Louis vuitton case solution
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The document discusses the evolution and strategies of LVMH, the largest luxury-goods firm, with a focus on its profitable market in Japan, which significantly contributes to its revenue. It highlights challenges such as brand dilution, counterfeit issues, and market saturation while detailing marketing strategies and attempts to attract young buyers. The recommendation includes reducing dependence on Japan, enhancing marketing towards children, and addressing counterfeit products through new brand initiatives.
Louis vuitton case solution
- 1. Biggest luxury-goods firm Japan being its profitable market, contributing 50% to its profitability By 1989, it has entered 130 countries across the world After conglomeration, LVMH has been into 5 business divisions: Fashion, leather goods, selective retailing, wines & spirits, perfumes & cosmetics, watches & jewelry Bernard Arnault bought the company in 1989 Boost in manufacturing productivity by 5% per year,2000 30% hike in earnings in 2003 Success of new line product, Murakami in 2003 Focused on problem solving, whenever problem arises, in more efficient way(zipper problem) Advertised through every possible medium: print Ads, billboards, magazines, Ads on TV etc. Adopting expansion strategy by 2007 New strategy adopted by focusing local customers in Japan Working on reinventing itself and regained what it used to be in Japan Focusing children as well now Establishing the brand as a consistent trendsetter in high fashion Attracting young buyers is a big problem To maintain the same brand in Japan VL’s move into new product line could result in Brand Dilution, is a big problem. Problem arising due to counterfeit of LV products from Seoul, Hong Kong, Tokyo, Los Angeles Japanese consumers’ eagerness to buy LV bags at inexpensive price Change in Japanese mindset after global recession Market leading towards saturation. LV had been following aggressive marketing strategy in the country, opening extravagant stores Japan contributing 20% to its revenue and 25% contribution is done by rest of Asia(exhibit 4) LV has decreased its investments in Fashion & Leather goods The more the prices were raised, the more the customers come back(Brand building focused) Young buyers were attracted by Brand Image and older clients by quality and lifetime free repairs Manufactured products in France, bearing the expenses of high labor cost. Cultivated a celebrity culture and employed famous models and actresses Situational Analysis Reducing dependency on Japan by focusing on other developing countries Reduce the no. of limited edition throughout the year. Generating awareness among children by using Social media Focusing high-end consumers through LinkedIn Limit its product line, which is leading to customer suspicion Launch a new brand and use predatory pricing to kill counterfeits. Problem Definition Recommendation Sonia Grover