Sunday, November 27, 2011

Chapter 7: Business Marketing

As we know, Louis Vuitton is part of Moët Hennessy • Louis Vuitton S.A. (aka LVMH). (Formed in 1987 when champagne producer Moët et Chandon and Hennessy, merged with fashion house Louis Vuitton in a to form the current group.)  The alliance of luxury brands within the LVMH group have catapulted LVMH to become the world's largest luxury goods group.


Through the trust gained by consumers, shareholders, and investors, the accumulation of brands in the LVMH have all seen an extreme growth in revenue. Louis Vuitton especially; according to Bloomberg Business Week, "Vuitton brought in 28 percent of LVMH’s revenue last year and 57 percent of earnings before interest and taxes, HSBC estimates. LVMH, which doesn’t break out figures by brand, reported a 13 percent increase in fashion and leather goods sales in the first nine months of 2011."  

Bernard Arnault, chairman and majority owner of the group, has called 2010 a "great vintage" for LVMH. In his Chairman's Message, Arnault shares the group has grown at a "remarkable pace", breaking all its "historical records"- LVMH revenues reached €20.3 billion ($28.26 billion), up from €17.1 billion in 2009. Total profits exceeded €4 billion.

Bernard Arnault


What does this mean for Vuitton? It validates their enormous role in the luxury goods industry. According tglobal research agency Millward Brown’s 2011 Brand Report, Vuitton topped the list in the luxury category, with a value of $24.312 billion (up 23 percent from last year). Vuitton placed at No. 26 on the top 100 list of 2011 Most Valuable Brands. 

Vuitton uses disintermediation strategy to distribute their products. They sell on their website, their stand alone boutiques, and because of relationship commitment- directly to departments stores like Neiman Marcus, Saks Fifth Avenue and Bloomingdales. The prices remain the same in all three avenues of retail. Consumers know what price points to expect, therefore, they can buy confidently from any of the avenues listed. 


Monday, November 21, 2011

Ch. 8 - Segmenting and Targeting Markets

 Louis Vuitton segments to multiple target markets. Many people, both men and women with different values and all walks of life are fans of Louis Vuitton.Vuitton has multiple avenues of communicating their brand to different target markets. Through high fashion print ads, and their Core Values campaign ads, these ads are segmented to both men and women in the Upper Class, to Upper-Middle, and Middle.

By gaining the interest of both the wealthy and middle class, they have mastered the art of "less is more", maintaining a sense of mystery, yet they really are an attainable brand. In recent years, Vuitton began streaming their fashion shows, which made the shows, once only available to the fashion crowd and celebrities, now accessible to the world. ( consumer decision making).  With products with price points as low as $45.00, one can walk out of a Vuitton store with a "Travel Guide to Berlin", Paris, New York, Amsterdam etc. They can leave with a bracelet priced at $390.00, or a travel trunk for $4500.00. The bottom line is, anyone can get their hands on Vuitton, yet this notion does not hinder Vuittons image. Vuitton maintains a high end clientele and a high class image and remains the most valuable luxury brand.

Upon entering a Louis Vuitton boutique, one will notice different counters and sections with different "themes". These counters range from, men's travel bags, unisex travel bags, fashion jewelry, high end jewelry, small leather goods, scarves, belts, shoes, travel books etc. The store is very organized, one can easily locate what section they are in, helping to navigate through what could be very confusing.

We cannot forget to mention that Marc Jacobs is Louis Vuitton's creative director. Jacobs, like most designers, has a high end line, and a contemporary one, "Marc Jacobs" and "Marc by Marc Jacobs". With his name affiliated with the brand, teenagers and young adults who are fans for Jacobs, begin to "up the ante" upon discovering Vuitton, creating a new fan who will eventually move into a segmented Target Market.

Sunday, November 13, 2011

Louis Vuitton and the Holiday Season.

When calling a Louis Vuitton store, I spoke with a sales associate regarding the avenues in which Vuitton markets for the Holiday season. 


4-6 times a year, Vuitton sends out a small brochure to clients. These clients are among those who have set up a profile within the store, in other words, people who spend. They call these brochures "catalogs", although, merchandise cannot be purchased though them. (Vuitton only sells through their stores or their website). This "catalog" is more along the lines of a lookbook. The products are displayed in an artistic light for the time of year in which it relates, ie. Cruise collection, summer, fall etc. 


She explained that because their clients are from "all different walks of life with many different religions and backgrounds", that the Holiday brochure reaches all of their clients, not those just affiliated with Christmas.  


For the the winter months, she explained, through photography, the setting depict certain ideas affiliated with winter months. For example, there is a page where luggage is stacked, with snowglobes on them. On other pages there are scarves, hats and gloves. The pages are "crisp", colors are deep and dark, and the "environment is warm." 


Tuesday, November 8, 2011

Ch. 11 - Developing and Managing Products

Louis Vuitton is always open to new developments, from internal affairs to new products. Their openness allows them to keep up with the times, growing and changing with the demands of the luxury market. From Vuitton's roots as a high quality luggage maker in 1854, they have been progressive in developed a line of luxury products that remain true to the brands values. In 1987 they formed LVMH, the worlds leading luxury group. In1998, Marc Jacobs joined Vuitton as Artistic Director, bringing new creativity and an exciting new vision to the Vuitton family.

When introducing a new product, Vuitton usually makes a spin off of a successful product and sells it for a limited time. Having Marc Jacobs on board in addition to the desirable, luxury label that is Vuitton, introducing new products is never a gamble for the brand. With celebrity endorsed advertisements, to celebrities and elite individuals carrying the products, the products are constantly on display.

Vuitton uses their windows in their flagship locations as creative ways to promote their new products. Watch the window display in Paris circa 2009, as the classic Speedy bag transforms itself to limited edition designs...




Below are some examples of limited edition products that have been available to the public in the last 10 years. 



Anniversary Collection Monogram  Scarves. Were available March 2010. 



Louis Vuitton Limited Edition Graduate Monogram Bag. Collaboration with New York artist, Richard Prince.


2008, Paris Hilton and Kim Kardashian carry their matching mirror limited edition Louis Vuitton Alma handbag.  


2009. Marc Jacobs for Louis Vuitton payed homage to his late friend, American Artist, Stephen Sprouse, who passed in 2004


2006. Monogrammed Groom Collection. The design features the groom character, an illustration from vintage Vuitton advertisements. 

Ch. 16 -Integrated Marketing Communications

Louis Vuitton has multiple avenues of communicating their brand to the public. Because Vuitton is so well know, they use word of mouth and person to person advertising as a major tool for advertising. They do however run high fashion print ads, and their Core Values campaign as advertisement.

Like I have mentioned in other posts, their advertisements lack the words "Louis Vuitton". Their monogramed canvas and logo is so identifiable by the public, they do not need to print the name.

In recent years, Vuitton began streaming their fashion shows, which made the shows, once only available to the fashion crowd and celebrities, now accessible to the world. (See consumer decision making for video) Through mass communication, Vuitton has gained the interest of both the wealthy and middle class. Somehow, they have mastered the art of "less is more" communication to the public, still maintaining a sense of mystery, yet they still appear as an attainable brand.

Through the "pull strategy", consumers that own and carry the brands merchandise act as walking advertisements. Most of these people are among the wealthy middle-upper class, acting as "role models" to others in society. This idea of consumers advertising creates a demand among other people who like and want to buy the product, thus, bringing people into the store and creating revenue.

Overall, Vuitton is a master at mass communication. Their messages are never clouded by "noise", sending clear and concise messages to their target market. This is why Vuitton is the most valuable luxury brand.

Saturday, October 29, 2011

Ch. 10 - Product Concepts


Louis Vuitton's products are undeniably recognizable to the general public. Whether or not a person owns, admires, despises, or cannot afford to buy Vuitton, nine times out of ten they can recognize a Vuitton product from a mile away.

The products Vuitton manufactures are of the utmost quality, ensured by warranty. Their brand is worth more than Tiffany, Fendi, Cartier, Rolex & Chanel combined. Their products are only sold thought its own superbly run boutiques with a no discounting policy (last sale in 1986).

With multiple collections under their brand umbrella, Vuitton represents a lifestyle. Through their branding and marketing strategies, they have made the idea of  lifestyle brand quite desirable. One can shop for handbags, luggage, small leather goods, shoes, ready to wear, watches, fine jewelry, books and stationary, and can add personalized monograms to any leather good. 




Their branding is genius, most recently they have felt that travel has lost its romanticism. Using this idea that traveling has fell short of a romantic experience, they decided to make a statement. Starting In 2007, Vuitton started showcasing their roots as a luggage maker using people who represent their core values as a company in their print ads. Colin Mitchell oversees Ogilvy's Global Strategy and Planning Group, which handles some of the world's most famous brands, including Louis Vuitton states: 
"We use Sean Connery, Keith Richards, Bono. These are famous travelers. They're more aligned with where we want to take the brand." He goes on to say, "We talk a lot about roots and wings...We need roots, a back story, but also we need wings to stretch forward into the future."


This idea of a solid vision enables Vuitton to be the most valuable luxury brand. The products represent so much more than wealth and materialism, it holds a high standard representing those who are (or would like to be) perceived as cultured and well traveled. 

Friday, October 21, 2011

Ch. 18 - Sales Promotion and Personal Selling

Louis Vuitton is a company that lacks sales promotion. Their items are never on sale, they never offer deals, and they certainly never give away samples. The brand that is Louis Vuitton is so coveted that it is unnecessary to offer deals. In fact, offering any type of discount would hurt the brand. The primary target market view themselves as elite, and use Vuitton to differentiate themselves; these people do not need to shop during times of sale prices.  Lack of promotion is something that draws them to Vuitton. 


Vuitton's producers insist that the product is of high quality, therefore any type of outlet to discount prices is unnecessary because their products are highly warranted. Furthermore, sales can promote a mentality that the discounted product is outdated, undesired, and/or overpriced. The perception of the products to the consumer can become tainted. I certainly have had this happen to me when shopping- my thought process is something like this: "Why would I buy from this particular store when there isn't a sale when I know I can get it for cheaper, and they are still making a profit!" If Vuitton offered discounts they would lose their power of prestige.  


Instead, Vuitton focuses on engaging customers in memorable experiences. Their employees work to emphasize the unique products and ensure a distinguished retail experience. The sales associates develop relationships with customers and create a comfortable, organized environment where the customer feels relaxed- not rushed. 


Something that adds the overall experience is the option to custom make a bag.  On Vuittons website they offer "Custom Made"... "Whether it is designed to fulfill a practical purpose or is an expression of individual creativity, custom-made leather goods is both functional and exceptional. All our special orders are hand made in our historical workshop in Asnieres near Paris. founded by Louis Vuitton himself." Here you are given the option to chose your design, leather and lining. 


Here is an example of what my personalized luggage tag would be...





Vuitton is a sponsor of the elite sporting event of yachting. The "America's Cup" trophy awards the winner of America's Cup match races between two yachts. This reaches the audience and target market of those who attend events such as yacht racing, these people most likely sport (pun intended) Louis Vuitton during their day-to-day lives. 





“We are extremely privileged that our vision for the next America’s Cup has attracted the return of a company like Louis Vuitton,” said Richard Worth, Chairman, America’s Cup Event Authority. “The 34th America’s Cup will culminate in 2013, marking the 30th anniversary of Louis Vuitton’s support of the sport of sailing, so we could not be more proud to see this great partnership continue and strengthen.”


Monday, October 17, 2011

Ch. 17 - Advertising and Public Relations

In 2007, Vuitton began using people who represent their core values as a company in their print ads. The idea behind this is to showcase Vuitton's roots as a luggage maker. These "real” people aka celebrities, run alongside their seasonal fashion campaigns. Most recently, U2 front man, Bono and his wife, are featured in Africa where they have long time fought to end poverty. Actor, Sean Connery’s ads showcase him in front of this home in the Bahamas.  Previous faces of the campaign include Sofia Coppola and her father Francis Ford Coppola sitting in Buenos Aires. Rolling Stone, Keith Richards in a hotel suite with a Vuitton guitar case, and Nobel Peace Prize winner and former President of the Soviet Union, Mikhail Gorbachev- in a limo passing the remaining part of the Berlin Wall.

Angelina Jolie is the new face of their Core Values Campaign. Shot in Cambodia where she is known to have adopted her first child, Maddox. It is undisclosed as to how much Jolie was paid for the campaign, but rumored to be around $10 million.

Running with Jolie's print ads, is a video featuring the actress in Cambodia, speaking about the life changing experiences she has had there. The video does not talk about Vuitton products, but focuses on lifestyle of travel and leisure. It showcases that Vuitton products not only accompany those who live a privileged lifestyle of ritz and glamour, but accompany those who have something to offer the world. 




Saturday, October 15, 2011

Ch. 15 - Retailing

Retailing Mix Elements for Louis Vuitton


In terms of product offerings, Louis Vuitton offers the utmost craftsmanship. Contrary to popular belief most Vuitton bags are of canvas material, not leather. The canvas, designed by Louis Vuitton himself, is coated in layers of shellac for waterproofing purposes. The products represent luxury, therefor, enticing consumers to purchase enhancing their ideal self- image, making their lives a tad- bit more luxurious.


Among it's 2,468 retail stores, Vuittons are strategically placed in cities and countries with pockets of wealth. They are continually growing in the Asian- Pacific market, as the mainland Chinese stimulate the majority of Vuitton's revenue. They are currently focusing on improving the art of luxurious retail experiences by improving the size and aesthetics of their current locations.


Vuitton's products are greatly recognizable to many, that their promotional strategies veer on the side of simplicity. Louis Vuitton print ads lack verbage stating "Louis Vuitton". Their ads tend to feature celebrities- these celebs are esteemed individuals to the general public, Vuitton uses this to their advantage. The ads are done extremely tactfully by various renowned photographers, like Annie Leibovitz,  Mert Atlas, Marcus Pigott, and Patrick Demarchelier.  The ads all exhibit beauty and an air of a desired lifestyle people feel Vuitton will grace them with. They are geared towards many different demographics, below are some examples:


Jennifer Lopez, actress, model, singer/songwriter. 


Angelina Jolie actress, humanitarian, and Goodwill Ambassador.


Filmmaker Francis Ford Coppola, author and director with daughter Sofia Coppola.


Mikhail Gorbachev, former  Soviet Union President Mikhail Gorbachev.


Kate Moss, Model.






The prices of Louis Vuitton products usually inflate every few years. They never offer discounts, deals, or sales. There is an enormous fluctuation in various price points within their stores. They offer a "lower" end of small leather goods, and certain designs enabling the general middle class the attainability to own the products. Thus increasing their overall revenue due to the availability they allow to many different social classes. 


The elevator in the Paris Louis Vuitton is completely black, it lacks any signals, lights and sound. When the doors open the consumer is open to every element Vuitton has in store for them! The presentation within Vuitton stores is consistent; always catering to people senses. The aura, display, and vibe in the stores are always synonymous to each other, creating a consistent shopping experience for the consumer.   One can expect the same atmosphere, display, and personalized service from every Vuitton store across the globe.  By consistently maintaining an aura of prestige in their stores, it builds confidence in the shopping experience for the consumer. The consumer is more at ease spending top- dollar for a piece when they feel they are getting top- notch service to accompany it. Vuitton stores do not just provide a retail transaction, but a retail experience. The experience is provided by the well trained sales personnel, who when faced with a potential buyer, help to make the purchaser feel good about their decision thus enforcing the final step: buying. 

Friday, October 14, 2011

Ch. 6 - Consumer Decision Making

In a world filled with different social classes and values, Louis Vuitton does a brilliant job targeting all of these groups. Like mentioned in the mission statement  section, Vuitton's products notoriously represent wealth and luxury. The wealthy want Vuitton in order to differentiate themselves from the lower classes, while the less wealthy want Vuitton to feel like they have achieved what the wealthy has.

The social influence of Vuittons products are extremely apparent in many areas. Their ads are not overly done and in your face, but their products are worn by many, acting as a nonmarketing- controlled information source. When it comes to consumers decision making process the Louis Vuitton brand is strong enough to influence consumers perception of prices, hitting all types of social classes with the desire to buy the product.

Louis Vuitton began streaming certain runway shows in 2010. This made fashion shows available to the world, instead of the select few in the fashion and entertainment industry. This marketing move enabled people who will never get to a fashion show feel they were apart of it- making them feel they could be apart of the brand too! Very smart! Both this year and last year, head designer for Vuitton's Ready to Wear, Marc Jacobs had Kate Moss walk last at his shows. Being the face of many different brands, Kate Moss is a recognizable face to a majority of the population. Again, making the majority of the population feel that Vuitton is an attainable brand. This years show was a work of art.



I would say that the majority of Louis Vuitton's consumers are those that feel Vuitton will enhance their ideal self- image. Although there is a small percentage that buy Vuitton products like luggage and clothing  that lack monograms and extensive design because they are of the utmost quality. To them the products are a smart investment that will serve to assist in their travels and wardrobes.

Overall I feel the decision making process for Vuitton mostly entails want. Price is secondary to the initial desire for the product. Most consumers will find a way to save and purchase if the yearning for a higher self- image is present.





Monday, September 26, 2011

Ch. 5 - Developing a Global Vision

The development of Vuitton from 1854 to what we know Louis Vuitton as today:

Starting as a trunk- maker in 1854, Louis Vuitton founded his fashion house in Rue Neuve des Capucines in Paris. By 1885 the company opened its first store in London on Oxford Street. By 1913, the Louis Vuitton Building opened on the Champs- Elysees. Stores also opened in New York, Bombay, Washington, London, Alexandria, and Buenos Aires as World War I began. In 1978, the label opened its first stores in Japan: Tokyo and Osaka. In 1983, Louis Vuitton later expanded its presence in Asia with the opening of a store in Taipei, Taiwan. In 1984, Seoul, South Korea.

In 1987 saw the creation of LVMH. By 1989, Louis Vuitton was operating 130 stores worldwide. In the 90s, Yves Carcelle was named president of LV, and in 1992, his brand opened its first Chinese location at the Palace Hotel in Beijing.








Today Louis Vuitton is focusing on expanding the stores that already exist (see Marketing Environment- Ethnic Markets). Because their No 1 clientele are the mainland Chinese, Vuitton is very serious about their presence in the Asian Market, and they continue to invest in Asia- Pac. Their Long term strategy is to continue to proactively tap into fastest growing consumer market, Asia.

Monday, September 19, 2011

Ch. 4 - The Marketing Environment

Ethnic Markets

LVMH's international diversity plays a major roll in its target market. As mentioned earlier, LVMH continues to develop and expand into cities, and countries with pockets of wealth.  Among its 2,468 retail stores there are now outposts in Ho Chi Minh City, Vietnam; Phnom Penh, Cambodia; Yekaterinburg, Russia; Macao; and Abu Dhabi. With their vision to expand into new markets consisting of wealth, LVMH is growing in global, ethnic markets.

According to an article written in September 2011 by The Business Times LVMH "will continue to invest in the Asia-Pacific region as it taps demand from growing numbers of the wealthy from the region."

Louis Vuitton's opened their first floating boutique at Marina Bay Sands in Singapore on Saturday, September 17th 2011.

 "There will be less net opening of stores and more investment into improving the size of stores, because 'luxury retail has to be a luxurious experience". - Yves Carcelle, who runs the fashion and leather goods unit for Louis Vuitton.

The company is working to expand their already existing stores. Louis Vuitton is adding a level to its Lee Gardens store in Hong Kong store to double its floor space. Vuitton is expanding its stores in Manila and in Ho Chi Minh City in Vietnam.  While the largest market in the world is still Japan, their No 1 clientele are the mainland Chinese, who, when travel, shop to a great extent at stores in cities such as, Singapore, Hong Kong, Macau and Paris.

Consultant McKinsey & Co has estimated that Luxury goods sales in China are set to rise 18 per cent a year to 180 billion yuan (S$34.88 billion) between 2010 and 2015. After posting a 46 per cent increase in Asia-Pacific sales in the five months through August, they see no signs that the demand is weakening;

They do not, however, see a growing market in India, even given the fact that the middle class population is expected to grown to 267 million in the next five years. Because of the foreign direct investment (FDI) in the retailing sector, the Indian government only allows a maximum of 51 percent for foreign investment. Louis Vuitton feels the Indian market is not a place for their continuously growing brand.
Frankly, I agree. What Louis Vuitton does not mention is that the FDI proposal is accompanied by the following: the minimum investment is $100 million, 50 percent of the foreign investment has to be channelled into supply chains; 30 percent of sales have to come from small traders; and foreign retailers have to source at least 30 percent of manufactured items from local small and medium-scale enterprises. 
That being said, this seems like unnecessary additional work for a brand that already has their supply chains, sourcing, and manufacturing down to a science.
 
LVMH foresees a successful future in the growing ethnic markets. Mr Carcelle sees no signs of slowing demand for luxury products in Europe or America.

'Even in period of crisis, people want to treat themselves, we don't see any signs of slowing down whether it's in Europe or in America. The world of luxury doesn't obey the same rules.' -Mr Carcelle .

Ch. 3 - Ethics & Social Responsibility

LVMH is committed to creating diversity within the group. LVMH recognizes the influence they have on consumers; sparking a sense of pleasure solely equated from the imagery they use from luxury. They are aware they have a responsibility to act as an exemplary corporate citizen. Their practices "comply with the most exacting standards of integrity, responsibility and respect for all stakeholders, everyday and everywhere around the world." With this, they have created the following:

EllesVHM:
In November 2009, the LVMH group announced several noteworthy commitments:
- Increase the number of women on executive committees
- Ensure greater representation in succession plans for influential positions
- Develop networking actions through forums, allowing women at every level to exchange experiences with one another
- Establish a committee to support the development of women high potentials

The same year, LVMH reaffirmed its commitment to women with a striking photo exhibition that showcased the wealth and diversity of women and the work they do throughout the Group.

Internships and Equal Opportunity:
LVMH is a signatory of the International Global Pact, the French Diversity Charter, and the French Charter of Corporate Commitment for equal opportunity in Education.
These commitments are implemented with concrete measures by the Human Resources Departments of the Houses through a systematic review of recruitment practices in order to make the process more objective.
In partnership with the French association "Nos Quartiers ont des Talents", an equal opportunity advocate, Group companies sponsor young graduates from underserved areas.
LVMH is a signatory of the "Apprenticeship Charter", and has expanded its internship programs to help more young people complete their degrees. The Group welcomed over 500 interns in France in 2008.

Equal Opportunity for People with Disabilities:
LVMH's proactive initiatives to encourage employment of people with disabilities reflect priorities at the human, business and managerial levels. To coordinate and energize this commitment, the LVMH "Handicap Mission" was created in 2007.
With the active involvement of over 30 Group companies, this structure acts as a powerful driver to promote the employment of people with disabilities.
The "Handicap Mission" provides operational support for Human Resources managers to facilitate the hiring and long-term employment of people with disabilities. It also expands sourcing relationships with sheltered workshops.
In 2008 LVMH signed an agreement with AGEFIPH, a French agency for employment of workers with disabilities. The Group has made firm commitments covering integration, e-recruitment, training and career development for people with disabilities.
The Handicap Mission has notably worked with Guerlain and the Spa Guerlain on the Champs-Elysées, developing a two-fold initiative. Employees receive disability awareness training and Spa staff get special training in welcoming customers with disabilities.

In April 2011, Bernard Arnault, chairman of LVMH Moët Hennessy Louis Vuitton, traveled to Washington to receive the Corporate Citizenship award from the Woodrow Wilson International Center of Scholars. The tribute was to commemorate Arnault's work with the company. He received a high praise from President Barack Obama and British Prime Minister Tony Blair, in addition to a video toast from Marc Jacobs and performance by U2. In an article written by Women's Wear Daily they stated:

"In his acceptance speech, Arnault underscored the importance of social responsibility and a strong moral code to the success of his business of luxury and fine living. As WWD reports, Arnault said:"

“Tonight, you do not just honor me. What you honor with this special award is a commitment of more than 80,000 people with a unique ambition to delight the world, to beautify our universe and to inspire the spirit of our times. Included in these today is the idea that corporations are also citizens with social responsibilities, a concept that I think of as distinctly American. I’m proud to say that we have adopted this principle at LVMH and we apply it not just at home in France, but around the world.”

As I mentioned in the Strategic Planning section, the damage control Arnault underwent to preserve the Dior brand did not go unnoticed. In the article by WWD, they added:

"It is perhaps with that dedication to responsibility that Arnault handled the controversy surrounding John Galliano's anti-semitic rants caught on video: The company fired the Dior designer swiftly and definitively, despite the industry's infatuation with the designer's talent."

LVMH continues to recognize their roll in society. They are aware they have a social and corporate responsibility to act as an exemplary corporate citizen. Using this to their advantage they continue to create jobs, encourage diversity, give back, and mostly, respect the influence they have as a company.

Monday, September 12, 2011

Ch. 2 - Strategic Planning for Competitive Advantage

Forbes.com calls, Bernard Arnault, Chairman of LVMH "Master of the Brand", in a article written in November 2010. Mr. Arnault is the "master" behind LVMH. On LVMH's website, Arnault writes:

"For several months, LVMH has enjoyed uninterrupted growth, to which all our business groups have contributed. It would be an over-simplification to suggest that this is due to the economic upturn alone. The Group's performance is also, above all, the result of the relevance and consistency of our long term strategy. A strategy that we pursued, unchanged, throughout the recent economic crisis. The support of the enduring values of our star brands, creativity as an absolute imperative, the quest for perfection in our products, and our efforts to ensure an environment of excellence coupled with impeccable service at our stores form the wellspring of our success. To these we must also add the agility and the motivation of our organization which benefits from the hands-on enterprise culture of the men and women of our Group. It enables us to take the right decisions quickly, invest where needed and seize opportunities to increase our market share. And this applies just as much when global economies are shrinking as when they start growing again."

LVMH's selective approach to their market is downright successful. The company, through its strategic planning, knows exactly where is wants to be at all times. Although economic times have dipped, the company had an extremely successful year in 2010, increasing its stock 60%.

LVMH  is a cash cow. The brands un LVMH maintain market dominace. They have a sustainable competitve advantage, holding dominace in the Luxury Goods market share.

Through the company's sucess in Dom Pérignon, they launched several vinatages, all which recieved critical acclaim. Louis Vuitton opened in London in 2010, whiched enhanced the appeal of the brand as well as the reputation for London as a city. In the perfumes and beauty domain, Jude Law starred in five-minute movie for Dior that Bernard Arnault says, "brilliantly illustrated the unique magic created by Mr Dior." This was after the crisis that overwhelmed  Christian Dior and its Chief Designer John Galliano.- I call that "brilliant damage control."
Also, in 2010 the beauty mecca, Sephora introduced themselves to a new market, Latin America.





Louis Vuitton Bond Street Maison in London

Home to a wide range of brands, they allocate their excess cash from their larger brands to work on expanding the others, while staying true to the originality of all of them. Mr. Arnault states in his Chairman's Message

 The performance of many other brands are also worthy of mention: Hennessy, Moet & Chandon, Fendi, Guerlain, Givenchy, Make Up For Ever, Marc Jacobs, Benefit, Hublot... We are home to a wide range of brands, we respect and strengthen the originality of each of them, each of our brands builds its future on its own culture and its historic know-how; this is a source of unique know-how for our Group. We give them all the nurturing and support they need for their long term development, while respecting their roots, their heritage and their individual personality. Whether they have established leadership positions in their markets, or have embarked on a promising development campaign, all of our brands have enhanced their standing and their appeal. They have continued their rational expansion and acquired the strength they need for the future. This same determination to invest for the long term led LVMH to become a shareholder in Hermès International – another brand which symbolizes French know-how, whose standards we share and whose vision we support. Its culture, so particular, is to be preserved preciously and our Group, as a shareholder of this company, will guarantee it.

LVMH continues to develop and expand into cities and countries with pockets of wealth;  Among its 2,468 retail stores there are now outposts in Ho Chi Minh City, Vietnam; Phnom Penh, Cambodia; Yekaterinburg, Russia; Macao; and Abu Dhabi. This growth is possible because LVMH stays true to each brands roots, highlighting the connection between the current work and the history of each brand.

Thursday, September 1, 2011

Brief History of LVMH

LVMH Brief History 


LVMH Moët HennessyLouis Vuitton S.A. , usually shortened to 
LVMH, is a French holding company and the world's largest luxury goods conglomerate. It is the parent of around 60 sub-companies that each manage a small number of prestigious brands. These daughter companies are, to a large extent, run autonomously. The group was formed after mergers brought together champagne producer Moët et Chandon and Hennessy, a leading manufacturer of cognac. In 1987, they created a $4 billion dollar merger with fashion house Louis Vuitton in a to form the current group.


Christian Dior, the luxury goods group, is the main holding company of LVMH, owning 42.38% of its shares, and 59.3% of its voting rights. Bernard Arnault, majority shareholder of Dior, is Chairman of both companies and CEO of LVMH. His successful integration of various famous aspirational brands into the group has inspired other luxury companies into doing the same. Thus Gucci (now part of the French conglomerate PPR) and Richemont have also created extended portfolios ofluxury brands. The oldest of the LVMH brands is wine producer Château d'Yquem, which dates its origins back to 1593.