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.

Chapter 15. Retailing

Louis Vuitton store
1 East 57th Street (corner with Fifth Avenue)
New York, NY 10022
USA

I recently visited the Louis Vuitton store on 5th Av, the largest in U.S. The building itself it's breathtaking, the exterior was renovated in 2007 by the architect Jun Aoki, he had the freedom to transform the stolid art decor exterior into a destination with multifaceted 21st Century appeal. Aoki conceived of the glass façade as a playfully sleek meditation on crystalline transparency and clouded translucency. Passersby experience a teasing optical illusion by day and a diffused streetlamp-through-fog appearance by night. At 20,000 square feet, the store's interior, designed by Peter Marino (New York) with LV Paris, was one of the largest retail spaces the LVMH store planning department ever worked on. More steel had to be added to the existing structure to support the new façade. Then, there was the Warner Bro's movie theater that had to be converted back to a level floor and structurally re-corrected for use as office space. Plus there were tons of wacky cartoon character detritus and candy machines left behind, such as the Superman who had formerly "supported" the old glass elevator and gargantuan Ninja Turtles.

The Damier checker pattern on the exterior is also the dominant interior motif: Grids and double-square rectangles are wittily integrated throughout the floors, in the checkerboard rugs, the double-square mill work for the product displays and the (quite literally) flashy LED "Feature Wall." The wall climbs from the ground floor up three stories to the top of the retail volume and is visible from outside the store. It can shift into 60 different spectrum colors, ranging from jewel-tone intense to misty pastel. It also functions as a screen for still images and films. Other interior highlights include: a wall of vintage trunks hovering above the periphery of the ground floor dotted with red hat cases evoking the 1943 Piet Mondrian painting, "Broadway Boogie Woogie," and the cantilevered bronze-clad monotube staircase.

The luxury store offers a truly unique shopping experience with its leather goods, classic men's and women's ready-to-wear, modern timepieces and jewelry, and uptown-chic footwear. Past the towering wooden grids that showcase the famed handbags lie the relaxed suits and ultra-feminine knee-length skirts that typify Vuitton's polished look, punctuated by bright colors and soft accents for a swank mix of tradition and modernity; this familiar style is echoed throughout Vuitton's designs, from the monogrammed canvas belts to the red ostrich-leather wrist watches. The displays are elegantly furnished, every item seems to scream buy me. The customers service is also excellent, the sales associates wear black suits with the tag of their name and they're not pushy, but well informed about the products and very professional. The atmosphere is without any doubt welcoming and is really hard to get out without buying anything.

Louis Vuitton uses e-tailing as well, its website is very elegant, informative and easy to navigate, the background music makes the shopping online even more pleasant. The website offers all services that you can find in the store, there are different ways you can contact a professional if you need any help, such as chat option, phone or call back option. The website offers personalized service as well.

Louis Vuitton's use of personalized e-commerce shows marketers how luxury brands can preserve their exclusive shopping experience and inspirational brand image online. Louis Vuitton is able to offer its traditional personalized 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 customize their bag with hand-painted personal initials and stripes on the color and direction of their choice. They are then prompted to visit the Louis Vuitton store to purchase their customized bag. Users of the app can also send “virtual” gifts to each other, adding a social dimension to the experience.

Sources: vmsd.com/content/louis-vuitton, Louis Vuitton.com, LVMH.com 

Chapter 6. Consumer Decision Making

What drives the consumer to purchase a Louis Vuitton product? As the president of the parent group LVMH said  “a truly unique concept that allies shopping, luxury, leisure, art, and culture”. Louis Vuitton is the most recognized luxury brand in the world, with 20 millions sales more than its competitors Louis Vuitton stands as the top of the evoked set in consumer mind.
When purchasing a Louis Vuitton product, consumers are driven by social factors, cultural factors, psychological factors and individual factors. The external stimulus of the consumers comes from a wide range of factors such as the continuous innovation of the products. Louis Vuitton has added ready to wear line, fine jewelry, watches and shoes to its collections. Along with the innovation of the products the company has adopted the new technology. The Mon Monogram application allows the consumers to customize their products. Louis Vuitton advertises its products through multiple channels, from print advertising to commercials, billboards, magazines and social media. The nonmarketing-controlled information source comes from hundreds of blogs, and review websites where people talk about the brand, lifestyle-related posts help associate Louis Vuitton with elite culture are successful in driving purchase discussion. When considering of purchasing a LV's bag the consumer is affected by conscious motives such as the high quality of the product that performs well, friends, colleagues or acquitances that already have a LV's bag, and limited edition make it more fashionable. The Latent motives are:

The bag will demonstrate that the consumer is successful, fashionable and elegant.The shopping experience, the feeling of being important and the long-lasting products make the consumer come back to the brand.
Louis Vuitton continues to collaborate with many artists, celebrities and sports figures the long list includes Bono Vox, Scarlett Johanson, Micheal Phelms, Madonna, Yayoi Kusama.

Chapter 5. Developing a Global Vision

 

Louis Vuitton started to expand since 1885. In that year the company opened the first store in London followed by other two stores in the next two years. In 1904 Louis Vuitton participated in World's Trade fair in U.S. trying to get the brand recognized by the Americans. In 1987 The brand established its presence in Japan, getting a share in Asian market, and also prepared the strategy to expand in China, and other Asian countries. With a well established presence in Europe and U.S. and Japan, and more than 1500 stores around the world and its e-commerce site, Louis Vuitton is a multinational corporation.
Louis Vuitton has factories in France, Italy, Spain, Switzerland and U.S. Its leather products are mainly made in France and Italy. The watches are made in Switzerland. The outsourcing of Louis Vuitton differs from the competitors because the company outsources  to enhance the product quality and prestige.


Louis Vuitton is one of the first luxury companies to see the potential economic growth of emerging markets such as China and India. With the rapid economic growth of the Chinese market Louis Vuitton saw the need of the people to show their social status. In fact today Louis Vuitton is number one luxury brand preferred by the Chinese.




Louis Vuitton uses the same quality of its products everywhere in the world. A bag sold in China or in India is the same quality of one sold in France. The company takes in consideration the cultural background and how people would understand better the concept of luxury. In Japan the company promotes its products through innovation and the involvement in the art and architecture scene associating its products with the art.
Louis Vuitton's products have the same price all over the world. The company adopted the dumping practice for the Japanese market as a strategy to have a greatest market share. In fact, about 90% of Japanese own a Louis Vuitton product.

Chapter 4. The Marketing Environment

Louis Vuitton is historically known to serve the powerful and the wealthy. Its target market is both men and women from 22 to 65 years of age. In its marketing strategy all the key factors play a very important role and are fully executed. Louis Vuitton offers to its customers a lifestyle experience, while analyzing the lifestyle components of its target market.
When Louis Vuitton opened the first store in China people asked: Why have you come here? We don't understand luxury - and the answer of Yves Carcelle the CEO of Louis Vuitton was: "No, you are sophisticated and one day soon you'll be the biggest superpower."
Louis Vuitton has pursued a consistent approach to developing the market, never compromising in the face of difficult operational obstacles, and, as always, controlling every aspect of the business. This unique approach has powered Louis Vuitton to its current position as the most successful luxury brand in China.

In India, Louis Vuitton will soon open its third store, which will be the second in Delhi. India has phenomenal potential and the growth has been exceptional. In fact, the volume of business in India is proportionally larger than when the company started in China. However, the market for luxury products remains marginal.

As the expansion of the brand continues in these new markets, Louis Vuitton is also adopting new ways of stimulating innovation in existing audiences. In Japan the company is introducing New- Generation stores, revolutionizing the ceremony that surrounds the sale of a luxury product. Architecture has become an integral part of the brand identity. This is manifested in the Omotesando building designed by Jun Aoki as a stack of trunks. A new era has begun where the in-store experience is almost as important to the customer as the product itself.
Louis Vuitton has a zero tolerance policy on counterfeit products. In 2012 Louis Vuitton won a U.S. Trade ruling that will help it keep knockoff Louis Vuitton handbags, luggage and accessories from entering the U.S. The order, which will go into effect in 60 days, directs Customs and Border Protection to turn away any products that are made in a way that is similar or copies the Louis Vuitton trademarks.
Louis Vuitton and the Recession
How did the recession affect Louis Vuitton? LVMH, saw it's stock  plummet from 40 to 10 at the end of 2008, but Louis Vuitton didn't change its message to fit with the time. Louis Vuitton refused to lower the prices and cheaper its quality products. A strong brand reduces its business risk because stands for something more than affordability.  Louis Vuitton has been very agile and sensitive with international expansion. The firm is aggressively expanding into the lucrative Chinese market but with the same exact standards that would befit a store in Milan or New York. In 2010  Louis Vuitton's net profit jumped to 73% led by the Asian market.

Sources: Bloomberg Business week.com LouisVuitton.com  Thealtantic.com LVMH.com

Chapter 3. The Concept of Ethical Behavior

LV as part of LVMH Group have adopted and promulgated the Supplier Code of Conduct which sets forth the Group’s requirements in terms of social responsibility (forced labor, discrimination, harassment, child labor, compensation, hours of work, freedom of association and collective bargaining, health and safety, etc.), the environment (impact reduction, use of green technologies, waste reduction, compliance with regulations and standards), and the fight against corruption. Relations with any partner necessitate the latter’s commitment to comply with all ethical principles enunciated in this Code. This Code of Conduct also sets forth the principle and procedures for the control and audit of compliance with these guidelines. Audits are also carried out on suppliers. In its supplier specifications documents, including clauses dealing with the individual rights of employees, child labor prevention, equality of opportunity and treatment, working time policy, and the protection of the environment. Louis Vuitton has put in place an ethical system of preliminary audits founded on compliance with local regulations as well as the SA 8000 social accountability standard, which is based on international workplace norms included in the ILO conventions: no child labor, no forced labor, providing a safe and healthy work environment, freedom of association and the right to collective bargaining, no discrimination, disciplinary practices, compliance with working hour and wage regulations. To ensure that they will be able to perform preliminary audits independently, Louis Vuitton’s buyers receive theoretical training covering the approach and criteria as well as practical training in the field in the company of an SA 8000 auditor. Specifically, Louis Vuittons suppliers must:

Share the fundamental values of the House 

Respect standing norms and regulations

Adhere to the ethical and social values of the House

Help protect the brands intellectual property and creativity

Protect nature and reduce the impact of its activities on the environment.

Louis Vuitton takes also preventive measures to ensure the application of the Code of Conduct some of them are the following:

Trace and protect all of the labor in its supply chain

Honor the role and voice of the worker as the best check on abuse

Provide for independent, unannounced, and thorough audits

Provide effective whistleblower and complaint procedures

Provide clear guidelines for security procedures throughout their supply chains to ensure that security

forces are not used to intimidate, hold, or abuse workers throughout their supply chains

Inform its shareholders and stakeholders on creation, maintenance and implementation of their related policies

Guarantee all workers mobility by strictly forbidding any holding of official documents

Ensure all workers are paid fairly

Comply with local laws related to slavery and trafficking in persons as well as ILO Conventions

Ensure that labor recruiters are fully licensed by their home government and do not engage in using fraud or debt to create a trafficking exploitation.

Louis Vuitton has always been conscious of the importance of respecting the environment and minimising its impact on the surroundings.
" Our culture is steeped in know-how, tradition and innovation. Such values naturally lead us to the respect of human heritage, and, first and foremost nature. The vast majority of the materials that we use in our products come from natural resources. We have a deep interest in committing ourselves to ensure that these materials remain available in the future." - Yves Carcelle CEO of Louis Vuitton.

Since 2004, Louis Vuitton has undertaken a Carbon Inventory every three years to continuously apply and improve innovative solutions across its operations and products around the world. Louis Vuitton voluntary actions not only encourage a collective commitment with suppliers and partners; they also raise environmental awareness and a sense of responsibility within the company. Louis Vuitton has fixed a “5R” rule : Renew, Recycle, Reduce, Review and Repair. Louis Vuitton craftsmen use renewable resources such as wood, cotton and leather wherever possible. Every member of the company is trained and made aware on how to recycle paper, plastic, leather off-cuts, etc. Louis Vuitton seeks to use the latest methods to reduce waste from packaging and to review the use of energy, products and employee transport etc. All stores further offer a repair service for leather goods and hard-sided luggage to ensure that the high-quality products, which are passed on from generation to generation, will last even longer.

Central to Louis Vuitton’s global commitment to local community initiatives is its long term partnership with global charity, SOS Children’s Villages. Louis Vuitton’s five-year partnership programme with the charity targets education, Partnership for Children’s Futures and learning support for disadvantaged children around the world 

Founded in 1949, SOS Children’s Villages supports orphaned and abandoned children and helps families in need to care for their children. Currently, there are more than 78,000 children and adolescents in some 500 SOS Children's Villages across 132 countries. Each SOS Village provides children with a home, a SOS mother, and a sense of belonging. In total, more than 900,000 beneficiaries receive services in more than 1,000 SOS educational, social and medical facilities.

In 2009 and 2010, Louis Vuitton supported the development of a multifunctional activity centre in the SOS Children’s Village in earthquake-devastated Chengdu, China. Louis Vuitton is also creating a university education programme targeting children from nine SOS China Villages who are particularly gifted or have shown high levels of scholastic aptitude and creative ability. SOS Children’s Village’s first-ever scholarship programme will also be launched and in its first year it will benefit 28 students from China, being renewed annually.

In 2009, Louis Vuitton celebrated the Red Cross’s 150 years of international activities in humanitarian aid as well as its own century and a half of savoir-faire in its Asnières workshops. The 150 years were celebrated by launching L’Excellence du Savoir-Faire, a special two-part charity project.

Fifth-generation member of the Vuitton family and head of Louis Vuitton’s Special Orders department, Patrick-Louis Vuitton created a limited edition ―Red Cross Medical Kit. The carefully crafted trunk features a hand-painted Red Cross logo on its monogrammed front, while special editions of the humanitarian association’s iconic red and grey emergency supply boxes are housed in its interior. Patrick-Louis Vuitton also created customised pieces for distinguished ambassadors of creativity: a dog carrier for Marc Jacobs, Creative Director of Louis Vuitton; a camera bag for photographer and friend of the house, Annie Leibovitz; a trolley case with knife tray for chef Ferran Adrià; an instrument case for musician and composer Gustavo Santaolalla; and a butterfly armoire for artist Damien Hirst.The auction raised a total of $755,000. All proceeds from the sale went to the Red Cross’s Fight against Malnutrition programme in Niger. Louis Vuitton further donated a percentage of sales of four iconic pieces — the Keepall, Speedy, Noe and Alma — from their US website to the American Red Cross.

In 2007, Louis Vuitton reaffirmed its commitment to environmental stewardship by becoming an active partner in The Climate Project. Founded by former US Vice President and Nobel Laureate Al Gore, this global non-profit organisation works to educate the public about climate change.On Earth Day, April 22, 2009, Louis Vuitton further demonstrated its commitment to the environment by donating 15% of sales made on its US website that day to The Climate Project. The initiative was followed by a 40th-anniversary celebration of the lunar landing on July 14, when, for that week, 10% of the sales of all travel-related purchases made at its Fifth Avenue flagship maison were donated to The Climate Project.
In 2009, Louis Vuitton collaborated with Spanish actress and OrphanAid Africa ambassador, Rossy De Palma, to create a collection of handcrafted fans. All proceeds from their sale at auction were donated to OrphanAid Africa.
On September 7, 2009, the Louis Vuitton Forest by More Trees was launched in Komoro City, Japan. The 104-hectare forest was created through cooperation with More Trees, an incorporated association led by Ryuichi Sakamoto. The goal of the project is to promote Japanese bio-diversity, by focusing on reforestation and creating forests in which ―beauty and ―relaxation can be experienced with all five senses.
 “As leader of the luxury industry we believe that we naturally have a responsibility to the world around us. Louis Vuitton continues to preserve its involvement within the world of Art & Education and this tradition dates back to the very core start of the House. Over the years, Louis Vuitton maintained its kinship with the field of Art, Education and culture with global projects, such as Young Arts Projects in London, Arte Excellence program in Singapore and the art and educational projects in Dubai in collaboration with Start” - Yves Carcelle, CEO and President of Louis Vuitton.

Sources: Louisvuitton.com/values, Chainstorereaction.com/LuoisVuitton, lvmh.com

Chapter 2. Strategic Planning for Competitive Advantage

Business mission statement of  Louis Vuitton is to represent the most refined qualities of Western "Art de Vivre" around the world. LV must continue to be synonymous with both elegance and creativity. Our products, and the cultural values they embody, blend tradition and innovation, and kindle dream and fantasy.
- Be creative and innovate
- Aim for product excellence
- Bolster the image of our brands with passionate determination
- Act as entrepreneurs
- Strive to be the best in all we do

SWOT analysis:
Strengths: Louis Vuitton is one of the oldest fashion houses in the world, easy recognizable by its logo LV and monogram canvas. The exeptional high quality, innovation, craftmaship, the association with art and architecture define the strenght of Loui Vuitton.  The brand has an international wealthy clientele, including celebrities and VIPs. Its products are available in its own exclusive stores and through Luisvuitton.com, accessible  anywhere in the world. LV offers also services for custom made products.
Weaknesses: Louis Vuitton is the number one world's most counterfeit brand, imitations affect brand's sales. Another weakness is restricted retail opportunity, the company distributes its products through its own stores and doesn't have discount sales, which makes the business dependable on economic conditions. If a depression occurs, the sales growth slows down sharply.
Opportunities: Expansion in emerging markets, such as China, Russia, India, Taiwan, Singapore etc. Luis Vuitton has  been  focusing   on    increasing     its    investment   in    such   emerging    economies    where     high  growth rates can be experienced. Louis Vuitton World's cup coming up in 2013 is also an opportunity for brand's exhibition.
Threats: Increased counterfeit crime will hurt the brand image .The abundance of counterfeit goods is affecting the sales. It is estimated that a loss due to counterfeit products converts in 6 billion Euro ($8.5b). The global economy; economic depression or recession, affects the sales  as  happened in 2002 and 2008. 

Competitive advantage
Louis Vuitton is known for using high quality raw materials in all of its products, the company has an empowering position to  observe its products quality by marketing them through its own stores all over the world . Since the founding, the products are made by hand which differentiate the brand among its competitors in the industry. Before 2005, it took 20 to 30 craftsmen to put together each Louis Vuitton  bag. Over the course of about eight days, separate workers would sew together leather panels, glue in linings and attach handles. For years the company paid far more attention to product design, craftsmanship and image than to the mechanics of keeping their stores stocked.  With help from management consultants at McKinsey & Co., Vuitton set out to make its manufacturing process more flexible, borrowing techniques from car makers companies. Today, clusters of six to 12 workers, each of them performing several tasks, make  LV-logo bags in a single day. The new settings improved company's production and the sales rose to 9% from the previous method of manufacturing. 
The reorganization extended beyond the factory floor. A distribution center in France used to send products directly to Vuitton's stores around the world. Now, the company is building a global distribution hub outside of Paris that will ship to six regional distribution centers: two in Japan, two elsewhere in Asia, one in the U.S. and one near Paris for European orders. Within a week of a product launch, stores around the world feed sales information to France and production is adjusted accordingly. Factories work on a daily schedule, compared to a weekly one before the reorganization.
The final stage of the reorganization expanded to the boutiques and the stores for a better customer service and more efficiency in employees performance . In the past, salespeople advising customers would disappear into stockrooms when products weren't available on the shop floor. Now, Vuitton assigns a few employees at each store to the stockroom. At a large new store on Paris's Champs-Elysees, items are sent via service elevator from a basement stockroom to the cash register. They arrive wrapped in tissue paper.

Strategic Directions
Louis Vuitton is a cash cow. It accounts for 37% of its group sales, LVMH, and most of its profits. Along with its leather goods, through product development strategy, LV has increased the sales  by introducing products such as jewelery, watches, books, sunglasses and a clothing line. Louis Vuitton has always transcended barriers across artistic, technical, and intellectual disciplines. Inaugurated in 2006 on the seventh floor of the Champs-Elysees Maison, the Espace Louis Vuitton is a space of artistic and cultural expression. In the future, will open several Maisons Louis Vuitton, a truly unique concept that allies shopping, luxury, leisure, art, and culture.

Target Market
LV targets high-income costumers of both genders.

The four Ps.

Product 
Louis Vuitton does not  only offer to its customers unique designs and high controlled quality products, but also inducts  them  to form attachments by giving to each product a name instead of a serial number. The company has a special orders service for custom made products.

Place
Louis Vuitton retains immensely tight control from production to distribution to sales. It distributes its products in its own stores located throughout the world, which allows it to control product quality and pricing. It also allows LV to prevent counterfeit products entering its distribution channels. In addition, the company distributes its products through LouisVuitton.com

Price
The core of Louis Vuitton pricing strategy is to sell its products to the same price no matter the location. Discounted and bargain sales are prohibited, once a product is taken out of production, it retires and does not go to a discount outlet or online discounter.  Louis Vuitton has not had a sale in 156 years.

Promotion
Louis Vuitton promotes his product through multiple channels. In store promotion - trains the staff to tell the story of each product. It has also been trailblazing in the use of social media, online and mobile, while maintaining the highest standards in print advertising. The Louis Vuitton company carefully cultivates a celebrity following and has used famous models, musicians, and actors. Involvement in events such as Louis Vuitton's cup  gives the brand a global visibility and recognition. The commercial (90 seconds)  "Where will life take you?" and  translated into 13 different languages, was the first Vuitton commercial ad ever and was directed by renowned French ad director Bruno Aveillan.

Effective strategic planning
Louis Vuitton took the second place as the luxury marketer of the year, in  2010. The brand has continued its expansion in Asian markets as well as in emerging markets. Its sales growth increase it's steady at 15%.
"The fine equilibrium between tradition and innovation reflects the DNA of Louis Vuitton. Products such as the Multicolore Monogram bags, the fruit of a collaboration between Marc Jacobs (LV's artistic director) and the contemporary artist Takashi Murakami, received a fantastic welcome. LV will continue working with this same creativity and respect for quality. As a leader of the sector, the challenge is to continue growing and still preserve the exclusivity and great quality the company has always offered." - Yves Carcelle CEO at LV.

Sources: Businessweek.com bloomberg.com, dailynews, wikipedia, luoisvuitton.com lvmh.com

Chapter 1. History and Mission Statement

Louis Vuitton, historically supplier of luggage to the wealthy and powerful, is known for combining the quality fabrication with innovative designs to reflect the needs of customers  and the changing modes of world travel. The first Fashion house was founded in 1854 by Louis Vuitton, he made a name for the company by inventing the first canvas flat bottom trunk. The canvas flat bottom trunk was easy to be stacked  also lightweight and airtight.  Many luggage makers imitated Louis Vuitton's style and design. Due to the continued limitation of his look , LV created the Damier Canvas pattern with the logo " marque L. Vuitton déposée" (Louis Vuitton trademark). 

After Louis Vuitton's death in 1892, his son Georges took over the management of the company, this era is know as the golden age.  He spun the family business into a worldwide corporation. In 1896 he participated at World's Fair in Chicago, introducing the brand to the American audience. The same year George created the  Louis Vuitton logo and the classic Monogram Canvas design. The graphic logo was   inspired by the trend of the Asian/Oriental designs in late Victorian period.

The Louis Vuitton Building opened in Champs Elysee in 1914. It was the largest travel-goods store at that time. Several store locations opened in New York, Buones Aries, Washington, London and Alexandria. In late 70's Louis Vuitton expanded into the Asian market, opening the first store in Japan followed by Osaka and Tokyo. Japanese sales came to account for nearly half of the company's revenue, which led the company to create Louis Vuitton Japan. It's expansion continued with opening stores in Seoul, South Korea and the first store in Beijing ,China. LV also expanded their involvement into the world's largest sport events such as "Luis Vuitton Cup" and "Louis Vuitton Classics."

 

In 1987,  Louis Vuitton merged with Möet-Hennessy, leading manufacters of champagne and cognac, to form the  world's largest luxury goods conglomerate LVMH . This $ 4 billion merger allowed Louis Vuitton to expand its investments in the luxury business, while saving Möet-Hennessy from the threat of takeover. 

LVMH comprises around  60 luxury goods brands. Its wine and spirit division includes brands like  Dom Pérignon, Moët & Chandon, Veuve Clicquot, Hennessy, Krug and Glenmoragie Whiskey, while the perfumes and cosmetics divison distributes brands such as Christian Dior, Guerlain, Bliss, Fresh, and Benefit. Fashion and leather goods includes Louis Vuitton, Donna Karan, Givenchy, Kenzo, Marc Jacobs, Fendi , Ce'line. Watches and jewelry: TAG Heuer, Zenith, Ebel, Chaumet, and Bulgari. LVMH also owns selective retailers including Sephora cosmetics stores, Le Bon Marché   Paris department stores, and 61% of DFS LTD Group (duty-free stores).

The mission of LVMH group is to represent around the world the most refined qualities of Western `Art de Vivre.' LVMH must continue to be synonymous with both elegance and creativity. Our products, and the cultural values they embody, blend tradition and innovation, and kindle dream and fantasy. In view of this mission, five priorities reflect the fundamental values shared by all Group shareholders. LVMH values: Be creative and innovate; Aim for product excellence; Bolster the image of our brands with passionate determination; Act as entrepreneurs; Strive to be the best in all we do.

Sources -  louisvuitton.com, lvmh.com, wikipedia.com, fundingverse.com.