Louis Vuitton marketing strategy and the emerging luxury market in China

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Louis Vuitton marketing strategy and the emerging luxury market in China

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Abstract

Louis Vuitton (LV) is the world 1st luxury brand and the leading brand of the LVMH group created in 1987, which was the 1st world group for luxurious goods' production and distribution. LVMH, ?16.5 billion sales worldwide in 2007 (+7.7%), is far ahead of the competition with revenues three times bigger than its close competitor, Richemont Group. The group is split in five core activities with a rich portfolio of over 60brands. Fashion and leather goods, with ?5.6 billion sales accounting for 34 % of the group turnover, are the group's growth engine. LV dominates the luxury segment by far with ?1.659 billion turnover in 2006 (2 times its two main followers PPR and Valentino), and owns 405 stores (+15 net openings 2008).

Tags: Chinese luxury goods, Luxury goods in china, Luxury market, Louis Vuitton marketing mix, Louis Vuitton target market

Company presentation
External analysis: Louis Vuitton in China
1. Macro environment: PESTEL analysis
2. Micro environment: competition's structure analysis
3. Porter 5 forces model
Market analysis: the luxury market in China
Why? The new attitudes in luxury consumption
Marketing strategy
1. Marketing objectives
2. The market strategy
3. Segmentation
4. Positioning
Marketing-Mix
1. Product
2. Price
3. Place
4. People
5. Physical evidence

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[...] Originality = guaranty of quality ('made in') and authenticity (‘designed by') The emerging, dynamic, and fast moving luxury market in China is challenging in terms of cultural, demographic and geographic dimensions for the Louis Vuitton's Marketing strategy. C. Marketing Strategy Louis Vuitton has been one of the first movers among luxury brands by making its emphatic entry into the market in 1982. It established its first exclusive concept store in Hong Kong and then trailed on towards the continental side in Beijing's Peninsula Hotel in 1992. [...]

[...] LV has already established 9 'landmark boutiques' in the three storeyed China World mall, and shall continue its expansion in this format. Promotion: The promotion campaigns have to be limited in numbers in order to preserve the brand its products, its selectivity, relative scarcity, and prestige perception. The finest quality of the scope, the message, and the support has to reflect the brand image. LV's promotion is about branding rather than the product. Despite some local adaptation, LV's target is always international. [...]

[...] the US $ / RMB) was Real estate and land price reached a bubbling effect A system of fiscal incentive for FDI in specific coastal areas was introduced Huge workforces and low wages in comparison to low productivity and business management skills was effective and rampant Social: A buoyant emerging consumer market China's population : A country constituting 1.3 billion inhabitants world population) and a population growth rate of (2008) Ageing population Education: As per surveys and reports in 1999, the country's GDP was wherein a literacy rate of was achieved in 2006 Rural exodus : Conversion of rural areas in urban localities is only a new principle in China. [...]

[...] The current strategy has been developed on three main axes[1]: Strengthening of its position in the emerging market segment: As growth relays when mature markets slowdown (E.U.&U.S.) or declines (as in the case of Japan), with a retail network extension, there is a high growth potential of new customers with increasing purchasing power and eagerness to adopt the foreign luxury goods (e.g. China, Russia, and India). A 'premium” positioning': By adopting a differentiation strategy, selling high quality innovative products at a higher price, and then staying above the emerging competition of the middle markets, rivals trade up in such a manner that they begin comforting its profitability. [...]

[...] (1980).Culture's Consequences, International Differences in Work-Related Values (Cross Cultural Research and Methodology) Newbury Park, CA: Sage.Hofstede Husband and Chadha, ‘Cult of the Luxury Brand: Inside Asia's Love Affair with Luxury', Nicholas Brealey Publisher, November 2006 International Finance Corporation : ' Doing Business in China ' 2007: accessed on 18/11/2008 http://francais.doingbusiness.org/ExploreEconomies/?economyid=42, Koetler, et al. ' Principes de Marketing', Pearson Education, 8th Edition Koetler, P. Dubois, B. 'Marketing Management', Pearson Education, 11th Edition Larenaudie, Raper, S. 'Luxury for The People!', Time, Style & Design, Vol Spring2005 LVMH, Institutional information : http://www.lvmh.fr/ Revenues', Corporate report, October 2008 ‘2008 biannual [...]

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