Louis Vuitton in India Case Study

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Global Marketing - Louis Vuitton in India

With a GDP growth rate of more than nine percent, India is one of the fastest growing economies in the world. The population size exceeds one billion, including around 83,000 dollar millionaires (2005), recording the world’s second fastest growth in the number of high-net-worth consumers. Luxury brands like Louis Vuitton can take advantage of a steadily increasing upper class and a more and more affluent middle class. Moreover, 51 percent of the population is under 25, which gives brands the possibility to educate its future customers and shape their fashion tastes. Along with the fact that the luxury products market is growing 20 percent annually, all these factors make the Indian market extraordinarily attractive for Louis Vuitton. In contrast, 87 percent of the population has an income less than $2.50 a day. The countries per capita income is well below the unit price of the products sold by Louis Vuitton and the enormous diversity of culture, people and languages, combined with high customs duties and high tariffs make it difficult for companies to gain ground in this promising economy. Considering both positive and negative aspects, I believe, that the Indian market comprises manifold business opportunities, especially in the rapidly developing segment of luxury products. A similarity all luxury brands share is the ambition to showcase its brand personality through an elite store design and highlight its reputation by the exclusivity of the surrounding areas. When Louis Vuitton entered India by opening its first store in a leading Indian luxury hotel, it found the right ambience for its products, but had to handle the limitation of space and the increasing rental costs. Having a store in a luxury mall would offer the same exclusive environment at a cheaper price and the possibility of image spillovers from other luxury stores around. Moreover, as the luxury mall model is new in India, it would arouse public...
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