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.