Louis Vuitton

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My presentation at London College of Fashion March 2009

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Louis Vuitton

  1. 1. Claudio Diniz
  2. 2. History <ul><li>Founded in 1854, by Louis Vuitton: Malletier a Paris </li></ul><ul><li>1858 - Grey trianon canvas </li></ul><ul><li>1888 - Damier Pattern </li></ul><ul><li>1896 Georges Vuitton designed the famous ‘Monogram Canvas’ </li></ul><ul><li>Expansion to countries worldover </li></ul><ul><li>1930s onwards creation of signature bags – Keepall, Noe, Speedy, Papillon </li></ul><ul><li>1959 Monogram Canvas made suppler to be used for purses, bags, and wallets </li></ul>
  3. 3. <ul><li>1983 Louis Vuitton Cup </li></ul><ul><li>1987 Formation of LVMH </li></ul><ul><li>1990s onwards they launched many new lines and collections </li></ul><ul><li>By 1989 there were 130 stores worldwide </li></ul><ul><li>1998 Marc Jacobs appointed as Art Director, Pret-a-Porter </li></ul><ul><li>2000s Collaboration with Stephen Sprouse and Takashi Murakami </li></ul><ul><li>Revamped a few old lines </li></ul>History
  4. 4. <ul><li>Portrait of Louis Vuitton (1821-1892) founder of the company </li></ul>Four historical canvas - bottom/right: grey Trianon canvas, bottom/left: Striped canvas, top/right: Damier canvas, top/left: Monogram canvas The Monogram canvas « Wardrobe » (1875) The «Steamer bag »: ancestor of soft bags The fabrication of Louis Vuitton shoes, for which no less than 150 operations are necessary Overview « Vuitton Building » : the façade of the Louis Vuitton store, at 70, Av. des Champs-Elysées (1914) Lock with multiple tumblers, launched in 1890
  5. 5. Launch of Louis Vuitton as a fashion label (1998) The Milano toiletry case, presented by Louis Vuitton at the International Exposition in 1925 Portrait of Patrick-Louis Vuitton, 5th generation of the Vuitton family Yves Carcelle, CEO Louis Vuitton Louis Vuitton workshop in Asnières, France Louis Vuitton’s 150th anniversary party (April 2004, Hongkong) Overview
  6. 6. Monogram Vernis – Pegase 50 Damier Geant Aventurier Stephen Sprouse – Keepall 50 Monogram Multicolore - Keepall Epi Leather – Sirius 45 Luggage Carried Monogram Canvas - Case
  7. 7. Monogram Mirior - Small Ring Agenda Cover Monogram Canvas - Mini Agenda Zippy Cover Epi Leather - Small Ring Agenda Cover Monogram Vernis - Agenda Cover PM Desk Agenda Cover – Nomade Leather Agendas Damier Azur Canvas - Pocket Agenda Cover
  8. 8. Watches Montres Tambour 2002 Montre Tourbillon Tambour Monogram Montres Tambour Diving Montres Speedy Montres Tambour Quartz Small Lovely Montres Tambour Fleurs Précieuses
  9. 9. Monogram Multicolore – Speedy 30 Monogram Mini Lin – Diaper Bag City Bags and Briefcases Damier Graphite – President Briefcase Mahina XL Stephen Sprouse – Neverfull GM Monogram Vernis – Roxbury Drive
  10. 10. Suhali Leather - Lockit Clutch Clutches and Pouches Monogram Damier Canvas – Pochette Compact Monogram Limelight – Clutch PM Stephen Sprouse – Pochette Accessories Afterdark Monogram – Motard Epi Leather – Sellier Dragonne Clutch
  11. 11. Wallets and Leather Goods Mahina - Amelia Wallet Monogram Canvis – Astrid Wallet Suhali Leather – Serenata Case Monogram Multicolore – Flat Coin Purse Epi Leather - Key Holder Monogram Denim – Zippy Wallet
  12. 12. Shoes Harold Loafer in Calf Leather Sofia Sandal in Suede Goat Leather Rose Pump in Glazed Calf Leather Lagoon Thong in Canvas Monogram Damier Canvas - Elan Sneaker Coconut Mule in Monogram Canvas & Leather Patchwork
  13. 13. Fine Jewellery Fleur Medalllian Necklace, Yellow Gold Small Monogram Gallea Band Ring, White Gold Clous Bracelet, Yellow Gold Large LV Pendant White Gold & Diamonds Les Luxuriantes Earrings with Pink Sapphires Les Craquantes Small Pendant & Chain
  14. 14. Sun Glasses Metal - Attraction Monogram Photocromique – Conspiration Pilote Metal and Acetate – Alias Round Desmayo Strass Cat Eye Obsession Carre LV Landscape Acetate - Mahina
  15. 15. Pens Charm Pen Agenda Ballpoint GM Roller Pen LV cup Leather-Covered Doc Ballpoint Pen Rhodium Finish
  16. 16. Books Birth of Modern Luxury City Guide 2009, Mumbai Travel Note Book London History of the LV Cup City Guide 2009 – European Cities Travel Note Book Mumbai
  17. 17. Ties and Scarves Olivia Scarf Monogram Shawl Mix Monogram Tie New Denim Square Scarf LV Tie Signature Silk Celestie Tie
  18. 18. Belts Monogram Damier Canvas Belt LV Initials Monogram Belt LV Inventeur Reversible Damier Ebene Belt Boitier Calf Leather Belt LV Intitials Monogram Multicolore Belt 1904 Natural Calf Leather Belt
  19. 19. Accessories Graffiti Brooch Sweet Monogram Headband Candy Bag Charm Monogram Canvas - Baxter Dog Collar GM Cigar Humidor 75 Mahogany and pear wood Monogram 1001 Nuits Hair Clip
  20. 20. Ready to Wear Spring Summer 2009 Spring Summer 2009 Cruise Collection 2009
  21. 21. Ready to Wear Spring Summer 2009 Pre Spring Summer 2009 Cruise Collection 2009
  22. 22. Brand Identity Physical Personality Self-projection Reflection Culture Relationship Luxury leather goods Monogram Damier Locks, trunks Quality Tradition Heritage Success, Show off Effortless luxury Art of travel Craftsmanship Sporting tradition Working class origin Elite customers “ La belle époque” French Japanese Elegance Comfort Understated Status Social belonging
  23. 23. Core Values <ul><li>Traditional and Classic </li></ul><ul><li>Luxurious and Elegant </li></ul><ul><li>Iconic </li></ul><ul><li>Creates Desire </li></ul><ul><li>Evokes a sense of Style </li></ul><ul><li>Subtle Changes </li></ul><ul><li>Sophisticated and Elite </li></ul>
  24. 24. Brand extension- Why Perfume? <ul><li>Available by all our competitors, missing from the LV catalogue </li></ul><ul><li>To cater to the already existing loyal LV customer </li></ul><ul><li>Fulfill desires of people of owning a LV product </li></ul><ul><li>Increase the Market Share </li></ul><ul><li>Increase Revenues </li></ul>
  25. 25. Competitors Analysis <ul><li>Perfumes when sold through selective distribution channels are clearly luxury products, even if they correspond to low-priced items </li></ul><ul><li>Brands like Chanel, Lancôme, Estée Lauder, Dior and Lanvin launched perfumes as early as the 19th century </li></ul><ul><li>Other luxury brands like Chanel, Dior and Armani have an aided awareness of around 80% to 90% through their perfumes </li></ul>
  26. 26. Competitors Analysis Gucci by Gucci, 50ml - £ 48.00 Elizabeth Arden, Badgley Mischka Couture, 100ml - £ 61.00 Marc Jacobs, Daisy, 50ml - £ 49.00 Dolce & Gabbana, Sicily, 50ml - £ 43.00 Emilio Pucci, Sabbia 167, 50ml - £ 39.00 Bond No 9, Nuits de Noho, 50ml - £ 90.00 Dior, Midnight Poison, 50ml - £ 54.00
  27. 27. Competitors Analysis Cartier, Delicies de Cartier, 50ml - £ 48.00 Giorgio Armani, Armani Code, 50ml - £ 45.00 Valentino, Rock n Rose Couture, 50ml - £ 46.00 Bvlgari, Rose Essential, 50ml - £ 54.00 Hermes, Kelly Caleche, 50ml - £ 52.00 Givenchy, Ange ou Demon, 50ml - £ 50.00 Ralph Lauren, Notorious, 50ml - £ 48.00 Jean Paul Gaultier, Fragile, 50ml - £ 59.00
  28. 28. Trend Book and Colour Trend Book Creation R - 111 G - 173 B - 222 R - 205 G - 55 B - 0 R - 239 G - 120 B - 171 R - 158 G - 0 B - 0 R - 0 G - 0 B - 0 R - 0 G - 138 B - 42 R - 134 G - 25 B - 124 R - 191 G - 173 B -191
  29. 29. Damier Azur R - 255 G - 212 B - 0 R - 212 G - 19 B - 128 R - 232 G - 223 B - 205 R - 125 G - 116 B - 119 Monogram Multicolore Trend Book and Colour Trend Book Creation
  30. 30. Creation and design of the new introduced product
  31. 31. Packaging Creation
  32. 32. Product Identity Material 2: Material 1: Colour 2: Colour 1: Shape 2: Shape1: Luxury , elegance, quality , clean Thick transparent glass Classical yet innovative (in a perfume bottle) Canvas Traditional yet feminine and young. Monogram Multicolore. Bright colours and white. Traditional , LV original signature print. Soft, feminine, dream Damier Azur Canvas in light blue and beige Feminine yet strong Slightly curvy corners and edges Elegance , sleek, modernity Very slim and long Meanings Signs
  33. 33. Package Identity Material 2: Material 1: Colour 2: Colour 1: Shape 2: Shape1: Luxury, elegance, expertise , classical, LV heritage Canvas Practical, moder n Metal Sophisticated yet modern and innovative Silver logo , product name and base Eternal, LV original, symbolic, legendary print Damier Azur Canvas. Light b lue and beige Feminine and soft Round corners and edges Practical , elegant, modern Long and slim tin with metal base Meanings Signs
  34. 34. Package Identity <ul><li>An innovative product with classical features that reflect the brand heritage and expertise. It also brings a touch of modernity, fun and agility. It caters to the sophisticated LV female customer and to the younger fans of the LV brand. </li></ul>
  35. 35. Modern Classic Mass market Luxury Perfume Voyager New Product Positioning
  36. 36. 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 LOW INNOVATION MEDIUM INNOVATION HIGH INNOVATION Voyager Parfum Innovation Value Scale
  37. 37. <ul><li>Core business of the brand - Luggage maker </li></ul><ul><li>LV heritage and signature products </li></ul><ul><li>The LV customer: jet set. Likes to travel and visit new places but one thing is constant: the LV bags, luggage and accessories </li></ul><ul><li>Simple name and easy to remember </li></ul><ul><li>Good sonority </li></ul><ul><li>Invite the customer to travel and dream. Join the LV universe </li></ul>Semantics – Why “Voyager”
  38. 38. Target Segmentation <ul><li>Our targeted client are both sex, aged between 30-50 year’s old </li></ul><ul><li>Income between £ 35.000-150.000 + </li></ul><ul><li>They are graduate professionals with sense of self-worth and novelty seekers </li></ul><ul><li>Our product can be bought for personal use or as a gift </li></ul><ul><li>Achievers and innovators </li></ul>
  39. 39. PAST French, Immaterial Never vulgar Plug in ephemeral Trends & Events Artistical statement Cultural Mobility Good life “ Planter ses racines tous les jours” Contemporaneity & Universal Myths Desire Stylish Positive atitude Brand Loyalty Self confidence Status Traditional Facets of Luxury
  40. 40. FIXED COST Production Cost 2.500 euros per colors X 2 = 5.000 euros 3.000 euros per piece 5.000 euros Per piece 3.000+5.000= 8.000 euros 3.000 euros per piece 13x3.000 = 39.000 euros(colors) 3.000 euros per piece (cutting) 39.000+3.000=42.000 60.000 euros per piece (Glass) 30.000 euros per piece (Cap) = 90.000 euros PRICES Colors films Metallic cutting frame Metallic LV Cutting frame Voyage Colors films Metallic cutting frame Glass injection matrix Cap injection matrix PRODUCTION TOOLS PACKAGING PACKAGING BOTTLE BOTTLE
  41. 41. VARIABLE COST Production Cost 3 euros 4 euros 5 euros Packaging Price per unit 4 euros 5 euros 6 euros BOTTLE Price per unit 150.000 100.000 50.000 NUMBER OF MODELS
  42. 42. Production Cost 44.80 euros 53.76 euros 57.25 euros 68.70 euros 74.50 euros 89.40 euros MARGIN : 500 % SELLING PRICES 8.96 euros 11.45 euros 14.90 euros TOTAL PRODUCTION COST BOTTLE + PACKAGING 3.08 euros 4.13 euros 5.26 euros PACKAGING Production cost per unit 3 euros 4 euros 5 euros PACKAGING Variable cost per unit 13.000/150.000 = 0.08 euros 13.000/100.000 = 0.13 euros 13.000/50.000 = 0.26 euros PACKAGING Fix cost per unit 5.88 euros 7.32 euros 9.64 euros BOTTLE Production cost per unit 5 euros 6 euros 7 euros BOTTLE Variable cost per unit 132.000/150.000 = 0.88 euros 132.000/ 100.000 = 1.32 euros 132.000/50.000 = 2.64 euros BOTTLE Fix cost per unit 150.000 100.000 50.000 Number of models
  43. 43. <ul><li>Cost of 50ml perfume bottle is £ 55.00 </li></ul>Pricing
  44. 44. <ul><li>Exclusive only to LV boutiques and concessions in department stores worldwide </li></ul><ul><li>Also available at LV web site and Duty Free </li></ul>Distribution Strategy
  45. 45. Exclusive/Selective Distribution when appropriate 110% Polo RL Richemont Burberry Tod's Group Bulgari LVMH Escada Group Coach Hermès Gucci Division Louis Vuitton R 2 = 0.8591 30% 40% 50% 60% 70% 80% 90% 100% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% % of Retail Sales EBIT Margin (%) Source : Merrill Lynch Luxury Goods Team estimates
  46. 46. Extrapolated Evolution
  47. 47. Source : Merrill Lynch Luxury Goods Team estimates (trend between in-house production and gross margin highlighted but names of companies are left blank intentionally) Manufacturing Integrity: Product Quality
  48. 48. Source : Merrill Lynch Luxury Goods Team estimates Source : Merrill Lynch Luxury Goods Team estimates Presence in most Profitable Product Categories
  49. 49. <ul><li>Characteristics </li></ul><ul><ul><li>Positioning </li></ul></ul><ul><ul><ul><li>Global brands with extended product propositions </li></ul></ul></ul><ul><ul><ul><li>Target the largest audience by creating desire with permission </li></ul></ul></ul><ul><ul><ul><li>Accessibility </li></ul></ul></ul><ul><ul><ul><li>A well established ‘historical brand’ opens its door to YOU for a ‘ luxuryland ’ experience </li></ul></ul></ul><ul><ul><ul><li>In line with customers looking for personal fulfillment over material / statutory distinction </li></ul></ul></ul><ul><ul><li>Customers </li></ul></ul><ul><ul><ul><li>Everyone’s welcome (but not said openly, everyone has to feel privileged)) </li></ul></ul></ul><ul><ul><ul><li>Price is not a discriminator in absolute terms </li></ul></ul></ul><ul><ul><ul><li>But remains a filter in relative terms </li></ul></ul></ul>Hypermodern Luxury: To Have and To Be
  50. 50. <ul><li>Advertisement placement in fashion, lifestyle and travel magazines, newspapers, specialized websites (ex: Style.com), TV and cinema. </li></ul><ul><li>PR. Beauty session of speciliazied magazines. </li></ul><ul><li>Advertisement with celebrities. Endorsement. </li></ul><ul><li>Direct Marketing. </li></ul><ul><li>Windows’ display. Teasers. </li></ul><ul><li>Special visual merchandising (especially in department stores) </li></ul>Communication Strategy

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