STAFFORDSHIRE UNIVERSITY 2010-2011
BRAND MANAGEMENT - 10006094
LOUIS VUITTON
CONTENTS
PART A ....................................................................................................................................................1 1. HISTORIC OF THE BRAND ............................................................................................................1 2. LOUIS VUITTON: THE FIRST LUXURY BRAND ............................................................................1 3. LOUIS VUITTON’S STRATEGY .....................................................................................................4 a. Many strategies face to a favorable environment ..............................................................4 b. Differentiation / Brand extension / Internationalization ...................................................6 c. Luxury online : a vital step ..................................................................................................8
PART B ................................................................................................................................................. 10 1. BUISINESS TO BUSINESS .......................................................................................................... 10 2. A MAJOR INNOVATION .......................................................................................................... 11 3. THE CLOTHING ACTIVITY : A CATEGORY EXTENSION ............................................................. 12 4. LUXURY ONLINE : IMPROVEMENTS OF THE WEBSITE ............................................................ 15
LOUIS VUITTON : « L’art de traverser le temps » PART A: CRITICALLY EVALUATE THE LOUIS VUITTON (LV) BRAND, USING APPROPRIATE BRAND THEORIES AND MODELS, FROM INCEPTION TO THE PRESENT DAY. 1. HISTORIC OF THE BRAND: 1837 LV becomes apprentices and builds travel trunks.
1987
1896 The Monogram Canvas was introduced.
LV merged with Moët and Hennessy, creating the LVMH group.
1854
1912
1998
He open his own house in Paris and invent the flat trunk.
Georges Vuitton opened the LV store, in the Champs Elysees.
Marc Jacobs becomes artistic director of LV: a fresh touch.
Adapted from the LV website.
Famous for the creation of the flat trunk, Louis Vuitton is a very powerful luxury brand. Everything started in 1854, when Louis Vuitton decided to open a store, and create bags. In a world of travel mostly reserved to elite, Vuitton saw a beautiful opportunity. Travel was synonymous of wealthy and of escape and discovers as well. Even now, travel is cheaper, but still synonymous of escape, and that's what people look for. 2. LOUIS VUITTON: THE FIRST LUXURY BRAND IN THE WORLD (BRAND IDENTITY AND POSITIONING)
The American Marketing Association defines the brand as “a name, a term or any other features that identifies one seller’s good from those of other sellers” (Schmitt and Rogers, 2008). It's important to look at the identity of the first luxury brand in the world. Indeed, 1
according to Matt Haig (2006) and the Interbrand website, Louis Vuitton is sixteenth on the best global brands ranking 2010, and "its brand value exceeds that of Gucci and is over double that of Prada". Riezebos (2003), has highlighted the importance of the brand value. It's the identity of the brand that convinces the customers and permits the brand to succeed. The brand onion (Nicolas Ind 2007) is a tool to start analyzing the image of Louis Vuitton:
All over the years, LV managed to keep its core values, its culture. Indeed, the brand is always seen as the main brand of luggage and travel, and associate to luxury and quality. The personality follows the values and remains very strong, it’s a timeless brand. For M. Tungate (2008), the branding initiatives of LV are also following the values: travel with the LV Cup yacht race (and luxury with theses boats).
2
In 1997, with the decision to put Marc Jacobs in charge of the artistic direction, LV made a bet: to be more innovative, to let the artistic lead the spirit of the brand, that's to say more fashionable. This spirit is now an entire value for LV, and it's working well. At the end, even if LV becomes more eccentric and youth‐oriented, the core values of LV will stay and “be ready for re‐appropriation when necessary” (Tungate, 2008). The brand identity prism (Kapferer, 2008) can give another perspective and add some insights to the brand onion. Indeed, the value of the brand it's also to create a strong brand identity.
The information in the prism gives some details and aspects of brand equity. So, it brings to the positioning, with this concept. Indeed, it’s the marketing effects uniquely attributable to the brand (Kotler and all, 2009).
3
The brand equity can also be seen as “a set of association and behaviors on the part of the brand people” (Srivastava and Shocker, 1991), or “a series of brand attributes as the brand dominance, knowledge or recognition” (Aaker). Gordon et all (1994) looked at the evolution at the brand equity. LV is now a timeless brand, which celebrated its 150th birthday in 2004. It’s a successful brand (for instance, in the first semester of 2010, the result had augmented of 28%), which managed well its brand identity and equity. The positioning can be seen as TRAVEL, HANDMADE, FASHION, and HISTORY. LV can continue its international expansion, and develop even more its lines and products. 3. LOUIS VUITTON'S STRATEGY
When you think about it, Louis Vuitton is a perfect example of brand extension or diversification. It started with one product in 1854, to have now a very broad range of products. Louis Vuitton started by working for an empress (opposite), and all over the years, it has continued to improve its products, to satisfy its customers. It first product was trunks, and now the brand is involved with fashion, jewelleries… a. MANY STRATEGIES FACE TO A FAVORABLE ENVIRONMENT
A luxury brand has a different strategy than another brand. Nevertheless, the brand has to look at its environment. The five forces model (De Chernatony and McDonald, 2008) shows that LV is in control of its environment. The brand doesn’t have many competitors and the macro‐environment doesn’t affect very much the luxury market. Plus, the brand has several ambitions, and keeps going on its growth.
4
Seeing the position of LV in the environment, what are the strategies chosen by the brand? The Ansoff’s Matrix (Lester 2009) permits to have a quick look of the global strategy of LV.
As said before, the LV brand created in 1854 started to manufacture trunks, but evolved very fast. Face to the success and the development of travel, LV made other types of luggage, as
5
smaller bags, less heavy than trunks and easier to carry. Today, the LV is a global brand, settled in several continents. The brand is not only a luggage brand anymore, but sells jewelleries, prêt‐à‐porter, city‐ travelers books… LV goes in many directions to develop itself: diversification, brand extensions… An important development which is not included in the matrix is Internet. Indeed, the online luxury is particular, and it’s important to see if LV has succeeded to create its online world. b. DIFFERENCIATION / BRAND EXTENSION / INTERNATIONALIZATION
The Ansoff’s Matrix showed that the LV brand globally follow three strategies. First, the LV brand differentiates its products. LV can be placed as a value added
brand,
differentiation,
in
in the
Porter’s model. Indeed, the brand is not playing on costs, but in a value added which makes the LV product specials, and wanted.
The strategy of the brand can also be seen through
the
brand
extension (Kotler). LV doesn’t
create
new
brands or sub brands, but
new
lines
of
products, or extensions of its competences. In 1997, LV sells fashion. 6
Keep the Louis Vuitton name, long after the founder died, show that the brand can be fashionable and keep it roots in the same time. It’s a strength and the sign of the timeless of LV. Plus, the brand succeeds its entry in fashion, even if its core business was luggage. Louis Vuitton stands in business that fits with the brand; indeed, fashion and jewelleries (and watches) are related to luxury, and can also be related to travel. Finally, LV decided to go abroad. It’s Georges Vuitton, son of Louis Vuitton, who incites his father to develop the company abroad. A store in London, then in New York was opened in 1885. The international strategy of LV is to have a global co‐ordination (Riezebos). LV is settled in more than 60 countries, and own 320 stores.
LV, despite its international growth, keeps its production’s sites in France. It’s a good strategy, because in luxury, culture and roots matters a lot and the roots of LV are France. 7
c. LUXURY ONLINE : A VITAL STEP
According to Okonkwo (2010), “a luxury brand that ignores the blogosphere is on its way back to the 18th century”. Indeed, Internet is everywhere, even small brands have to be online to avoid being old‐fashioned. The McDonald and De Chernatony following model is interesting to see the strengths and weaknesses of the LV brand online.
The LV site is representative of the spirit of the brand. Indeed, a brand has to give the same image on and offline, to be credible. 8
The site doesn’t have a lot of weaknesses:
It’s difficult to go back when a language is chosen.
The welcome page, after the choice of the language is too heavy. Less information for a better clarity could be better.
Finally, the evaluation of the LV brand showed that it’s a timeless brand, which had made many bets (Marc Jacobs, the internationalization…), but was always successful. Louis Vuitton can also always improve its strategies and its positioning, but the bases are here. The first luxury brand has earned its position.
9
PART B: GIVE SUGGESTIONS AS TO HOW THE LOUIS VUITTON BRAND COULD BE DEVELOPED IN THE NEXT 5‐ 10 YEARS.
The Louis Vuitton brand managed very well its development during these past years. But as every leader, the brand has to keep going on its strategy, and develop new elements to stay the first luxury brand in the world. In the next 5‐10 years, the LV brand can develop itself and several axes:
An important change will be to create a NEW INNOVATION. Indeed, the band is known by its very important innovations (The Monogram Canvas, the flat trunk…). Despite some creation as the graffiti or the Monogram in colors, Louis Vuitton has to give birth to something new, which will give a new breath to the brand for many years.
Another point where the brand can develop itself will be in EXTENSIONS. It could be interesting for LV to develop its clothing line. Indeed, this branch is not famous as the luggage activity. The parades are very famous, but Louis Vuitton is first known with its bags. Marc Jacobs succeed to give new perspectives with graffiti and partnerships with Asian artists for the bags. Now, it’s time to look at the clothing line and do some new lines, and limited edition.
Finally, it's obviously that INTERNET is growing very fast. An essential strategy for Louis Vuitton will be to take attention on the online perspective. Now, every brand has its website. The point of having a website in not to have a shop window, but to create a customer experience, to be different than other competitor’s website.
1. AN INNOVATION
It’s time for LV to find a new innovation which will follow the brand for many years. The Monogram Canvas is still fashion, but in 2003 it was renewed. LV need to find a new icon, a new logo or sign that can represent the brand like the others icons, for many years.
10
LV has to create new things, to go abroad and to have product extensions, but not in perfumes. Indeed, the brand controls its production, and it’s strength. If LV wants to make perfumes, the brand has to let a part of its production to others firms. It will be a danger, because LV wants to control everything, and it will not be possible anymore. 2. CLOTHING ACTIVITY: A CATEGORY EXTENSION
Now, LV can develop another part of its products, the clothing lines. Indeed, Marc Jacobs is a designer who can help the brand find new ideas and partnership to re‐launch the line. With this operation, a huge campaign has to be created. The theme will be the travel. Indeed, it’s the core business of LV. It will be good to re‐ launch the clothing line, using strong values. Travel will be mix with fashion, avant‐gardism. Regarding the extension, Marc Jacobs will have to create five new lines of clothes; one for every continents. It will permit to show the internationalization of LV, and to take that opportunity to invest new markets with this promotion. Indeed, the perspectives of LV are to invest Lebanon and the Dominican Republic: “We have three stores in Dubai, one in Jeddah, one in Riyadh. And obviously, it was essential to open in Beirut” (Yves Carcelles, interview in a French radio station, 2010). So, every line will have its own universe, but they will be linked by some features, founded by Marc Jacobs. It can be a “star” clothes, that will be in every collection and declines according to the country. 11
The Levitt model (Riezebos 2008) shows how LV will improve its products to create the new line. Moreover, this extension will permit to improve brand image, reduce risk perceived by customers, and have consumer variety seeking, as well as revitalize the brand (Keller 2008).
3. LUXURY ONLINE: IMPROVEMENTS OF THE WEBSITE
“Luxury brand have a great deal to gain but also a great deal to fear from the Internet” (Kapferer, 2001). He also said that rarity makes luxury brands, but the danger is that Internet makes everything available. The aim is to have a good website, a rare website. Jones (1986) highlighted the customer’s perceptions of added value. LV has to managed the added value from experience, that’s to say to create a real and new experience through the website for the customer. LV already started that, it’s possible to “touch” with the cursor the leather, and it changes the texture. So, LV has to go more with experiential marketing (Keller 2003), to distance itself from others luxury brands. That will involve “enjoy multiple touch points and multiple senses”, and do “entertainment”, in order to be distinctive and relevant. The idea is to make the customer feel good and that he wants to come back. In the front page, after the choice of the country (that could be in a map), the welcome page will be characterize by a LV store or a new environment, as a landscape (to remain in the travel spirit). 12
Here, the internet user will enter in the 3D experience of LV (as the picture shows). He will have to click on a tree or a furniture (according to the environment chosen) to go on different sections. Every section, except the e‐shopping, will be designed like that. Plus, the site sill have more videos, more animations and real experience (for instance, when the cursor is in on something, the texture can move).
Finally, improvements on the LV website can be shown with the 7Cs models (Okonkwo, 2010). Indeed, 7 categories permit to see where the site will be improved, in response to the model in the first part (De Chernatony and MacDonald).
13
The LV brand is the first luxury brand in the world, and certainly will be the first luxury brand fir many years. Every bets are successful. However, it’s time to take new bets, to create new things. The Kapferer (2008) prism above shows the changes of the brand in the next few years. 14
REFERENCES PART A:
Brand ranking, accessible at: http://www.interbrand.com.
De Chernatony L., McDonald M. (2008), Creating powerful brands, Elsevier Butterworth‐ Heinemann (p.58, 294‐98).
History of Louis Vuitton, accessible at: http://www.louisvuitton.com/fr/flash/index.jsp?direct1=home_entry_fr.
Haig M. (2006), Brand Royalty, Kogan Page Limited (p.137).
Ind N. (2007), Living the brand, Kogan Page Limited.
Kapferer J.N. (2008) The new strategic brand management, Kogan Page Limited (p.183).
Kotler P., Keller K., (2009) Marketing management, Pearson Education Limited (p.454).
Lester A. (2009), Growth management: Two hats are better than one, Macmillan Publishers Limited (p.52).
Riezebos R. (2003) Brand management: a theoretical and practical approach, Pearson Education Limited (p.11, 206).
Schmitt B., Rogers D. (2008), Handbook on brand and experience management, Edward Elgar Publishing Limited (p.107).
Tungate M. (2008), Fashion brands: branding style from Armani to Zara, Kogan Page Limited (p.156).
PART B:
Interview of Yves Carcelles on BFM radio : http://www.radiobfm.com/edito/info/74443/yves‐carcelle‐and‐quot‐cest‐un‐tres‐ bon‐moment‐pour‐ouvrir‐a‐beyrouth‐and‐quot‐/
Kapferer J.N. (2008) The new strategic brand management, Kogan Page Limited (p.183).
Kapferer J‐N., (2001), Re‐inventing the brand, Kogan Page Limited (p.201‐202).
Kotler P., Keller K., (2009) Marketing management, Pearson Education Limited (p.440, 743).
Okonkwo U. (2010) Luxury online, Macmillan Publishers Limited (p.155).
Riezebos R. (2003) Brand management: a theoretical and practical approach, Pearson Education Limited (p.19).
15