Louis Vuitton (LV) in Japan - Case Study Example

Louis Vuitton in Japan The reason why Louis Vuitton has been so successful in the Japanese luxury market is that Japan is the capital of luxury goods. HSBC estimated that, in 2009, almost half of the world’s luxury goods were sold in Japan. This makes Japan the world’s largest luxury goods market and Japan has the highest spending per capita for these products. All of these factors have contributed to the success of Louis Vuitton in the Japanese market. The reason for this is that the Japanese consumers are already used to spending on luxury goods so there is no need to educate them as it would be necessary to do so in other countries.

All that is required is for Louis Vuitton is to market its products and the customers will naturally come.2) There are many challenges that Louis Vuitton face in trying to capture a significant portion of the Japanese luxury goods market. Other brands such as Bulgari, Baccarat, Burberry, the Gucci Group, and Salvatore Ferragamo are all trying to get a foothold in the Japanese luxury goods market. In addition to these already established brands, there are always new brands entering the market all the time.

One such new entrant was the Swedish brand H&M, which entered the Japanese market in 2008. On the other hand though, Louis Vuitton is well-placed to thrive in the Japanese market because quality is a key factor that the Japanese consumers place emphasis on. Quality is something that Louis Vuitton has much experience in. This is one marketing strategy that may prove to be successful in the Japanese market.3) Originally, Louis Vuitton was the first foreign luxury brand to enter the Japanese market, and it did so with the need for a Japanese partner.

Louis Vuitton decided to open its own subsidiary in Japan, which was something that was unheard of before Louis Vuitton pioneered the concept. The company delegated authority to each individual Japanese store, and gave its Japanese managers control of marketing strategies because they knew the local culture best. However, in 2003, Louis Vuitton decided to change its marketing strategy in order to stay ahead of its competitors. To do this, Louis Vuitton collaborated with a Japanese artist, Takashi Murakami.

He designed that year’s spring and summer collection and, as a result, Louis Vuitton’s profits increased by 10 percent.4) At the beginning of the global financial crisis, it seemed that Louis Vuitton’s sales in Japanese may decrease because of limited spending on the part of consumers. In addition to this, Louis Vuitton’s products are priced very highly, and are out of reach for the average consumer. Young Japanese women are no longer willing to spend the same amount of Louis Vuitton products because of the downturn in the economy.

In response to this, Louis Vuitton has started to change its marketing strategy in the Japanese market. To carry this out, Louis Vuitton has offered cheaper items in order to increase sales and have also opened new stores in cities where Louis Vuitton is not well known.