Essay about Lvmh and Luxury Goods Marketing

Although the company did show an increased gross profit of $8,255,000 with $6,358,000 less Net Sales in 2013 versus 2012, that increase is due to the reduction in product Cost of Goods Sold by $14,613,000. Since increases in product price will negatively affect sales, one of management’s primary goals is to keep prices stable. This objective is achieved through implementation of cost cutting programs, investing in more efficient equipment, and automation of more steps in the production process.

The case study Preserve the Luxury or Extend the Brand presents a fictional dilemma, based on a real company, faced by Chateau de Vallois, a prestigious and famous wine-producing estate in the Bordeaux region of France. De Vallois is a family owned and run business; part owners are Gaspard de Sauveterre - a 75-year old majority owner, and equal partial owners: Francois de Sauveterre – Gaspard’s son and the chateau’s CEO , and Claire de Valhubert – Garspard’s granddaughter. De Vallois had fallen into a slow decline under its previous owner, but Gaspard along with Jean-Paul Oudineaux, his estate manager, had restored the chateau and since then de Vallois had been steadily profitable

1. On the Perceptual Map, all segments drift to the lower right. Which segment drifts at the fastest rate? Which drifts at the slowest?

Japan’s unemployment rate of about 4% opposed to the U.S. unemployment rate of close to 10%. Even the financial debt to GDP ration is an advantage, and debt in the private sector has not increased unlike the U.S. and European countries, (Time, 2009). In addition, since Japan is a huge exporter and with the U.S. demand going downward, the international balances and growth declined especially as the dollar value dropped and the yen surged. •

Discuss what is meant by the term “customer orientation”. Illustrate with examples how companies demonstrate their customer orientation by reference to at least two elements of the marketing mix.

Most luxury brands have been family-owned or -controlled and, consequently, were single-brand firms for the most part. However, mergers and acquisitions have been growing in the industry, with LVMH leading the way. Our strategic recommendation is to follow LVMH’s lead and acquire a multitude of diverse companies to build the Gucci portfolio.

LVMH, known as Moët Hennessy • Louis Vuitton, is a French conglomerate and the largest producer of luxury goods in the world. LVMH was formed in 1987 with the merger of Moet et Chandon a champagne manufacturer, Hennessy a cognac manufacturer, and Louis Vuitton a fashion house.

It is hard to imagine that after the financial crisis swept across Europe, many great transitional enterprises had to face collapse and bankrupt while the luxury goods industry become more prosperous. Recently, the French luxury goods group LVMH announced their recent business condition. The volume of the first week in October had incredibly increased by 12% the previous week. The Hermes Corporation also said that in order to meet the increasing number of market demand, it would open 15 branch stores in the latter half of the year. These aroused some fierce debates, the public held a skeptical opinion towards the questions: How can the luxury companies maintain their positions? Why didn’t they strike down by financial crisis?

After analyzing the results from the previous quarter, it was determined that the prices set for each segment were not sufficient. Product sales priority were also not properly adjusted. With the R&D investments, sales priorities needed to be changed for the main focus to become the most profitable market segments. Prices were not competitive which in turned decreased revenue, market share, and profitability. To become more competitive we altered the prices in each market segment. The Workhorse product was the first to change, the price was lowered to $2500 in an attempt to increase sales; at this price Team 4 was still making a profit on this product, as well as making the price much more competitive. The Workhorse sales priority was also lowered to 3rd in Americas and 4th in APAC and EMEA. This product was not selling as well as we had hoped, and was no longer as profitable as it once was which led to this decision. Next, the Innovator product’s price was adjusted; this involved a price increase to $4100. This price was adjusted to include the new

Louis Vuitton is considered under the luxury goods industry. The luxury goods industry is a high profitable industry with low outside threat. There are only few large players in the industry and they server to the wealthiest people in the world. The luxury companies have high power to control the price so they have ability to grow sustainably.

Louis Vuitton Moet Hennessy, a luxury goods provider is looking to expand their brand dominance in Asia. In order to expand successfully LVMH must evaluate challenges that may arise and get in the way of their successful expansion. In the Asian market, LVMH must deal with political and cultural uncertainties, the threat of counterfeit products, and the increased cost of products in Asia compared to France.

Roberts, 2016). The truth is that this is not the first time that the fashion megahouse

LVMH has a diversified source of revenues from all of its different product lines. “Due to its high brand value perception, the company will be able to cross sell its products to increase revenues, primarily because all its products have high end positioning and the customer segment it caters to is uniform across the product

Japan ranks as the third largest economy in the world as of 2010. The GDP at current prices in US dollars in Japan was reported at 5068.06 billion in 2009, according to the International Monetary Fund (IMF). Japan’s resurgence after World War II has however reached an inflection point in yearly 1989 after the burst of Japan’s asset price and real estate bubbles. As can be seen from the graph below, Japan’s GDP has hovered around the same level through more than 20 years of economic stagnation. The GDP’s slow growth has been exacerbated by the world financial crisis of 2008. A major landmark of Japan’s stagnation has been the BOJ’s fight against deflation.

On the other hand, the large market potential has drawn a host of luxury-goods companies to enter the China market, which makes the competition fiercer and fiercer. And it is troublesome for LV that there are plenty of fake goods imitating LV’s style prevailing in China, which are actually not likely to reduce LV’s high-end consumers, but would exert negative influences on consumers’ impression and awareness of LV.