Evaluation of Louis Vuitton in Hong Kong Market

Published: 2020-08-04 09:25:04
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Due to LV is the international company with a big geographic web, in this study it merely analyzes and evaluates the company in Hong Kong market. Louis Vuitton Malletier ( LV ) was founded in 1854 at France by Louis Vuitton. LV is one of the taking international manner houses which characterized on luxury goods, off-the-rack, places, tickers, jewellery, accoutrements, dark glassess and books. There are 9,671 people work at LV in 85 different occupation classs. LV has 14 production and development units and 300 shops in 44 states around the universe. LV became a subordinate of LVMH ( Moet Hennessy aˆ? Louis Vuitton S.A. ) in 1987. ( LVMH 2010 )
The company had a simple doctrine – Tradition Modernity ” . LV is the traditional company with a long proud history. At the same clip LV needs its merchandises be advanced, modern and originative. This lies behind the LV trade name message ‘Enriching know-how with continual invention. Perpetuating tradition with vision… ‘ It is non merely profit for the clients but besides refers to its professionals ‘ accomplishments that retain the time-honoured values and address of true craftsmans. ( Fifty-five 2010 )
A farther illustration of the manner LV to associate with the universe is their ‘creatifparnature ‘ plan. Environmental protection is one of the hot subject discuss at everyplace. Based on LV fixed 4R regulation ” – Renew, Recycle, Reduce and Review, their luxury merchandises must be committed to environmental duty. LV uses renewable energy beginnings to salvage electricity and H2O at the stores in Spain. Besides, the company creates work forces pocketbooks use eco-design and all of the merchandises bundle in ‘green ‘ ( useless of plastics ) . ( LV 2010a )
Customer-Based Brand Equity Model ( CBBE )
LV CBBE pyramid ( See Figure 1 ) is strong in left and right-hand sizes. It is besides strong from the underside to the top. LV is basking the highest trade name consciousness every bit good as the strong trueness and high repetition purchase rate. LV has success focused on the luxury merchandise market and its image can tie in with clients. ( Keller 2008 pp. 61 )
For the foundation degree of CBBE Pyramid, LV has created a high consciousness degree on Salience portion. Based on the company taking trade name elements ( see Figure 10 ) and leveraging secondary associations to construct trade name equity ( see Figure 11 ) , the trade name consciousness is created in client heads. There are 20 % of people will purchase LV merchandises when money was no object ( see Figure 8 ) . Compare with the other luxury trade name, LV is the 4th trade name that people will believe on purchase. It is high deepness of trade name consciousness, the clients are easy to remember and acknowledge on those luxury trade name. The graph of figure 7 shows that there are merely 7 % of the people will purchase the merchandise. It seems that people are non truly depends on the purchase and usage state of affairs, comprehensiveness of trade name consciousness. LV has created a high consciousness in this phase, while more depth than comprehensiveness of trade name consciousness.
After the saliency degree, Performance and Imagery can be built. Mr. Sampson Lee ( 2006 ) , president of G-CEM, invented and put Emotion Curve into applications. ( CT 2007 ) In figure 3, he used five LV sub-processes, they are ‘store mentality and interior ornament ‘ , ‘product ‘ , ‘price ‘ , ‘service ‘ , and ‘feeling of prestigiousness. ‘ The consequence shows that LV creates a positive and epicurean image through advertisement, public dealingss and famous person. For the shop mentality and interior ornament, merchandise and prestigiousness feeling, client thinks LV creates its trade name values. But for the monetary value and service, clients may believe as a hurting point. Because of the salesgirls in LV stores, no affair the client is wear as a rich individual or famous person, normally ignore them. The monetary value is besides settled extremely. ( CT 2007 )
For the imagery portion, harmonizing to a Millward Brown 2010 survey, LV is the universe ‘s most valuable luxury trade name. ( Millward 2010 ) It is the successful luxury trade name with expansive history. Because of LV is a luxury trade name, the purchasers must be in high income degree and high position at the society.
At the 3rd phase, Judgment is based on the trade name attitude. In figure 4, clients may split into 3 phases of client procedure rhythm, prospecting, purchasing and consuming. LV has done the best occupation on those advertisement, public dealingss, famous person events, retail shops and merchandises, while website and name centre are comparatively weak, since Hong Kong market have no online shopping and the call Centre service are really hapless. Although there are two points are failed, LV can supply the best bag in the universe with maximal quality and continual design and advanced. ( CT 2007 ) As the Feeling of the luxury, it means that the merchandise users are in high position. It likes a dream and go more successful when utilizing those luxuries.
The concluding degree of CBBE Pyramid, the graph ( see figure 5 ) recognizes that all those communicating tools are comparatively high without website and call Centre. It means that clients feel really positive of the trade name and it creates a foundation of the trade name trueness. Based on those figure 3, 4 and 5, it is created the strong left and right manus size, the underside to exceed of the CBBE theoretical account and concluding clients repeat purchase. ( CT 2007 )
Marketing Mix Theory
Merchandise
Harmonizing to a Millward Brown 2010 survey, LV is the universe ‘s 29th most valuable trade name and is estimated to be deserving $ 19.8 billion. ( Millward 2010 ) One of the company celebrated label is LV monogram. LV is utilizing line extentsion from luxury short pantss and leather goods to off-the-rack, places, tickers, jewelry, accoutrements, dark glassess, and books. ( Fifty-five 2010b ; LV 2010c )
To keep LV ‘s high degree of merchandise quality, LV goods have non changed its industry manner since 19th century, particularly the baggage is still made by manus. ( Martin 1995 pp.A 750 ) Each LV bag is tested and do certain can defy wear and tear. The bag is put in a anguish machine, where it is opened and closed five times per minute for three hebdomads. And that is non all – It is thrown, shaken, and crushed. ” LV stands out from their rivals and concentrate on its merchandise quality. ( Paul 2002 ) Titanic sank in 1912, a twelvemonth when LV bags were every spot as high repute as now. While no 1 knows precisely how much LV baggage went down with the ship, but it ‘s clear that LV baggage still integral after the accident. ( LVA 2010 )
The company ‘s doctrine supports the ‘Art de Vivre ‘ rule which means the ‘The Art of Travel ‘ in English account. This states that the merchandises are long standing and unique in the universe. This besides a portion of ‘Tradition Modernity ‘ message – walk through the clip journey from history to now. LV design different merchandise in different clip period. For the Industrial Revolution in Europe at 19th century, LV provides many sorts of bag to fulfill ‘unique gustatory sensation ‘ clients. In the early twentieth century, LV design travel closet, hat boxes, auto bole and tool box. It is more make usage of the merchandises instead than concentrate on the merchandise design. ( LV 2010d ) For now, LV continue to supply and plan many other accoutrements and bags for work forces and adult females. Some of the merchandises are focused on its value and some of these are focued on the funtion. For illustration the Loius Vuitton City Guide 2011, LV keeps on developing its goods for travel usage. It means the company can run into different consumer demands everyplace. ( LV 2010e )
Monetary value
LV is used a luxury pricing scheme, which means high markups, limited handiness, and few if any markdowns. ( Keller 2008 pp. 208-209 ) Harmonizing to the tabular array of Louis Vuitton and Gucci Handbags at c. a‚¬500 ( see Figure 2 ) , the lowest monetary value of LV pocketbook is a‚¬256. ( Bernstein 2009 ) It is hard for the lower income degree people to purchase LV merchandises when the company set a high monetary value for the merchandises.
Topographic point
For commanding the company quality and its image, LV sells its merchandise merely through a planetary web of company-owned shop. As Bernard Arnault, the president and CEO of LVMH, said before, If you control your mill, you control your quality ; if you control your distribution, you control your image. ” It is necessary that provide a luxury image through the store design and the distribution channel. ( Keller 2008 pp. 208-209 ) To run into the mark client, the merchandises must sell in LV shops. LV expands its shops with the focal point on typical edifice designs related to location. It can make the populace through its particular store design. Besides, there are merely 300 shops in 44 states. ( LV2010 ) It can easy to command over the merchandising procedure and construct the clients relationship by the retails mercantile establishments.
Promotion
LV is really careful by taking the advertisement run. The company normally uses print ads in magazine and hoardings. These aid to exposure its trade name to the populace and set up the trade name trueness for repetition purchase.
LV chooses Steffi Graf and Andre Agassi at 2007 to advance their trade name to public in print ads and utilizing picture for World Cup which invited Maradona, Pele and Zidane at online run. ( Kate 2008 ; McEleny 2010 )
Except print ads and picture, LV besides takes the commercial broadcasts in telecasting ( 90 seconds ) Where will life take you? ” This is the first LV commercial advertisement and translated into 13 different linguistic communications. The advertizement brings out the nucleus value of LV. It is about the people lifestyle and their behaviour of life. ( AMMN 2008 ) Again, this aligns with ‘The Art of Travel ‘ message.
For keeping an upscale image of luxury trade name, LV normally sponsors some major events with luxury seal in the universe.
Porter ‘s Generic Strategies
Based on Porter ‘s Generic Strategies, to accomplish and keep the competitory advantages, there are four generic competitory schemes can be chosen. ( QuickMBA 2010 ) LV, marks full market and uses competence singularity, chooses distinction scheme to surpass its competition. The primary point on this scheme lies in making client trueness.
For the luxury trade name, it is non merely a maker provides goods but besides makes ‘intangible into touchable ‘ . LV provides after gross revenues service for care its trade name merchandises. It can heighten the service quality and perceived as being alone. ( LV2010 )
Firm public presentation is the other of import standards that can distinguish LV and its rivals. There are placed an employees developing to maintain them to supply high quality service to each client. It is necessary that control luxury trade name quality through service and merchandise ( LV 2010 )
Since LV merely has few shops in worldwide, it eases to present a consistent service quality. Since LV merely made its merchandise in France and Spain, it can restrict the hazard on production procedure every bit good as to command quality. Those activities can develop a more trustful relationship with clients. ( LV2010 )
Based on LV utilizing distinction scheme, it can easy to make the trueness and distinguish itself in the competitory market.
Drumhead
To reason, LV makes usage of marketing mix to pass on the trade name message to their client. This allowed them to make strong trade name image and maintain tantrum at those market alteration. This is a good illustration on how marketing mix can assist to increase trade name equity.
Besides, it is success on differentiate with the rivals. Because of the competitory market, the houses need to more flexible to avoid challenge. Based on those theoretical accounts and theory, LV is success in the market and go one of the strong trade names in worldwide.

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