Louis Vuitton is a French luxury fashion house established in 1854 known for its monogrammed products. It is now part of LVMH, the world's largest luxury group, and ranked as the 17th most valuable global brand in 2013. Louis Vuitton employs meticulous quality control and marketing processes focused on craftsmanship, branding, and exclusivity to build loyalty among high-income customers and drive continued success as one of the most profitable luxury brands in the world.

1. Yasmina RAYEH Fetac Minor Level 6
AIS Code 6N4188
MARKETING MANAGEMENT PROCESS

2. Established in 1854 by a master Louis Vuitton Mattelier, the French fashion house Louis Vuitton identified by the
monogram “LV” has become the most successful part of the luxury organisation in the XXI century. The Company
changed status in 1962 as a “S.A” (Limited liability company-Public Company), and is governed by the provisions
of the French Commercial Code1.
LV is one of the 60 brands of the holding company group, LVMH, owned by a French family and led by its most
emblematic personality, Bernard Arnault, Chairman and CEO.
LV employs all rules and processes as if these were “diplomatic protocols” to define its etiquette. LV history
shows that the brand began its business by dedicating itself on selling travel trunks, Secretaires 2
…etc. to
diplomats and very wealthy people on the 5 continents.
Since then, Louis Vuitton has developed a wide range of products, including leather goods, shoes, ready-to-wear
clothing lines, jewellery, and personalised items to please its growing clientele seeking to liaise their status to a
prestigious brand. LV offers a Business model, identity and values in the service of excellence3
with products
elaborated by top designers and craftsmanship.
Q1.
Dr. P. Kotler has defined marketing as “Marketing is the science and art of exploring, creating, and delivering value to satisfy
the needs of a target market at a profit
4
.”
Louis Vuitton is part of the one of the most profitable industry and known luxury brand in the world. On
Interbrand’s Best Global Brands 2013, the brand was ranked number 17 and represents “the highest of any other
luxury apparel and accessories brands5
”. The brand’s value has increased by 6% imposing itself through a global
presence in 2 sectors: Selective retailing and Fashion & Leather Goods which altogether represented 63% of
LVMH revenue in 2013.
Such a success is the result of a combination of creativity, craftsmanship, entrepreneurship, respected and
outstanding Identity, an exclusive approach to distribution, and last but not the least, innovation and
environmental performances. The strategy of LV follows the scheme given by P. Kotler regarding Marketing’s key
processes:
• Opportunity identification in order to find new niche markets and enhance their visibility worldwide
• New product development is in ad equation with the group policy by developing high quality material and
products
• Customer attraction is narrowed to specific segments, obviously people who have the means to purchase a
high value product.
• Customer retention and loyalty building as LV nonetheless interoperates with high profile customers
through new technologies, exhibition and exclusive point of sales. To retain them, LV guarantees the
longevity of the product by repairing them (i.e. you can send back a purchased bag to a specified
craftsmanship section for repair).
• Order fulfilment such as bringing out responsibility at all levels of production and distribution to minimise
waste and observing significant protocols improving the bio-environment
1
Bylaws_2013_VA.pdf
2
http://www.pullmangallery.com/cat/36/Louis-Vuitton----Luggage
3
Louis Vuittonannual-general-meetings2014, AG_2014_VA.pdf, p11
4
http://www.kotlermarketing.com/phil_questions.shtml, and P. Kotler, Marketing Management, 11th edition.
5
http://www.luxurydaily.com/cartier-louis-vuitton-and-prada-among-top-100-global-brands-interbrand/

3. Q2.
Marketing techniques conventionally used by brands selling to the mass market are actually avoided by luxury
brands such as Louis Vuitton6
. LV “runs counter to conventional marketing theories” (4p’s) by selling and
communicating “products of impeccable quality”7
incorporating the brand’s value, craftsmanship and history.
Studying luxury brands through the lens of marketing reveals that LV sells superior quality products attached to
the brand reputation.
(Branding) A product is not sold without extended customer services, a net and clear brand entity platform and
an elaborate communication plan that is recognised globally.
Publicity and PR focus on branding through PERFECTION-STYLE-FASHION advertising through different
channels: TV, Fashion Magazines, events, website and social media. With the Digital era, LV has rolled out an
iPhone application “Amble” in ad equation with their “Art of travel” and “Cruise Collection”.
Communication: Elitist, classy, and consistent as part of the multi-channel brand awareness campaign
through multi-channel advertisement8
.
Prestigious Sponsorships and events presence (America Cup, LV Classic) enhance the brand image that impact
on high profile customers.
(People) LV offers jobs across the entire product life cycle, from design to sales, including in its contingent
skilled and highly trained people who can liaise with “special” customers such as VIP and in other trades9
: SALES
ASSOCIATES ensure the personal selling, handle the follow-up and customer loyalty.
(Physical evidence) The principal evidence is the monogram pattern LV; emblem of the brand designed on
absolutely all items with an impeccable finish, therefore misalignment is prohibited.
LV organic nomenclature is “pedigree oriented” as if they belong to a breed: urban places (i.e. Soho), natural
spaces (Baikal) or names (Linda).
Sample of LV packaging10
Gamble Necklace:
(Processes) To allow this reputation, an effective administration system controls each step of the production, and
quality through vertical (VMS), horizontal and digital integrations channels11
. The iPhone application “Amble”
allows users to liaise to the brand while travelling12
, the website provides a personal membership subscription
and a social channel inviting customer to the “ART of travel” and “Collection Cruise”. Internally, iPad application
for internal publications (Quark and AppStudio) was launched.
6
The Principle of Louis Vuitton and Why Louis Vuitton thrives even in hard times Professor Shinya Nagasawa,
Waseda University, 2014
7
http://www.yomiuri.co.jp/adv/wol/dy/opinion/gover-eco_101220.html
8
See appendix II
9
http://www.lvmh.com/talents/lvmh-ecosystem/metiers
10
http://stephanie-nguyen.blogspot.ie/2010/10/louis-vuitton-gamble-necklace.html
11
www.quark.com/pdfs/03621CS_LouisVuitton_IE_Web.pdf, 2012.
12
https://itunes.apple.com/en/app/amble-with-louis-vuitton/id415902307?mt=8 (Create your own unique tours:
the Ambles. Take personal pictures, notes, videos and sounds along your way.)

4. Q3
To satisfy ABC1 customers, Communication and Sales Management work side by side: SALES ASSOCIATES
communicate with the customer at the personal level, while PR works towards the overall goals of the company
launching the best communications awareness campaigns that make the product sells itself.
At a product level, quality control processes and monitoring assure the quality throughout the production13
,
mainly with vertical integration processes which prohibit Outlet Product Production. LV products added-value is
distinctly noticeable with designs and trademarks, which are registered and IP protected. Moreover, Activities
through the “Union des fabricants”, and “Comité Colbert” prevail the brand authenticity against counterfeiting.
In his article and books (Nagasawa, 2014)14
Professor Shinya Nagasawa, Waseda University, mentions that LV
prohibits second-Hand stores, inorganics names, licensing, downward expansion and entry level branding.
However, the latter has been used for Valentine ’s Day with online gifts guides15
. This can be the effect of the
globalisation uses local trends as well.
As said, the brand recognition is undeniable; therefore it is the key to enhancing communicating the uniqueness
of the product.
Communicating is another part of LV marketing strategy delivering consistent messaging across all advertising
channels16
including new technologies platforms. Marketing strategies enhance affluent consumers’ likeability
and loyalty to the brand that can be identified through the sale’s progression.
This communication is seasonal and follows the fashion trends. The product life cycle is generally linked to usual
cyclical purchases made by high/medium social classes revamping their wardrobe. Bringing forward new
collections through technology platforms has allowed the traditional brand to connect with customers and sell
more products, but also to define its “politically correct” ideals and visionary values17
.
13
http://publications.lib.chalmers.se/records/fulltext/127812.pdf
14
The Principle of Louis Vuitton and Why Louis Vuitton thrives even in hard times Professor Shinya Nagasawa, Waseda
University
15
http://www.luxurydaily.com/luxury-fashion-brands-focus-on-entry-level-gifts-for-valentine%E2%80%99s-day/
16
Luxury Daily - Luxury Marketing Outlook 2013
http://www.luxurydaily.com/wp-content/uploads/2013/01/Luxury_Marketing_Outlook_2013.pdf,p10
17
http://fr.louisvuitton.com/front/#/fra_FR/Collections/Homme/Sacs-homme/stories/Visionnaires-Rencontres

5. Q4. The Luxury Industry is assessed by the Porter 5’s Forces as follow
The swot analysis define the potential of Louis Vuitton18
18
Source: Louis Vuittonannual-general-meetings2014, AG_2014_VA.pdf, pp4-14
http://www.instantluxe.co.uk/blog/luxury-brands-on-war
http://www.lepoint.fr/culture/le-styliste-nicolas-ghesquiere-intronise-chez-louis-vuitton-04-11-2013-
1752050_3.php

6. Q5
Customers/Buyers: are the core of the business and PR are taking cared of with extreme vigilance.LV used to
target consumers in emergent markets, as well as highlighting new psychographic elements to reach the high-
end customer of the luxury industry.
Suppliers: Creativity and craftsmanship are the essence of LV business: Craftsmanship, creative and
specialized fields of competence interacts to provide new creation answering the demand.
PESTEL can determine the environment that could affect LV:
19
http://vosdroits.service-public.fr/professionnels-entreprises/F22887.xhtml
20
http://www.instantluxe.co.uk/blog/luxury-brands-on-war
See (http://www.youtube.com/watch?v=0oySyLPAzWg)
21
http://scholarship.law.upenn.edu/cgi/viewcontent.cgi?article=1118&context=jlasc
22
http://www.bovilis.com/diseases/ringworm/control.asp
23
http://www.reuters.com/article/2013/09/16/lvmh-louisvuitton-idUSL5N0H92V820130916
24
http://publications.lib.chalmers.se/records/fulltext/127812.pdf
Political 1- France (Colbert Committee) clamping down on counterfeit by punishing the buyers19
launching a national campaign at Airports20
:
2- Lobby in China The “shanzhai” (Social Justice) phenomenon versus IP Laws.
3- War at the edge of Europe (Ukraine)
Impact
4- Awareness of the public against IP thieves.
5- Increase of demand in luxury brands in China equals raise in sales of genuine products21
Economic 1- Increase price of raw material tied to the market (leather, Oil for PVC material)
Impact
Cost of Engineering and research for new material to deliver High quality standard products.
Social 1- Lobbyists against the leather industry (one of the most polluting industries in the world) to
whom LV answer with a new green approach.
2- ABC1 class “New Rich” equal new niche of customers in China (raise of salary, raise of sells)
Impact
1- Launch of green policy and Increase of using other material (coated canvas, PVC)
2- New niche of customers means growth in genuine LV products.
Technological
-
Environmenta
l
1- Vaccination to prevent ringworms affecting the leather industry amongst calves, “allowing
the leather industry to consistently produce grade 1” 22
2- Footprint on biodiversity: Objective to be conform to ISO 14001 certification (supply chain,
workshops)
Impact
1- Quality preservation
2- Best practices Actions: Environmental Preservation (social responsibility of the brand,
suppliers/sub-contractors).
Examples:
1- “Capucines” bag shortage due to production constraints23
2- Environmental Chart and alma project24

7. Q6 Competitive advantages and sustainability:
As seen in question 4, threats to the luxury industry following the Porter’s 5 Forces25
are relatively weak. “A firm's
relative position within its industry determines whether a firm's profitability is above or below the industry
average. The fundamental basis of above average profitability in the long run is sustainable competitive
advantage”26
.
Therefore Porters competitive advantage tool can apply to LV segmentation strategy.
LV strategy follows dichotomy segmentation: geographical and psychographic. LV operates in the High-end of
the luxury market using the DIFFERENCIATION and DIFFERENCIATION FOCUS variants to maintain and expand
its revenue in emergent markets, and DIFFERENCIATION FOCUS is chosen to deliver customized or scarce items
to specific consumers. If the brand has recorded outstanding results in 2013, it is because of its ability to move
into a more high-end segment of the luxury market focusing on satisfying consumers’ desire for customization27
.
25
Porter, Michael E., "Competitive Advantage". 1985, Ch. 1, pp 11-15. The Free Press. New York.
26
http://www.ifm.eng.cam.ac.uk/research/dstools/porters-generic-competitive-strategies/
27
http://www.interbrand.com/it/best-global-brands/2013/LouisVuitton

8. The Porter's value chains evaluate the added-value activities that underpin LV success as described in the
schema below28
:
LV Efficiency is achieved through vertical (VMS) , horizontal and digital channel integrations, where
administration strategies in place are effective in gaining quality control over raw materials, manufacturing and
finally, over selective distribution channels.
28
Porter, Michael E. (1985). Competitive Advantage: Creating and Sustaining Superior Performance. New York.:
Simon and Schuster. pp. 11–15

9. Q7. Segmentation, targeting and positioning considerations.
Since the political change in the 1990’s, LV modus operandi was to expand in new emergent countries seizing de
facto the opportunity to reach new rich in eastern and oriental countries. As a global company, LV has adopted a
local approach respecting the culture heritage of each country. In China, Louis Vuitton has been touting a
“vintage” image to promote its brand heritage in 201329
so the brand could adapt to the local market. In Europe,
LV sets new standards in luxury lifestyle30
with “The Art of Travel” and “the Art of Cruise“, which philosophy is
tinged with nostalgia.
Nowadays, the demographic segmentation is still largely implemented by LV, targeting men and women, ABC1
category of people earning a high and disposable income, it appears that social class; lifestyle, education and
personality are measured in order to reach its global strategy goals31
. The psychographic segmentation had
open new routes to high-end segments of the luxury market that has recently increased LV revenue. LV goods
represent ostentatious sign of wealth. Hence, scarcest or customized is the product, the more highly-valued it will
be32
.
From the following table33
, we can establish the pattern of the perception map (Competitors: Hermes, Chanel,
Gucci, Burberry, Prada, Fendi, Versace, Coach).
Perceptual map
29
http://jingdaily.com/how-lvmh-adapts-to-chinas-evolving-luxury-market/38161/
30
http://juliet7981.blogspot.ie/2012/12/chapter-8-segmenting-and-targeting.html
31
http://edoc.hu-berlin.de/dissertationen/willer-ragnar-karl-2006-07-19/HTML/chapter2.html, p62.
32
http://www.brandchannel.com/images/papers/533_8ps_of_luxury_branding.pdf
33
Wiedmann, Hennigs, Siebels / Measuring Consumers‘ Luxury Value Perception: A Cross-Cultural Framework,
p5, Academy of Marketing Science Review, volume 2007 no. 7 Available:
http://www.amsreview.org/articles/wiedmann07-2007.pdf

10. APPENDIX I
STRATEGIC CHALLENGE LVMH GROUP34
ENVIRONEMENTAL STRATEGY35
34
LVMH_environment2012EN.pdf, p13.
35
Louis Vuittonannual-general-meetings2014, AG_2014_VA.pdf, p12

11. APPENDIX II
COMMUNICATION
Elitist, classy, and consistent communication as part of the multi-channel brand awareness campaign:
 Website  First TV campaign in 201236
 Shop Windows, Artwork design, exhibitions
 Celebrities:
36
http://fashionforlinda.blogspot.ie/2012/11/louis-vuittons-first-tv-advert.html