Impact of Female Generation Y on Louis Vuitton Marketing Strategy - Case Study Example

Impact of Female Generation Y on Louis Vuitton Marketing strategy Author’s name Institutional affiliation Introduction This paper seeks to explore the marketing mix framework of Louis Vuitton Company with emphasis on the female millennia generation. Louis Vuitton is a company which was conceptualized in the year eighteen fifty four by an individual who the company was named after. Due to his unique designs he got popular and expanded his fashion business and moved it to a new village. Unfortunately, in the year eighteen ninety two he passed on but this did not shutter his company’s dream; his son George took over. He ensured that the company maintained luxury and worth as he strived to expand it globally (Louis Vuitton, 2013). The company has been and still remains the largest Luxury outlet worldwide. Its net worth is approximately USD $19 Billion. Its accelerating fame is mainly due to creation of a new collection each season that passes and an array of hands on experts. It has always sought aid in advertising from different celebrities. According to Kim & Ko (2012, p. 1480) luxury brands are the largest number of luxury consumers and had increased to three hundred and thirty million in the year twenty thirteen from ninety million in the year nineteen ninety five. They have seen this success due to adoption of social media marketing strategies. Among the target market, the largest group is the females especially the millennia. Market Louis Vuitton market size is huge covering the affluent in the society who wish to be attributed to class and quality products. These are characterized by value for style, tradition, crafted products and exceptionality (Chevalier &Mazzalovo, 2008). It is present in over fifty countries with approximately four hundred and fifty stores worldwide. It has a market share of about sixty percent in the luxury business. It is ranked as the best quality luxury products seller and preference for customers. Even though it faces counterfeit products like its fellow competitors, its profit margins have not been affected as much as Gucci’s. It has a broad and deep range of products: Handbags, travel bags, jewelry, books, sunglasses, ready-to-wear and wallets. The marketing principle of the company operates under the four Ps of marketing mix (Nagasaw, 2009). It strives to do away with all counterfeit products and their prices are not discounted at all. Competitors Even though Louis Vuitton has been on the lead as the best luxury company for nine years, it faces stiff competition from two main companies who always lurk behind it in the ranking list. Hermes a French based Luxury Company it is well known for accessories, luggage and apparels. It was founded in eighteen thirty seven which implies that it is older than its main competitor: Louis Vuitton and The House of Gucci (Hermes). It has an approximation of fifteen products ranging from jewelry to ties watches bags and many more. Its unique selling point is the creation of unique and quality leather products with the members of high social class as the main target clients. They also create customized products at a higher price in order to cater for customer special requests. It has a wide range of dedicated craftsmen who make the best out every product. Their target markets are wider compared to other key competitors in the industry. However, their main focus is ladies and men of different age groups. These comprise both low net worth and high net worth clients who. The lowest range is usually $5,500 and the highest been $ one million liquid assets. According to SWOT analysis, the greatest strengths is that is has a strong brand name worldwide, over three hundred stores worldwide of which one hundred and eighty are operated directly (World best Luxury brands, 2012). Its weaknesses are a limited coverage worldwide and inadequate adoption on e-marketing strategies. The second main competitor is a company commonly known as Gucci although its formal name is The House of Gucci. It is an Italy based company which was conceptualized in the year nineteen twenty one by Guccio Gucci (Tokatli 2013, p. 239). In order to ensure quality products reach its esteemed clients, it has a direct control over three hundred and fifty stores. Its main processing plant is located in Italy which has increased the competitive power of the company by increasing customer preference. It has ensured exemplification of its products which serves as one of its main selling point. Its target market includes both women and men. However, unlike other luxury companies it puts much emphasis on kids wear collection. This is a key marketing strategy which focuses on parents and potential parents too especially mothers who look forward to instilling the trendy and classic products to their children. More often than not, when the children grow up are likely to continue using the same luxury products since they are already accustomed to them. The main strengths of the company are strong brand image, diversified target markets and quality products. It has only one key weakness which is lower margin in realization of profits as compared to its main competitors like Louis Vuitton. This could majorly be due to increased number of its counterfeited products. Its main products are leather made ranging from bags, ties, fragrances, shoes to baby carriers and many more. Comparison between the three main competitors Gucci is mainly specialized in bags with its main identity as read and green stripes. Its core values are exceptional quality, craftsmanship and exclusively made in Italy. It targets both middle and upper class individuals who seek to have classy and quality products. It uses both print and electronic media especially Television in advertising its products. It has over years had sales on its seasonal products which also applies to Hermes (World Luxury Brands, 2012). The latter has its main identity as an orange box. Invariability, meticulousness and craftsmanship are its main core values. It mainly specializes in Birkin bags and scarves with high net worth individuals as its main target clients. Louis Vuitton on the contrast has its target clients as prosperous men and women. It uses print media and Television as its main advertising channels. As opposed to Hermes and Gucci, the brand has neither sales nor discounts on any of its products. It has graphic symbol of a brown monogram as its main identity. Identification of target markets The main target markets for Louis Vuitton is individuals of the upper social and economic class who have a sense for fashion and exclusivity. The demographic segmentation of the target groups is based on age, sex and excess income to dispose. It also uses psychographic segmentation to attract clients (Henning’s eta al., 2012, p.34). This is evident from its brand identity graphic symbol. For example trend setters and individuals seeking prestige fit in this particular segment. The company has also branched into adopting customers' usage as a segment. They have stored data in their ecommerce databases whereby the heavy spenders get periodical collections of new products. The main target market for this paper is the female millennial. They uphold a common culture of class and need to be trendy and pace setting in the society. They comprise of those born form eighteen ninety. They are still energetic and vibrant. Most of them earn huge salaries or are into luxurious businesses. Most of them are celebrities and others look upon some celebrities as their fashion icons. This group is characterized by various core values: Most of the uphold power due to high social class and stature. Their affluent nature makes them influential to on potential customers or even in other aspects of life. Most uphold security in terms of family, relationships, sources of income and health status. The consumption of the products are mainly based on gender depending on who they suit most (Schwartz 2012, p.11). For example handbags would suit ladies while ties and wallets suit men. Social- economic class is a determining factor since most of the products are highly priced and never have any discounts levied on them. The study of Maslow wanted to understand how people are motivated. Unconscious desires and rewards are not the only motivational system but there other systems which stimulates human beings. Various internal influences contribute to a certain percentage female consumers (generation Y) needs and motives and thus these patrons search for the products that satisfy their different wants (Oliver, 2014). They behavior toward a brand is related to what needs are being met by the product available in the market. If a luxury product fulfills one need the female consumer seeks then she wants to find whether the product will be able to fulfil her other need or motive (Kim & Jang 2014, p45). Consumer motivation is a very impelling drive behind various marketplaces activities and thus it is very important for marketers to understand how to position their products in order to satisfy motives and need of female luxury customers. These patrons motivation are claimed to be a process in which they try to attain their satisfaction which involves five stages. The stages commences at latent need which manifests into drive to satisfy the need, then consumers set goals which leads to hut and lastly hey acquire the product that meets their needs. The positioning of the product that may result to meeting the female consumers’ needs and motives is determined by why the females’ customers are purchasing the luxuries, some buy to impress others while other want to satisfy their desires and goals (Kim & Jang 2014, p45). The luxury products hierarchy is organized in certain levels. At the top is the level of enormously high prices on inaccessible luxury products which are associated with the socio-economic class of elite female consumers to satisfy the need of status and crave for esteem this level makes female consumers feel important, respected, competent and their motive for self- respect is achieved. The next level is that of intermediate luxury products the attainable to professional female consumers. This socio-economic class motives and needs are to belong to certain group, this positioning of the products makes have luxuries that are attained to the professional group of female. The final positioning is pricing certain products of luxury good at lower accessible to normal consumers in the market place in order to meet basic physical needs. This group wants to attained social status of inaccessible products but their motives are limited by extreme high prices. The inaccessible luxury products are positioned as personalized products such as Cars (BMW), clothes and other products. These products have prices which make the luxuries aloof in the marketplace only accessible by high status and powerful female consumers. This level gives rise to consumers perceived and that of sellers’ desired position. These positions contribute to making a better communication plan in the market. In order to meet female consumers’ needs and motives marketers classify luxury products according to public and private goods. The consumption and perceptions of these products is in regards to consumers’ attitude (Mo & Roux 2014, p200). Research carried to study various customers’ attitudes towards buying foreign or domestic attire suggested that, if domestic clothes are more expensive consumers prefer foreign apparel and new trendy brands. Price perception will determine whether consumers’ needs and motives are satisfied. Marketer use high prices to appeal for clients from elite class. If consumers perceive that the prices were fair for the quality they will repeat their purchases. To marketers shaping is very important since new product purchase entails behaviors which are complex. Learning theory in the context of marketing involves five stages; it begins with advertising then awareness knowledge, trial purchase, product (buddle of negative and positive attributes) which manifests into reinforcement satisfaction and lastly the stage of increasing repeat behavior probability. For luxury products, marketers use promotional tools such as rewards to reinforce existing female consumer’s behaviors. The learning behavior has offered marketers with insightful directions in understanding female consumers. Luxury products appeal for a higher socio-economic class lifestyle. Consumers who want to gain self-respect and important individuals in the society such as musicians, politicians and athletes. To understand consumers’ lifestyle, marketers need to carry out a psychographic study in order to tap female consumer’s social and psychological nature (Solomon, 2014). Luxurious products are available to all people in different lifestyles not just for female in generation Y. Process such as need for recognition, post purchase behavior, information search, evaluation of alternatives and purchases helps in female consumers to make decisions. Information of luxury product is available to these consumers internally, externally and in non-marketing controlled sources. Marketers of luxury products have provided information about these products in online stores social media and direct emailing to their esteemed consumers (Kim & Jang 2014, p45). Information is also available to consumers from their previous experience with the brand. The stage of decision making female consumers (generation Y) are in is the alternative evaluation and purchase all information about luxury products is available in websites and thus these consumers are deciding on which brand to purchase that can meet their needs and motives. Consumers evaluate brands according to country of origin, brand name, and price, quality of the brand in contrast to previous experience and important characteristics of each product. Generation Y consumers evaluate luxury products according to fashion, status, social class and there income levels. Even though marketer sometimes influence consumer’s evaluation criteria consumers narrow there criteria of evaluation to one personal set. General Y use heuristic thumb mental rule to arrive to speedy purchasing decision. Most female consumers make purchases based on brand loyalty. Female consumers shopping behavior start when they have gotten enough information about the brand. They first search on the internet about the security of the product, the alternative available same products in the company, qualities of the products and whether the product is available in the domestic market. Next step on how they go about their shopping is that the weight between prices and quality. Female consumers tend to look for products with promotions in the market. The probability of post purchase behavior occurring is very minimal as the female consumers of these luxuries products are satisfied and their purchase decision is made with the guidance of markets (Joung 2013, p537). It helps them to have better balance attitude, personal knowledge and belief about the product so that they would not experience cognitive dissonance after purchase. In cases where these behavior occur marketing communication can be used to reduce the attitudes in order to help in strengthening the consumer’s choice on the brand (Joung 2013, p532). According to research brand loyalty on female consumers is promoted through use of direct communication techniques such as direct emails, messaging and calls where esteem consumers are provided with information about the brand. Purchasers of the brand are encouraged through rewards and promotions such as price cut and good customer services. Every marketer in the market wants a share in the mind of target consumer, that is marketers want their products to be thought of when consumers are in need of those type of merchandises. For example, marketers of BMW want people to think of BMW when they think of cars. To position these services in the mind of female consumers (generation Y) marketers have established special store only for luxury products which has great attractive names known almost by every person within the marketplace (Kim & Jang 2014, p45). Luxury products have chosen names which symbolizes the luxury products in the store. For example, Gucci is a luxury brand that has secured position in almost all the mind of generation Y consumers. Full marketing mix is very important in providing support of product positioning. More that only promotional mix is required to achieve the goal of positioning. The market will be confused incase marketing mix is inconsistent resulting to limited and weak outcome of repeat sales. Luxury companies have set prices which are consistent and not changing at very high percentage in order to keep brands positioning stable in the market. Luxury brand companies have used 4P’s of marketing to strengthen their product positioning in the market by developing promotion techniques that helps maintain customers brand loyalty (Kim & Jang 2014, p45). Places these products have been placed are convenient to every consumer in the market. Bibliography Chevalier, M. and Mazzalovo, G., 2008. Luxury brand management: a world of privilege. John Wiley & Sons Hennigs, N., Wiedmann, K.P. and Klarmann, C., 2012. Luxury brands in the digital age–exclusivity versus ubiquity. Marketing Review St. Gallen, 29(1), pp.30-35. Horton, S. (2010) Bain & Company. “Nearly Two-Thirds of Purchases by Style-Conscious Consumers Favor Durable, Timeless, Classic Styles Over Trendy, Contemporary Styles.” Retrieved from http://www.bain.com/about/press/press-releases/styleconscious-women-actively-spending-in-2010.aspx Joung, H.M., 2013. Materialism and clothing post-purchase behaviors. Journal of consumer marketing, 30(6), pp.530-537. 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