Marketing Principles of Louis Vuitton

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WASEDA

BUSINESS

& ECONOMIC

STUDIES 2008 NO.44

Marketing

Principles

of Louis

Vuitton

The Strongest Brand Strategy by Shin'ya Nagasawa*

Abstract: By systematically breaking down the strategy of the single Louis Vuitton luxury brand into the four Ps (Product, Price, Place, and Promotion), our aim in this paper 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 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. 1. Introduction Headed up by the Louis Vuitton (hereinafterreferred to as "Louis Vuitton") fashion label, the colorful array of over 50 brands managed by LVMH Moet Hennessy. Louis Vuitton S.A. (hereinafter referred to as "LVMH") includes Christian Dior, Givency, Celine, Fendi, Donna Karan, Loewe, jeweler Chaumct, Fred, watchmaker Zenith, Tag Heuer, alcoholic beverage maker Moet & Chandon, and the premium champagne Don Perignon, as well as DFS and Le Bon March€-the world's first department store. The management and history of the company's development were elucidated in the author's previous book (Nagasawa2002). * Shin'ya Nagasawa is a professor of MOT (Management of Technology) at Waseda Business School, Graduate School of Commerce, Waseda University,Tokyo, Japan, and also a visiting professor of ESSEC BusinessSchool, Cergy, France (2008-2009). He holds a Doctor of Engineering from Waseda University. This paper is revised from the paper presented on the International Conference on Management Engineering 2008, Kitakyushu,March 2008. 41

The previous book also had another theme: considering the nature of luxury brands as distinct from commodity markers. 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 explored in the previous book . In researchers' brand management theories, one rarely finds mention of representative luxury brands like Louis Vuitton or Dior, or of LVMI-I. 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 I VMH 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, and Promotion), our aim in this

book (Nagasawa 2007) 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 Vuiunn 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.

2. An Overwhelming Presence in the Japanese Luxury Market Based on data published in Luxury Import Brand Marker in Japan 2008 (Yano Research Institute Ltd. 2008), Louis Vuircon held the top spot for net sales of single brands for FY2007 with sales of around 165.0 billion yen-approximately 2.7 times that of third-place Hermes, about 3.1 times fourth-place Tiffany and around 2.5 times Coach, which had rapidly advanced to second. Moreover, in per-store sales for major luxury brands, Louis Vuitton raked in approximately 3.0 billion yen-three times that of its main competitors-demonstrating to more than ten Louis Vuitton's tremendous...
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