LOUIS VUITTON

Topics: Luxury good, LVMH, Marketing Pages: 18 (3462 words) Published: December 11, 2014


LOUIS VUITTON IN JAPAN: THE MAGIC TOUCH

Table of Contents
PROBLEM STATEMENT3
SITUATION ANALYSIS3
Company History and Background3
Company Mission Statement and Vision4
Company Strategy4
INTERNAL ANALYSIS4
Strengths5
Weaknesses5
EXTERNAL ANALYSIS6
Opportunities6
Threats6
Political Elements6
Economic Elements6
Social-Cultural Elements7
Technological Elements7
Legal7
Competitive Analysis8
Market Analysis and Segmentation8
KEY SUCCESS FACTORS10
KEY UNCERTAINTIES10
ALTERNATIVES10
RECOMMENDATION12
ACTION PLAN12
CONTINGENCY PLAN13
APPENDICES14
REFERENCES18

PROBLEM STATEMENT
Excellence in business and marketing execution, heritage, and worldwide brand recognition coupled with trendy yet timelessness quality products with exclusive aura perpetually instigating the Japanese’s genetic demand for luxury has allowed Louis Vuitton (LV) to become the leading luxury house in Japan and make it its primary source of revenues for more than four decades. This was equally fueled by high level of disposable incomes as well as Japanese social and cultural conforming norms. However, the recent prolonged global recession has eventually resulted in some changes of atypical Japanese buying behaviours that eventually will have negative consequences on luxury goods market as a whole. To protect its market share and revenues dilution in Japan, LV needs to identify those market segments with un-capitalized revenue opportunities or prone to lose consumers and then develop and implement distribution, product and/or advertising initiatives that would yield optimization.

SITUATION ANALYSIS

Company History and Background

Company Mission Statement and Vision
The mission statement of all LVMH brands is: “To represent around the world the most refined qualities of Western `Art de Vivre' and must continue to be synonymous with both elegance and creativity” through products embodying “cultural values, blend tradition and innovation, and kindle dream and fantasy.”[1]

Company Strategy
The execution of LV’s business strategy centre around five priorities reflecting the shared LMVH’s brands fundamental values which are: (i) be creative and innovative; (ii) aim for product excellence; (iii) bolster the image of our brands with passionate determination; (iv) act as entrepreneurs; and (v)strive to be the best in all they do.[1]. INTERNAL ANALYSIS

Despite its 150 years of heritage in the luxury market the LV brand continue to be very successful mainly due to the extraordinary, unique, consistent and holistic execution of its business strategy. Product - LV’s success is directly related to the quality and design of its products and in this respect LV is continuously investing manufacturing technologies that improves both quality and productivity. Quality control is one of the key steps in the production process and employs a sequence of strict test before products are released to the market. Product and design innovation is achieved through collaboration with famous designers such as Marc Jacobs, Takashi Murakami just to name a few who revive the product lines with collections with trendy or market cultural specific elements. Equally important, LV is taking counterfeiting measure to prevent replication of their products as the brands image can be compromised. Pricing – LV`s pricing is very high and reflects the quality, craftsmanship, exclusiveness and values of the products. LV is very restrictive with its pricing policies and as a result the LV products are never on sale or marked down. Particularly for Japan, the prices are in general 25% higher compared to those in Paris and it seems that is was the right strategy as the Japanese consumers purchasing behaviours are driven by other values compared to those in other markets. Placement - LV has chosen to a limited distribution channels that allow exclusive control over pricing and...

References: Helsen, Kotabe. Global Marketing Management, 5th edition
1 http://www.lvmh.com/the-group/lvmh-group/group-mission-and-values
2 http://www.yanoresearch.com/press/press.php/000609
3 http://www.mckinsey.com/insights/consumer_and_retail/japans_luxury_shoppers_move_on
http://www.businessoffashion.com/2010/10/japans-premium-pricing-problem.html
http://en.wikipedia.org/wiki/List_of_Japanese_cities_by_population
http://www.mystore411.com/store/listing/187/Japan/Louis-Vuitton-(LV)-store-locations
http://www.budde.com.au/Research/Japan-Mobile-Market-Overview-Statistics-and-Forecasts.html
http://www.jmrn.com/UserFiles/File/DCLB_JMRN.pdf
http://luxurysociety.com/articles/2009/01/the-future-of-luxury-in-japan
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