Principle of Fashion Marketing - Essay Example

? Fashion Marketing Table of Contents Fashion Marketing Table of Contents 2 Introduction 3 Branding and Importance of branding in the fashion market 13 Introduction Louis Vuitton primarily known as Louis Vuitton Malletier is a renowned French based fashion house established in the year 1854. The brand name of the Louis Vuitton is provided in accordance with its founder name Louis Vuitton and is abbreviated and labelled as LV. The product line of the company is quite wide and includes products for all fashion and status conscious customers. Some examples of the products of Louis Vuitton are shoes, wallets, bags, handbags, jewellery, accessories, and various other leather and luxury goods. The growth history of the Louis Vuitton has been awarded with the reward of world’s most valuable luxury brand for the six consecutive years from 2006 to 2012. The recognition as world’s most luxury brand has also enabled the company to gain high market valuation. The market valuation of the Louis Vuitton was about 25.9 billion USD in the year 2012 (Louis Vuitton 2012). The underlying essay aims at analysing brand position of Louis Vuitton. The brand analysis of the company will be done in accordance with the stepwise framework of PEST analysis, MICRO analysis, market segmentation, target market strategy, etc. The marketing mix of the company will also be presented in order to specific ideas regarding product, pricing, place and promotional strategy being adopted by the company. The assessment of branding and marketing perspective of the company in light of the above mentioned frameworks will facilitate in identifying challenges likely to incur in the next three years and solutions in the form of recommendations to handle such challenges. PEST analysis PEST analysis is the most widely adopted tool of performing macro environment analysis of the company. PEST analysis represents the acronym of political, economic, legal and technological analysis of the concerned company. Political This dimension of PEST analysis takes into consideration political structure, stability and regulating or governing philosophy behind respective government. France is one of the developed country with stable political environment. The political atmosphere of the country is favourable with no political trouble, crisis, conflict or any adverse situation. The favourable political climate has attracted many investors to invest money in the Louis Vuitton expansion strategies. The establishment of any business operation in the France requires a fixed investment limit of 1500000 Euros (France Country Report, 2011). The fixed investment limit act as a obstacle for many international enterprises. But, France government has tried to convert this obstacle into opportunity by announcing various tax saving schemes to business organisations of France. Moreover, France government also do not hold any strict religious belief and customs and thus facilitates the entry of every business enterprise having any religious background and customs. The favourable political conditions have facilitated the Louis Vuitton to a wide extent in carrying the business operations and pursuing international expansion strategies in France without any difficulty. Economic Economic conditions and factors also play a significant role in determining success of any business operation. The economic variables take into account inflation and interest rates, unemployment condition, Gross domestic product (GDP), and many more. The GDP rate of France was being considered as stronger in the year 2011 with the surprising growth of about 1.85%. The economy of France was considered as fifth largest in the world and second largest in the Europe. It is also being recognised as one of the wealthiest European country and world’s fourth largest wealthiest nation. The aggregate household wealth of the economy was about 2.6 million dollar in the year 2012 demonstrating growth history of France (France Country Report, 2011). The inflation and unemployment rate of the France economy was also under control paving path for existing and proposed business firms to make entry decision in the respective economy. The inflation rate of the France was about 1.7% in 2010 which was increased to 2.3% in 2011 and decreased further to 2% in 2012. Likewise, unemployment rate has also grown to a slight extent from 9.8% in 2010 to 9.9% in 2012 (France Country Report, 2011). All the above aspects has made the economic position and situation of the France economy quite favourable one. Social The social structure of the France economy was also quite favourable and distributed in a uniform manner among all age groups. The majority population of France economy lies between the age group of 15-64 years. The age group between 15-64 years account for about 65% of the total population of the country. The life expectancy rate of France population is also being satisfactory for about 76.77 years and 86.34 years for male and female respectively (Life expectancy at birth. 2011). The income class of France population was also high as it is one of the wealthiest European country. The positive social factors and variables enabled the France customers to purchase and consume Louis Vuitton products. Technological Technological environment of the France is supported and developed through continuous and regular scientific developments and advancements. The country has been awarded as world’s fourth largest industrial power nation having leadership in nuclear energy, computer science, space technology, and in environmental protection. The government of France regularly support and provide assistance to the technological and industrial advancement in order to boost the existing growth and development phase of the economy. The support and contribution of France government towards technological and industrial development enabled the Louis Vuitton to introduce new and advanced technologically updated products and services (Okonkwo 2007). MICRO analysis MICRO analysis fosters a significant tool of analysing and understanding micro or internal environment condition of the Louis Vuitton. MICRO analysis of the company is being done in light of customer, competitors, suppliers and distributors. All these components of MICRO analysis account major stakeholders of the company. The detailed analysis of the each of these stakeholders is as follow: Customers Louis Vuitton is an international brand expanded its operations across the world. The luxury luggage products manufactured and distributed by the company is being purchased and consumed by customers on a global scale. The customers of Louis Vuitton are mainly high budget and less price concerned. The customers of Louis Vuitton aspire to purchase status, style and fashion symbol along with company’s products as. In other words, current and potential customers of company seek to procure additional value added benefit other than practical use of the products. The female aged 25 and high with relatively stable financial background accounts for comparatively large customer base of Louis Vuitton products. In addition, the youngsters and teenagers following and adapting the fashionable trends also accounts for major customer group of company. Louis Vuitton products are also being used by celebrities, film stars, models, and high profile business and elite class customers in addition to regular customers (Craik 2009). Competitors The competitors of the Louis Vuitton comprise Gucci, Prada, Chanel, Hermes, Dolce & Gabbana, and so on. The competitors pose significant threat to the market share and position of the company in both horizontal and vertical manner. The horizontal threat is being posed by Dolce & Gabbana and Gucci through offering wide and extensive range of handbags, purses, watches and sunglasses. The competitors offer more or less same products with some change in their design, style and appearance. The slight and minute differences in the style, design and appearance creates difficulty for Louis Vuitton to sustain and improve its marketing position in the fashion industry. It is also worth being mentioning that most of the competitors of Louis Vuitton came into existence after so many years of its establishment (Hines and Bruce 2012). The company continued to enjoy monopoly in the fashion industry and accessories till the establishment of various competing firms. However, the growth and development of various competing firms in the fashion industry has made the situation more critical and vulnerable for Louis Vuitton. Distributors The distributors represent another major stakeholder of the company assumes the responsibility of making the products and services available to the customers. It is necessary for every business organisations to have integrated and comprehensive set of distribution system in order to ensure maximum product availability. In this regard, distribution systems of Louis Vuitton exclusively consist of company’s online shopping site, its own shopping stores, and speciality stores in retail outlets. The company do not adopt discount and convenience stores for distributing products in order to retain luxury image of the company (Lea-Greenwood 2012). The distribution network of the Louis Vuitton is comparatively restricted and narrower in size and approach. On the one hand, product availability through few distribution channels enabled the company to nurture and promote its luxury brand image while on the other hand it poses threat on the market share and growth prospects of the company. Suppliers The supplier groups for Louis Vuitton accounts mainly raw material supplier, adhesive suppliers, leather and colour suppliers, etc. The supplier plays a significant role in manufacturing and producing required products in an easier and faster manner. Louis Vuitton gives due consideration to the sustainability and environmental protection factors at the time of selecting suppliers. The company adopts ‘supplier tool’ policy in order to get suppliers and subcontractors of desired environmental standards and specifications. In addition, the company also conducts environmental sustainability and awareness program for their suppliers and subcontractors. For instance, Kenzo Mode, one of the reputed fabric suppliers of Louis Vuitton complies with all the environmental regulations regarding nitrogen dyes and use of nickel (LVMH Suppliers 2012). Market segmentation and target market strategy Market segmentation is the process adopted by the business firms for dividing the total market into small homogenous divisions. The homogenous divisions created by the market segmentation pose similar characteristics and features helps in targeting and approaching the divisions more efficiently and properly. Market segmentation of the Louis Vuitton follows demographic, psychographic and behavioural bases in order to divide the target market into various segments. More specifically, company divides the target market on the basis of age, income, personality, price consciousness, self image, and gender. The male and female having high profile income and personality values are targeted primarily by the company (Tungate 2012). The high fashion and status symbols products of Louis Vuitton aimed to serve the need of enhanced appearance and self image of men and women belongs to upper and upper middle class income customers. After gaining substantial and considerable interest from upper and upper middle class customers, Louis Vuitton shift its marketing efforts towards celebrities, film stars and models. The new target market in the form of celebrities and models of fashion world enabled the company to penetrate the market of fashion industry more effectively. This market segment of fashion world and stars has provided the Louis Vuitton with high end clientele and high class luxury image. It is also desirable to adopt an appropriate marketing strategy in order to approach or target the selected markets properly. Louis Vuitton adopts differentiated marketing strategy to appeal to both men and women in a creative and personalised manner (Noel Kapferer 2012). The company uses to explore and present different or uniform promotional messages for targeting selected markets. Although differentiated marketing strategy has increased the cost of doing business, yet it has facilitated higher sales and revenue for the company. The differentiated marketing strategy also benefit the Louis Vuitton in gaining strong foothold and recognition and diversification in the fashion and luxury market field apart from maximising sales and revenue figures. Brand positioning map The brand positioning map of the Louis Vuitton is created in light of two variables i.e., fashionability and price. Louis Vuitton along with various competing brand are presented in the map. The brand positioning map indicates that Louis Vuitton offers exceptional fashion experience and taste to the customers. The fashion variable of the Louis Vuitton positively relates with the price. The higher the fashionability, the greater will be the price. It has also been identified that there are various other competing brands like Gucci, Hermes, Prada, etc. However, the fashion sense and price of competing brands is comparatively less than Louis Vuitton. High Medium Low Good Very Good Excellent Marketing Mix Marketing mix also represent one of the most widely used tools in brand analysis and positioning. The tool present analysis of the brand in light of 4 P’s of marketing mix i.e., product, price, place and promotion. Marketing mix will also prove helpful in providing detailed information regarding the available products, pricing, distribution and promotion strategy being adopted by the company to ensure the maximum product acceptance in the target markets. Product The product line of the company encompasses various fashion related products and accessories. The company regularly strives to enrich product line and width in order to provide one stop solution to the target audience. The product line of the company primarily encompasses of fashion related accessories, jewellery products, watches, wallets, handbags, shoes, and other architectural pieces. The product line is regularly revitalised and revamped by the company in order to meet contemporary demand, taste and style of its premium and elite class customers. The income level and changing lifestyle trends are kept in mind by the company at the time of designing and finalising products (Welters and Lillethun 2011). In recent years, Louis Vuitton has added another product line of leather goods for business class people. The various leather goods include briefcases, palm-cases, organisers, etc for the business person and professionals. The main idea behind introducing leather products for business world is to target this untapped market and huge revenue potential exists in this market. Some of the graphical pictures of the Louis Vuitton products are: 1) Handbags 2) Wallet and Shoes Price: Louis Vuitton targets high profile customers having relatively strong financial background and base. The high profile customers are targeted as products of the company are relatively expensive and precious. In this regard, it can be said that Louis Vuitton adopts premium pricing strategy in the target market. The premium pricing strategy was in accordance with the superior product quality and high profile target customers. The selected target customers do not hesitate in spending high prices for products capable of providing them a distinct and unified combination of style and appearance (Onkvisit and Shaw 2004). Place: This dimension of marketing mix is concerned with the distribution and delivery of the products at the desired destinations. Louis Vuitton adopts a quite selective and cautious approach in selecting appropriate distribution mode and channel. Louis Vuitton utilises its own stores to distribute the product across the world. This strategy is adopted with the intention of having absolute control over product quality and pricing (Chevalier and Xiao Lu 2011). Besides, company also uses online shopping LouisVuitton.com to ensure fast ordering and delivery of products. Some images of Louis Vuitton stores are: Promotion: As the name suggests, promotion strategy and tools are being employed in order to promote awareness and interest regarding products. Fashion shows, magazine ads, display of customised cases, etc. are the main promotion tools adopted by the company. The company do not utilises any sales promotion and discount schemes for the stock clearance in order to retain the luxury brand image. The target market of the company is confined to the upper and elite class customers which act as the major reason behind selection of these promotional tools. Images of advertisement campaign and fashion shows are: Branding and Importance of branding in the fashion market Success in the fashion industry is primarily associated with the strong brand name and image. Business firms in the fashion world cannot earn strong brand name and image merely by crafting and developing designs of products and accessories. In this regard, Louis Vuitton realised that importance of brand and strived to develop creative identity of company through developing and establishing iconic brand image in the fashion industry. Brand image reflects the identity and values hold by the company and also conveys message regarding style and quality of fashion products (Steele 2010). Brand image can be expressed through logo, symbols, packaging or any other desirable attribute. Louis Vuitton focussed the marketing efforts towards developing an appealing logo or symbol in order to establish a distinct identity in the market place. Logo of Louis Vuitton has been developed after extensive research and deliberate process to deliver a powerful message to the consumers and nurturing the identity of the company on the other hand. It can also be said that strong and appealing brand image is the only assets for the fashion firms creating difficulty for the players to imitate and thus protect identity of concerned company. The logo and symbol of Louis Vuitton is primarily developed with the intention of protecting the firm’s identity from Parisian company’s designer luggage (Xiao Lu 2011). The logo of the company was inspired from the Japanese flower shape Motif and resembles the image of luxury, brilliance and indulgence. The graphical representation of the brand logo of the Louis Vuitton is shown below: The marketing mix of the company also played a crucial role in supporting and accelerating brand image of the Louis Vuitton in the fashion world. The marketing mix combines the creative product ideas and supported them with the effective pricing and promotional strategies in order to deliver enhanced product experience to the users of fashion world. The marketing mix of the company regularly monitors and focuses on the changing fashion trends and consumer psychology in order to portray brand image of the company as an artistic blend of art and fashion (Kitty 2004). The marketing mix of the Louis Vuitton is perfectly synchronised and integrated in order to deliver lifestyle, status and attitude to the customers through brand name and image of the company. Evaluation of marketing challenges likely to face by the brand in the next 3 years The above stated marketing analysis of the Louis Vuitton fosters various significant challenges that are likely to encounter in the coming years. The marketing challenges likely to face by the company in the immediate next three years relates to the stiff competition in the fashion industry. The competitors of Louis Vuitton like Gucci, Prada, Chanel, Hermes, Dolce & Gabbana are striving hard towards gaining their foothold in the fashion industry. The increasing presence of competitors will pose a threat on the market share and growth prospects of the Louis Vuitton (Hayes 2005). Another challenge likely to be faced by the Louis Vuitton relates to the distribution of fashion and leather products. It has been identified that Louis Vuitton depends on only on its own stores and online shopping site for the purpose of making products available to the customers. The strategy of the Louis Vuitton limits the scope of product availability and makes the situation more vulnerable and susceptible to the loss of market share. Furthermore, lack of provision of discount sales and sales promotion schemes might also results in shrinkage of customer base of the company. The prices of the Louis Vuitton products are comparatively higher and therefore can be afforded only by elite or premium class customers. The absence of sales promotion and discount saving schemes prevent the chances of bulk purchases or attracting customers with low income group (Gerval 2009). Recommendations The recommendations seem helpful to Louis Vuitton in order to handle the challenges likely to incur in the coming years are: First recommendation relates to adoption of multiple sales promotion channels like sales promotion, discount saving schemes, organising travelling art gallery, etc. The multiple and wide promotional tools will provide the company an integrated and comprehensive tool in targeting customers across the globe. The company should also form tie-ups with other retail formats for the exclusive display and sale of its products. It is necessary as the product distribution only through company’s stores and e-commerce site limits the marketing and sales opportunities. Louis Vuitton needs to widen and expands its distribution channels to sustain and grow in the fashion industry (Gehlhar 2008). Louis Vuitton should also expand its products to the economy class customers in addition to elite and high income group customers. In this regard, the company should identify alternative product design suits with the income profile of the economical customers. This strategy will prove helpful in expanding customer base and improving sustainability position in the coming time. Louis Vuitton also needs to introduce custom made products at the regular intervals in order to deliver enhanced purchasing experience to the existing users. This strategy will also prove helpful in targeting new customer base and thus expanding market reach and potential of the company (Danziger 2005). Conclusion The overall discussion of Louis Vuitton marketing perspective and brand analysis led to the conclusion that the company holds reputed image and reputation in the field of fashion and leather goods. The external analysis through PEST analysis also revealed that favourable political and economic environment of the country also contributed significantly in gaining foothold in the fashion industry. The continuously developing social and technological factors also complement the growth history of Louis Vuitton. Besides, Micro analysis of all the stakeholders also helped in identifying recent trends and prevailing opportunities. The marketing mix and brand positioning analysis also led to the conclusion that there is strong emphasis on the product features and attributes to gain foothold in the fashion industry. The analytical tools also enabled the Louis Vuitton to identify marketing challenges that can incur in the coming time. 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