LOUIS VUITTON

IN JAPAN

Group 4
Ishpreet kaur-----------------18PT2-27
Siddharth Malhotra---------18PT2-49
Piyush Kumar----------------18PT2-34
Prateek Singhal--------------18PT2-37
Vikas Ranjan-----------------18PT2-55
Haran--------------------------18PT2-21
1. Louis Vuitton – A Global luxury Brand

2. Louis Vuitton in Japan

3. Problem Statement

4. Market analysis and LV position analysis

5. Recommendations
LOUIS VUITTON: World’s Biggest Luxury Brand

• 5 Divisions: Fashion and Leather goods; Selective Retailing; Wines and Spirits; Perfumes and
Cosmetics; and Watches and Jewelry
• 50+ luxury brands
• Most Glamorous
• 2004 annual sales: $3.8 Billion
• Twice the size of its competitors

Efficient Management Practices

• Increase in manufacturing productivity – 5% per year
• Continuous improvement – Theme of LV’s industrial operations
• Labor-intensive process – 24 workers team producing about 120 handbags a day
• Achieved perfect equilibrium between machines and labour
 Quality Products
• Lifetime repair guarantees
• Loyalty Strategy attracted more customers – bought new range of bags
• Challenge – attracting young buyers
• Ready-to-wear and shoe lines – perfect match
• Younger buyers – attraction was brand image
• Older Client – attraction was quality and lifetime free repairs
• 11/13 Factories of Louis Vuitton bags were in France – one of the most expensive labor markets
• Quality control – test laboratories; raw material – Northern European Cattle
• Team of 20-30 employees responsible for 1 product at a time
• Briefed about the product: aim to have autonomous and multi-skilled employees
Advertising
• Celebrity culture, employed famous models and actresses,
such as Jennifer Lopez and Madonna, in its advertising
campaigns
• 2007, shift from hiring traditional top models, and
featured the former Soviet leader Mikhail Gorbachev with
sports stars Steffi Graf, Andre Agassi and Catherine
Deneuve
• Used Print ads in magazines and billboards in large
cosmopolitan cities
• “Where will the life take you?” – mind boggling 90 second
commercial ad in TV
• Media department – very strategic in choosing the
newspapers and magazines to reach out to the higher
income group
Significance of Japan Market • In 2009, Japan was solely responsible for sale of
45% of luxury goods sold worldwide.
for LVMH
• Japan had the highest per capita spending for
luxury goods.
• LVMH tapped the market potential well with
252 stores in Japan, much higher than any other
luxury brand.
• For more than a decade Japan solely was
responsible for half of LVMH’s profit.
• In 2008, Japan was responsible for 20% of
LVMH’s total revenue.
 • LV made an entry into the Japanese Market in 1977 which was followed by
Louis Vuitton In The “Vuittonmania” where around 20 mil Japanese women owned a LV Bag.
Japanese Market • LV had the first mover advantage of opening its own subsidiary in the
Japanese Market.
• The French Headquarters, gave autonomy to each subsidiary and gave
preference to Japanese Managers so that they could understand the local
customers.
• LV provided the Japanese customers the same experience as it did in its
flagship stores in France.
• LV’s strategy was to provide a delightful customer experience in their
stores which would be later emulated by their products that their
customers buy.
• The Japanese customers had an eye for high sense of fashion which
motivated LV to push the envelope by going for more audacious and
amazing stores and maintaining high product quality.
 • Japan being the world’s most concentrated source
of revenue for luxury brands was one of the most
Japanese Luxury Market & important markets for most luxury brands.
Consumer Behavior • Even with Japan’s geographic limitations, it was a
hub for most global luxury brands.
• Japan originating from a Group-Oriented Culture
had more females which were beauty conscious,
and thus originated the need of owning something
that is considered beautiful.
• In 2008, there was a shift in customer perspective
from being brand centric to quality centric, looking
for a bargain.
• With changing times there was a shift in Japanese
consumer behaviour as they were less inclined to
tolerate high prices of luxury brands.
• Cyclical nature of the Japanese market forced
brands to reassess their strategies and reinvent
themselves.
Marketing Strategy

Limited Edition Strategy

Collaboration with artist Takashi who recreated pop version of

LV Monogram in 33 colors

Price Reduction- Upto 7%

Market Dilution: Offering new product lines

Challenges in Japanese Market

Huge Counterfeiting of all the Luxury products

Competition by entry of New Brands

Change in Mindset of Consumers- Value Proposition

Competing with High Prices while maintaining Quality

Louis Vuitton Japan - Future Growth

Louis Vuitton Internet Business

Ready to Wear Collection

Louis Vuitton Children’s line

Louis Vuitton Expansion in Mid & Smaller Cities

Targeting more & more Wealthier families

 Problem statement
• Address the Market dilution issue, especially with the exclusive
launches.

• Communicate or Re-define the LV brand value especially among

young consumers.

• Pricing decision of LV luxury products in Japan after the

Financial crisis

• Addressing the impact of counterfeit products in Japan Market.

• Reduce the Overdependence on the Japanese market.

 Firm Brand Analysis
Luxury experience

Status Symbol High Quality

Leather products

Lv

Tradition and
Longetivity LOUIS VITTON Premiu
m Price

Life Long Relationship

 What do we want to achieve In Japanese
Market

Elevate brand
Stature

Size of Circle
represents Quality
exclusivity
Price and

perception
Counterfeit

Classic Fashion
 MARKET AND FIRM ANALYSIS

• The Japanese market is a very specific and selective market. According to luxury analysts, Japan is the largest
market for luxury brands, between 12 and 40 per cent of global sales.
• Japan has always been known for group-oriented culture in which the pressure to own iconic brands is huge.
• Successful brands such as Prada, Hermès and Louis Vuitton have been successful in formulating strategy
based on the cultural norms of the Japanese luxury market.
• The Japanese way of consuming luxury items seems more like a compulsory form of social expression, and
the bandwagon effect is relatively more in Japan due to the influence of friends and relatives.
• Japanese consumers are becoming less likely to tolerate the high prices that formerly created desirability
among consumers.
• Appreciation of the yen (more than 15 per cent against the U.S. dollar and roughly 12 per cent against the
euro) during the last three years has also fueled the fire as Japan has been dependent on income from
exports.
 MARKET AND FIRM ANALYSIS

• Japan was one of Louis Vuitton’s first overseas markets and has become over the
Opportunities Challenges
years its main source of revenue. Louis Vuitton Japan has led an aggressive
marketing strategy, targeting the high- and middle- income groups. Customers Loyalty in
Market dilution
Japan
• The firm has focused on product development and brand management, while
trying to understand and adapt to the Japanese market. Consumers’ long-
time attachment to Counterfeiting, i.e.,
• There is a need to redefine and communicate the LV brand and value proposition the Louis Vuitton fake bags
to the younger consumers. brand

• Louis Vuitton’s Internet business and a foray into children’s wear have been
Challenges arising
among the growth vectors for the brand. Strong presence of out of global
Louis Vuitton stores recession and impact
• Newer product categories such as jewelry, watches and eyewear are growing in Japanese cities on Japanese
rapidly and overwhelming expectations. Customers

• Ready-to-wear represents another category to grow.

 RECOMMENDATIONS
• To control the market dilution, and maintain the core brand essence of tradition and Longevity, Consistent
global collections need to be maintained.
• Also Following the culture of the market, LV can look into creating specific product ranges and design such
as the Takashi Design bags and contemporary design of classic bags etc.

• Communicate to the young customers the brand’s tradition, glamorous, luxurious and intrinsic value of their
products. LV needs to recreate the whole experience of shopping at their store and owning a LV product. (like
the “Where will life take you” campaign)
• Communicate through brand influencers the feature of a genuine LV product and the differences between
a counterfeit and a genuine product. Since the brands people own in japan is sort of a status symbol, this
education of identifying the counterfeits can significantly reduce the replacement of counterfeits for the
LV product, along with the legal way of curbing fakes.

• Pricing of the product need not be reduced. But membership type of programs, which can elevate the customer
buying experience needs to be introduced. Expansion of the LV stores in other small cities, exploiting the
present brand image among people can help in sales growth.

• Overdependence on Japan needs to be reduced, by Developing other higher per capita income developing
markets like, Hong Kong, Singapore and Korea.
 France Japan

Low Context High Context

Culture Culture

• High context culture so tradition ,relationship ,social acceptance are important aspects
for Japan Market

• Creating Awareness about the brand essence –Tradition, Quality and Relationship
features and also pointing out the key features and design which can differentiate
counterfeits.

• Create the Cult among LV owners . Online platforms like twitter and Instagram for
creating influencers.

• Sponsorship for members to exclusive clubs and international airport lounge –

Relationship building continues
QUESTIONS..??