3/14/2013

JITESH ANAND 10IB-033

CASE STUDY: LOUIS VUITTON IN INDIA

Louis Vuitton in India | Jitesh Anand

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INTRODUCTION: Luxury Brands in India

If it was few decades ago, there was a very limited scenario one could see with respect to the luxury market in India. Those days luxury market was associated with the rich class and with very few upper-middle class people. However, with the involvement of number of international luxury brands in the country, the shape of the luxury market in India has undergone a dramatic transformation. When it comes to the word luxury it is mostly misunderstood with the meaning beyond the reach of common man. With every year passing by, the so called beyond the reach of common man is proving to be a false fact. Luxury products are becoming the necessities not only for the rich class or upper middle class but also for the middle class people. Luxury market in India is build up on basic four elements which are quality, value for money, customer satisfaction and the most important creativity. In order to be successful in Indian market luxury brands should be able to sustain and fulfill these criteria on a long term basis. The Indian luxury market is growing at a rate of 25% which simply implies the consumption of luxury products has been increasing at a fast pace. India is becoming the new destination for luxury brands across the globe and Indian government opening Foreign Direct Investment (FDI) in retail has resulted in many global luxury retail brands to plan and strategize their expansion in India. If industry experts are to be believed Indian customers are more than ready to spend on these high-end luxury products evolving India in a major way. Post the economic reforms of 1991 the Indian luxury market which was virtually non-existent at the time witnessed a boom in terms of new entrants. Major players catering to the higher income group entered the market covering every possible segment from automobiles to watches to apparels and accessories. Some of the major players in the apparels and accessories segment to have entered India in the last decade are Giorgio Armani, Fendy, Givenchy, Valentino, Ralph Lauren, Gucci, Bvlgari, Versace, Chanel, Louis Vuitton, Hermes, Burberry and many more. Globalization has driven companies to create strategies in order to broaden their geographical scope and compete in the global market. In developing geographical expansion strategies, firms have recognized the importance that brand management deserves. Brands play a critical role in establishing a firm's visibility and position in international markets. Similar is the case with the luxury market. With the globalization the luxury brands are moving on a rollercoaster to expand globally. The presence of most of the luxury brands of US and Europe in India are getting more popular and increase in consumption of their goods can be seen. Quite a possible reason would be the huge population of young and conscious shoppers aspired and following International brands is attracting such luxury brands to India. To make a positive impact with the expansion, the international brands in India either take all the product categories to India or some of the categories remain in the brand’s or company’s country of origin and few ones are expanded with some new categories introduced with respect to the local market. Louis Vuitton is one such brand which with the aim of expansion in India follows the later strategy.

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2. Louis Vuitton

Image 1: July 1898 Louis Vuitton ad

Louis Vuitton has prided itself in its tradition and longstanding commitment to thousands of people’s lifestyles for over a century and a half. The famous brand started out back in the 1850’s. The founder was made famous for crafting the luggage for Napoleon. Right from its origins as a trunk maker, Louis Vuitton has always been a trendsetter, progressively developing a range of luxury products consistent with the brand's values. After 1998 with a change in the management and the appointment of a new creative director the brand swiftly became and international enterprise, opening its first store in England over a century ago. In 1987, Louis Vuitton became a subsidiary of LVMH, the world's leading luxury goods group. Its luxury goods and services range from Moet & Chandon champagne to La Tribune newspaper and Radio Classique. Leather goods, clothing, shoes and accessories are included under the Louis Vuitton brand. Additional brands under LVMH include Dior, Tagheuer, Kenzo, Givenchy and many more elitist trade names. LVMH not only focuses on material merchandise. Its ongoing support in a wide range of activities such as the Louis Vuitton cup and its responsibility in ensuring environmental protection has made LVMH one versatile, integrated, socially conscious organization. Louis Vuitton has taken full advantage of the many synergies generated within the group while retaining their identity and remaining faithful to their distinctive difference. Over recent years, the brand has tried to modernise its image by utilising the talents of young designers and artists in rejuvenating the image of some of their products, whilst maintaining the classic designs. This reinvention has attracted younger buyers into the brand. 3

However no one designer for Louis Vuitton has eclipsed the powerful brand image of Louis Vuitton itself, unlike other design brands.

Image 2: Louis Vuitton Logo

Louis Vuitton stands out from their peers through their relentless focus on product quality. All products are extensively tested to make sure that they can withstand wear and tear, and that there are no imperfections. The company has blended mechanisation and handmade craftsmanship into their products, boosting their productivity, maintaining that high level of product quality, whilst still holding onto the allure of handmade quality. In an effort, to maintain the prestige image of a Louis Vuitton product, the company operates a pricing integrity strategy amongst its entire distribution network, a Louis Vuitton bag is never reduced in price, and there are no sale periods. The company offers customised products such as personal engraving on hand luggage pieces, boosting its appeal further. Furthermore, the company sponsors elite sporting events such as yachting and motorsport events. This is in effort to match the audience of sponsorship property with the target audience of the brand itself. Louis Vuitton’s Quality Emphasis    

Extensive laboratory equipment test products (e.g. opening and closing zippers 5,000 times). Leather is sourced from Northern Europe, as they tend to have fewer insect bites, thus are less blemished. The company offers a lifetime repair guarantee. Integrate manufacturing initiatives such as “quality circles” in the production process.

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Image 3: Louis Vuitton Yatch Team

Some brands like Hermes, a key rival, create even greater exclusivity by having a three-year waiting list before one of their bags can be obtained. These bags are handcrafted, adding to the appeal. Again, China and India are seen as the next big growth markets for the Louis Vuitton brand. At the moment, 55% of its sales are from Japanese sales alone. It has found itself particularly over reliant on the Japanese market, and seeks greater presence in other foreign markets.

Image 4: Angelina Jolie with Louis Vuitton Bag

The Louis Vuitton brand and the famous LV monogram are among the world's most valuable brands. According to a Millward Brown 2010 study, Louis Vuitton is the world's 29th most valuable brand, right after Gillette and before Wells Fargo. For the sixth consecutive year, Louis Vuitton still at number one of ten most powerful brand published by the Millward Brown Optimor's 2011 BrandZ study with value of $24.3 billion. It was more than double value from the second rank.

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Products Since the 19th century, manufacture of Louis Vuitton goods has not changed: Luggage is still made by hand. Contemporary Fashion gives a preview of the creation of the LV trunks: "the craftsmen line up the leather and canvas, tapping in the tiny nails one by one and securing the five-letter solid pickproof brass locks with an individual handmade key, designed to allow the traveler to have only one key for all of his or her luggage. The wooden frames of each trunk are made of 30-year-old poplar that has been allowed to dry for at least four years. Each trunk has a serial number and can take up to 60 hours to make, and a suitcase as many as 15 hours."

Image 5: Iconic Louis Vuitton Luggage Set

Iconic bags of Louis Vuitton include the Speedy bag and Neverfull bags. Each season Louis Vuitton produces rare, limited edition bags only available to their "VIP" club.

Image 6: Louis Vuitton Speedy Bag

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Many of the company's products utilize the signature brown Damier and Monogram Canvas materials, both of which were first used in the late 19th century. All of the company's products exhibit the eponymous LV initials. The company markets its product through its own stores located throughout the world, which allows it to control product quality and pricing. It also allows LV to prevent counterfeit products entering its distribution channels. In addition, the company distributes its products through LouisVuitton.com.

Image 7: Counterfeit Louis Vuitton Neverfull Bag

Apart from luggage LVMH also is present in manufacture of exclusive time pieces, shoes for both men and women, fine jewellery, books & stationary and ready to wear clothing for both men and women all of which as their other products are fit to be adorned by royalty.

Image 8: Louis Vuitton Timepiece

For future expansion in India, LVMH is also planning to venture towards the ethnic wear segment for both men and women, this move of the brand was made clear when it acquired a minority stake in ethnic Indian fashion major Fab India. 7

Advertising The Louis Vuitton Company carefully cultivates a celebrity following and has used famous models, musicians, and actors such as Keith Richards, Madonna, Jennifer Lopez, Sean Connery, Hayden Christensen and most recently Angelina Jolie in its marketing campaigns. Breaking from their usual traditions of employing supermodels and celebrities to advertise their products, on 2 August 2007, the company announced that the former USSR leader Mikhail Gorbachev would appear in an ad campaign along with Steffi Graf, Selena Gomez, and Catherine Deneuve. Many rappers, most notably Kanye West Juicy J and Wiz Khalifa have mentioned the company in certain songs.

Image 9: Bono and Ali in Louis Vuitton Print ad

The company commonly uses print ads in magazines and billboards in cosmopolitan cities. It previously relied on selected press for its advertising campaigns (frequently involving prestigious stars like Steffi Graf, Andre Agassi, Gisele Bündchen and Catherine Deneuve) shot by Annie Leibovitz. However, Antoine Arnault, director of the communication department, has recently decided to enter the world of television and cinema: The commercial (90 seconds) is exploring the theme "Where will life take you?" and is translated into 13 different languages. This is the first Vuitton commercial ad ever and was directed by renowned French ad director Bruno Aveillan.

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Image 10: Louis Vuitton Billboard

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3. Louis Vuitton India: Communication Strategy
 The mission statement of Louis Vuitton India is as:

The mission of the LVMH group is to represent the most refined qualities of Western art all over the world. LVMH must strive to continue being synonymous with both elegance and creativity. Its products, and the cultural values they signify, are a combination of tradition and innovation. In view of this mission, five priorities reflect the fundamental values shared by all Group stakeholders: - Be creative and innovate - Aim for product excellence - Bolster the image of our brands with passionate determination - Act as entrepreneurs - Strive to be the best in all we do 

The concepts of Louis Vuitton relates to its target market through a number of outlets. Modern day Louis Vuitton has embraced new innovations, they have stayed true to their roots since 1854 as trunk-makers. Because the product speaks for itself, Vuitton's advertisements are solely used as reminders. o Louis Vuitton capitalizes on the idea that all income levels want to purchase their brand. There tends to be two types of groups that buy Louis Vuitton. One being people who want to differentiate themselves and their wealth buy wearing the brand. The other tends to buy Vuitton because the referenced group serves as role model to the idea of wealth. o Vuitton’s ads target both of these groups. Their ads exude minimalism, luxury and affluence. Because the brand has such recognizable qualities, sometimes the name "Louis Vuitton" is not posted. Their products act as representation of the name. The ads work in allowing their target market to relate to the messages that are conveyed with social identity a status.

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Image 11: Maradona, Pele and Zidane in Louis Vuitton print ad

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Marketing Objectives o Be creative and innovative o Aim for product excellence o Continue to uphold the image of the brand o Act a entrepreneurs o Strive for the best

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Louis Vuitton Retailing Activities

Louis Vuitton's retailing activities are kept to a minimum. With the lack of sales and promotions, the store never changes or falls into disarray. Their target market is those of affluence and/or those who seek it. With this type of clientele customer service must be top notch. Sales associates work to keep personal relationships with customers greeting by name and sending follow up mail to ensure the product is being enjoyed! The stores are located in swankiest address in a city like in Delhi LVMH stores are located in Oberoi Hotel, one of the city’s finest hotels (This was the first LVMH store in Delhi) and in DLF Emporio Mall which is the latest address in the city for luxury brands where it shares space with other brands as Burberry, Armani, Ermenegildo Zegna among others.

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Image 12: Louis Vuitton store in Delhi

Vuitton location is notorious for their window displays. When walking by the Vuitton store one can always find a crowd "oo-ing and ahh-ing" at their spectacular windows. This is the most promoting Vuitton engages in. This though is not seen in any of its stores in Delhi. Apart from Delhi LVMH has their exclusive store in Bengaluru, Mumbai and Chennai.

Image 13: Louis Vuitton store in Mumbai (Taj Land’s End)

Integrated Marketing Communication Louis Vuitton recognizes the importance of social media. Although certain events are exclusive to the select few, fans worldwide are able be included in the brand! Vuitton continues to be progressive- by engaging fans thought multiple avenues; Vuitton stays present in keeping fans in the know, even if they are not potential customers. But this usage of social media as a marketing tool has not been witnessed in the Indian market by the company and in India the company is still mainly advertising through print media. Facebook as a marketing tool is a superb option and is being used by all brands worldwide to gain a wider audience but Louis Vuitton India is still at this moment social media shy. Though the company has a facebook page but it hasn’t been updated since September 2012.

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But this is also leading to degradation of the premium imagery of the brand. Like at the facebook page for Louis Vuitton India classified ads are seen where the existing customers of the brands products are offering second hand bags. Though they might claim them to be 100% original, it’s still bad for the brands image.

Image 14: Louis Vuitton India Facebook Page

Image 15: Used LV Column on Louis Vuitton India Page

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Image 16: Louis Vuitton International Facebook Page

For the opening of the London Flagship store on May 25th 2010, Vuitton created an advertising buildup on the internet. They invited the world to watch opening night live on the internet! They did this in multiple ways: Facebook: Through their facebook fan page, they began releasing small amounts of information regarding the red carpet event. They also created an event on facebook with the option for fans to RSVP "attending", "maybe attending" or "not attending"just like any other event page on facebook. Twitter: On its Twitter page, Vuitton kept followers up to date by tweeting about the red carpet event. YouTube: On YouTube one can find many videos about celebrities being interviewed about new Louis Vuitton ventures and their personal views and feelings about the brand. Advertising for LVMH till now is done mainly using the print media and out of home promotion as the main mediums for marketing. In print media their ads are mainly printed in premium luxury and lifestyle magazines such as Femina, Men’s Health, Time and Style, Vogue and Vanity Fair, etc.

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Image 17: Louis Vuitton print ad

Image 18: Louis Vuitton India Print ad with Uma Thurman

For out of home advertising Luis Vuitton did the “Big Bag” campaign where they installed a huge 20 foot high replica of signature LV trunk at Mumbai’s Chhatrapati Shivaji Airport and Indira Gandhi International Airport in Delhi.

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Image 19: Big Bag Campaign (1)

Image 20: Big Bag Campaign (2)

In their print ads the company is now instead of using exotic foreign locales has started using exotic Indian destinations as their choice of location for the photo shoots.

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Image 21: Louis Vuitton ad shot in Rajasthan

Though till now LVMH has mainly advertised through the print media and out of home advertising but in 2012 it launched its first ever television commercial, the commercial featured prominent supermodel Arizona Muse. The ad was preceded by a 10 second teaser and a lot of hype was also created using facebook.

4. Future Direction  The company should concentrate a bit more on the social media aspect of marketing. The current status of the facebook page for Louis Vuitton India is that of neglect as it is still displaying the pictures of fall 2012 collection and hasn’t been updated after September 2012 User content on the page should be filtered, like the current page has many posts by users that are either spam or are like used products ads. Outside India, store advertising is used through store windows, like display of ads and new collection in the store window; this is not being done in India in any of its stores across the 3 cities it is present in. Louis Vuitton products are only in its stores unlike Gucci and Armani, it should continue to work on this strategy and maintain only the company stores as the selling point.

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