The document discusses the evolution and strategies of LVMH, the largest luxury-goods firm, with a focus on its profitable market in Japan, which significantly contributes to its revenue. It highlights challenges such as brand dilution, counterfeit issues, and market saturation while detailing marketing strategies and attempts to attract young buyers. The recommendation includes reducing dependence on Japan, enhancing marketing towards children, and addressing counterfeit products through new brand initiatives.

1. Biggest luxury-goods firm
Japan being its profitable market, contributing 50% to its profitability
By 1989, it has entered 130 countries across the world
After conglomeration, LVMH has been into 5 business divisions: Fashion, leather
goods, selective retailing, wines & spirits, perfumes & cosmetics, watches & jewelry
 Bernard Arnault bought the company in 1989
Boost in manufacturing productivity by 5% per year,2000
30% hike in earnings in 2003
Success of new line product, Murakami in 2003
Focused on problem solving, whenever problem arises, in more efficient way(zipper
problem)
Advertised through every possible medium: print Ads, billboards, magazines, Ads on
TV etc.
Adopting expansion strategy by 2007
New strategy adopted by focusing local customers in Japan
Working on reinventing itself and regained what it used to be in Japan
Focusing children as well now
Establishing the brand as a consistent trendsetter in high
fashion
 Attracting young buyers is a big problem
To maintain the same brand in Japan
VL’s move into new product line could result in Brand
Dilution, is a big problem.
Problem arising due to counterfeit of LV products from
Seoul, Hong Kong, Tokyo, Los Angeles
Japanese consumers’ eagerness to buy LV bags at
inexpensive price
Change in Japanese mindset after global recession
Market leading towards saturation.
 LV had been following aggressive marketing strategy in the country,
opening extravagant stores
 Japan contributing 20% to its revenue and 25% contribution is done by
rest of Asia(exhibit 4)
 LV has decreased its investments in Fashion & Leather goods
 The more the prices were raised, the more the customers come
back(Brand building focused)
 Young buyers were attracted by Brand Image and older clients by quality
and lifetime free repairs
 Manufactured products in France, bearing the expenses of high labor
cost.
 Cultivated a celebrity culture and employed famous models and actresses
Situational Analysis
 Reducing dependency on Japan by focusing on other
developing countries
 Reduce the no. of limited edition throughout the year.
 Generating awareness among children by using Social media
 Focusing high-end consumers through LinkedIn
 Limit its product line, which is leading to customer suspicion
 Launch a new brand and use predatory pricing to kill
counterfeits.
Problem Definition
Recommendation
Sonia Grover