Louis Vuitton in India

Rahul Majhajan DM-195Sachin Gupta DM-131Sarthak DM-139Shallabh Agarwal DM-143Shantanu Shekhar DM-145Shekhar Sinha IB-056

Flow of Presentation

• The Case• About Louis Vuitton

THE CASE

• Marketing of a high-end brand into a low-income Nation

• Louis Vuitton facing challenge of identifying potential customers, the lack of media to build its brand, and the absence of high streets to open stores in India

• Initial two stores in New Delhi and Mumbai inside two luxury hotels

• Planning to open third in a luxury mall as a replacement of luxury retail clusters

About Louis Vuitton

• French luxury brand • Company of LVMH Group: • 5 Business segments i.e. Fashion and leather goods, Perfumes and cosmetics, Watches and jewellery, Wines and spirits, Selective retailing• More than 60 brands, each ‘STAR’ performer • 382 LV stores out of 2,048 LMVH Group stores • Fashion and leather group has a high contribution in LMVH Group profits • High demand for LV products• Same merchandise in all stores• No markdowns on LV products• Labour intensive process• More focus on craftsmanship than mass manufacturing• Self managed supply chain. Delivered directly to stores

Before 2004 : Underlying issues

• Low brand awareness• In Luxury hotels, shop space was a constraint– 3,000 sq.ft. compared to an Asian avg of 20,000 sq.ft.

in hotels• Rentals were twice compared to that of luxury

malls– Competition with other luxury brands– Inexperience of developers in luxury retailing– Absence of high streets in India negates feasibility of

showroom

Decisions in International Marketing

Whether to go aboard

Which market to enter

How to enter the market

Which Marketing Program

Which Marketing

organization

Whether to go aboard

• Pressure from the investors Needed double-digit growth.

• By 2000, Company have acquired over 60 brands.

• Needs a larger customer base.• Markets like America, western Europe & Japan

already covered.

Need to enter new Market

Which market to enter

• Emergence of high net worth individuals• Declining trade barriers• Changes in communication• Better information and transportation

technologies• Increasing middle class income• Increasing young population• Growing sophistication in lifestyle needs

Strategic window for Asian Market

Indian Market – New Venture

• 20000 families with annual income greater than INR 100 million.

• Number to be expexted to grow to 53k by 2005 & 140000 by 2010

• Recorded second fastest growth( 19.3%) in the number of of HNW( High-net-worth)

• Size of luxury market was $4 billion, expected to grow to $30 Billion by 2015