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Louis Vuitton's Marketing Strategy

Essay by   •  June 19, 2011  •  Case Study  •  1,631 Words (7 Pages)  •  8,867 Views

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It is very important to pay attention to the place in Louis Vuitton's marketing strategy.

Indeed, whether we consider the shops themselves, their stocking strategy, or their communication directly into the shops, every detail has been strictly calculated and codified in advance.

Louis Vuitton shops must be unique and almost as a whole experience just by themselves. Christophe Barthélémy (from the firm Fair Play) says: "The shop can no longer look like a shop but like a theatre playing the fantasy world of the brand". So their design is really important to the brand. The chief architect in charge of the creation of shops worldwide, in the sole intention of homogeneity, is Peter Marino, from New York. Therefore, all the shops present similarities regarding the interior architecture, such as the choice of materials. Volumes of light woods, glass and brass for the window displays, the shelves as well as the counter. The major lines are to inspire sobriety, class, and wealth in the shades. This is important in their sensorial marketing strategy which appeals to the sense of viewing.

However, a few shops such as the one in Omotesando, in Japan, are drifting away from the stylistic characteristics of the shops in Europe. The style "made in Vuitton" now includes more contemporary or even "avant-gardistes" ingredients.

Until recently, 20 to 30 people were needed to assemble a bag Reade from Louis Vuitton in 8 days. But the supply chain of LVMH has been changed in order to optimize the production. Today, 6 to 12 multi-tasks employees can make a bag in only 1 day. The objective was to sustain a sufficient stock of all the most wanted products in every shop.

For many years Louis Vuitton focused more on the design of its products, their savoir-faire and their image than the sustainability of their stocks. But quickly, the company realized that their customers also expected the products to be always available in the shops. Louis Vuitton recognized this twist in the customers' mind and therefore, adapted its supply chain accordingly. Bernard Arnault, the CEO of LVMH noticed that: "If you control your factory, you control your quality; if you control your distribution, you control your image." Due to the success encountered, LVMH plans on globalizing the concept to more of its divisions in the group.

Let's notice that some of its competitors are already on the way to change their supply chain too to make it more efficient (Prada, Burberry, Versace).

Regarding their distribution network, Louis Vuitton has a tremendous competitive advantage. Indeed, exclusively sell their products in their own shops excepted in the USA.

Between 2003 and 2007, with the annual average growth of 9,4% of the market, the world luxury market was prosperous. During this period of time, the actors developed their own sales places. There was a race for the best spots and big surfaces, massive investments in the renewal of the existing places (ex: the Champs Elysées shop lastly in Paris), implementation over the foreign countries, especially the emerging markets. In this context, Louis Vuitton had a good advance in terms of place as it already had a good strategy regarding its points of sales. They were numerous, ideally situated in the big cities, and large.

To cut a long story short, Louis Vuitton took a big risk in offering to sell its merchandise online. Indeed, the risk was to damage the brand image or the prestige, to reduce the aspect of exclusivity of the access to the brand, as well as to facilitate the counterfeiting. But as of now, it seems to have worked very well as they are globalizing this distribution strategy.

* Promotion

Advertising budget: 196 millions US dollars in 2001.

Communication Strategy Louis Vuitton's communication strategy changed in February 2008. A that time, a new strategy was launched.

The brand's objectives are plural:

*They want to be perceived as a high quality brand, using high quality materials, having more than a century of experience in the sector, investing quite some money in Research & Development (looking for new materials, combination, and thinking of the future!).

*They want to be perceived as a model of elegance and refinement, thanks to their origins, the French touch is very important! Especially for the foreign target market: Asia.

*They want to innovate now. "Always leading the avant-garde of fashion without compromising traditional craftsmanship of luxury leather goods" (www.louisvuitton.com). Sometimes, the brand can be perceived (and we've noticed this through our brand associations interviews we lead)

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