Louis Vuitton Case
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Introduction:
Luxury or Luxus comes to mind when we here of Louis Vuitton. Louis Vuitton started as a handmade leather bag unit and later expanded into leather accessories. The brand is targeted to Super rich customers in the world, be it in Europe, America and Asia.
Background:
Louis Vuitton was started in 1854 in Paris. The company flourished during the era of rail and ship expansions. It soon opened up new stores in London, UK. Louis Vuitton remained as single product brand till 1987. In 1987, Louis Vuitton merged with Moet Hennessy, a French wine maker of 1743 to form the LVMH group.
LVMH went on acquiring brands and till 1990 it had around 60 brands under its belt covering products in four different business segments: wines and spirits, watches and jewellery, perfumes and cosmetics, fashion and leather goods. Louis Vuitton Travel brand is still one of the flagship product which brings more than 50 percent revenue for the company.
Product and Services:
Louis Vuitton at the beginning had just the leather bag as the only product but after seven decades it expanded and went on to acquire new brands and beautiful men and women luxury accessories in leather segments and perfumes and cosmetics. It has products like handbags, iconic bags, travel bags, small leather bags, accessories, shoes, ready to wear, timepieces, jewellery, books and stationary and monograms
Identification of Problem:
The problems that Louis Vuitton was facing are
The marketing of high end brand in a low income nation.
Identifying the target customers
The lack of media to build its brand
The absence of high streets to open stores.
How does the luxury brand deal with changing customer profile and concept of luxury?
Analysis of Environment:
Internal: Mark Kay has strong internal policies for its sales executives. With good percentage of margin to executives, bonus to sales directors for recruitments, percentage share of wholesale volume sales on first and second level units to National sales directors. With training opportunities and flexible timing and three months relaxing period in case of no sales from the executive were few of the good norms of the company.
External: All of the firm products were sold on the principal bases of price and quality in highly competitive markets. The firm competed directly with direct sales companies in sales of cosmetics products and indirectly with firms which manufactured cosmetics and toiletry items which were sold in retail or department stores. In the United States activity was seen from the Food and Drug Administration (FDA), the Federal Trade Commission (FTC), Congress end various state legislatures. At the same time, cosmetics regulations were changing in the European Economic Community (EEC) countries and, Argentina, Canada, and Australia. It was clear that a new wave of regulatory activity affecting the industry had commenced. Ingredients claims, packaging, testing, advertising and other activities of the cosmetics industry were being closely scrutinized by regulators and legislators with a view toward regulatory control.
Industry: The Direct selling industry saw many competitors entering the market with low investments and unregulated laws for the direct selling industry. The opportunity was open. The cosmetics industry was growing at faster pace, so the number of direct selling companies In this segment was increasing along with other organized products that were available in retail stores.
SWOT analysis:
STRENGTH
One of the oldest and legendary brand in fashion industry
Known