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 to global 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. 

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.

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." 

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.

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. 

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.”