Description
This is a presentation explaining louis vuitton case.
Case Study Analysis
Notable Facts
?
World’s leading luxury brand empire with excess of $ 17 billion revenues and more than 60 brands
Took luxury marketing to new paradigm by connecting with everyday customer’s aspirations
? ? ? ? ? ? ?
?
Champagne: World No. 1 Cognac: World No. 1 Fashion & Leather Goods : World No. 1 Perfumes & Cosmetics : World No. 3 No. 1 in France Watches & Jewellery: World No. 3 Selective Retailing: World No. 1
Major Brands
?
Fashion & Beauty Brands
?
American Brands
?
Watch & Accessories
?
Wine & Spirits
Product & Revenue Categories
Wines & Spirits (18%)
Fashion & Leather (34%)
Perfumes & Cosmetics (18%)
Watches & Jewelry (5%)
Selective Retail Distribution (25%)
Firm vis-à-vis Industry
•Global brand recognition •Experience over time •Leading position •Quality provider •Distribution •Public Relations
•Diversification •Conflict of interest •Forward and backward integration •Counterfeiting •Declining shares
•M & A •Consumer trends •Current increase in wealth •New & emerging markets •Distribution channels
•Change in consumer taste •High correlation to economic conditions •Competitors from smaller markets
Question 1
?
Bernaud Arnault has built LVMH into a luxury goods empire by making numerous acquisitions, what strategy is evident here?
Strategy driving acquisitions
?
The LVMH acquisition strategy can be classified into 3 main drivers:
? Product adjacency ? Supportive distribution ? Synergizing with key markets
?
Additional key considerations:
? Targeted
companies with high development potential and global recognition ? Presence in full spectrum of luxury non durable products
Strategy driving acquisitions
?
Some common learning:
? Major acquisitions outside own sector where they
don’t have the ?know-how? and don’t match the company image ? Arnault being the major shareholder makes it easier to make decisions on new acquisitions
?
New market entry plan:
? Choose target countries to enter ? Conduct a market study - 2 to 3 months ? Intensive marketing communication
campaign - 4 to 8 months ? After first month of advertising campaign, open store in major cities
Question 2
?
How do LVMH executives adjust prices in response to changing economic conditions?
Adjusting prices
?
Raising wholesale prices so as to restrict access for down-market consumers through discount retailers Reducing advertising spend primarily on perfume and cosmetics
?
?
Raising prices to counter currency devaluation and maintain profitability
Maintaining high correlation with tourism business and vary price by 1012%
?
Question 3
?
Do you think the high retail prices charged for luxury goods are worth paying?
LMVH Luxury Goods
?
Analyzing the communication & core value
LMVH Luxury Brands
?
Epitomizes ?Art de Vivre?: The art of living well as in occident LVMH philosophy comprises of:
? ? ? ?
?
Tradition History Elegance Modernity
?
Central Motto: Customers are not just buying a product, they buy an image – an aspiration of a lifestyle Embrace modernity while maintaining a creative spirit
?
Question 4
?
How will luxury good marketers be affected by the slowdown in tourism that followed the terror attacks of September 11, 2001?
A Quote
?While there has been much talk about the impact of September 11 on US brands and the global fashion economy, in reality nothing really changed, ? Says David Wolfe, trend analyst for New York based Doneger Group.
HOW?
Nautica’s Sales (Competitor)
LMVH’s Sales
Sales Q4 2001-2002
LMVH Sales 2002
Sales 2002 by Regions in %
Market in Focus: Selective Distribution
Effect of Terrorism on Luxury Market
?
DFS: Restructuring and marketing initiatives Progressive return to tourism but still below 2000 levels Continue holders to negotiate with concession
?
?
?
Renovation of certain galleries and renewal of certain airport concessions.
Cultural Elements
?
Shopping in the United States isn’t purely about need. It’s about emotional connection to who they are and how they live. Shopping is so much a part of their lives in this country that it’s both a necessity and therapy. The way to care is to shop. Friends, arm-in-arm, shopping together. It was all about holding on to something or someone you could recognize as safe.
?
?
Retailer’s Effort
?
Emotional need was not the only thing getting shoppers out of the house and into the checkout lines. Retailers marked everything down— significantly down. It was a great time to save money, despite the fact that people were losing their jobs and the economy was tumbling.
?
Questions?
doc_154249595.pptx
This is a presentation explaining louis vuitton case.
Case Study Analysis
Notable Facts
?
World’s leading luxury brand empire with excess of $ 17 billion revenues and more than 60 brands
Took luxury marketing to new paradigm by connecting with everyday customer’s aspirations
? ? ? ? ? ? ?
?
Champagne: World No. 1 Cognac: World No. 1 Fashion & Leather Goods : World No. 1 Perfumes & Cosmetics : World No. 3 No. 1 in France Watches & Jewellery: World No. 3 Selective Retailing: World No. 1
Major Brands
?
Fashion & Beauty Brands
?
American Brands
?
Watch & Accessories
?
Wine & Spirits
Product & Revenue Categories
Wines & Spirits (18%)
Fashion & Leather (34%)
Perfumes & Cosmetics (18%)
Watches & Jewelry (5%)
Selective Retail Distribution (25%)
Firm vis-à-vis Industry
•Global brand recognition •Experience over time •Leading position •Quality provider •Distribution •Public Relations
•Diversification •Conflict of interest •Forward and backward integration •Counterfeiting •Declining shares
•M & A •Consumer trends •Current increase in wealth •New & emerging markets •Distribution channels
•Change in consumer taste •High correlation to economic conditions •Competitors from smaller markets
Question 1
?
Bernaud Arnault has built LVMH into a luxury goods empire by making numerous acquisitions, what strategy is evident here?
Strategy driving acquisitions
?
The LVMH acquisition strategy can be classified into 3 main drivers:
? Product adjacency ? Supportive distribution ? Synergizing with key markets
?
Additional key considerations:
? Targeted
companies with high development potential and global recognition ? Presence in full spectrum of luxury non durable products
Strategy driving acquisitions
?
Some common learning:
? Major acquisitions outside own sector where they
don’t have the ?know-how? and don’t match the company image ? Arnault being the major shareholder makes it easier to make decisions on new acquisitions
?
New market entry plan:
? Choose target countries to enter ? Conduct a market study - 2 to 3 months ? Intensive marketing communication
campaign - 4 to 8 months ? After first month of advertising campaign, open store in major cities
Question 2
?
How do LVMH executives adjust prices in response to changing economic conditions?
Adjusting prices
?
Raising wholesale prices so as to restrict access for down-market consumers through discount retailers Reducing advertising spend primarily on perfume and cosmetics
?
?
Raising prices to counter currency devaluation and maintain profitability
Maintaining high correlation with tourism business and vary price by 1012%
?
Question 3
?
Do you think the high retail prices charged for luxury goods are worth paying?
LMVH Luxury Goods
?
Analyzing the communication & core value
LMVH Luxury Brands
?
Epitomizes ?Art de Vivre?: The art of living well as in occident LVMH philosophy comprises of:
? ? ? ?
?
Tradition History Elegance Modernity
?
Central Motto: Customers are not just buying a product, they buy an image – an aspiration of a lifestyle Embrace modernity while maintaining a creative spirit
?
Question 4
?
How will luxury good marketers be affected by the slowdown in tourism that followed the terror attacks of September 11, 2001?
A Quote
?While there has been much talk about the impact of September 11 on US brands and the global fashion economy, in reality nothing really changed, ? Says David Wolfe, trend analyst for New York based Doneger Group.
HOW?
Nautica’s Sales (Competitor)
LMVH’s Sales
Sales Q4 2001-2002
LMVH Sales 2002
Sales 2002 by Regions in %
Market in Focus: Selective Distribution
Effect of Terrorism on Luxury Market
?
DFS: Restructuring and marketing initiatives Progressive return to tourism but still below 2000 levels Continue holders to negotiate with concession
?
?
?
Renovation of certain galleries and renewal of certain airport concessions.
Cultural Elements
?
Shopping in the United States isn’t purely about need. It’s about emotional connection to who they are and how they live. Shopping is so much a part of their lives in this country that it’s both a necessity and therapy. The way to care is to shop. Friends, arm-in-arm, shopping together. It was all about holding on to something or someone you could recognize as safe.
?
?
Retailer’s Effort
?
Emotional need was not the only thing getting shoppers out of the house and into the checkout lines. Retailers marked everything down— significantly down. It was a great time to save money, despite the fact that people were losing their jobs and the economy was tumbling.
?
Questions?
doc_154249595.pptx