Chapter 7. Business Marketing

As I was reading the chapter, I thought there wasn't  much I could write about Louis Vuitton and business marketing, considering that the company is a manufacturer and retailer. But then I realized that although LV manufactures and retails its own products - mostly luxury leather goods, apparel, jewelry and watches- still business marketing occurs, because the company needs raw materials, services or other finished or unfinished products from another business. Even on a single collaboration the strategic alliance, trust and the relationship commitment are part of the expansion of the company.
Louis Vuitton started as a trunk maker, today Louis Vuitton is the most desired luxury brand. As apart of LVMH ( the merger between LV and Moet Hennesy in 1987), Louis Vuitton brings in half of the profits for the entire group.

In recent years, Louis Vuitton has blazed a trail as a trendsetter in retail architecture, constructing flagship stores worldwide, each of them treated diversely to reflect the soul of the city. Louis Vuitton had established a relationship commitment with the architect Peter Marino, since most of the stores are designed by him. The company also contracted PFG which supplied custom made furniture and fixtures for the flagship stores.

Louis Vuitton collaborated with Mercedes Benz and made custom interiors for the car, through the service of personalization. The interiors will remind you of the iconic Louis Vuitton handbag. The famous Louis Vuitton monogram pattern fabric makes an appearance on the upholstery of these high-end cars.

On November 21, Reuter announced:" French luxury pen maker S.T. Dupont is to supply Louis Vuitton as part of the French fashion brand's return to the stationery business to be unveiled in mid-December, sources close to the matter said."The transaction means that Louis Vuitton will effectively take on Montblanc, part of Swiss company Richemont, in the market for high-end writing instruments. S.T. Dupont makes lacquered black pens and square-shaped cigarette lighters in a factory in the French Alps. It has also launched a collection of bags, pens and lighters based on actors Humphrey Bogart and Audrey Hepburn, who owned S.T. Dupont products. Louis Vuitton, which made pens in the mid-1990s but phased them out, has big ambitions for its new collection, which will include alligator-skin fountain pens, customised stationery, bright inks, writing pads and Baccarat crystal ink wells."

Louis Vuitton lately changed its CEO. Jordi Constans, a former senior executive at French yogurt-maker Danone, has officially taken over from Yves Carcelle as the CEO of Louis Vuitton. Yves Carcelle joined LVMH in 1989 as Strategic Director. He was the Chairman and CEO of Louis Vuitton from 1990 to 2012. He is currently Vice-President of the Fondation d’Entreprise Louis Vuitton pour la Création and a member of the LVMH Executive Committee.


A personal note

I'm glad I took this class and discovered so much about marketing in general, and more specifically about Louis Vuitton. The blog itself is mostly informative and  relies on the material found on internet, but still, it's impressive the change of the company in the past 157 years. It has history of incredible innovation and values. Invests in arts, architecture and travel, and defines the true concept of luxury, as Louis Vuitton would say "The Birth of Modern Luxury." Louis Vuitton, founder of the house of Louis Vuitton in 1854, and Marc Jacobs, its artistic director since 1997. Two innovators , both rooted in their respective centuries, advanced an entire industry. Two creators, each in his own language, appropriated cultural codes and trends in order to shape the history of contemporary fashion.
Special thanks go to Professor Joel Evans, another innovator in his own category; "The Art of Teaching." It's because of him that this blog exists. He made marketing fun, enjoyable, easy and understandable. He is a great teacher. "The mediocre teacher tells. The good teacher explains. The superior teacher demonstrates. The great teacher inspires." ~William A. Ward

Chapter 8. Segmenting and Targeting Markets

Louis Vuitton started out with providing luxury products exclusively for the very wealthy people of the society. Although times have changed and the market for luxury products has increased enormously, Louis Vuitton still targets the wealthy. The creativity, exclusivity,craftsmanship, precision, high quality, innovation and premium pricing are product attributes that not only give the consumer the satisfaction of owning expensive items, but the extra-added psychological benefits like prestige and a sense of high status that reminds them and others that they belong to an exclusive group of a selected few.

Geographic Segmentation.

Louis Vuitton's marketing strategy has been exceptional in expanding in countries with high density, such as China, India, Russia and lately Brasil. When Louis Vuitton opened its first store in China, people asked: "Why have you come here? We don't understand luxury" The answer of Yves Carcelle - CEO and Chairman of Louis Vuitton said: "No, you are sophisticated and one day soon you'll be the biggest superpower." I posted this phrase in an older post, and since then it stayed with me. It was 18 years ago ca. when Louis Vuitton opened its first store in China and today China is close to being the biggest superpower. The Chinese were right, they didn't understand luxury, but Louis Vuitton was there to show them what luxury meant - The art of traveling, which means the Fine art of living. 

Demographic Segmentation.

Louis Vuitton targets both genders, men and women, from 16 to 80 years of age obviously wealthy.  

Business men and women with high income and disposable income.

Psychographic Segmentation. 

Louis Vuitton uses psychographic segmentation such as lifestyle and motives to further identify its target market. In countries such as China and Brazil people need to show their social status, and wealth. Louis Vuitton appeals to these customers with status related motives.

Trendsetters and fashionistas are the next segment. For instance, Louis Vuitton collaborated with Kanye West to target the Hip Hop personalities.   

The lifestyle segmentation is Louis Vuitton's ultimate strategy. The slogan "The Art of Traveling" set new standards for a luxury lifestyle. Since traveling is an art, then owing a Louis Vuitton product makes you part of that art. 

Usage - Rate Segmentation
Louis Vuitton segments consumers by usage; specifically targeting heavy users. Buyer information is collected at the point of sale and stored in a database. Heavy users are sent seasonal catalogs as well as invitations to purchase exclusive product collections to encourage repeated sales and brand loyalty.

Positioning 

The long history, craftsmanship, exceptional quality, creativity, unstoppable innovation, association with art etc., position Louis Vuitton as the Master of Luxury in consumers' mind. 

The 2013 Louis Vuitton Cup will mark the 30th anniversary of this esteemed event; a yachting competition sponsored by Louis Vuitton, in which the winner advances to the America’s Cup. This sponsored event caters to the extremely wealthy, who are traditionally loyal Louis Vuitton customers. The event reinforces Louis Vuitton’s prestigious image and creates a sense of exclusivity that those who participate in the event seek.

Louis Vuitton also holds the Louis Vuitton Classics Annual Automobile Race in Paris. It was 

launched in 1989 and has taken place every year since then. Expensive cars have an association with classic values and a conservative lifestyle which also is an approach that Louis Vuitton aims to have. The company and its founders have a connection with cars ever since the foundation. A hundred years ago George Vuitton, son of Louis Vuitton, designed the first car trunk. In the following years he continued designing interior car details and added finishing touches to classics like Bentley, Rolls Royce, Alfa Romeo and Hotchkiss.

Chapter 11. Developing and Managing Products

LV has always been known as an innovator. The ambition of the original family to spread their products and quality around the world has been the key of success of what we know today as Louis Vuitton. Only George Vuitton, after his death in 1936 left more than 750 designs of handbags and luggage. He was also the one who changed the pattern of Louis Vuitton, inspired by the Japanese motifs. The innovation of the company has been outstanding. Along with the luggage and the handbags Louis Vuitton has expanded its line of products with the art of traveling and art of packing. Books, city guides  and even catalogs always sell out. In 1997, the company hired Marc Jacobs Vuitton as its Artistic Director. Marc Jacobs introduced the first pret a porter line for Louis Vuitton. The clothing line was incredibly successful, and there were no doubts it could have been otherwise. Marc Jacobs is a true artist, and the association of Louis Vuitton with the art world transpires in all of its products. This is what gives Louis Vuitton an absolute advantage. Either you buy a handbag, a luggage, a pair of shoes or even sunglasses, they will make you feel special because there is a story   behind each product. There is a journey, and there is art in this journey. Is the art that makes the luxury.

 With the arrival of Marc Jacobs, the men’s and women’s ready-to-wear line had been expanded with the introduction of shoes, watches and jewelry.
Louis Vuitton uses their windows in their flagship locations as creative ways to promote their new products. An example of the creative way is the picture above, when  Louis Vuitton collaborated with the Japanese artist  Yayoi Kusama. Marc Jacobs said: "It is a wonderful idea the collaboration with art, it changes the environment. For many people who don't look at art or go to galleries, there will be a new venue, a new place to come and appreciate it through the eyes of Vuitton." From a marketer prospective, this is the best way to maintain the relationship with existing customers by offering not only new products, but pieces of art work. It also implies that the world of Louis Vuitton is endless.

Chapter 16. Integrated Marketing Communications

Let's start by saying that Louis Vuitton is a legend in the luxury market. Legend is one element of a product's appeal which tends to be overlooked. Lineage, origin, and history provide anesthesia for the "pain of spending." As far as luxury brands are concerned, the excellence of the sheer quality, exceptionalness of design, and appeal of fashionable trends due to the contemporary efforts of those in the management ranks, artisans, and designers are important elements. In addition to these, the previous history of the house brand and mythical episodes are also valuable components of a brand's appeal. General marketing looks to "mass advertising" in its efforts to sell at high volume.

Television commercials typify that approach. Louis Vuitton, however, did not advertise on television until 2007. It's first commercial was an institutional commercial and since then the company has continued that line. It's TV commercials appear on golf and traveling channels and target a specific audience such as the business people who travel often. While Louis Vuitton does advertise in newspapers and magazines, these consist mainly of image ads rather than "aggressive" sales ads, and more focus is given to publicity (being taken in the media). The age of the House of Louis Vuitton cannot be said to have been rabid about promotion, meaning that most of the principles for promotion likely originated with the luxury brand strategy of the holding company LVMH. At Louis Vuitton the main stars are the products themselves, and it encourages customers to pledge their allegiance to the products. The photographs and text in Louis Vuitton advertisements position the products in the starring role. "Louis Vuitton trunks are solid." "Vernis and monogram mini-bags are adorable." "How functional is the business briefcase?" "Who should you entrust the repair of your bag to?" Talk of matters aside from Louis Vuitton products does not appear.

Ogilvy PR decided to use the launch of the new French Louis Vuitton web site (featuring André Agassi and Stefi Graff) to start a conversation among relevant online influencers. Louis Vuitton is also giving an enormous importance to the social media. When it opened the flagship store in London, Louis Vuitton sent an invitation to all the fans and showed the event live in its Facebook page.

Louis Vuitton's use of personalised e-commerce shows marketers how luxury brands can preserve their exclusive shopping experience and aspirational brand image online. Louis Vuitton is able to offer its traditional personalised service to its community of Facebook users via its Mon Monogram app. Users discuss purchase to a much greater extent than for other post topics, suggesting the app can act as a call to action while maintaining Louis Vuitton’s luxurious brand image. Alongside its posts about culture and travel, Louis Vuitton's Facebook page features the Mon Monogram app. which allows members to fully customise their bag with hand-painted personal initials and stripes on the colour and direction of their choice. They are then prompted to visit the Louis Vuitton store to purchase their customised bag. Users of the app can also send “virtual” gifts to each other, adding a social dimension to the experience.

Chapter 10. Product Concept

Louis Vuitton, has been a part of the fashion industry for approximately 157 years, dating back to the 19th century. The company started in France and is recognized world-wide for creating speciality products. In the past, the fashion and luxury industry were made possible by the craftsmanship and motivation of the best skilled artists. All Louis Vuitton luggage and handbags are created by the hands of talented artisans. Each product is carefully crafted using the finest materials. Originally Louis Vuitton created luggage in the mid 1800’s. The company expanded the product offerings to handbags in the early 1890’s. The actual product variety remained limited, while an assortment of luggage and handbag styles flourished with the creation of new fabrics, logos, and designs.

Today the Monogram Canvas and the Monogram Denim remain two of Louis Vuitton’s most popular designs. The company has expanded the depth of their products greatly by producing many additional handbag lines. Presently, the most popular lines including the Monogram Canvas and Denim are; the

Monogram Multicolore, Monogram Mini, Monogram Mini Lin, Monogram Satin, Monogram Vernis, Monogram Perfo, Damier Azur, Damier Azur Canvas, Damier Geant Canvas, Onatah Leather, Nomade Leather, Suhali Leather, Epi Leather, Antigua, and Velvet Chains. Within each handbag line, there is an even larger product depth ranging from various sizes and styles. Every single type of bag has its own special name under the line category. Some popular handbag names in the Monogram Canvas line are; Lockit, Lockit Vertical, Lockit Horizontal, Speedy 25, Speedy 30, Alma, Mini Noe, Noe.

In 1997, Marc Jacobs was hired by Louis Vuitton to be its label’s artistic director . 

That year he introduced the company’s first ready-to-wear line of clothing. This was the first time that Louis Vuitton ventured to a new product offering other than luggage and handbags. Today Louis Vuitton product offerings also include cosmetic and vanity cases, sunglasses, shoes, scarves and accessories, belts, timepieces, and fine jewelry. The company built its foundations on the hand work that goes into each of its custom made products. 

Since the company first began, all products have been concentrated on by the art of craftsmanship. Louis Vuitton does not use machinery to mass produce their handbags. Just a few years ago 20-30 craftsmen were needed to assemble the Louis Vuitton “Reade” tote bag in approximately an

eight day time period. However, with the increase of boutiques, the company found problems keeping all their stores fully stocked. To solve the problem without depending on machines, Louis Vuitton turned to a more modern idea of the factory line, inspired by car maker Toyota Motor Corporation. Louis Vuitton does not want to alter the company’s image by changing the way the bags are produced. The service offering  have not exactly changed, but rather expanded with time. The new factory format is known as Pegase, named after the mythological winged horse and Louis Vuitton’s rolling suitcase. The main change under the new method of the assembly line is that the handbags no longer sit on carts before they are transferred to the next station to be worked on.

The company is now able to distribute new collections to their boutiques every six weeks, speeding up the process more than twice as fast. Louis Vuitton still holds on their old traditions, although changing moderately to keep up with the fast pace economy.

The original pattern of Louis Vuitton's trunks was a striped canvas. However, as the label became more and more popular, it was copied more and more. So, in 1889, Louis and Georges Vuitton decided to change their signature pattern to a brown draught board pattern on a beige background. This new pattern was the very first registered trademark (Marque L. Vuitton despose'). The new pattern was referred to as the Damier canvas. After Louis Vuitton died, his son Georges became the mastermind behind the company. Georges had true international ambitions, with plans to expand into the United States. By this time, competitors had also copied the Damier canvas. It was time to come up with a new signature pattern that was much more difficult to copy. Georges created the new motif, which was comprised of a beige circle containing a four-petal flower, a curved beige lozenge containing a four-pointed curved star, a star with a point in the center, and the initials LV in memory of his father. Finally, the monogram canvas, so well known today was born. One main thing to remember, Louis Vuitton, is always about perfection, and would never put out anything less than that. At Louis Vuitton Malletier, 85% of the corrugated packaging used to transport products is totally composed of recycled fibers. The labelling is purily informative. In its labels Louis Vuitton describes the material used for the products, where these products are made, and the bar code. 

Louis Vuitton does not offer an expressed warranty but offers a service of repair throughout lifetime.

For the launch of the My Monogram service on Small Leather Goods, Louis Vuitton asked British artist Billie Achilleos to work on 4 animals made of Louis Vuitton Small Leather Goods.

The creativity and and the association with art makes Louis Vuitton a unique company. Louis Vuitton and Marc Jacobs is a story of two personalities and their contributions to the world of fashion : Louis Vuitton, founder of the house of Louis Vuitton in 1854, and Marc Jacobs, its artistic director since 1997. Two innovators , both rooted in their respective centuries, advanced an entire industry. 

trendland.com Louis Vuitton.com, dailynews.com, LVMH.com wikiepedia.com post-gazette.com

Chapter 18. Sales Promotion and Personal Selling

Louis Vuitton hasn't had a sale in 156 years. "Louis Vuitton is a unique organisation: the products never go on sale, nor are they sold at duty-free shops. We create what people desire. And I love that commitment to quality." Marc Jacob - artistic director, said.

A luxury brand often wants to impose a minimum resale price for its high-end clothes in order to prevent online resellers and competing boutiques from “underselling” or discounting the goods, making it available to a wider segment of the market, and in turn, eroding the luxury brand image. Louis Vuitton does not only manufacture and sell its products to a well defined target market, but also sells a lifestyle. Therefore, the pricing and promotion strategy it is not only to protect  the brand from counterfeiting but also to be loyal to its customers. Louis Vuitton doesn't have outlets, nor sample sales.

The brand emphasizes the personal selling, values the “fullness of information” exchanged between a customer and a Louis Vuitton salesperson; LV trains salespeople to tell the stories behind the products and inform customers regarding the rich details of latest pieces, how to care for the bags, and updates on key fashion designers. Yearly, Louis Vuitton supplements stores with catalogs that consumers can buy. The catalogues contain an immense amount of information about the products; the catalogues always sell out. 

Chapter 17. Advertising and Public Relations

 Louis Vuitton commonly uses print ads in magazines and billboards in cosmopolitan cities. It previously relied on selected press for its advertising campaigns (frequently involving prestigious stars like Steffi Graf, Andre Agassi, Gisele Bündchen and Catherine Deneuve) shot by Annie Leibovitz. However, Antoine Arnault, director of the communication department, has recently decided to enter the world of television and cinema: The commercial (90 seconds) is exploring the theme "Where will life take you?" and is translated into 13 different languages. This is the first Vuitton commercial ad ever and was directed by renowned French ad director Bruno Aveillan.

 LVMH devotes over ten percent of annual sales to promotion and advertising. The company advertises its brands primarily in fashion and lifestyle publications. Some of the leading brands sponsor major international events with luxury cachet, as Louis Vuitton does by sponsoring the America’s Cup. Since image is an essential part of marketing luxury goods, LVMH is careful to evaluate every advertising and promotional opportunity for consistency with the image of its brands. As a result, the company manages a portfolio of luxury brands unparalleled in both size and sales.
Louis Vuitton’s chief executive Yves Carcelles once said: “Our brand is about reliability, quality, style, innovation and authenticity.” But that may not complete, according to Richard Wachman of London’s The Observer: “Louis Vuitton is also selling a certain idea of France… a brand that represents a mythical France, one of which neither the French nor the outside world can get enough.” In short, the essence of a luxury good is its exclusivity, i.e. not everyone can afford it, only a small group of people can enjoy it, and Louis Vuitton pushes exclusivity to the extreme.

The $8 million, specially built locomotive Marc Jacobs sent barreling down the Fall 2012 Louis Vuitton runway it's back, and this time, it serves as the backdrop of the house's Fall 2012 ad campaign. "We wanted to continue the journey we started with the fashion show — the glamour of travel and the romance of going somewhere," Jacobs explained. To do so, the train was deconstructed and shipped to a New York studio where it was rebuilt, filled with models, and photographed by Steven Meisel. "We wanted to maintain the comfortingly luxurious and old-fashioned journey that the collection represented. Opulence, the brocades, the beautiful cuts of the suits, and I guess, the distant romantic glamour of travel," Jacobs said.

Louis Vuitton populated its Fall 2011 runway with supermodels like Kate Moss, Amber Valletta, Carolyn Murphy, and Naomi Campbell, but you wouldn't guess it based on the collection's campaign. Instead of its usual top model or actress seasonal face, the brand went with very young, in some cases: 16-year-old Zuzanna Bijoch, 15-year-old Daphne Groeneveld, 20-year-old Gertrud Hegelund, 16-year-old Nyasha Matonhodze, 20-year-old Anais Pouliot, and Fei Fei Sun, who was born in 1989.

In 2007, Louis Vuitton asked Ogilvy PR's Digital Influence team in Paris to generate positive word of mouth about the brand among online “influencers.” The campaign needed to be focused and efficient, because it would not be supported by global marketing nor a traditional public relations launch.
Ogilvy PR decided to use the launch of the new French Louis Vuitton web site (featuring André Agassi and Stefi Graff) to start a conversation among relevant online influencers. Ogilvy PR had three major goals in doing so: to drive users to Louis Vuitton's site via organic search; to lead them to associate the brand with high quality and emotional values; and to gather verbal testimonials and "buzz" for the website, which would in turn generate further interest in Louis Vuitton among key audiences — including the media and affluent consumers.