the "best ecological practices" at all levels of production.
In fact, environmental protection is not merely an issue of generosity or philanthropy. It is critical to our future. For companies, it is a factor of progress and competitiveness while for society it represents a tangible proof of freedom and a new way of thinking. LVMH has already met this triple challenge. Tradition cannot be separated from innovation, nor nature from creation.
Other brands by LVMH
Champagne Moët & Chandon
Founded in : 1743
Activities : Champagne
20, avenue de Champagne
BP 140, 51333 Epernay Cedex – France
Marc Jacobs International LLC
Founded in : 1984
Activities : Ready-to-wear for men & women, leather goods, accessories & fragrances
72 Spring Street – 2nd floor
New York, NY 10012 – USA
Fendi SRL
Founded in : 1925
Activities : Ready-to-wear, leather goods, accessories & fragrances
Via del Leoncino 5
00187 Rome – Italy
Donna Karan
Founded in : 1984
Activities : Ready-to-wear for men & women, childrenswear, accessories
550 7th Avenue
New York, NY 10018 – USA
www.donnakaran.com
Givenchy S.A.
Founded in : 1952
Activities : Haute couture, ready-to-wear, shoes, leather goods & accessories
3, avenue George V
75008 Paris – France
KENZO S.A.
Founded in : 1970
Activities : Ready-to-wear, leather goods, shoes & accessories
18, rue Vivienne
75002 Paris – France
Parfums ChristianDior
Founded in : 1947
Activities : Fragrances, make-up, skincare
33, avenue Hoche
75008 Paris – France
MAKE UP FOR EVER S.A.
Founded in : 1984
Activities : Professional products for makeup artists & consumer cosmetics
12, rue de Penthièvre
75008 Paris – France
Emilio Pucci Parfums
Founded in : 1966
Activities : Fragrance, skincare
58-60, avenue de la Grande Armée
75017 Paris - France
TAG Heuer SA
Founded in : 1860
Activities : Watches & chronographs
Louis-Joseph Chevrolet 6a
2300 La Chaux-de-Fonds – Switzerland
Dior Watches
Founded in : 1975
Activities : Watches & Pens
44, rue François 1er
75008 Paris – France
Zenith International SA
Founded in : 1865
Activities : Watches & chronographs
Billodes 34-36
2400 Le Locle – Switzerland
DFS Group LTD
Founded in : 1961
Activities : Retailer for international travelers
4005-8 One Exchange Square
8 Connaught Place, Central, Hong Kong
Sephora
Founded in : 1969
Activities : Retail beauty chain: fragrances, make-up, skincare, beauty care & accessories
65, avenue Edouard Vaillant
92100 Boulogne-Billancourt - France
Groupe Les Echos
Founded in : 1908
Activities : Media group
16/18 rue du Quatre Septembre
75002 Paris - FRANCE
CHAPTER 10
FUTURE EXPANSION
Bernard Arnault plans for the “FUTURE” of LVMH:
The Wall Street Journal has an interesting profile of LVMH CEO Bernard Arnault. Arnault is the richest man in France and one of the most influential style makers in the world of luxury fashion. His opinions influence everything from the line of a skirt to what becomes the next hot handbag. In addition to being the CEO of the company that owns Louis Vuitton, Givenchy, Dior, Tag Heuer, Fendi and Moët & Chandon champagne, Arnault is also the majority stockholder. He discussed the company's vision for remaining strong during the recession when luxury sales are down all over the globe and how as a businessman he manages to get along so well with the temperamental and brilliant designers he's hired, such as Lagerfeld, Jacobs and Galliano.
In the emerging markets LVMH is counting on for its future growth—countries such as China, India and Russia, where owning branded products is still a way to exude status and achievement -- there is also economic uncertainty. Arnault remains sanguine. "In 1998, the Russian economy was on the brink, and then it rebounded. It happened quite quickly. India too—I have no doubt it will rebound," he says, opening a silver pill box and popping an artificial sweetener into his coffee.
"China is the most interesting part of the world for me now. I go there two or three times a year, most recently in Dalian, where we've just opened in a new mall. There are so many people who are getting to the stage where they want to consume, who want to be part of a club." Over the next five years, Arnault expects China to account for 20 percent of LVMH's sales. "China is feeling the effects of the crisis, but less than the U.S. And when you consider that Chinese tourists are now buying as much as Japanese tourists, when there were virtually none just 10 years ago, I'm not so worried."
"Designers are closer to artists than to engineers," Arnault says. "They're not like normal managers, and you have to balance their creativity and rationality. John, Karl, Marc, they're genius. You can't put them into a rational environment. They're sometimes late, and you have to accept that if you work with them, you have to be understanding with them."
CHAPTER 11
CONCLUSION
Louis Vuitton has high amounts of brand knowledge due to the strength of favorable and unique associations in its brand awareness and image components. Moreover, LV entered India early and therefore, enjoys the first mover advantage. Thus it can be concluded that it is a very equitable brand. Work needs to be done however to increase the awareness among the masses also, because they are the customers of tomorrow. Also, moreassortment and variety of products should be brought in India instead of restricting more towards bags.
LVMH is in 'an excellent position' to once again strengthen its leadership in 2010. "Taking into account the uncertainty of the strength of the economic recovery, LVMH will continue in 2010 to rigorously manage all of its businesses. It will be focused on further, increasing its competitive advantages, the group will continue its strong dynamic innovation and expansion in the most attractive markets.
"Strengthened by the flexibility of its organization and the good balance of its business lines and geographic exposure, LVMH enters 2011 with confidence and has set itself the objective of increasing, once again, its leadership of the global luxury goods industry."
• A UNIQUE GROUP – LEADER IN A GROWING MARKET
• TALENTED MANAGEMENT
• CONSTANTLY RENEWED CREATIVITY
• INTERNAL GROWTH: A PRIORITY IN 2001
• TARGETS: DOUBLE THE GROUP’S SIZE IN 5 YEARS
Chapter 12
BIBLIOGRAPHY
http://www.lvmh.com
http://www.louisvuitton.com
Monash, Melbourne Libraries.
RMIT, Melbourne Libraries
IED, Milan libraries.
