LOUIS VUITTON

IN INDIA

ANNISSA FARAH HANOUM (29118112)

ARIS IRMI (29118196)
PANJI RAMDHANA (29118295)
RANGGA BARAN (29118XXX)
RD M RIZAL GHAZALI (29118117)

BRAND AND MARKETING

COMMUNICATION
MM6031
 LVMH
TIMELINE

1854 1987s 1990s 2000 2007

Invented in 1854 in Paris, has 2048 store

French craftmen invented had over 60 brands, 4 worldwide, 71,885
flat-topped trunk with business segments : employees, 74% outside
merged with Moet LVMH has acquired many
canvas cover , 7 decades Wines & Spirits france , listed on NYSE,
Hennesy (French Wine brands, targeting
later began to Watches & Jewellery consolidated revenue
Maker) → LVMH Group heritage brand
diversifying into leather Perfume & Cosmetics EUR16.5 billionn, NPM
accessories become Fashion & Leather Euro 2.3 billion in end
multiproduct 2007

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LVMH
LVMH GROUP BUSINESS SEGMENTS

WINE FRAGRANCE WATCH AND SELECTIVE

FASHION LEATHER
AND SPIRITS AND COSMETICS JEWELLRY RETAILING
AND GOODS

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LOUIS VUITTON
BRIEF PROFILE

https://www.interbrand.com/best-brands/best-global-brands/2018/ranking/louisvuitton/

Louis Vuitton, part of the luxury group LVMH,

is a French fashion house founded in 1854, LV Generates 50% of group profits. Which
build on heritage with association with affluence and exclusivity
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LOUIS VUITTON
GLOBAL SEGMENTATION-TARGETING-POSITIONING

Brand positioning
stp
PRESTIGE PRICE
Those who has high disposable income / affluent,
well-off and professionals, Those who pursue
segmentation
prestige and exclusivity with repetitive purchase
behaviour

Those who are The Status Seeker, The

targeting MASS MARKET
Quality Seeker, and The Self-Indulger EXCLUSIVITY

A Jet Setter, with emotion message of high

positioning superiority, ego, status, and power

AFFORDABILITY

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LOUIS VUITTON
GLOBAL MARKETING MIX STRATEGY

Luxury brand, which built on heritage and skillful artisans,

hires finest craftsmen and ensures that the product is
PRODUCT PRICE completely unique. The company registers all its designs
and product to avoid imitation. Louis Vuitton makes finest
bags, unique dresses, designer shoes, and exquisite
watches.

They also have other range of products such as wallets,

eyewear, jewelry, scarves, briefcases, belts, etc
PROMOTION PLACE

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LOUIS VUITTON
GLOBAL MARKETING MIX STRATEGY

Louis Vuitton uses value based pricing in its marketing mix

for its products.
PRODUCT PRICE
Since customers perceive the company’s products as high
value products, the customers are willing to pay the
amount. Louis Vuitton pays special attention to the quality
of the material, the designs and make of the products.
Thus, the cost price of the products eventually goes very
high
PROMOTION PLACE

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LOUIS VUITTON
GLOBAL MARKETING MIX STRATEGY

Louis Vuitton employs famous musicians, actors and

models in their marketing campaigns.
PRODUCT PRICE
Louis Vuitton Is a luxury brand and hence the celebrities
make a better emotional connect with the celebrities.

Its primary source of promotion is print media. In

cosmopolitan cities, magazines and billboards work the
best for the company.
PROMOTION PLACE

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LOUIS VUITTON
GLOBAL MARKETING MIX STRATEGY

Louis Vuitton ensure exclusive distribution channels

PRODUCT PRICE Their products are sold in exclusive ways and outlets.
Luxury independent stores, luxury LRCs and other
respective outlets which inline with its image. Louis
Vuitton have their highly specialized sales persons trained
to treat their customers with utmost care. They treat their
customers with high warmth and provide personalized
attention. They have limited stores and hence the
PROMOTION PLACE customer walks up to the store.

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LUXURY GOODS IN INDIA
MAHARAJA

in 19th Century, 600 maharajas

were known as the wealthiest
people in India flooded the small
factory of LV in Paris to purchase
custom-made leather interiors for
their travel that helped LV
survived the Great Depression and
the relationship continue and
made them as the potential
consumers for LV.

Under Pressure from Wall Street

to sustain double digit growth
rates, they was planning to enter
new potential growing market in
India.

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 LOUIS VUITTON
MACRO ENVIRONMENT ANALYSIS

SOCIAL ECONOMY
209% ↑
190% ↑
158%↑
136%↑
114%↑
82%↑
38%↑
-4%↓
Average growth 1995-2009
% Population
then 2009* – MODERN INDIA Though the Mid-High Social Classes seems had
small portion of the population but
www.ncaer.org/Downloads/PublicationsCatalog.pdf
Has the highest growth rates recognized by the
LV as “Cocooner”, while the lowest class is
declining
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LOUIS VUITTON
MACRO ENVIRONMENT ANALYSIS

SOCIAL ECONOMY

20% ↑
Luxury
Products
10%
Luxury Market worth 4 Luxury
Billion of which 2,9 Billion Service
in Assets, 0,7 Billion in 18%
Service, and 0,4 Billion in
Products, Luxury Products
Luxury
predicted to grows 20%
Assets
Cocooners, had potential to develop taste of annually 72%
luxury to become loyal consumers. And will
expected to reach 583 Millions by 2025. while
Ex-Maharajas become as viral marketers /
influencer to business owners, actors,
politicians, bureaucrats BRAND AND MARKETING COMMUNICATION MM6031
LOUIS VUITTON
MACRO ENVIRONMENT ANALYSIS

SOCIAL ECONOMY
Superior
Functionality and quality

LUXURY AS REWARD
AND SYMBOL

Indian consumers
LUXURY AS INDULGENCE
Want “exclusivity” -- High Gap
between consumer segments

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LOUIS VUITTON
MACRO ENVIRONMENT ANALYSIS

POLITICAL

1995* 2001 2006

1970 1991
THE CUSTOMS BAN OF IMPORTS 51% Ownership
ANTI MNC ACT LIBERALIZATION DUTIES OF LUXURY LIFTED allowance fdi
PRODUCTS IS HIGH FOR LEATHER GOODS For single brand
30-70%

Negative Impact for LV

Positive Impact for LV
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LOUIS VUITTON
INDUSTRIAL ENVIRONMENT ANALYSIS

NEW ENTRANTS

New Entrants Bargaining Power is

Other Foreign Brands (Dior,
Moderate towards LV
Fendi, Armani, Dolce &
Gabana, Cartier, etc)

SUPPLIERS COMPETITORS BUYER

• Skillful artisans, finest craftsmen and • Existing Loyal Consumers

finest quality of materials with Global (Maharajas, etc)
Supply Chain processes •Local Leather Brands • 97 Millions Potential
• Mall Developers (DLF) offers : Consumers and more to
Luxury Malls & LRC grows
• Maharajas (Hotel Owners) Buyer Bargaining Power is
SUBTITUTES
Suppliers Bargaining Power Low towards LV
is High towards LV
Subtitutes power is Low
Competitors power is •Counterfeit Products
towards LV
low towards LV BRAND AND MARKETING COMMUNICATION MM6031
LOUIS VUITTON
SWOT ANALYSIS
STRENGTH
• Solid financial position
• Very Strong Brand Image
• Unique
• The brand has a clientele
• High quality retail network
• Own multi-retail brands of the world
OPPORTUNITY
• 97 Millions Potential Consumers and
more to grow
• Liberalization and FDI Policy
• Lifted Ban Policy of Leather Goods
• Grows of Luxury Malls
• UB City Luxury Project
• Loyal Consumers (Maharajas) to
become the outlet/channel
WEAKNESSES
• Brand ambassador might have
inappropriate behavior lead to bad
publicity and cause by others such as
pressure from animal activist PETA
• Lack of Experience in store layout
fitting in limited space and other
restriction (from developers)
THREAT
• Market Uncertainty
• Inexperienced Mall Developers
• Counterfeit Items
• Direct and strong competitors
following the fashion collection trends
in the luxury industry
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LOUIS VUITTON
RECOMENDATION FOR LV INDIA
PRODUCT
Bags, unique dresses, designer
shoes, and exquisite watches.
Other range of products such as
wallets, eyewear, jewelry,
scarves, briefcases, belts, etc
Luxury brand, which built on
heritage and skillful artisans,
hires finest craftsmen and
ensures that the product is
completely unique
PRICE
Value Based pricing in its marketing
mix for its products. Since customers
perceive the company’s products as
high value products, the customers
are willing to pay the amount
PROMOTIO PLACE
N • Luxury Hotel (High Opex) :
(+) High Engagement
(+) Appropriate Surroundings good image
• Brand endorsers, famous
(-) Rental costs high because of demand
musicians, actors and models in
(-) Store space issue
their marketing campaigns.
• Luxury Malls (Opex) :
• Advertising activities could be
(+) Wider customer reach(high traffic area)
seen in a high end magazine to
(+) Half Cost of luxury hotel rental cost,
reach its specific target market
Larger store size,
(+) Proper Surroundings, acceptable image
• Personal Selling, public relation
(-) Limited Space
and event : LV regularly
conducted an event for its new
• Independent Stores (High Capex):
season collection, other than
(+) Flexible with store design
that it was only could be
(-) Costly
attended by people with
(-) Difficult to find proper surroundings
special background. For an
example Maharaja and other
• Luxury Retail Cluster (High Capex):
influential person
(+) Flexible with store design, good image
(-) Too Costly with market uncertainty /
acceptance
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LOUIS VUITTON
RECOMENDATION 7PS
PEOPLE
LV provide jobs across the entire
product life cycle from design to
sales, including in its contingent
skilled and highly trained people
who can liaise with special
customers such as VIP and in other
trade. Sales Associates ensure the
personal selling handle the follow up
and customers loyalty
PROCESS PHYSICAL
EVIDENCE
From the beginning through its prod.
dev. have more room for creativity
from its creative designer team
because not being intended for mass LV have its signature logo that
production thus more variety on the appear in its store, also a luxury
product of particular season store ambience with seamless,
collection and selective personalized convenience shopping
items for exclusivity, its distribution experience
only in complete control channel by
its own store, sales associate also
handle customer by one on one
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Why do people buy luxury goods?
LVMH
Why do people buy luxury goods?

The reasons of why people buy luxury items are unexpectedly vary. The buying
decisions of luxury goods are dictated by their personal concept of luxury which is
shaped by the geographical location and culture. Luxury goods are purchased for
different purposes, including:
1. Personal indulgence
2. Superior functionality and quality
3. Showcasing the desired status symbols (the most dominant motive for
Indians)
4. Providing the feeling of being special (for Europe)
5. Exclusivity (for the Indian and US customers)
(Refer to Slides 7)

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 Louis Vuitton is a high-end product. India is a
low-income economy. Can this dichotomy be reconciled?
LVMH
Can this dichotomy be reconciled?

There was positive historical relationship between the company and the Maharajas
(the wealthiest people in the country).

Apart from the fact that 87% of the country’s population are living below the
poverty line, the demand of luxury products generated by the rich and ruling class
was not fulfilled due to the luxury products was simply unavailable.

The potential costumer base in India is promising. According to the World Wealth
Report (2005-2006), the high-net-worth (HNW) consumers is at 83,000 in 2005
which is the world’s second fastest growth in the number of HNW individuals
accounting 19.3%.

The size of the luxury market in India was also compatible for LV to operate at
approximately $4 billion. The number is expected to grow to $30 billion by 2015.

(Refer to Slides 13-15)

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What are the external factors hindering the purchase of luxury
goods in a country like india?
LVMH
What are the external factors hindering the purchase
of luxury goods in a country like india?

• The custom duty on imports of luxury goods were high

• High tariff of luxury product hinders the consumer to buying goods locally.
• Official ban on importing leather products.
• There were resistance form the government that the entrance of luxury brands
would set the local leather trade at risk.
• The official stance as Anti-MNC (Multinational Corporations)

(Refer to Slides 16)

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Why do luxury goods marketers form retail clusters?
LVMH
Why do luxury goods marketers form retail clusters?

• Clusters enable a luxury product company to showcase its product or services

which comply with the brand personality.
• Clusters offers opportunities for brands to use its store design to create
distinctive image without being interviewed by the other
• The system also can attract large traffic to give scale to give scale to individual
stores by the sheer number of consumers
• The cluster system is also can attract shoppers from a far and facilitate window
shopping that might increase the likelihood of converting the visit to sales.

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Why do certain luxury brands look for store locations in luxury
hotels?
LVMH
Why do certain luxury brands look for store locations in luxury hotels?

Indian consumers are pursuing exclusivity when it comes in purchasing luxury goods.
Being at the top of society, the super rich likes to ensure a clear gap between them
and the other social classes. Some luxury brands are choosing to open their store in a
luxury hotel because it is a good symbol of exclusivity, taste and lifestyle. Luxury hotel
is also a gathering point for the higher class of a society and a hub for the super rich
who travel.

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How does a luxury mall work for luxury goods marketers?
LVMH
How does a luxury mall work for luxury goods marketers?

• Luxury brands must ensure that the environment around them is matched with
the image that they are trying to project. Therefore, providing proper leisurely
environment for the target market to window shop would be the one of the key
strategies for the brand to be implemented.
• Furthermore, by using the luxury mall concept, the company must develop and
nurture a new generation of luxury consumers from scratch.
• The luxury mall concept may be suitable to accommodate the demand of the
luxury goods which currently is not merely about having money but also having a
taste for the good life and a feel of lifestyle.

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THANK YOU