MBA 6033 MARKETING MANAGEMENT

Assignment #03

Submitted to:

DR. FRANKIE WONG

By:

HARIS AWANG

ID #: MBA2016041001

+6019 204 3273

03rd April, 2016

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Case Study: Louis Vuitton

Reference: Page 295, Marketing Management by Kotler & Keller

Q1. How does an exclusive brand such as Louis Vuitton grow and stay fresh while retaining

its cachet?

A1.

Louis Vuitton grows by maintaining & protecting its brand image which is perceived by

consumers as a premium brand. This is achieved by:

forming a strategic partnership with Moët et Chandon and Hennessy, a luxury goods

conglomerate. This has boosted the brand association and opens up doors to a larger

market.

ensuring products are made of state-of-the-art high quality raw materials. Consumers

would desire to have Louis Vuitton products. Any bags or sunglasses can serve the

same purpose but Louis Vuitton just sets its products apart by being differentiated in

terms of quality and prestige.

not reducing the prices as this will maintain it positioning in the luxury market. LV

products have to have a certain characteristic that associate LV with luxury and pricing

is very crucial in determining this.

selling through its website louisvuitton.com to reach new segments of consumers and

regions. This is to realized its marketing potential according to the consumers behaviour

and geographic demand.

expanding its market to China and India. These two nations are fast becoming nations

with middle-class with more purchasing power than ever before.

associating its brand with high-profile celebrities and supermodels such as Madonna,

Audrey Hepburn, and Jennifer Lopez. This will give more brand personality and

emotional branding association as people would want to have what their idols are

wearing.

Louis Vuitton stays fresh while retaining its cachet by:

breaking the tradition of associating itself with non-traditional celebrities such as Steffi

Graf, Mikhail Gorbachev, Buzz Aldrin, and Keith Richards in a campaign entitled

“Core Values.” This positions itself into new segments of consumers while maintaining

its class and prestigious brand image.

launching its first television commercial focused on luxury traveling instead of fashion.

forming new partnerships with international artists, museums, and cultural

organizations.

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Q2. Is the counterfeiting of Louis Vuitton always a negative? Are there any circumstances

where it can be seen as having some positive aspects?

A2.

Counterfeiting of Louis Vuitton is, most of the time, negative and can be detrimental to the

brand image of Louis Vuitton. If it is rampant and uncontrolled, brand dilution may occur. If

there’s too many counterfeit products in the market, consumers may lose interest as the brand

itself may be easily associated with counterfeit products. Consumers do not like to have this

type of brand association especially when they spend a lot of money.

With the advent of manufacturing technology, counterfeiters are getting better and better at

replicating Louis Vuitton products. This poses a serious threat to the company as consumers

will be having difficulties differentiating the products.

On the other hand, there are circumstances under which counterfeiting can be positive. In a

way, it creates a potential untapped market segment which may benefit Louis Vuitton in the

long run. People who buy counterfeit Louis Vuitton products may someday become their real

customers. On one fine day, someone may just have the money and buys a real Louis Vuitton

products. Moreover, getting your products copied is also a form of recognition and flattery.

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Excerpt from page 295, Marketing Management by Kotler & Keller:

Louis Vuitton (LV) is one of the world’s most legendary brands and is synonymous with

images of luxury, wealth, and fashion. The company is known for its iconic handbags, leather

goods, shoes, watches, jewelry, accessories, and sunglasses, and is the highest-ranked luxury

brand in the world.

It was 1854 when Louis Vuitton opened his first store in Paris and sold handmade, high-

quality trunks and luggage. In the late 19th century, Vuitton introduced his signature Damier

and Monogram Canvas materials, featuring the famous design still used in most of the

company’s products today. Throughout the 20th century, the company that carries his name

continued to grow internationally, expanding into the fashion world by the 1950s and reaching

$10 million in sales by 1977. In 1987, Louis Vuitton merged with Moët et Chandon and

Hennessy, leading manufacturers of champagne and cognac, and created LVMH, a luxury

goods conglomerate.

Louis Vuitton’s products are made with state-of-the-art materials, and its designers use

a combination of art, precision, and craftsmanship to produce only the finest products. The

legendary LV monogram appears on all the company’s products and stands for the highest

quality, premium status, and luxury travel. Over the years, however, counterfeiting has become

a huge problem and one of Louis Vuitton’s most difficult challenges. Louis Vuitton is one of

the most counterfeited brands in the world, and the company takes the problem very seriously

because it feels that counterfeits dilute its prestigious brand image. Louis Vuitton employs a

full team of lawyers and fights counterfeiting in a variety of ways with special agencies and

investigative teams.

Until the 1980s, Louis Vuitton products were available in a wide variety of department

stores. However, to reduce the risk of counterfeiting, the company now maintains tighter

control over its distribution channels. Today, it sells its products only through authentic Louis

Vuitton boutiques located in upscale shopping areas and high end department stores, all run

independently with their own employees and managers. Louis Vuitton prices are never

reduced, and only recently did the company start selling through louisvuitton.com in hopes of

reaching new consumers and regions.

Over the years, a wide variety of high-profile celebrities and supermodels have used LV

products, including Madonna, Audrey Hepburn, and Jennifer Lopez. In its marketing efforts,

the company has used high-fashion celebrities, billboards, print ads, and its own international

regatta—the Louis Vuitton Cup. Recently, LV broke tradition and featured non-traditional

celebrities such as Steffi Graf, Mikhail Gorbachev, Buzz Aldrin, and Keith Richards in a

campaign entitled “Core Values.” LV also launched its first television commercial focused on

luxury traveling rather than fashion and has formed new partnerships with international

artists, museums, and cultural organizations in hopes of keeping the brand fresh. That said,

Louis Vuitton still spends up to 60 hours making one piece of luggage by hand—the same way

it did 150 years ago.

Today, Louis Vuitton holds a brand value of $26 billion according to Forbes and is

ranked the 17th most powerful global brand according to Interbrand. The company is focused

on expanding its luxury brand into growing markets such as China and India as well as

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continuing to grow in strong markets like Japan and Europe. It also continues to add new

product lines to its portfolio.

Sources: Reena Jana, “Louis Vuitton’s Life of Luxury,” BusinessWeek, August 6, 2007; Eric

Pfanner, “Luxury Firms Move to Make Web Work for Them,” New York Times, November

17, 2009; www.louisvuitton.com.

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Notes