International Luxury Branding Analysis of Louis Vuitton - Case Study Example

International Luxury Branding Analysis of Louis Vuitton

Introduction

Because of the highly weighted status and style that they give to the consumers, luxury brands are among the few business commodities that people all over the world love (Dubois and Czellar, 2002, p. 157). Nevertheless, the names of these brands keep reminding the consumers to get exactly what they pay for. Some luxury brands in the world include Ralph Lauren, Prada, Burberry, Hermes, Gucci and Luis Vuitton (LV). For purposes of this report, it analyses a critical review on the competitive luxury branding strategies of Luis Vuitton in France, a fashion house, retailing cosmetics, jewellery, watches, leather commodities, books, and accessories. Besides, it provides a recommended retailing strategy for LV to ensure sustainability of future performance of its brands.

Secondary Data for Market

PESTLE Analysis

Political Factors

The new policy, regulations, and business rules influence LV’s development in the French market. The value added tax rose by 2.5%, threatening the market through the various restrictions on customers’ spending. As at 2010, the per capita household disposable income significantly increased at a 4.1% (Okonkwo, 2007, p. 87).

Economic Factors

The growth in cosmetics and perfume products in France by 6.5%, has affected the macro environment in France. Inflation rates in 2008 shrank from 0.3% to 4%, expanding the purchasing power, and people purchased more of the LV brand goods (Mercado, 2010, P. 115). From 2007-09, the GDP rose by 3.5% to the current price, providing more opportunities to other perfumes and cosmetic markets.

Social Factors

LV relates to people from different backgrounds, holding varied preferences and opinions. It targets the wealthy and has established its image according to the social identity theory, where consumers think that buying the LV products raises their social status, most of them graduate professionals (Mercado, 2010, P. 115).

Technological Factors

The growth of social network has intensified online advertising, even to LV, who gathers information attitudes, opinions and reviews through the blogs, chat groups, blogs and websites (Mercado, 2010, P. 115). Online shopping is an opportunity for LV, and technology has raised their sample innovations.

Environmental Factors

Greening business is currently trending, and consumer costs on the greener commodities have risen by a fifth after two years (Cavender and Kincade, 2014, P. 231). During the summer, there is much purchase of the LV products, which encourages it to ensure a high degree of environmental performance, therefore, an opportunity.

Legal Factors

Testing calls have regulated the EU markets, whereas terror and discrimination acts, affect the markets of LV adversely. The banning of smoking in public boosted the market in 2007 (Rosca, Alqararah, Ussenov, & Zaghadoud, 2014, p. 65). Additionally, LV fined almost 12 billion dollars to acquire shares in Hermes, a French leather products manufacturer.

SWOT Analysis

The strengths of LV include brand recognition, creating a value perception worldwide and a consumer loyalty due to the faith in their products. It has a variety of products and an extensive target group. The celebrity endorsements and advertisements from celebs have been their strength, besides environment sustaining. Regarding the weaknesses, it provides no discount sales and has not expanded properly and has limited retail opportunities.

LV’s opportunities comprise their frequent use of exhibition events, besides meeting the tastes and preferences of their clients. It often organises campaigns to raise brand awareness, receiving celebrities’ support like Madonna Natalie Portman. Their threats include the rise of counterfeit products, increasing competition and poor economic conditions. Frequent variations in the tastes of customers are additionally a threat.

LV’s Luxury Branding Strategies

Advertisements

LV employs the use of its website and other social media platforms to share their luxury images and information that reaches their worldwide customers. For instance, thy use their official Instagram page @louisevuitton to share the photos of their products, which their customers can have access to at all places in the world. Other platforms include Twitter and Facebook handles that it uses to increase its brand awareness (Olins, 2008, p. 105). It is from these platforms that they invite celebrities to post their experiences with their products. One judicious use of this medium as a way of branding according to Kim and Ko (2012) is that it only works for the audiences who have the internet access, and are available in these social media forums.

Rare Products

Whenever individuals do not have frequent access to a product, their desire to acquire it increases, especially in the luxury sector, where customers tend to aspire to get what they cannot find easily (Hogg et al., 2006, p. 57). LV offers its products to clients in limited ways, through raising their prices to ensure that they are not common in the market and that access to their commodities becomes limited. To justify this form of exclusivity, LV provides bona fide products to its esteemed customers. Therefore, the strategy to make the product makes the clients who purchase it feel exclusive, prestigious, making them desire to get associated with the products of the company (Kapferer, 2012, p. 187). Critically, this has the effect of reducing the sales of the business products (Chevalier and Mazzalovo, 2008, p. 96). When the prices are high to limit the access, the sales of LV’s products fall.

Intense Customer Search

Successful marketing to the persons who purchase expensive commodities entails finding more information concerning them in different ways and availing to them the response required (Sirapracha, and Tocquer, 2012, p. 103). LV, in its attempt to brand its luxury brands, searches for customer groups in online platforms, after which they avail the information. Availing information concerning their products to clients to access even increases the initial desires of the customers to acquire them (Sherry, 1998, p. 109). However, a critical view of this aspect is that it assumes that all the preferences if the clients are the same, which is wrong because people might have varied tastes, necessitating slight changes on the products (Lederer and Hill, 2001, p. 125).

Product Diversification

LV diversifies the luxury products by providing a broad range of commodities in its brand. Due to the varied demands of people in France, the branding strategy works best for it when it gives a wide range of luxury commodities that the capable clients can access. In its case, it provides iconic handbags, clothing, watches, sunglasses, shoes, books and other products that various segments of the population can access. Though rare in the market, providing a broad range of commodities helps the institution in promoting its product to many demographic segments (Keller, 2008, p. 209). A danger of their product diversification strategy is that it may result in overextension raising the costs, and the company may fail to give particular attention to some products, resulting in a loss of value (Wiersema and Bowen, 2008).

Future Retailing Strategy

Advocate Beliefs

Instead of merely relying on the brand values, LV needs to promote beliefs to their clients, which can go further, as they are usually very specific, besides being much segmenting. Contrary to the mass brands, the luxury brands need not to make much effort to please everyone in the market, because they are also aiming to make their products rare, to create the value aspect (Lawer and Knox, 2006). However, they should be focussing on the clients who have the same belief as they do, which is majorly that the product is superior, of worth and brings style and class. An example that LV needs to reflect on is the belief of Ferrari in their products’ high performance. The luxury brand of Ferrari rarely finds ways for advertisement in the mass media platforms (Peng and Chang, 2012, p. 691). However, it has consistently capitalized in Formula 1 events. Subsequently, it puts more emphasis on actions that associate to its belief, to strengthen this precept in the clients’ minds. The creation of faith in the luxury brands brings about product positioning, which is how the customers perceive the brand of a company’s commodities in their minds. One of the determinants of success for any brand, the luxury types included, is the way that the products get positioned in the customer’s minds. Regarding that, advocating the belief of the luxury brand products is necessary because of their limited nature, their high prices that only the wealthy can access and the style they bring (Ankita, 2016, p. 27). There is great need to create the belief that the brand will make the client feel special.

Concerning the necessity to advocate creed, LV, as a specialist in fashion designs, needs to instil the belief in the art in their customers. It needs to link up with other artists, like Yayoi Kusama, a Japanese artist to ensure a restricted product edition. Contrary to mass markets where brands get distributed with attempts to reach many people and please all of them, LV needs to make sure that it puts more focus on those clients who believe in their commodities while maintaining their competence in the field of art.

In conclusion, Louis Vuitton, a French fashion company, employs various strategies in selling its luxury brand. Among them comprise making their products rare, diversifying them, advertising them, and intensified customer search. However, being that the company needs to maintain their products not typical, a recommendation is to ensure that they advocate the belief in their products on their clients, which is a measure of guaranteeing availability to the few, making it valuable, of style and status.