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This document provides an overview of LVMH, the world's leading luxury products group, and their expansion into Asia. Some key points: - LVMH is a $13 billion group with over 1,500 retail stores worldwide and 50 sub-companies including brands like Louis Vuitton, Christian Dior, and TAG Heuer. - 40% of LVMH's sales come from Asia, where the growing middle class and rising wealth have increased demand for luxury goods. - LVMH has expanded aggressively into key Asian markets like China, Japan, South Korea, and India through new store openings. Each country presents different opportunities and challenges for the company. - Counterfeiting and

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197 views

Final

This document provides an overview of LVMH, the world's leading luxury products group, and their expansion into Asia. Some key points: - LVMH is a $13 billion group with over 1,500 retail stores worldwide and 50 sub-companies including brands like Louis Vuitton, Christian Dior, and TAG Heuer. - 40% of LVMH's sales come from Asia, where the growing middle class and rising wealth have increased demand for luxury goods. - LVMH has expanded aggressively into key Asian markets like China, Japan, South Korea, and India through new store openings. Each country presents different opportunities and challenges for the company. - Counterfeiting and

Uploaded by

Suman Gadwal
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPT, PDF, TXT or read online on Scribd
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Presented by : Kamal Sunita Pallvi

Company Profile
LVMH is the worlds leading luxury products group.
A $13 Bn group of companies with operations across

the world- 1,500 retail stores in about 60 countries.


A parent of around 50 sub-companies In 2004 40% of the sales is from Asian market. In early 1990s it decided to expand in China, South

Korea & India.

Industry Profile : Luxury Goods


The sales of luxury products were expected to rise by 3%

to 5%.
Shares in luxury companies tend to go up
Growing middle class is also buying designer goods.

26% of the worlds millionaires are in Asia


8% increase in GDP

Competition in the industry :


Gucci :
Well entrenched player in Europe and North

America.
Guccio Gucci originally started as a reseller of luggage

imported from Germany.


As of 2003, Gucci Group had 348 directly operated

stores.

Competition in the industry :


Richemont
It was the second-largest luxury goods company in the world.
Major player in Jewellery and Watches. Sales of watches and Jewellery accounted for 70% of total

luxury products sales in 2000.

Hermes
Relied on single-branded strategy. Products mainly clothing , fragrance and leather accessories. Japan accounted for 25% of its sales in 2000.

Competition in the industry :


Bulgari :
It operated in seven luxury segments including

watches, perfumes, jewellery etc. Substantial part of its revenue was from watches and jewellery Customers were mostly first time buyers. Asia pacific accounted for 36% of its sales.

Wines & spirits

Fashion & Leather

Watches & jewellery

Perfumes & cosmetics

Target marketing
LV uses demographic targeting strategy to target their customers

pricing strategy
Premium Pricing
Never on sale!! Price range: Handbags: $550 - $3,700 Wallets: $200 - $700

Promotion strategy
Advertisements
used famous models and actresses such as Jennifer Lopez and most

recently Madonna in its marketing campaigns


USSR leader Mikhail Gorbachev appeared in an ad campaign Many rappers like Kanye West have mentioned the company in songs

uses print ads in magazines and billboards .

In 2008, enter the world of television and cinema: the theme is Where will

life take you? is translated into 13 different languages


Tagline Some journeys can change mankind forever
Emphasize on personal selling Dont emphasize on sales promotion

Endorsements: Jennifer Lopez, Kate Moss, Uma Thurman, and Scarlett Johansson

Louis Vuitton Advertising Campaign

Expansion of LVMH in Asia


Declining trade barriers and trade tariffs in the luxury

goods market
Change in communication technology Capture growing Asian markets Perception of luxury brand as status symbol Growing number of tourists from Asian countries

Expansion of LVMH in Asia


26% of people having financial assets more than $1

million lives in Asia in 2003


Asian buyers accounted for 30-40% of sales of all

luxury clothing, handbags and watches


Less competition in luxury market Young rich population.

Japan :
There were 47 Louis Vuitton stores in Japan.

By 2003, Japan accounted for about 20% of Christian Diors

sales.
Had plans to increase it to 30% in the future. Tough competition from competitors like Prada.

China :
China a huge market and was expected to play a pivotal role

in the future of brands. significant 30%.

Annual growth rate of premium cosmetic market was a there were 9 LVMH shops. LVMH was trying hard to establish an efficient operating

model in China. Mainly concentrating on eastern and southern China. jewellery.

Area of focus are selling wines, perfumes, watches and

South Korea :
Even though small in size was a huge market for

luxury brands.
LVMH had 15 stores. Here the market was comparatively more stable and

secured from external threats.


The young age of customers in the Korean luxury

segment also represented a tremendous opportunity.

India :
LVMH launched its first store in India in 2003 Product brands from its watches and jewellery group-

TAG Heuer and Christian Dior.


Indias growing economy, its English-speaking

population, its improved social & political stability and

opening of the economy to outside investors attracted


LVMH to invest in India.
LVMHs major challenges are
To create a culture in India to shop luxury goods & make them

aware of the same .


Convince Indian customers who shop luxury brand to buy from

India.
To face huge competition in watch market

Issues and challenges


Political uncertainty and cultural differences: risk of new tariffs

Opposition activist group


Asian crisis spread of chicken flu

Depreciation of yen against dollar


Cultural influence of Asian region Cost efficiency Counterfeiting Distribution and pricing : Gray market

Recommendations
Should be available only in small quantities Focus more on TV add Can open up to Franchising with High end malls around the

world To be more distinctive from the competition concentrating its business model to production of leather goods only Venture into Untapped market- Mauritius, Madagascar Offer more economic lines to the consumer

Conclusion
Is leading name in luxury and style.
With its outstanding quality , its expecational beauty

lv offers to for the customer of the world only the best of the best Lv Great showcase and reputation and pride for france Macro & Micro economic variables favorable in Asian market Thus it should aggressively expand in Asia without diluting its brand identity

Describe some of the country- specific target market for luxury goods?

Japan:
They are big buyers of luxury brands.

Japan accounts for 33% of fashion and leather category.


20% of Christian Diors sale is from Japan The brand image is everything in Japan were there is

little difference between the rich and the poor. Large percentage of single, working women.

Should LVMH reach out to new middle- class customers who are willing to purchase luxury items?

Answer
Yes , if the purchasing power of the new middle class

increases then it is good for LVMH as the customers who can afford it increases .

But LVMH should reach this market segment

without tarnishing its brand.


They should not decrease the price of their products. Maintain only exclusive show rooms.

Describe the counterfeit business today. How is this affecting companies and businesses?

Answer
Counterfeiting is the illegal use of a registered trade

mark
Counterfeits affect the sales of brands by diluting the

brand identity
Fail to perform up to the expectations of the customers

How should luxury brand fight against counterfeiting?

Answer
Check on internet auction sites for the sale of

counterfeit products
Employ full time staffs to work with investigators and

lawyers to protect the brand


Push for better legislation against counterfeits

Thank you

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