- LVMH is a leading luxury goods conglomerate with over 50 brands including Louis Vuitton. It has over 1,500 retail stores globally and is looking to expand further in Asia. - A presentation reviews LVMH's business, strengths like its brand portfolio and distribution network, and opportunities in the growing Asian market. It also outlines threats like competitors and imitations. - Issues in Asia include how to reduce imitations, create awareness of authentic retailers, and break through cultural barriers. Recommended solutions involve tighter regulations, marketing to change demand, and establishing new brands tailored to local cultures. Expansion through private ownership and franchises is also suggested.

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)
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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
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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
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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
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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)
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11. Financial Analysis
• Margin
• Sales, income,
• Contribution
• Growth rate
• Exhibit 5
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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
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19. Thank you