Case of LVMH's pricing strategy in contrast with COACH's

2. Louis Vuitton's first-ever TV adv campaign
• So executive at Louis Vuitton's annouced in January 2008 an adv campaign
on television and cinema.
• First time ever in this domain.
• Risks:
• To fall against the misunderstanding of people (risk of being the first).
• Mass market not obligatory fits luxury targets.
• Don't fail in choosing channels & cinemas. Channels & cinemas has to fit
the targets.
• Losing advertising budget, if they don't match their objectives.

3. EXCHANGE RATE EFFECT
• March euro/dollars : 1.50 - November euro / dollars : 1.25
• Variation: -16.6%
• Cut of 10% of the $8000 suit to maintain holliday sales in December
• Costs :
• Production in dollars and euro
• Marketing in euros
• 50% of wages in euro
• Revenue:
• 28% in euro
• 72% in other currency

4. Demand curve
2 facts to take into consideration:
• As it is said in the document overall sales decreased in many importat markets
• US, Russia and emerging markets.
• However this decrease in sales is balanced by higher sales costs
> It means that the demand is decreased however it is balanced by the remaining
customers who are ready to pay more for the same product. They don't really care
about the price
> The company has still a margin in terms of price elasticity. They did not reach the
psychological limit

5. LVMH vs COACH
Pricing Strategy

6. LVMH vs COACH
Pricing Strategy

7. LVMH vs COACH
Pricing Strategy
LVMH is High price, high fashion where in Coach is High price, fragmented fashion

8. LVMH vs COACH
Pricing Strategy
Parameters LVMH Coach
Pricing Objective Branding, Image building Sales Escalation
Cost Eg: $1000 Eg: $100-$500
Positioning Luxury Products at high end
price
Affordable luxury products
Promotions & Sales Not much Advertising, Focus
on specific segment
Alot of Advertising intially, to
increase footfall
COACH commenced with affordable high pricing but lately there has been a decline in their advertising & hence
sales wherein LVMH have maintained the same strategy infact have plans to raise prices, reducing marketing
budget.

9. T H A N K Y O U