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Innovation Strategy

Presentation of the strategy of the launching of a fake new perfume by Louis Vuitton.
by

Keren Castelli

on 2 June 2011

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Transcript of Innovation Strategy

LES LEGENDES by Louis Vuitton Our Project Create an exclusive and luxurious collection of perfumes for women How? Market Analysis Segmentation Conservative
Well established
Post Materialist
...WOMEN Targeting Well established women: +30, high income, sophisticated, strong sense of aesthetics, high exclusivity claim
Conservative women: +50, high disposable funds, status oriented Positioning An exclusive collector edition that rewards you with the unique privilege of luxury and expresses tradition and modernity through its sensual fragrances What Strategy? Overall Strategy A Louis Vuitton brand extension: a collection of fragrances called "LES LEGENDES by Louis Vuitton".
A total of 5 perfumes, one lauched per year (during 5 consecutive years)
Limited edition and quantity (5,000 units per perfume)
At a high price Long Term Strategy Keep share of voice at a high level through ads and events
Increase brand awareness
Make Louis Vuitton top of mind for luxury goods Short Term Strategy Reinforce brand image
Challenge main market leaders
Increase share of voice The Perfume The concept

Perfumes are placed in various Louis Vuitton original trunks tracing down the different canvas evolution across the years. Which explains why we chose the name for the collection as "LES LEGENDES" taking into account the famous trunks which will forever be remembered. One Bottle... All the bottles will be made of crystal and will be identical ... Five trunks... "L'Originel" "L'Intemporel" "L'Eternel" "L'Inattendu" L'Imaginaire ... And one packaging. Pricing Strategy Cost of the bottles
Partnership with Swarovski
€40 per bottle taking into account:
The margin of Swarovski
The costs linked for the production of a new bottle for Swarovski

The costs for the caps is evaluated at €15 per unit
It will be made of precious metal Customization of the trunks
Engraving of the LV initials + initials of the buyer
Costs of €15 per unit L’Imaginaire (multicolour packaging)
Based on the production costs of a currently offered LV trunk, the potential selling price could be €810
Margin of LV for the currently offered trunk : 34%
Subtraction of the communication costs (estimated at 10%)
810 * 56% = €453.6 L’Originel et l’Intemporel
Based on the computation of « L’Imaginaire » perfume
Margin of LV :34%, reduced by 10% for additional manufacturing costs
Subtraction of the communication costs (estimated at 10%)
810 * 66% = €534.6 L’Inattendu
Based on the production cost of a currently offered LV trunk, the potential selling price could be €450
Margin of LV for the currently offered trunk : 34%
Subtraction of the communication costs (estimated at 10%)
450 * 56% = €252 L’Eternel
Based on the production cost of a currently offered LV trunk, the potential selling price could be €600
Margin of LV for the currently offered trunk : 34%
Subtraction of the communication costs (estimated at 10%)
600 * 56% = €336 Costs of the perfume
“Eau de parfum” for a bottle of €29.5:
20% of aromatic compounds: €14.96/ml €88.26/unit
80% of ethanol: €0.001882/ml €0.04/unit Costs of the « nez »  €42.000 per perfume
Costs of the secondary packaging  €5 per unit Selling price proposition: €3.000 Distribution Mix Available in 5 cities: Paris, London, Milan, New-York and Tokyo 1000 units of perfume sold in each city Only in two LV stores per city, proposing the largest choice of LV’s product range In the stores, the perfume will stand, next to its little trunk opened,
on a display stand in the middle of the room. It will be inside a glass protection Poles will be used all around the perfume to prevent people from touching it Communication Mix At the launching
Grandiose ceremony, in a different city every year.
Example here of the first lauching ceremony in Paris.

WHEN? One day after the closing date of the Fashion Week in Paris (on 8th of Marsh 2012)

WHO? Selected guests (loyal customers, celebrities...)

WHAT? Revelation of our product, distribution of classy samples During the following year
On 9th of March 2012 and during a month : samples in 9 selected LV stores IF purchase exceeds €1.500. Teasing advertising campaign



On 15th of April, in our targeted 5 cities :
Perfume available in 9 selected stores
Launching of the advertising campaign (billboards and magazines)
Street marketing operation in 5 big cities Advertising
Adverts in luxurious magazines, posters and billboards
2 kinds: teasing and promotional Web communication Web communication
Exclusive social media as Diamonds Lounge and aSmallWorld
Video of the inauguration ceremony
Evolution of the perfume Sales promotion
Each customer buying for €1.500 in one of the 9 selected LV stores will receive a sample (during 30 days after the ceremony) Public relation
Article about the history of the brand and the perfume project, in a luxurious magazine. Street marketing
Increase brand awareness, street marketing operation after the ceremony Marketing Mix Strategy: use the most elegant and sophisticated means creating in the customer a deep aspiration for purchasing all of the perfumes of the new collection.

Action: promotion actions :
During the Fashion Weeks: creating some buzz with teasing operations (project, on the building of famous luxury department stores, pictures of our five female legends )
Launching event: high-end, private and exclusive event where invitations . A video of the event will be shown in both prestigious social networks and on the Fashion TV channel.
Once the perfume is launched: large-sized billboards on notorious buildings present in the top five big fashion cities.
On the Louis Vuitton website: page dedicated to Les Légendes collection where every perfume will have its own tab. Promotion Place Strategy: perfume available in very few places only.
 
Action:
Les Légendes collection will be sold
exclusively in nine Louis Vuitton shops
displayed under a glass dome, under high surveillance. Customers will be able to touch and try it only under personnel surveillance and follow a strict ritual to follow by the staff displayed only for exhibition purposes under a glass dome placed in prestigious shopping stores in the five cities:

Paris: Galleries LaFayette
London: Harrods
New-York: Bergdorf Goodman
Milan : La Rinascente
Tokyo: Matsuya Ginza Partnership  Product creation

  Perfume: Maison Caron Paris
Bottle: the Swarovski Crystal Society TV promotion

Fashion TV (broadcasting our launching ceremony and interviews of people that contributed to the creation of the perfume) Perfume exhibition

Partnership with a famous luxury department store in each of the five targeted cities Launching ceremonies

International Luxury Media will organize our launching ceremonies in the five cities we chose. Identity Box packaging
Trunk
Bottle
Glass showcase
Advertisements Crystal Bottle
Leather trunk Box packaging
Leather Trunk
Crystal bottle Perfume
Leather box In the product Unique product made by a selective perfume house
Remarkable natural materials Packaging Packaging shaped as a trunk
Eco-friendly box with innovative opening
Crystal bottle Promotion Exhibition of the product in five famous luxury retailers
Street actions for teasing and ad campaign during fashion weeks
Launching ceremony at the end of fashion weeks Point-of-sales Exclusively sold in 9 Louis Vuitton points-of-sales in 5 cities all over the world Marketing Costs Marketing Cost

Patent: 300€ / brand name
Advertising: 325.000€
Magazines: 4 months  60.000€
Billboards: 2 places, 4 months  240.000€
Mall: Galleries LaFayette  25.000€
Launching ceremony: 200.000€
Very prestigious ceremony with 1.000 exclusive guests
Street marketing: 9.870€
Point-of-sales marketing: 20.000€
Presentation device for the perfume + Distribution of samples To enhance exclusivity, when a customer will want to see it closer or to smell it, he/she will have to ask the sales person.
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