Louis Vuitton Moet HennessyExpanding Brand Dominance in Asia~ Group 5 (Rizwan Chand) ~

1. Louis Vuitton Moet Hennessy
Expanding Brand Dominance in Asia
~ Group 5 (Rizwan Chand) ~

2. ~ Agenda ~
• Introduction
• SWOT Analysis
• 4Ps Analysis
• Asia Market Analysis
• Competitors Analysis
• Financial Analysis
• Problem Statement
• Recommended Solution
Copyright©2010 by Group 5: Case in Marketing Class

3. Introduction
• LVMH is the world’s leading luxury product group
• 1,500 retail stores in about 60 countries
• LVMH is the parents of around 50 sub-companies
• First started in 1854 in France by ‘Louis Vuitton’
as ‘House of Louis Vuitton’ producing
extraordinary quality and flawless craftsmanship
in every Louis Vuitton bag
• To stay on the top of luxury goods business and
expand the empire, they did acquisition of Italian
and American companies.
Copyright©2010 by Group 5: Case in Marketing Class

4. Introduction
• LVMH Business Lines (Figure 1)
• Put number of brands (exhibit 3)
• Sales contribution (Exhibit 5)
Copyright©2010 by Group 5: Case in Marketing Class

5. SWOT Analysis - Strengths
• Strong brand/ (not only strong brand, not only function, It defy the
exclusive status of the user (TBC)
• Good positioning based on systematic brand management
• Wide range of luxury product
• Achieve cost saving through sharing the resources among brands
• Worldwide distribution network
• High profit margin (link)
• Good management – able to manage through trade deficit (page
11), know the market condition (India), know their business (not
move to China)
• Good growth strategies – merger & acquisition of other high end
brands
• Able to maintain the higher demand to supply
• Able to attract buyers from different cultures
• Country of origin reaffirm the high product quality
Copyright©2010 by Group 5: Case in Marketing Class

6. SWOT Analysis - Brand
• Good marketing to maintain high demand and
create new demand of the new customers
– Sell at selective stores to maintain exclusivity and
high demand
– Event when open stores in Japan
– Chinese letter from Satellite to celebrate 150 years
– Invest to create a culture and envi in India
• Consistent brand image all over the world
• Attractive advertisement??
• Systematic brand management
Copyright©2010 by Group 5: Case in Marketing Class

7. SWOT Analysis - Weaknesses
• Difficult to change product manufacturing
place (now at France, Spain, California)
• Low profit margin of watch and jewellery
section
• In time of crisis, they can’t cut back on
Marketing expenses – Advertising, Event
Sponsoring
Copyright©2010 by Group 5: Case in Marketing Class

8. SWOT Analysis - Opportunities
• The growing asian market (link)
• Declining trade barriers globally
• Changing in Communication, Information,
transportation technologies – people know
reach more people through internet
• Increasing interest of international travelling
for Asian people – increase awareness of
brands
Copyright©2010 by Group 5: Case in Marketing Class

9. SWOT Analysis - Threats
• Grey market
• Imitated products
• Strong competitors
• Macroenvironment
– Cultural Differences
– Political uncertainties
– Economic Recession
– Epidemic (SARS, Chicken Flu)
– New tariff
Copyright©2010 by Group 5: Case in Marketing Class

10. 4Ps Analysis
• Product (Exhibit 3)
• Price
– High
– Not equal across the world
• Place
– Sell in exclusive shop, DFS, some online shops
– Number of stores around the world, in asia
– Manufacturing place (France, Spain, California)
• Promotion
– Individual brand promotion
– World event sponsoring – Olympics, international
event
– International Fashion show (P12)
Copyright©2010 by Group 5: Case in Marketing Class

11. Financial Analysis
• Margin
• Sales, income,
• Contribution
• Growth rate
• Exhibit 5
Copyright©2010 by Group 5: Case in Marketing Class

12. Competitors Analysis
• Gucci
– Multi brand model strategy
– Sales in 2001 was 2.26 USD
– Number of directly-operated stores 348
• Richmont
– Dominant in Jewellery and watches
– Key brands: Cartier, Van Cleef & Arpels, and Piaget
• Hermes
– Clothing to fragrance, leather accessories
– Reputation for quality and fashion leadership
– Japan is 25%
• Bulgari
– Operating in 7 luxury segments
– Mainly Watches (46%), Jewellery (33%)
– Japan and US are main market. Asia-Pacific is 36% of sales.
Copyright©2010 by Group 5: Case in Marketing Class

13. Asia Market Analysis
• The growing asian economy
– GDP
– Market condition
– How LVHM is doing now
– Market size
• Buyers power in India (not large proportion)
– Demand latest design from catwalk
Copyright©2010 by Group 5: Case in Marketing Class

14. Problems & Issues in Asia
- How to expand in Asian market
- How to eliminating the imitate products?
- How to create awareness to buy from original
retailers?
- How to break through cultural barrier?
- Expansion through private ownership or
franchise?
Copyright©2010 by Group 5: Case in Marketing Class

15. Recommended Solution
• Eliminating imitated product
– Current situation
• Imposing the patent and copyright
• Keep track of the customers in database
– Propose solution
• Creating demand for the real product and rejecting the
fake product through marketing
• Create the realization
Copyright©2010 by Group 5: Case in Marketing Class

16. Recommended Solution
• How to create awareness to buy from original
retailers (not grey market and France)?
– Current situation
– Propose solution
• Join with the government to set the regulation
Copyright©2010 by Group 5: Case in Marketing Class

17. Recommended Solution
• How break through cultural barrier?
– Current situation
– Propose solution
• Establish new luxury brand/product line for Asia
• Demonstrate how the brand will fit in the local culture
– Advertising campaign
– Sponsorship for cultural and social event
Copyright©2010 by Group 5: Case in Marketing Class

18. Recommended Solution
• Expansion through private ownership or
franchise?
– Current situation
• The mixed of private ownership and franchise in Japan
– Propose solution
• Go with both private ownership and franchise just like
Japan
• Though high investment, we can guarantee to sell
authentic products
Copyright©2010 by Group 5: Case in Marketing Class

19. Thank you