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Louis Vuitton
Sofia Martin
Master in Management
Operations and Supply Chain Management
Introduction
- Luxury retail company founded in 1854 by Louis Vuitton
- Famous for their LV monogram
- Products range from trunks, purses, shoes, and jewlery
- Operates in over 50 countries worldwide
Introduction
Louis Vuitton Company Timeline
Louis Vuitton Company Timeline
Brand Positioning
- Symbol of modern day luxury
- Creates innovative, elegant, and practical designs of the highest quality
- Brand strategy and theme revolves around travel and exploration
Brand Positioning
Competition
Competition
Why Louis Vuitton?
Since I was a young girl I have always been facisnated by Louis Vuitton and have been a huge fan of the brand. To me the brand is the industry leader in luxury, fashion, and elegance. When deciding what to do this mind map on Louis Vuitton was an obvious choice because I love everything about this company.
Product Design and Innovation
Product Design and Innovation
Louis Vuitton has adopted strategy towards brand innovation while during the year the brand adopt a low to medium innovation, in certain moment of the year it launches special events that bring brand image and innovation up.
The main values in Louis Vuitton innovation strategy are the following:
- Improve brand value innovation
- Develop a co-branding
- Develop new styles of products for the brand
- Reach a new client segment
- Confirm that the brand is ‘In’
- Keep classic elements
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Inside Louis Vuittons Success
Company Values
The five core values of Louis Vuitton are the following:
- 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
Company Values
Global Strategy
Louis Vuitton’s principles highlight the elements of quality, exceptional craftsmanship, the value of art and the protection of heritage. These elements are strongly incorporated in its’ long term sustainable strategy and can be seen in its marketing mix 4Ps.
Global Strategy
Product
Product
Unlike other brands whose marketing seeks for adequate product quality as excess quality might come with high cost, Louis Vuitton offers something totally different, a product of distinguished quality and attention to detail. Louis Vuitton goods has always strive for perfection: Products like luggage, shoes are hand made by expert craftsmen, high quality fabrics and materials are used in their products to ensure durability. The concept of absolute quality is placed at heart of Louis Vuitton’s marketing strategy which makes consumers look at Louis Vuitton as the only choice.
Going beyond the quality of a luxury product, Louis Vuitton also emphasizes strongly on both tradition and innovation at the same time. Every products of LV come with a story behind it. By doing this, it has been able to maintain the loyal customers who expect its traditional quality products and the new younger generation of customers who always search for the latest fashion trends.
Price
Louis Vuitton consistently pursues a luxury pricing strategy where there are high mark-ups and limited availability. The company does not believe in cutting cost or off shoring production to China or any other countries where the labour cost is cheaper. This strategy makes Louis Vuttion the most recognizable and desirable luxry brand.
Price
Place
Louis Vuitton bags are only offered through limited distribution channels, its own stores, a series of high end departmental stores throughout the world, which allow it to control product quality and pricing. More importantly, by using its own channels that can be controlled, it allows LV to prevent counterfeit products entering its distribution channels. Up to date, LV has opened its stores in more than 60 countries
Place
Buisness Insider Article on Why LV never goes on sale
http://www.businessinsider.com/louis-vuitton-never-goes-on-sale-2014-12
Promotion
Louis Vuitton has a well-known reputation as the largest luxury goods advertiser in the world. Regardless of the economic situation, budget for marketing campaigns keeps increasing non-stop in order to maintain the prestige image of the brand. Unlike other luxury brands, Louis Vuitton uses a marketing strategy which controls its product to make it appear to be premium quality but attainable.Thus, it continues expanding its broad consumer base without losing its image.
Louis Vuitton uses high quality print advertising in high fashion magazines including Vogue, on billboard in major cities.
Promotion
Advertising Campaigns
Advertising Campaigns
LV Commercial
Supply Chain Strategies
Supply Chain Strategies
Louis Vuitton focuses more on product design, craftsmanship and image than on the processes of keeping their stores stocked. When new designs catch on, they often run out of stock, and Louis Vuitton normally does not rush to speed up production and distribution.
Louis Vuitton uses lean production process which enables their process to react quickly to change with their orders. This approach offers a way for Vuitton to shift production to the handbags that were selling best, senior Vuitton executives say. The “zero-defect policy” of the car makers — all problems are supposed to be corrected before cars left the factory — also seemed appealing.
Distribution
Distribution
Rather than getting ride of their time consuming hand-crafting procedures of the manufacturing process, it is imporant to the company to keep some of the traditional aspects that the brand is known for. This needs to be maintained by a balanced supply chain system which merges technical advancements with traditional know-how.The reorganization extended beyond the factory floor. A distribution center in France used to send products directly to Vuitton’s stores around the world. Now, the company is building a global distribution hub outside of Paris that will ship to six regional distribution centers: two in Japan, two elsewhere in Asia, one in the U.S. and one near Paris for European orders. Within a week of a product launch, stores around the world feed sales information to France and production is adjusted accordingly.
In addition, According to Straits Time (1 Feb 2013), Louis Vuitton is planning to slows down its expansion plan and focus on high-end products in order to preserve its exclusive image. The company mentioned that as the brand has got a large footprint worldwide, it might become a little too commonplace, hence this decision is made to protect this luxurious brand. It is reported that the brand has got more than 460 stores in more than 50 countries, generating more than 7 million euros in annual sales.
Louis Vuitton E-Commerce
- The companies e-commerce revenue model is strictly the sale of its leather goods.
- Louis Vuitton’s site brings in as much money as some of its biggest shops, according to the firm’s communications director Antoine Arnault.
- LVMH is very selective of the sales figures they post on their corporate site, making it difficult to determine the exact profit earned from its EC channel.
- The products are never discounted.
- Maintain total control over the brand by making its product available only though louisvuitton.com
- Through E-Commerce they are able to educate customers about where the product can be safely obtained online.
Interview with LV Supply Chain Manager
https://www.lvmh.com/news-documents/news/lvmh-supply-chain-3-questions-for-alain-doudard/
Interview with LV Supply Chain Manager
Journey through LV Supply Chain Process
https://www.lvmh.com/news-documents/news/journey-to-the-heart-of-the-lvmh-supply-chain/
Using i2 Technology to improve Supply
Using i2 Technology to improve Supply
Louis Vuitton has been succesful combining their traditional methods of production with modern technology. By Using the i2 strategy they were able to be more efficent while maintaining their high standard in quality. By launching this they were focusing on their international clientele to ensure their products available wherever there were clients who wanted them. i2 helped LV close the gap between demand and supply.
i2 article
http://laurenbossers.writersresidence.com/system/attachments/files/3750/original/Louis_Vuitton_case_study.pdf
i2 article
Louis Vuitton Lean Manufacturing Process Video- Start video at 4min25sec
Louis Vuitton Lean Manufacturing Process Vid...
Customer Experience Management
In luxury retail, being customer centric is crucial for success. Louis Vuitton has become an industry leader over the years in adding value to their products through a pleasant customer experience.The origin of LV customer experience reflects the characteristics of the upper-class
societies of the nations where the brands were founded, as well as the nations' modeling and color tastes. The characteristic of Louis Vuitton's customer experience tends to accommodate a wider range of customers despite its high-price products.
Customer Experience Management
In-Store Experience
In-Store Experience
Louis Vuitton is distinguishing itself through its in-store experience by focusing on heritage, its most iconic products, a high level of customization, and a clear separation of areas within boutiques to facilitate customer interactions with products. Nevertheless, despite a strong social media presence, the French fashion house is still reluctant to fully integrate digital channels within the customer experience, fearing a loss of consumers’ trust, which is ultimately a lost opportunity. Louis Vuitton focuses on extremely customer friendly in the stores, where you will be greeted by a salesperson who will cater to your every need to make your shopping experience plesant. LV also offers clients the ability to deliver the desired product to your doorstep if not available in stores.
Customer Involvement and Customization
https://www.highsnobiety.com/2017/06/06/louis-vuitton-make-it-yours-campaign/
Customer Involvement and Customization
Online Customer Journey
Having a strong online presence is extremely important for luxury brands, and Louis Vuitton is no different. In the link below you can see how much goes into the LV online website in order to make the customer journey a pleasant one.
Online Customer Journey
https://econsultancy.com/blog/66175-louis-vuitton-analysis-of-the-luxury-online-customer-journey9
Why is Louis Vuitton is Worth the Money?
https://www.designer-vintage.com/en/lists/article/5-reasons-why-louis-vuitton-bags-are-worth-the-money
Take Aways
- Louis Vuitton remains an industry leader in the luxury market
- Although they have a great customer experience both online and in store, there is room for improvement by using more technology
- They could continue expanding within the Asia-Pacific market where LV will have to meet the demand to increase growth
- Decisons LV will have to make will be whether to turn to a more automatied assembly model in order to higher their customer base but will lose some of their high end market. Or LV can stick to their heritage by using artisan labor where they will please their high-end customers but lose assible customers
Take Aways
Conclusion
Louis Vuitton has strong roots in their heritage and reputation for the highest quality products and a great customer experience with added value to all their products through promotions, warrantys, and product longevity. The supply chain of LV currently focuses on making handmade products of the highest quality, so if they try to expand much more they will need to rely more heavily on machinery which in turn may ruin the reputation. Louis Vuitton can keep a sustainable competitive advantage by maintaining their superior craftsmanship and by being quick to adapting to changes in the market. Future problems LV may have include the fact that it may be difficult to attract new customers while sticking to their roots in artisanship. With their strong distribution channel and how they choose to move forward in the future will shift the luxury market.