LV品牌中国市场分析

Project MiaLouisVuittonWritten by Mia (Shuo Sun) Date: 2008-06-02List of content1 Project definition31.1 Problem background31.2 Problem formulation31.3 Limitations41.4 Methodology42 Introduction:52.1 LVMH group52.2 Louis Vuitton52.21 The brand history52.22 Global development73 SWOT analysis74 Analyzing competition104.1 Five forces104.11 Industry competitors104.12 Threat of new entrant114.13 Threat of substitute product114.14 Bargaining power of suppliers124.15 Bargaining power of customers124.2 The main competitor in Chinese market124.3 Market positions145 Chinese market155.1 Introduction of Chinese market155.2 Growth strategies175.3 Analyzing the costumers185.31 Buyer characteristics185.32 The buying decision process205.4 Different types of customers225.5 The copy product285.6 Advertisement315.7 Conclusion336 Questionnaire336.1 Questionnaire336.2 Analysis of the questionnaires357 Brand377.1 Brand equity377.2 Branding position417.3 Product life-cycle Marketing strategies438 Conclusion459 List of Literature451 Project definitionLVMH group is the biggest luxury product group in the world, and the company has a lot of brands, Louis Vuitton is the best well-known brand in this big group. This brand built its own flagship shops in many countries of the world. According to the development of the China development, China be come the third biggest luxury product market in the world. LVMH group especially Louis Vuitton get a good development in China. 1.1 Problem backgroundLouis Vuitton is a famous luxury brand in the worldwide. The target customers of its products include the royal family nobles and some rich successful people. This luxury brand means successful and status. But now many people when they buy these luxury products, they just eyeless follow the branding, but they do not care about the product itself. Many people think that have luxury product can satisfy their amour-propre, luxury product is not only merchandise. Also have many people, they want to own some famous luxury brand, but they do not have enough money, so they choose the copy one. More and more people use the copy one, through this way the luxury brand become common and philistinism and the value of the brand will be lost. 1.2 Problem formulationFrom last century, the purchasing power of Chinese customers is increase very fast, more and more Chinese customers became richer, and they more prefer to buy the foreign brands. Some international supermarket chain and shops and retailers get into the Chinese market, these shops will open a road to the luxury product get into the Chinese market. Many famous luxury product brands began to get into the Chinese market. In China, the average income of the people is lower than some developed country, so the price of the luxury product is still very high for the many people. Luxury product has an expensive price depend on their history and the user of these brands and the quality, but in the Chinese market, the copy one is popular, because richer people is only a few group in the country, and most people in the country are not rich, they do not want to spend their 2 or 3 mouths salary on a luxury product, like a bag. But for some luxury brand, like Louis Vuitton, they are the leaders of the fashion in the world, because they have their own fashion show. Many people want to follow the fashion, but they can not consume luxury product as a normal product, so they choose copy one, and the copy one have a big market share compare the real one.1.3 LimitationsIn this project, I did not write some thing about the financial part of this brand, and I did not write the organization part of the brand either. I only focus on the analysis of the brand and analysis the Chinese market and the Chinese customers. 1.4 MethodologyI use the SWOT analysis, five forces, market position, brand position, product life cycle, STP model and buying behavior in the project. 2 Introduction:2.1 LVMH group LVMH Mot Hennessy - Louis Vuitton group is the biggest luxury products group in the world. The group own more than fifty famous brands in five different areas which include Wines & Spirits; Fashion & Leather Goods; Perfumes & Cosmetics; Watches & Jewelry; Selective retailing. This French group was building on 1987, but these famous brands have a long history, so depends on the brands, the group grown fast. Right now the group has more than 2000 stores in worldwide and more than 71000 employees, and more than 74% employees are based outside France. (The figures from the website of LVMH group) Besides developing business the group also builds some welfare works and protects the environment. The mission of the LVMH group is to represent the most refined qualities of Western Art de Vivre around the world. In view of this mission, five priorities reflect the fundamental values shared by all group stakeholders: be creative and innovate: aim for produce excellence; bolster the image of our brands with passionate determination; act as entrepreneurs strive to be the best in all we do. 2.2 Louis Vuitton In this famous luxury product group, Louis Vuitton is the most well known brand. The main product of Louis Vuitton is leathers-traveling bags and handbags. 2.21 The brand historyIn 1837, Louis Vuitton who was born in a carpenter family in France comes to Paris, and tries to make a living in there. At first, he was an apprentice of a workshop which was make luggage. After several years, he began to service to the royalty, and depends on the better craft, Louis Vuitton make a traveling bag for the queen of Napoleon III, after that the queen began to trust in him. When Louis Vuitton service in the palace, his technique and taste of making traveling bags are increased, this is good for him to make the high quality luggage in the future. And at the same time, making the luggage for the royalty, it is also increase the brand value of Louis Vuitton in the future. In 1854, Louis Vuitton stop working in the royal palace, and he open the first shop of leather in Pairs, the main product is the flat luggage, and at this time, he create a new brand, named Louis Vuitton. Because he has the experience of service to the queen, he creates the classical “Trianongrey” traveling bags which make of canvas. After this kind of bags launched, it becomes very popular in the upper classes of Paris, many nobles in Paris they choose this luggage to be their traveling bags. After four years, Louis Vuitton opens the first factory in Asnires. In 1871, Louis Vuitton opens a new shop on Scribe road; after four years, he opened a new shop in London. The classical product ironbound luggage was lunched in 1889. In 1896, the familiar Monogram design was launched to try and counteract the replicas made by his competitors who were copying his unique styles. The son of Louis Vuitton make the famous “LV” logo on it. The later generations of Louis Vuitton makes this brand more and more famous, and create a good value of this brand. In 1984, the stocks of Louis Vuitton are come into the market in Paris and New York. In 1987, Louis Vuitton and the Moet champagne company which build in 1973 and the brand Hennessy which build in 1765 incorporated to a new group LVMH group. After more than 150 years, although Louis Vuitton already belongs to LVMH this biggest luxury product group, but in all brands under LVMH group, the sales of Louis Vuitton is more than 60% of the whole group. 2.22 Global development Louis Vuitton come from France and after the brand was born, it become very popular in Pairs or the whole France. The first foreign market of Louis Vuitton is London. After that, Louis Vuitton also gets successful in other western countries. In 1978, Louis Vuitton open its market in Japan, this is its first step in Asian market. Louis Vuitton get a big successful in Japanese market, now, Japanese market is the biggest market for Louis Vuitton in the world. From 1992, Louis Vuitton enters Chinese market. Until 2008, Louis Vuitton already opened 19 shops in China, not only focus on the big city like Beijing Shanghai, also opened shops in middle size cities. In future of 2008, Louis Vuitton plan to open 10 new shops in China. Louis Vuitton already opens its shops in 52 countries. Louis Vuitton more focus in Asian market, because right now, China is become to the third biggest luxury product market in the world, just after Japan and the US. The total population in Asian is the largest in the world and the economy development in Asian grown fast, especially Indian China this kind of developing countries. 3 SWOT analysis StrengthsLVMH group is the biggest luxury group in the world, the group has more than 50 brands in 5 different areas, and Louis Vuitton is the main and the most important brand in the group. This is the stronger supporter for the brand. Louis Vuitton has more than 150 years history, this brand is also the most well know brand in the luxury industry. It is very famous. Many people think Louis Vuitton means luxury successful and richer. Expect the centuries-old history; Louis Vuitton products have best quality fashion design and refined craftwork. About the materials, Louis Vuitton choose the skin that from the cattle that live in the north Europe, because the natural environment, the cattle bite by mosquito infrequent, so the skin do not have a lot of scar on it. In the produce process, Louis Vuitton control their quality very strict, their product do not have any distortion, the main factory of Louis Vuitton in Paris has a exam room for test the finished product. Every year, the fashion show of Louis Vuitton is the leader of the fashion industry. Through the beautiful design, Louis Vuitton is one of the leader of the fashion industry. For the VIP, Louis Vuitton offers the other service-they can have their own product make to order. This service can give the customer some unique product for themselves, this attract many people. And most customers of Louis Vuitton are the noble or richer people, they choose this brand, in the other side, this is also increase the brand value, the upper class in the social believes this brand. As a luxury product, the price of Louis Vuitton is high, but it can be a product through Mom to the daughter, because the Louis Vuitton products never have any discount, and the price of the products goes up year by year, and the brand maintain their products forever. Also cause the higher price, the logo of Louis Vuitton becomes a kind of sign of successful and richer. Weakness As a luxury brand, its target customers are the first class of the social, so they only service few people. Its market is smaller than the ordinary products. In this luxury industry, it has a lot of famous brand. Louis Vuitton has many competitors. Some competitors come from the same luxury group, like Fendi, some competitors belong to other luxury group, like Gucci. These famous brands all have centuries-old history. These brand all focus on the first class in the social. Louis Vuittons leathers and bags better than other brands, but the other brands also have some famous classical design. But in the fashion industry, the profit of every product is high. In the fashion industry, artistic design need cooperated with business market very closed; this is good for the development of the brand. Some times a designer makes some very beautiful and artistic things, maybe it will popular in the other designers or some people engage in art, but they can not agree with by the target customers, this will lose the market share. So the designer of this brand must make a good balance with art and business.OpportunityBecause of the luxury products service the few people, so they need to enter and find more and more market. Louis Vuitton is very famous in the world, so it always chooses the new and strange market for luxury brands. Now China is their new and important market. Before it opens its shops in China; many Chinese customers already bought their product when they were traveling in western countries. This is a good foundation for Louis Vuitton enters to the Chinese market. Louis Vuitton enter the Chinese market from 1992, it is the earliest brand to the Chinese market. The brand also produces some different product for different group of customers, especially for the young people. Now, the brand also enters the Indian and Russian market. They are also the new and big market. ThreatNow, all famous brands need face a big problem-the copy product of their brand. Some brand like Louis Vuitton, they sell product to customers not only quality design service also include sign of status and lifestyle. Although some of the copy product their design is as same as the real one, but they can not use the same material as the real ones, but the price is cheaper than the real one. Although the more and more copy products in the market is means the real brand is very popular and hot, this makes the brand lost their brand value. 4 Analyzing competitionIn this industry has some brands, but the product of every brand is different, most of luxury brands have their own design style, that is the most different thing with others. Through their differentia, these brands share the whole market share. I think this is differentiated oligopoly. Luxury products have many different kinds, like cars, electric product and some fashion product. 4.1 Five forces 4.11 Industry competitorsLuxury product is not necessary in the daily life. In luxury product industry, most of the brands come from France Italy and some western countries. Most of them have a centuries-old history, like Louis Vuitton. In the luxury product industry, their customers only a few of the whole populations, but it has a lot of different brands, many of them belong to same luxury product group. Now there are four biggest luxury product groups in the world. They are LVMH group which has main brand Louis Vuitton come from France, Richemond group which has Cartier Piaget Montblanc Dunhill come from Switzerland, Gucci group which has Gucci YSL and Swatch group which has Swatch Omega and so on. And some luxury brands have their own group, like Chanel. In the different groups, Louis Vuitton has two main competitors, Gucci and Chanel. These three brands are the most well known brands in this industry for Chinese people. Many customers of luxury products, they use all these three brands. In some way, Louis Vuitton is most famous in these three brands, but they good at in different area. If the customers want to buy some leathers, lousi Vuitton is the first choice for them, but if they want to buy some cosmetics, Chanel is the first choice, especially the NO 5 perfume. The bags and the shoes of Gucci are famous, and the evening wear of Gucci and Chanel are more famous than Lousi Vuitton. Although their product all about fashion, they have different styles. Compare with two main competitors, Louis Vuitton is the oldest brand, and Louis Vuittons product used to service the royal family. 4.12 Threat of new entrantIn this industry, almost all the brand have centuries-old history, and some young brands in this industry, they have the most famous designers. The design majordomo of Louis Vuitton is Marc Jacobs, through Louis Vuitton, he become the most famous designer in fashion industry, and he built a new brand use his name, this new brand is young, but it has a famous designers, so the customers sometimes choose this brand. But the profits of Marc Jacobs also belong to the same group with Louis Vuitton. So if a new brand which without famous designers enters this market and want to get successful is difficult. The existent brand they already win almost all the market share. Their brand image is well known by most people include the existent customers and target customers. Most of luxury product is the fashion product, so the design is the most important part of one brand. Although some famous designer built some new brands, but these new brands can not as same as Louis Vuitton, because Louis Vuitton has centuries-old history, they sell products to their customers not only product, also include some history, culture and life style, the young brand can not do it, they just can through the design to attract the customers 4.13 Threat of substitute productRight now, many famous luxury brands they try to build second line brand of them, the second line brand is from a same company, but the price is cheap, and the design style is different, because they want to focus on the different kinds of customers, like Giorgio Armani and Emporio Armani. Many Louis Vuittons handbags cost more than ten thousands RMB, just a few people can buy new bags in every season when it launched new designs, except some crazy fans of Louis Vuitton. I think this strategy is useful to the growth of the western countries market, many people chooses the sub-brand product; but in Chinese market, some second line brands do not well-know by most people. 4.14 Bargaining power of suppliers Almost every luxury product brand like an independent company, they have their own factories, designers, and the shops. So the influence of suppliers is smaller for luxury brands. 4.15 Bargaining power of customersLouis Vuitton sells its product to its customers directly. And depends on the market and the population, they can open more than one shops in one country or on city. Louis Vuitton do not have any retailers or agents in the market, the bargaining power of the customers is lower. As a luxury product, the price normally higher than the other product, and when the customers want to buy a luxury product,