By : Nimisha Karnani

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Abstract 2

1. Introduction1.1 Louis Vuitton: Company profile1.2 Mission statement 1.3 Strategy1.4 Mergers & Acquisitions 4555

2. SWOT Analysis6

3.Marketing Mix 3.1 Product 3.2 Price3.3 Place3.4 Promotion78910

4.External Environment Analysis12

5.Conclusion13

6.References 14

1. INTRODUCTION1.1 Louis Vuitton: Company profileLouis Vuitton Malletier, commonly referred to asLouis Vuittonor shortened toLV, is a French fashion house founded in 1854 byLouis Vuitton. The label's LVmonogramappears on most of its products, ranging fromluxurytrunks and leather goods to ready-to-wear, shoes, watches, jewellery, accessories, sunglasses, and books. Louis Vuitton is one of the world's leading international fashion houses; it sells its products through standaloneboutiques, lease departments in high-enddepartment stores, and through thee-commercesection of its website.Louis Vuitton is the world's most valuable luxury brand and is a division of LVMH. It is one of the most profitable brands in the world with profit margins approaching 40%.For six consecutive years (20062012), Louis Vuitton has been named the world's most valuable luxury brand. Long-time creative director Marc Jacobs left Louis Vuitton in 2013 after 16 years incharge of the brand.Recent product endorsers of the brand include Angelina Jolie, Muhammad Ali and Michael Phelps. The luxury powerhouse operates some 3,385 stores across Asia (including China and Japan), Europe, and North America. While more than a third of its stores are in Europe, Asia is the company's single largestmarket, accounting for more than 35% of sales. LVMH rings up about 30% of its sales in Europe (including France with 11%). The US represents more than 20%.

Marc Jacobs, Former designer for LV

1.2 Mission StatementThe mission of the LVMH group is to represent the most refined qualities of Western "Art de Vivre" around the world. LVMH wants to be synonymous with both elegance and creativity. In view of this mission; five priorities reflect the fundamental values shared by all Group stakeholders: Be creative and innovate Aim for product excellence Bolster the image of our brands with passionate determination Act as entrepreneurs Strive to be the best in all that is done1.3 StrategyWith the market for luxury goods on a tear -- especially in fast-growingmarkets in Asia --LVMH is flush with cash for acquisitions and growth. The company is growing its stores base in all of its markets, except for Japan, where it held steady at 370 shops in 2013. LVMH added 180 stores in 2013 after adding about 165 in 2012. China is a huge emerging market for luxury goods, including wines & spirits, and a pillar of growth for the French company.The company has been focusing on controlling as much of its distribution across its 60 brands as possible. LVMH has more than 3,380 retail outlets (87% are outside France). Nearly half belong to its Selective Retailing business, which consists primarily of Sephora cosmetics stores. About 40% are fashion and leather goods shops, led by Louis Vuitton,and also include Fendi boutiques, and hundreds of other shops under the Celine, Givenchy, DonnaKaran,Thomas Pink, Pucci, andMarc Jacobs brands, among others.LVMH's namesake Louis Vuitton brand, as well as Fendi and Marc Jacobs, are proving resilient in Europe, despite the economic slowdown there, and posting strong revenue gains in Asia.1.4 Mergers and AcquisitionsLVMH expanded its products portfolio in mid-2013 when it purchased an 80% stake in Italian cashmere company Loro Piana for $2.57 billion, more than three times the $900 million in sales the company had expected to post in 2013. LVMH values Loro Piana for its products' unique quality and craftsmanship and its six generations of leadership. As part of the transaction, the cashmere company's owners will retain a stake in the business.The company put its ample cash to good use, in late 2011 the French luxury goods firm completed a3.7 billion ($5 billion) tenderoffer for the shares of Rome-based jewellerBvlgari. Bvlgari is the smallest of the major luxury jewellery and watch makers and the deal doubles LVMH's watch and jewellery business. The Bvlgari deal was announced soon after LVMH acquired apair of niche brands: Ole Henriksen and Nude skin care. In late 2010, LVMH bought more than 20% of the shares of its rivalHermes International. While LVMH described the move as friendly.

2. SWOT ANALYSIS Strengths1. The brand is one of the oldest fashion houses with more than 150 years of history.2. The brand is easily recognizable because of its logo and monogram canvas on most of its products.3. The brand has its presence in most of the large shopping hubs of the world.4. The brand is available exclusively in its own stores.5. The brand also makes custom tailored products for its few elite customers.6. The brand has a clientele including international celebrities.7. Extremely high brand recall and global presence.

Weakness1. The brand is available only in its exclusive stores making it difficult for people all around the world2. Fake imitations affect brand and sales

Opportunities1. The company needs to adopt the current fashion trends to stay in business2. The company can offer once in a yeardiscounts for its customers.3. Revamping LVs image from time to time to meet contemporary tasted and styles of its elite customers.

Threats:1. The brand is counterfeited all around the world2. Economic crisis can hurt the brand sales in a negative way.

3. Marketing mix 3.1 Product:

The classic LV bagThe first of the Four Ps of marketing is product. A product can be either a tangible good or an intangible service that fulfils a need or want of consumers. Whether you sell custom pallets and wood products or provide luxury accommodations, its imperative that you have a clear grasp of exactly what your product is and what makes it unique before you can successfully market it.The label's LVmonogramappears on most of its products, ranging fromluxurytrunks and leather goods to ready-to-wear, shoes, watches, jewellery, accessories, sunglasses, and books. However, a Louis Vuitton handbag offers a product of distinguished quality and attention to detail, as well as one with a story behind it. Furthermore, while general marketing places 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 the creativities of Marc Jacobs, who was the artistic director of Louis Vuitton for a long time, and have been shared and carried on by the business corporation.Elimination of counterfeit productsBy way of enlightenment campaigns aimed at the general public, the LV Group has conducted seminars and symposiums related to intellectual property from time to time to retain its high-end brand name and image in the market.Louis Vuitton knock-offs? Unforgivable! The company distributes warning notices to imitators for using a "mock monogram" which combines dark brown colours with the characters L and V, as well as the company logo, flowers, and stars without permission.Louis Vuitton allies itself with the law. This is to remark on the fact that Louis Vuitton creates highly original lines which are difficult to imitate. The company then registers these trademarks and designs. The design of Louis Vuitton travel bags, particularly their arrangement, has evolved in order to do away with counterfeits.

Comparison between an Original LV and a counterfeitSpecial order handbags:Louis Vuitton has a special order service. These are custom orders for self-indulgers who would like Louis Vuitton to make custom-made products and order-made products. Products with Inorganic Serial NumbersLouis Vuitton creatively names all its products. They believe that it is important to produce the effect of having users form an attachment for the product. To cite an example of said names, the names of districts like Soho, Broadway, Ural and Baikal. If products were given serial numbers with just numbers and symbols, such as a product name like MG40 for instance, then this would produce a completely inorganic resonance.3.2 Price:

After a concrete understanding of the product offeringis established pricing decisions can be made. Price determinations will impact profit margins, supply, demand andmarketing strategy. Similar (in concept) products and brands may need to be positioned differently based on varying price points, while price elasticity considerations may influence the next two Ps.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. It can be said that such high prices are unnecessary for merely stowing and carrying things. In essence, the Louis Vuitton difference is value, not price-this being absolute value, not relative value.

Premium PricingThe notion of prestige pricing shows up in the pricing strategy of Louis Vuitton. 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 Louis Vuitton, which reigns over the top range of luxury brands, represents prestige pricing to consumers even though it is proper pricing for Louis Vuitton.No Bargain SalesLooking at markets in which bargain sales run rampant, one brand has a history of not once holding a sale where it reduced its prices in 156 years. That brand is Louis Vuitton. Throughout history, Louis Vuitton has not held a bargain sale even once because of its single-minded devotion to quality. This is because the core of Louis Vuitton's pricing strategy lies in selling products to all of the customers at the same price.LV burns leftover goods at the end of the year. If the bags are not sold, they burn them in order to prevent putting a lower price on them. Historically, its known that LV does not put its pieces on sale. This is done to sustain an items valuePrinciple Prohibiting Sale in Value SetsThe practise of throwing in added bonuses with the products is just a variation of a price discount. This is because if the amount of money paid is the same for cases where added bonuses are included and cases where they are not included, then including these extras amounts to the same as providing a price discount for the cost of the added bonus. Louis Vuitton does not include such added bonuses. Louis Vuitton also does not engage in set sales and does not acknowledge set sales since they lead to price discounts.3.3 PlaceMarketing is about putting the right product, at the right price, at the right place, at the right time. Its critical then, to evaluate what the ideal locations are to convert potential clients into actual clients. Today, even in situations where the actual transaction doesnt happen on the web, the initial place potential clients are engaged and converted is online.General marketing seeks to create broad distribution channels opening more stores or selling through non-department store outlets such as mail order and volume retailers. On the other hand Louis Vuitton, bags are only offered through limited distribution channels. One might go as far as to say that Louis Vuitton innovated a method of selling that amounts to controlling place and not using channels that cannot be controlled. Prime LocationsBrands are attracted to urban area which are suited to their brand image and establish stores there which in turn create a virtuous cycle whereby the areas image improves further and the establishment of stores accelerates. In order for luxury brands to succeed internationally it is essential for then to be successful. This is the exact practise is followed by Louis Vuitton.

Operates through Flagship stores onlyThe establishment of large-scale flagship stores endows Louis Vuitton with bases from which gives a more prestigious and clearer image and to thoroughly ensure a sense of high added value. This acts as a measure to further enhance Louis Vuitton as a top brand. If Louis Vuitton 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 tested tactic for luxury brands, with Louis Vuitton's global flagship score strategy serving as an excellent example of this. Louis Vuitton is preparing a number of strategic moves and setups against this backdrop.In-store layoutLouis Vuitton is working on the long-awaited retail stores while increasing its ready fire power in the form of in-shop placement in department stores and expanding sales. The concept allows customers to enjoy shopping in the atmosphere of a Parisian boutique from those days by utilizing the space of a retail store.3.4 Promotion:Promotionlooks at the many waysmarketing agencies disseminate relevant product information to consumers and differentiate a particular product or service.Promotions includes elements like: advertising, public relations, social media marketing, email marketing, search engine marketing, video marketing and more. Each touch point must be supported by a well-positioned brand to truly maximize return on investment. General marketing looks at 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). Recent product endorsers of the brand include Angelina Jolie, Muhammad Ali and Michael Phelps.

Angelina Jolie, brand ambassador for Louis Vuitton Prohibiting Television Commercials The company says television commercials are not suitable to promote their product. There are the problems of "reach" and "richness." Louis Vuitton values the fullness of information talked over in rich detail by salespersons and customers, such as discussions of how to care of bags, the features of the latest creations, etc.Emphasis on publicityThe company conducts paid advertisements in the same way that other luxury brands do. However, it emphasises publicity through PR in which brands and products are taken up by the media, such as newspaper, magazines, etc more than the average brand does. For example, prior to a store opening, a number of fashion magazines put together major special features and the magnificent opening party was reported on extensively.PROMOTION 6: Principle of Extravagant Parties Extravagant parties used for promotion:As part of Louis Vuittons promotional strategy, Louis Vuitton holds extravagant parties. The parties are thrown in a spectacular manner the extravagance itself and the large number of famous celebrities become topics of conversation which are rapidly picked up on by the mass media. Even though Louis Vuitton 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.

3. External environment analysis of Louis VuittonDemographic and Social Trends LV utilizes demographic targeting strategy to identify its customers. LVs target markets include both men and women aging range of young adults aged 22 years to seniors aged 65 years from the upper middle class and above. The organization has been facing numerous challenges from demographic evolutions such as aging populations, and racial and ethnic proportion changes in the world. Due to that, LV would have to continuously bring up new products to cater to the changes of demands.LV products are also a great social phenomenon in Asia comparing to France its origin country. LV has done very well in Japan marketas Japanese habitually goes after high quality products and LVs unique monogram is also a great contribution to it. LV products is often catered toonly a few people as it is highly priced, so no regular people can afford it. Political and legal factors:Due to LVs image, it has become one of the most counterfeited fashion brands in the world. Owing to its high price, generally people cannot afford to buy it. In the recent years, no doubt there are numerous products bearing LV initials in the streets all over the world, but only a small percentage of the products are genuine. Lately, there has been a rise in counterfeiting luxury products because numerous manufacturing has been shifted to countries with poor intellectual property rights and with the opportunity provided to those countries by technology. Although LV has taken various actions to fight against counterfeit but there are still numerous fake LVs out there. Therefore the company has setup a team of people responsible fully on anti-counterfeiting with the help of special investigation agencies and lawyers. In addition, the company is also keeping the distribution of its products in close control. Working together with governments is among the ways to help LV fight against counterfeit. For instance, the company, in concert with other French makers of luxury goods,has successfully lobbied the French parliament to make the import of even one counterfeit article a criminal offence. Economic factors:One of the biggest factors that affects sales of LV goods in India is the tariff. The higher the taxes are for its goods, the smaller the incentive is to buy those goods because demand isnt going to be as high if prices have to increase in order to make up for the tax. In order for luxury goods to. LV targets the richest people in the country. But on the other hand, most of the population is very poor and wouldnt be able to purchase such goods, even if they saved up for it. However, there is a select group of rich people who would make setting up luxury stores in India profitable because there are very few stores in India for them to go to. The market is currently set up for an oligopoly, because the demand for goods at a luxury store would be inelastic for anyone interested in a luxury item and there are so few stores.

4. ConclusionBy systematically breaking down the strategy of the Louis Vuitton into the four Ps (Product, Price, Place, and Promotion), SWOT analysis and studying the external factors that affect its operation, I found out that the rules or principles of its brand marketing greatly differ from that of general consumer goods. In other words, the company has successfully applied the rules and principles required to make any luxury brand a huge success. Showing that the current rise of Louis Vuitton is not a coincidence but rather something achieved through strategy will surely be of interest to firms struggling with lack of brand power or those looking to boost brand power.In conclusion, the key to luxury brand marketing boils down to the following three points:1. Product excellence by itself in not enough, the luxury brand must perform at an experiential level as well. As luxury consumers evolve, not only these act as points of differentiation, but also as substance to justify a premium value and pricing.2. While pedigree factor is important to exuberate the years of mastery or lineage, it is crucial to generate ongoing relevance and dynamism through the persona, PR & public-figure factor.3. Luxury brands must continue to maintain a certain degree of exclusivity and stature with the paucity factor and the placement factor from the retail experience to the touch-points it associates itself with.

5. References1. http://www.lvmh.com/the-group/lvmh-companies-and-brands2. file:///C:/Users/Suresh/Downloads/WasedaBusiness&EconomicStudies_45_Nagasawa1.pdf3. http://prezi.com/8ynvsvldcege/louis-vuitton-consumer-behavior/4. http://www.luxurydaily.com/wp-content/uploads/2013/01/Luxury_Marketing_Outlook_2013.pdf5. http://www.theglobeandmail.com/report-on-business/international-business/european-business/louis-vuitton-slows-expansion-to-protect-image/article8069266/

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