LOUIS VUITTON

Brand Premium of Luxury Goods and the Counterfeit Market:

A Look at Louis Vuitton Handbags

Natalie PowersDr. Marc Fetscherin

LOUIS VUITTON

AGENDA• Objective• Hypothesis• Existing research• Data collection• Results• Conclusions

OBJECTIVE• Understand the effect of high

prices of luxury handbags on buying patterns of consumers – Retail channels– Online discounted stores– Counterfeit sellers

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HYPOTHESIS• Greater availability of counterfeit

products, and the increased quality in their similarity to originals, consumers are willing to pay less money for a knockoff item than for an authentic product

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EXISTING RESEARCH• What drives consumers to buy

counterfeits– Brand recognition without high

cost– Increased quality– Availability

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DATA COLLECTION• Consumer

survey• Price collection

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CONSUMER SURVEY

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How many Louis Vuitton handbags do you own? 0 1 2 > 3

How many of these were purchased at an authorized Louis Vuitton retailer? 0 1 2 All

How would you rate the quality of the handbags purchased from this venue? Poor Middle LowMiddle High Very High

How would you rate your satisfaction with the price paid for the handbag?Very

UnsatisfiedReasonably

Satisfied SatisfiedVery

Satisfied

How many of your handbags were purchased at an online discount store? 0 1 2 All

How would you rate the quality of the handbags purchased from this venue? Poor Middle LowMiddle High Very High

How would you rate your satisfaction with the price paid for the handbag?Very

UnsatisfiedReasonably

Satisfied SatisfiedVery

Satisfied

How many of your handbags were purchased from a counterfeit dealer? 0 1 2 All

How would you rate the quality of the handbags purchased from this venue? Poor Middle LowMiddle High Very High

How would you rate your satisfaction with the price paid for the handbag?Very

UnsatisfiedReasonably

Satisfied SatisfiedVery

Satisfied

Does the quality of your handbag lend itself to be recognized as a counterfeit product? Yes

Upon Close Inspection Not Often Never

Which of these would persuade you to buy an authentic Louis Vuitton handbag most?

Lower Price

Increased Quality

More Exclusivity

Inability to Counterfeit

CONSUMER SURVEY

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LV

Discou

nter

Count

erfei

ts

Quality

Pri

ce S

atis

fact

ion

Hig

h

Low High

Low

PRICE COLLECTION

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PRICE COLLECTION

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Retail Store Online- Discounted Replica (Counterfeit)

LouisVuitton

NeimanMarcus

Saks 5thAvenue LaPerle SacBelle Balenci Bagways

LV-Designer

Bags eHandBagz

Monogram Canvas

Looping Mini 725 795 725 475 287 285 130 145 190

Speedy 30 620 620 620 450 299 299 125 155 200

Babylone 1,110 1,110 1,110 450 309 319 N/A 165 199

Monogram Multicolor

Alma 1,450 1,450 900 700 468 468 145 185 219

Pouchette 590 590 285 275 290 290 99 N/A 149

Trouville 1,400 1,400 900 775 496 496 195 185 269

PRICE COLLECTIONPercent Change in Price

Retail Stores Online DiscountCounterfeit

SellersProduct

Overall

Monogram Canvas

Looping Mini 10% 67% 46% 512%

Speedy 30 0% 51% 60% 396%

Babylone 0% 46% 21% 573%

Monogram Multicolor

Alma 61% 50% 51% 900%

Pouchette Accessoires 107% 5% 51% 496%

Trouville 56% 56% 45% 657%

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CONCLUSION• Prices for the same product vary the

least in retail stores

• All but two bags demonstrated an overall difference in price of over 500% – Highest was Alma with 900% increase

from counterfeit to retail

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CONCLUSION• Counterfeits owners who rated quality

low to middle, had price satisfaction ranging from moderate to high – Indicates they believe they got a good

value for their money

• Authentic owners rated quality very highly but price satisfaction was lower than that of the counterfeit buyer– Comfort with the quality knowing it is

authentic, but had to pay a lot of money for it

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CONCLUSION• Counterfeits offer lower quality, but

with their low price provide an attractive value proposition for consumers– If consumer satisfaction with the quality

of the counterfeit handbag is moderate to high, but price satisfaction is even higher, consumers are willing to forgo the absolute quality of an authentic handbag for a more satisfying counterfeit

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RECOMMENDATIONS• Survey population size• Additional brands

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