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This paper examines how luxury fashion brands renew themselves in order to balance the exclusivity that isassociated with luxury goods and with profit maximization. Using consumers’ demand theory it is shown how luxuryfashion brands go through different phases to renew the perception of exclusivity. A proposed model for the stages aluxury brand goes through to keep up the perception of exclusivity is provided. The focus is on identifying howluxury fashion brands renew themselves in order to create a perception of exclusivity and scarcity. The limitations ofthe study is that research has yet to be done on how consumers of luxury fashion goods perceive these efforts putforward by luxury fashion brands. Problems associated with luxury fashion brands,
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THE MARKETING SITUATION
• Louis Vuitton Moet Hennessy - owns over sixty global brands
• In 2009, Louis Vuitton spent over $687 million in advertising, making them the 58th largest advertiser
• Currently the leading luxury brand provider in the world
THE MARKETING SITUATION
• Louis Vuitton Moet Hennessy Chairman and CEO, Bernard Arnault
• Sales have increased since the beginning of the recession
• Perfumes and cosmetics grew eight percent• The watches and jewelry sector of the company
increased 12 percent, which is said to be caused by other brands also in the Moet Hennessy Corporation
• No Vuitton bag has ever been marked down
Louis Vuitton Pinault-Printemps-Redoute (PPR) $-
$1,000,000,000
$2,000,000,000
$3,000,000,000
$4,000,000,000
$5,000,000,000
$6,000,000,000
$5,145,000,000
$2,575,190,782
Top Brands:
Louis Vuitton, Fendi, Dom
Pérignon, Tag
Heuer, De Beers
Top Brands: Yves Saint Laurent, Gucci group
(Bottega Veneta, Balen-ciaga, Gucci), Puma
Operating Income of LVMH relative to its primary competitor.
CAMPAIGN OBJECTIVES• Expand the target market• Satisfy the emotional needs of current and
prospective customers for status and luxury• Increase revenue
CAMPAIGN OBJECTIVES
• To refresh and reintroduce this 150-year-old brand
• Keith Richards as a rock music legend and Madonna as an international icon– targets a broader age demographic of
their target audience
Personal needs (accomplishment, ego-building, self-
esteem)
Social needs (status, esteem, acceptance by
others, evidence of affluence)
Safety needs
Physiological needs (sex)
The PSSP hierarchy of needs as it pertains to the Louis Vuitton target audience.
THE TARGET AUDIENCE
• Women of a non-specific ethnic group
• Between the ages of 25 and 55• It all comes down to status &
flaunting affluence.
THE TARGET AUDIENCE• Demographic variables
– age, race, gender, & income
• Geographic variables – regions and size of state and or county– No set state or county size– more prevalent in larger metropolises
• Psychographic variables – interest in club membership– shopping– fashion– media– Achievements
• Behavioristic variables– benefit expectations – brand loyalty
SIX MAJOR STRATEGIES OF PRODUCT POSITIONING
• Based on product features – crème de la crème, highest quality & status
• Based on benefits, solutions or needs – quality, status• For a specific usage occasion – everyday, work, clubbing,
dinner out, school, work, etc.• For a specific user category – affluent men & women
between the ages of 25 and 55, status and ego-oriented individuals
• Against another product – playing up the benefits of owning a real “Louis”, rather than a competing luxury brand (they never name their competitors, they simply portray their brand as being in a league of its own)
• For product class disassociation – comparing it to its direct competitors in the luxury industry
THE CREATIVE STRATEGY• Goal is to refresh and reintroduce a 150-year-
old brand• Use of celebrities for different age groups and
genres • It is also said that the campaign with Keith
Richards, “restates travel as the fundamental and defining value of Louis Vuitton, interpreting it as a personal journey.”
THE CREATIVE STRATEGY• The celebrity campaign reinforces the idea
that these luxury items are not necessarily intended for purchase by everyone.
• Celebrities are good symbols to use when trying to illustrate status.
• Celebrity advertising campaigns make consumers desire the status associated with the brand.
• Desire to branch out of traditional target market.
THE MEDIA STRATEGY
• Main Objectives– define their luxury brand– build a solid marketing foundation – keep their audience engaged in the
products
THE MEDIA STRATEGY
• The celebrity handbag campaign of 2008-2009– Keith Richards, Madonna– Word-of-mouth marketing
• Use of traditional media vehicles– billboards– First-time 90-second commercials– Print Ads – featured in popular magazines such as
People, InStyle and Shape
THE MEDIA STRATEGY
• Ultimate goal is to achieve brand resonance
• Louis Vuitton spent $687.3 million on advertising in 2009 (Marketer Trees 2009).
THE MEDIA STRATEGY
• Brand monitoring– Discover the customers’ needs in real
time on the social web – Discover consumer sentiment and their
media perceptions
OTHER COMMUNICATION PROGRAMS
• The Social Media– Use of creative designs, colors, and logo
placement– Facebook account – 68,942 friends
• In-store marketing tactics• Charity event celebrating the brand’s 150th
birthday– percentage of its sales donated to the
American Red Cross
EVIDENCE OF RESULTS
• Still #1 in luxury industry• Fashion and leather goods division
accounts for thirty-five percent (35%) of the company’s $8.4 billion total divisional revenue
• Sales in the fourth quarter of 2008 rose 6% to 7%
• Reputation has catalyzed its sustainability during difficult economic times
EVIDENCE OF RESULTS
• High amount of brand recognition and brand resonance– cult-like circle to which “Louis” owners
belong
• The luxury industry has only been phased slightly by the sluggish economy
• Celebrity advertisements maintain favorable consumer perceptions
• Opening new boutiques
REFERENCES• "Luxe Strategy: Luxury Brands Using Social Media". Fashionably Marketing. November 12, 2009
<http://fashionablymarketing.me/2009/10/luxury-brands-social-media-marketing-strategies/>. • Scott, Lesley. "Fashion Tributes". November 12, 2009
<http://fashiontribes.typepad.com/fashion/2009/11/louis-vuitton-celebrate-150-years-of-fabulous-with- charity-bags.html>.
• Bowser, Jacquie. "OgilvyOne scoops Louis Vuitton global digital accout". Brand Republic. November 1, 2009 <http://media.asia/Newsarticle/2009_10/OgilvyOne-scoops>.
• "LVMH Moet Hennessy L.V. (LVMUY)." Wikiinvest. 2009. Web. 6 Nov 2009. <http://www.wikinvest.com/stock/Lvmh_moet_hennessy_L.V._(LVMUY)>.
• Wendlandt, Astrid. "WRAPUP 1-Hermes, LVMH bring relief to luxury sector." Reuters. 6 Feb 2009. Web. 7 Nov 2009. <http://www.reuters.com/article/rbssRetailDepartmentStores/idUSL62805520090206>.
• Gumuchian, Marie-Louise, and Mathilde Gardin. "Louis Vuitton "very optimistic" on Christmas sales." Reuters. 7 Oct 2009. Reuters, Web. 7 Nov 2009. <http://www.reuters.com/article/ousivMolt/idUSTRE5963VL20091007>.
• Marketer Trees 2009. Advertising Age. Web. 18 Nov. 2009. http://adage.com/marketertrees09/.• http://stylenews.peoplestylewatch.com/2009/06/30/sneak-peek-madonnas-fallwinter-louis-vuitton-
ads/• http://www.customerthink.com/blog/louis_vuitton_effective_experience• Images courtesy of: http://dgimanagement.com/blog/wp-content/uploads/2009/07/louis-vuitton-
madonna-fall-winter-2009-ad.jpg, http://worldclassshitty.files.wordpress.com/2009/08/keith_richards1.jpg, http://earsucker.com/wp-content/uploads/2009/06/madonna_louis_vuitton_new_campaign_ad.jpg