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The Luxury Goods Market

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Ludivine ZAJICEK

on 31 May 2014

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Transcript of The Luxury Goods Market

The Luxury Goods Market
Summary
The Concept
The Global Luxury Goods Industry
• Global income (2002 - 2012) : + 60%

• Prices of the goods (1976 - 2012) : + 800%

• 2010 - 2012 : + 10% growth of the global turnover

• 2013 - 2015 : + 5 to 6% expected (€ 250 Billion in 2015)

The French Market
• France : 25% of the global market (52.2 billion euros)

• 3 out of the 5 biggest group are French :
- LVMH
- L'Oreal
- Kering (PPR)

• 130 out of the 270 biggest international brands are French
Focus on a Player : LVMH
Conclusion
• Market not affected by the 2008 global crisis

• 1st Exporting sector in the world

• Most important sector in France
• The concept
• The Global Luxury Industry
• The French Market
• Focus on a Player : LVMH
• Conclusion

Evolution of the French Market
LVMH

- 28 billion € (2012)
- 2008 - 2012 : + 63%
- 2011 - 2012 : + 19%
Hermès
- 3.5 billion € (2012)
- 2008 - 2012 : + 97%
- 2011 - 2012 : + 22.6%
Main Actors
Exports
• 1st Exporting sector

• 80 % of the French luxury industry turnover

• 42 Billion of €
Reasons of Success
International recognition of the French know-how

Quality of the goods & Brand Image

Solidarity (Comité Colbert)

Conquering strategy
Where ?
What ?
Keys of success
• E-Commerce : + 25% each year since 2008 Only 2.6% of the total sales


"Luxury 2.0" :
- Superior consumer experience
- Reputation of the brand
- Excellence of the employees

• Increasing demand for products without logo and for precious metals

• Increase of the younger customers : originality better than tradition

Sources
• Bain & Co :

Luxury Goods Worldwide Market Study Fall 2013
, October 28, 2013
http://www.bain.com/publications/articles/luxury-goods-worldwide-market-study-fall-2013.aspx

• Les Metiers.Net :

Les Metiers du Luxe
, October 2013
http://www.lesmetiers.net/orientation/p1_197668/panorama-du-secteur?idDossierParent=p1_197706

• Consulate France-Hong Kong :

France, world leader in luxury goods
, July 31, 2013
http://www.consulfrance-hongkong.org/France-World-leader-in-luxury,6529

• L'Expansion :

Les secrets de la réussite du luxe à la française,
July 3, 2013
http://lexpansion.lexpress.fr/entreprise/les-secrets-de-la-reussite-du-luxe-a-la-francaise_392358.html

• LVMH :

Website of the company
http://www.lvmh.fr/





MARKETING MIX
Product
High Quality
Raw materials
History (Know how)
Design
Price
High retail pricing
High gross margin
Good net profit
Place
Promotion
Usually,
Exclusive distribution
(sometimes selective)
CHANNELS:

- Department stores
- Outlets
- Luxury shops
- Duty free shops
Mastered
communication policy

Sponsoring
(Golf competitions, yacht and formula one races)

Product
placement

Every single brand has its own
muse

Reputation
(word of mouth)
Important concern:
counterfeiting goods
Loss of
€ 60 billion
in terms of VAT income for the G20 countries.
 
Counterfeiting and piracy were responsible for a loss of
186,600
jobs in 2008.

Serious need to fight it!

Accounts for approximately 5 to 7% of world trade, or an approximate volume of 193 billion euros (from figures collected between 1999 and 2005)
The brands
General information
The revenue
Financial structure
Key figures
Opportunities

• Emerging countries
• Increase of the HENRYs
• E-commerce

Threats

• Counterfeiting
• Maturing European Market
Full transcript