Word Count – 3,154 words.
Marketing in a Contemporary Context4
Understanding Consumer Behaviour6
Segmentation, Targeting & Positioning10
The Marketing Mix12
Appendix (Including Additional Readings)18
“There are four main elements to our business model – product, distribution, communication and price. Our job is to do such a fantastic job on the first three that people forget all about the fourth.” (Bernard Arnault, CEO of Moët Hennessy-Louis Vuitton. Taken from Anonymous, 2009) Merging into its current form in 1987, Moët Hennessy-Louis Vuitton (henceforth referred to as LVMH), serves as one of the largest luxury goods providers in the world, trading in over 65 countries and employing over 30,000 individuals. With the concept of consumer value ever being redefined relative to the constricting nature of the current economic climate, one could be forgiven for imagining that the process of marketing luxury products/services to an increasingly conservative consumer base would be a difficult one to maintain successfully. In spite of this, LVMH has upheld its profitability when so many of its competitors have failed to do so. At the forefront of the 50 or so brands that fall under the LVMH umbrella is the company’s flagship marque– Louis Vuitton (LV). Despite a recent slump in demand within the luxury leather goods industry, LV has proven to be representative of the adaptable nature of the conglomerate as a whole. Whereas for many, the must-have features of yesterday are today’s can-live-withouts (Quench, 2008), LV has adopted a consistent, innovative marketing strategy to ensure that whatever it chooses to sell never falls into the latter category in the minds of customers. This piece intends to accurately portray the method by which LV understands the current obstacles it faces in executing effective marketing within its business. Hence, it would seem prudent to depict the areas where its products are still most coveted, the level of understanding that Louis Vuitton maintains concerning its customers’ needs and the ensuing means by which it uses the tools of the marketing trade to use such principal expertise to its advantage. Marketing in a Contemporary Context
According to Christian Grönroos, marketing can be defined as “an organizational function and a set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.” More than ever, a strict emphasis on providing service-based value creation to the customer must maintained if a business hopes to successfully traverse the current strategic environment (Fellenz & Brady, 2010). In an attempt to portray the worthwhile nature of its products/services to potential patrons, a current seller in today’s global buyers’ market must effectively make the high-quality nature of its products discernible to consumers relative to that of its competitors: “Gimmicks are out; reliability, durability, safety and performance are in.” (Quelch, 2008). Today’s atmosphere of uncertainty may also serve as one of opportunity for any business that chooses to takes advantage of the presently sceptical nature of consumers, solidifying their trust in its products/services, gaining market share today so as to retain it and subsequently avoid any ‘diluted brand equity’ tomorrow (Lodish, 2007). Seizing such opportunities within today’s market for luxury leather goods comes in recognising that when potential customers have less money, they spend what little they may have on quality (Anonymous, 2009). For a company that describes 60% of those who purchase one of its Speedy monogram canvas handbags (Figure...