...Luxury Car Retailing & Trends Executive Summary A luxury car is indeed a status symbol that is a reflection of one’s personality and power in society. There is a steady increase in luxury car customers globally as there is a rise in income, wealth and urbanization. It is more of a dream come true of the rising middle class to purchase and own a luxury car. After the global financial crisis (Reyneke et al., 2012) hit the luxury auto market, it was interesting to find that the younger generation maintained their spending habits and joined the baby boomers who were already major consumers of luxury cars. However, the concept of cars being a boy toy has certainly evolved with the emergence of female consumers . These women are driven by their need to showcase their power and independence. The finest example are the Chinese and Middle Eastern women who have come out of their cocoons and protested against a male dominated culture and purchasing luxury cars were a part of that change. As the younger generation have become more environmentally conscious, luxury car retailers have adopted the ‘go green’ concept by bringing out diesel run and electric cars. Another trend that is picking up is the customization of cars. Luxury car retailers have chosen to customize their car for their customers providing them exclusivity and satisfaction as the customers get what they exactly want. The sales for luxury cars from 2012 to 2014 have been forecasted to increase steadily but there are...
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...glittering French multinational in Japan took place in Aoyama, one of Tokyo’s fashionable districts. A unique vision of luxury took shape when Louis Vuitton opened yet another new store inside Comme des Garçons on September 4, 2008, in the heart of Japan’s capital. The pop-up store situated on the prestigious Omotesando Street was an illustration of Louis Vuitton’s attachment to the Japanese luxury market. Yves Carcelle, chairman and CEO of Louis Vuitton, said, “This project not only brings a new meaning to luxury, but also speaks volumes about how the know-how and heritage of Louis Vuitton have always been perceived in Japan, including by its foremost designers. We are very proud to have been able to help Rei Kawakubo2 relive her memories in such an original and creative way.”3The Omotesando guerrilla marketing event reflected Louis Vuitton’s success in Japan. Louis Vuitton had been following an aggressive marketing strategy in the country, opening extravagant stores such as those in Ginza or Roppongi.Take a walk on Ginza’s main street, Chuo Dori, the centre of a paradise for shoppers, with longestablished department stores, such as Mitsukoshi, Takashimaya and Matsuzakaya. Continue through the high-end fashion street Namiki-dori. Stop. There it is. You have reached the massive flagship Louis Vuitton store. When Louis Vuitton, the world’s biggest luxury-goods firm, inaugurated its huge shop in 2002 in the district of Omotesando, Tokyo, hundreds of people were queued outside...
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...of their Directly Operated Stores (DOS) as part of the defensive strategy of taking more control of the distribution process. The 2003 figure showed that DOS accounted for 61.3% of revenues compared to a much lower 32.5% in 1999. Its aggressive strategy accomplished through diversification and communication is also another of Gucci’s strengths. Gucci changed its strategy of carrying a single brand to branching out to a multi brand group. This strategy is also adopted by other conglomerates such as Louis Vuitton and Prada. Some luxury companies use the strategy of focusing only on one brand and add other business segments such as what Armani, Polo Ralph Lauren, and Versace did. Read on Discount Luxury Brands Big luxury brands offer discount and cheap luxury products under tough economic time. This strategy is done in order to allow the positioning of the brand in the industry to differ depending on the number of brands and the number of business segments the company wants to compete in. This is the idea behind focus (mono brand) versus diversification (multi-brand). Gucci Group has more than 10 brands, including Gucci, Yves Saint Laurent, YSL Beauté and Sergio Rossi. Weaknesses The weaknesses of Gucci include instability in management and financial base. The instability of its management can affect the group’s corporate strategy and vision. The financial base is weak and alarming, with a long term debt increase from $17 million in 1998 to $143 million in 1999 and...
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...rate. In response Louis Vuitton began to look for opportunities to expand globally. Its focus quickly turned to infiltrating the Indian market. By 2008 Louis Vuitton had opened two other stores located in luxury hotels in India. These hotels provided easy access to LV’s targeted market, which was the “super rich”. Now the company was faced with another decision, to continue operation in luxury hotels or to expand into luxury malls. Up to this point, luxury malls were new to Indian consumers, creating a level of uncertainty for Louis Vuitton. In this case evaluation, we will discuss the impact of a high-end company entering a low income country. HIGH-END BRANDS IN LOW INCOME COUNTRIES A high-end brand, such as Louis Vuitton, can often find a market in a low income country. Sometimes the market is too small or too fragmented to pursue, but this is not always the case. Many low income countries have a very unbalanced social structure consisting of a large proportion of the population in or near poverty, a small middle class, and the remainder of the population made up of very wealthy families. The small number of wealthy families often controls the majority of the nation’s wealth and can be a sizable market for high-end brands. This provided a business opportunity...
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...The Luxury Evolution Every generation redefines its definition of luxury. How they relate to it or reject it. From the “more generation”, to the X, we have seen everything from conspicuous consumption to less is more. Each generation also redefines its relationship to luxury. The evolution of social, political and economic factors is just a few of the major defining elements in any generation’s approach to luxury products. How a particular group defines luxury is often influenced by the preceding generation’s relationship to it. Is it a coincidence that the lean, Generation-X “less is more” philosophy of the 1990’s immediately followed the Baby Boomer’s conspicuous consumption ideals of the 1980’s. No business lives or dies more by the definition of luxury, than the Cosmetics Industry. From mass to class distribution to direct sell, luxury is the name, of the game. Revolution or evolution, defining luxury becomes the bete noir as the baton is handed to each new generation The Cosmetics Industry lives on its ability to provide luxury goods (No matter the definition) more than any other. It is imperative that we not Only understand how varying market segments define luxury and thereby consume it, but equally important that we can predict how fresh and upcoming markets will define their unique relationship to it. As an industry we must ask ourselves, are we open to deconstructing traditional definitions of what constitutes luxury? What new requisites will tomorrow’s...
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...APPENDICES11 Appendix 1: Porters 5 Forces11 Appendix 3: Luxury Goods Group & Brands Top Ten Competitors13 Appendix 4: Industry Map*.14 Appendix 5: Financial Performance14 Appendix 6: PESTLE Analysis15 Appendix 7: SWOT Analysis16 Appendix 8: Evaluating industry Attractiveness and Competitive strength19 Appendix 9: A Nine Cell Industry Attractiveness-Competitive Matrix20 Appendix 10: Cross Business Strategic Fits20 Appendix 11: Evaluating the Strategy of a Diversified Company21 Appendix 12: LVMH's Timeline of Mergers and Acquisitions24 9.0 REFERENCES25 1.0 Executive Summary The aim of this paper is to discuss the key strategic issues that LVMH face and establish some future recommendations that can be implemented in order for LVMH to remain successful in the luxury industry. In order to determine the key strategic issues a number of analysis tools were applied to the case study; they include Porter's 5 forces model, SWOT analysis and PESTEL. It was found that the key strategic issues that LVMH face centred on diversification and vertical integration. A number of strategies have been proposed to offer some recommendations to LVMH, they namely in restructuring their retail sector, considering the concept of moderate diversification and focusing on the human resources side of acquisitions and mergers. 2.0 Introduction This report is based on the analysis of a case study 27 titled: LVMH's Diversification Strategy into Luxury Goods. The scope of this report is limited to the data...
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...demand details 3.4 Technology needs 4.0 Target Market 7 4.1.1 Target Market Segment Strategy 4.1.2 Market Needs 4.1.3 Market Trends 4.2 Industry Analysis 4.2.1 Industry Participants/Key Players 4.2.2 Main Competitor analysis 5.0 Strategic and Implementation Summary 10 5.1 Marketing Strategy 5.2 Pricing Strategies 5.3 Promotional Strategies 5.4 Distribution Patterns 5.5 Marketing Program 5.6 Sales Strategies 5.7 Sales Forecast 5.8 Sales Program 6.0 Web Plan Summary 13. 6.1 Website Marketing Strategy 6.2 Development requirement Reference 15 1.0 Executive Summary 1.1 Objective This paper will tend to provide a brief introduction of Louis Vuitton, the famous and high price and high reputation luxury brand product originated from France. Later, this paper will further investigate on the information regarding the company’s products and services (product mix) and its marketing analysis and industry analysis in general. The strategies analysis and implementation of the strategies will be demonstrated and website marketing strategies by the company will be discussed as well after the implementation of the strategies plan. Lastly, a brief conclusion will be provided to summarize the entire marketing plan for LVMH. 1.2 Vision and Mission LouisVuittonMoët Hennessy group,LVMH, would represent the most refined qualities of so called "Art de Vivre" in France and around the world. LVMH will have to constantly with the balance and both elegance...
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... Introduction The luxury goods may be are fatal temptation for each girl. In economics, luxury goods are good for which demand increases more than proportionally as income rises. It present a striking contrast to "necessity goods". As the demand of "necessity goods" are not related to income increasing or decreasing. On the other hand, Begin with 2007, global economy has been stumbling under recession. As known to all, financial crisis brought to United States economy slowing down and it has spread globally effecting all countries. Economic recession directly influenced on income level and employment. In addition, consumption levels have fall off drastically. Such two characteristic factors make me interested in the relationship between luxury brand and Economic recession. So I researched the ideas and found a few books which talked about the luxury brands in Asia under economic recession. The literature review will pay attention to a book on the cult of Luxury Brand, Impact of Personal Orientation on Luxury Brand Purchase Value, Shopper Behaviour in Recession and impulsive buying behaviour in recession. Radha Chadha is one of the most famous expert in marketing and consumer research in Asia. In the book of the cult of the Luxury Brand which presented the "lux- plosion" or the explosion of luxury brands in Asia. This book shows up the paradox of the luxury brands management in Asia market and tries to redefine the new age luxury brand...
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...and bibliography 8.0 Appendices Introduction The global fashion industry is altering with higher end fashion stores opening and selling their goods on display in more international markets such as China. This report analyses and develops the foreign markets for high end fashion. A company has been set up is called Ted Maker Ltd. The company is looking into investing in overseas with its business. The company is already an established company which sells accessories in the UK. This report will seek to develop whether or not the company should open a store overseas. With competitors opening new stores and an increase in new store development, competition in the market is getting high. This indicates that how critical it is to the chain to expand its product lines and operations, in order to advance a competitive strategy to expand the financial attainment in the high fashion industry. The report will be seeking to identify important facts and figures around the business to recommend the best course of action to expand the chain. This report seeks to provide an analysis of the luxury accessories store by undertaking a strategic audit. The report will consider going on to any feasible strategic possibilities in worldwide expansion. 2.0 Situational analysis 2.1 Macro and Micro Environment According to Bradley (2005), Pestle analysis is a measurement means to evaluate the environment surrounding the establishment (Bradley, 2005) Political Austerity in the UK has mainly...
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...you are adding value to its business if you want this recommendation to be executed and get paid for it. What are the business circumstances of this company and how do they translate into the need for more or less cash-flow flexibility? Does the existing capital structure—assuming the company can’t change its business practices—provide the company with the cash flow flexibility (more or less) that it wants? Why? In terms of the possible alternatives you are considering which would you recommend to the company—and why? Make your pitch! In so doing, consider using the cost versus flexibility framework. Business Circumstances; Flexibility Prada currently requires a significant amount of capital both to refinance debt that is maturing in the next six to twelve months and the planned financing of growth in the Asian (especially Chinese) markets. Since financial markets aware urgent need Prada, are to raise capital, it is important that the Board of Directors of a credible strategy to increase the required minimum capital of 1 billion? to develop. Although the press was suggesting that Prada is to do an IPO, the company has tried this several times in the past without success, mainly because of poor timing (9/11, the SARS outbreak and the ongoing global financial crisis and the European sovereign debt crisis). China represents a major market for global luxury goods brands like Prada. As beyondbrics recently pointed out, the country’s luxury goods sector is expected to be...
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...(“LVMH”) was formed in 1987 when Louis Vuitton, a leading luxury fashion brand, formed in 1854, merged with Moet Hennessy. Moet Hennessy had been formed in 1971 when Hennessy, a cognac manufacturer, merged with Moet et Chandon, a high end champagne producer. This formation of LVMH would signal the creation of one of the world’s most profitable and encompassing luxury goods conglomerates. In 1989, Bernard Arnault would enter the picture, become the major shareholder of LVMH and take up position as chairman. An entrepreneur and art admirer, Arnault had amassed a personal fortune in real estate and in other luxury goods markets before purchasing the majority share of LVMH. Under him, LVMH would grow exponentially, acquire even more brands, expand into new markets, and see unprecedented growth. By the late 1990’s to early 2000’s, the company would be posting net revenues in the billions of Euros, comprise some fifty sub companies, all of brand names synonymous with high end fashion and luxury, and have over 1,500 retail stores operating in every major market on a global level. LVMH became the parent company to some fifty sub companies across a variety of different product industries and types. All were owned by the same company, but most operated independently and, in some instances, were direct competitors of each other. Regardless, each company no matter how different had one thing in common; they all produced high end luxury products. LVMH operated five sub categories: wines and...
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...Analysis10 4.4 SWOT Analysis12 4.5 PESTEL Analysis14 5.0 STRATEGIC ALTERNATIVES20 6.0 RECOMMENDATION23 7.0 ACTION PLAN24 8.0 CONTIGENCY PLAN28 9.0 REFERENCES28 1.0 CASE SUMMARY In recent years, modern customers are no longer acquiring shopping only for their goods and services. Nowadays, these customers are buying for different reasons such as to show off their personality, to boost self esteem or to satisfy physiological needs. Shopping good brands like Louis Vuitton, Gucci, Channel and other luxury brands is like a form of self expression and gives people a sense of accomplishment. Louis Vuitton or famously known by its acronym LV, is known for world’s most valuable luxury brand. It was founded by Louis Vuitton Moet Hennesy (LVMH) in 1854 on Rue Neuve des Capuccines in Paris, France. The historical journey began when Vuitton found out traveller trunk were easily stacked. He was made famous for crafting the luggage for Napoleon. This company is famous for its luxury products such as trunks and leather goods to ready to wear, footwear, watches, jewellery, accessories, sunglasses and books. Louis Vuitton stands out more among other brands through their relentless focus on product quality. Since the 19th Century, the manufactures of Louis Vuitton goods are still handmade and over 100 stages are involved in the making of each bag. All products are extensively tested to make sure that they can withstand wear and tear, and that there are no imperfections. The company markets...
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...4353 OCTOBER 10, 2011 ROBERT SIMONS MICHAEL MAHONEY Raleigh & Rosse: Measures to Motivate Exceptional Service Grasping the iconic “golden horseshoe” door handle, CEO Linda Watkins strode into Raleigh & Rosse’s Palm Springs, California, store and surveyed the sales floor. Ambient lighting was subdued while hidden halogen ceiling lamps artfully spotlighted merchandise and signage. Display cases made from polished exotic woods projected visual warmth and sophistication. A harpist played Mozart crisply in the background. It was just over a week into January 2010, and the store, swept clean of holiday decorations, had bright spring colors on display. Watkins noticed many sales associates engaged with customers, but foot traffic was below expectations for a Saturday afternoon. Her cellphone rang. “Linda, I got your voicemail. Raleigh & Rosse is being sued by its sales associates in a class action lawsuit?” asked Brian Rosse. He could barely contain his anger. Watkins moved to a quiet corner of the sales floor. “Sorry, Brian. R&R was served notice late Friday,” she said. “Looks like it’s a rehash of the ‘working off the clock’ charges that we dealt with last year. Logan [R&R’s general counsel] isn’t too worried about the merits.” “But think about the negative publicity, the damage to our brand and image!” “We’ve already engaged our PR agency to work on communications strategy. This is not great news, Brian, but I’m determined to find a way to manage it. Why don’t we discuss the...
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...including handbags, business cases, luggage and travel accessories, wallets, outerwear, eyewear, gloves, scarves, fragrance and fine jewelry. Continued development of new categories has further established the signature style and distinctive identity of the Coach brand. Together with our licensing partners, we also offer watches, footwear, eyewear and fragrance bearing the Coach brand name. Marketing Environment Coach has many competitors but their top three competitors are Dooney & Bourke, Kate Spade and Michael Kors. Dooney & Bourke started in 1975 and is an American made brand; Kate Spade was started in 1993 and is also an American brand and lastly, Michael Kors which was started in 1981, is and American brand. Coach reaches a larger demographic compared too many of their other higher-priced competitors, such as Louis Vuitton, Prada, Gucci, Cole Haan and Dooney & Bourke, because Coach says that they are “affordable luxury”. These competitors are focused on a higher-fashion, higher income demographic than Coach is. Dooney & Bourke and Cole Haan also stress “accessible luxury” which makes them Coach’s key rivals. Coach continues to be one of the best recognized accessories brands in the United States, and is actually the leading American manufacturer and retailer of leather goods, accessories and apparel for women and men. The largest player in the United States luxury handbag market is Coach with 36% market share. Coach is the second highest-selling luxury handbag retailer in...
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...Brand Name and the Quest for Success in the Luxury Sector All luxury designers strive to achieve long-term success. To put a label on a collection of products is to create a brand, but that label does not provide for definite staying power. Lucrative brands have gone beyond creating something pretty; an outstanding brand writes a story that the consumer believes and wants to buy into and the brand then becomes more than its product. Labels that grasp the importance of branding understand that they must be more than the watch or bag or scarf. The appeal of a brand must be in who the consumer becomes when he or she puts on or uses a certain product. Brand awareness widens when a high-end label creates and conveys a clear message or lifestyle that the consumer thinks he or she can attain through purchase. That is the art of branding. Branding convinces the consumer not to simply buy a product, but instead buy the brand as a whole. A stellar product does not stand alone—behind it must be something deeper, a message or a symbol which should represent or relate back to the identity of the brand. Within the luxury sector, where products are often an investment regardless of one’s socio-economic status, conveying an identity is crucial. If the consumer cannot see what he or she will gain from purchasing a $2,000 handbag or a $26,000 watch, there will be no sale, and the ship that is the brand will sink. John Goodchild and Clive Callow, authors of Brands: Visions and Values...
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