Hotel Brand Extension

Hotel Brand Extension Louis Vuitton by: Wendy Bonilla, Angela, Wesley, Sarah

Table of Content Company Summary Overview & Timeline Mission Statement / Vision and Values Statement Current Products & Services Current Revenue (Final Direction) Target Market & Customer Profile Environmental Factors affecting the business & Future Growth Plans Proposed potential brand/product line Current Positioning in the market, current placement & current promotional activities Market Analysis Brand Extension Size of the market PEST Analysis SWOT Analysis Key Players - Product Mix, Price, Service & Distribution Target Consumer Demographic Segmentation Lifestyle & Psychographic Segmentations Customer Profile 5Ps Strategy for Proposed Extension Overview & Moodboard Pricing Strategy Distribution, channels Promotion Strategy Marketing Mix Conclusion Sources

EXECUTIVE SUMMARY This report includes an analysis for Louis Vuitton’s current positioning, distribution, and marketing mix situation. The report is to suggest a potential brand extension for Louis Vuitton.

While the luxury market is seeing some of its lowest numbers in years, Louis Vuitton remains a leading luxury retailer of handbags, clothing, and accessories, for both men and women. And the brand continued to generate outstanding profit to the LVMH Group in the first half of 2017.

The luxury market is extremely competitive and Louis Vuitton strives to be on top.

Utilizing consistency in quality gives them the ability to do so. Louis Vuitton is classic and creative; setting high goals for themselves and reaching for success. While they will face issues due to price points and competitors they still keep high expectations.

An internal weakness facing the brand is its high prices and lack of discounts, this can often turn away consumers. Knock-off Louis Vuitton bags are an industry of their own, they pose a threat to the brand and “water down” the market that the brand has worked so hard to achieve and maintain.

We have designed a potential brand extension to bring new excitement to Louis Vuitton’s loyal customers. The extension is the Louis Vuitton Hotel in Paris. This report gives detailed information on the target customer, competitors, a brief promotion strategy, and market analysis for the Louis Vuitton Hotel.

Brand Company Louis Vuitton Malletier is a French fashion house and luxury retail company. Louis Vuitton is known for selling luxury trunks, leather goods, ready-to-wear, shoes, watches, jewelry, accessories, sunglasses and books.

History/timeline • Founded in 1854 by Louis Vuitton(French box maker and packer) in Paris, France - originally specialized in trunks • 1885 - first store opened in London on Oxford Street • 1892 - Louis Vuitton died and management passed along to his son Louis’ son, Georges Vuitton set out to create a worldwide corporation • 1896 - signature LV monogram was patented • 1914 - LV building launched on Champs-Elysees - the the time, largest travel goods store worldwide • 1936 Georges died and his son Gaston-Louis took over the company • 1977 - LV owns two stores that bring in 10 million dollars annually • 1987 - creation of LVMH • 1997 - Marc Jacobs appointed the first creative director • 2003 - Collaborated with Takashi Murakami and created multi-color monogram in 33 different colors •2007 - Creation of the “Neverfull” tote bag which has become the best selling bag of all times.

•2013 - Nicolas Ghesquière replaced Marc Jacobs’ position as creative director.

•2017- Collaborated with streetwear brand Supreme.

The products were only sold through pop-up stores and the collection went wild on social media.

Mission Statement / Vision and Values • Core values - travelling and craftsmanship • “The mission of the LVMH group is to represent the most refined qualities of Western “Art de Vivre” around the world. LVMH must continue to be synonymous with both elegance and creativity. Our products, and the cultural values they embody, blend tradition and innovation, and kindle dream and fantasy.

• LV itself does not have a mission or vision statement • In view of this mission, five priorities reflect the fundamental values shared by all Group stakeholders: - 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”

Current Products & Services • LVMH owns: LV, Moet-Hennessy, Bvlgari, Celine, Kenzo, Loewe, Fendi, Givenchy, • Sephora, Benefit, Make Up For Ever, Marc Jacobs, and other brands.

• Wines and spirits, fashion and leather goods, perfume and cosmetics, watches and jewelry, selective retailing, other activities • Focusing on Louis Vuitton • 70 “houses” - brands managed under LVMH

Current ownership structure and organization •Multinational luxury goods conglomerate - combination of many corporations that are engaged in entirely different businesses, but fall under one corporate group •Public entity

Current revenue (financial direction)

Current target market and customer profile • Individuals who have a high disposable income • Both men and women • Young adults to seniors (age range from 22-65) • Fashion forward Quality and status seekers who tend to self indulge • Individuals who strive for and respect tradition and innovation Name: Riley Jones Age:35 Occupation: VP of a large corporation, has a high disposable income Location: New York CIty Interests: Fashion, Travel, Reading, Shopping, Technology, Family and Friends, Eating at the most popular restaurants, Pilates.

Name: Frank Nickle Age: 55 Occupation: Salon owner Monthly Income: $30,000 Location: Paris Interests: Fashion, Travel, Shopping, Technology, Reading, trying anything new

Environmental factor affecting the business Cruelty Free Fashion: The rising awareness of animal abuse in the fashion and leather goods industry is affecting many high end brands that use animal products in their merchandise. A growing number of people are against the usage of real leather and fur when it comes to clothing and accessories and Louis Vuitton prides themselves in that very material. This can cause a decline in the acceptance of the brand by both consumers and observers. Earlier in 2017, PETA (People for Ethical Treatment of Animals), has bought stake in Louis Vuitton in order to pressure them to stop using exotic animal skins.

Future growth plans: Louis Vuitton is constantly adapting and incorporating new production processes and habits in order to create new solutions to many of the environmental challenges that the fashion industry faces. The entire entity of the LVMH Group has an Environmental Department that has a mapped out plan and initiative to take towards sustainability.

The company strives to reduce its carbon footprint drastically by 2020. For the company’s future growth plan, the funds that are used in order to reduce its carbon footprint will double.” Sustainability is a topic that an increasing number of fashion houses are taking seriously. It is something that LVMH will be investing a great deal of time and money into.

A quote that is taken from their website states: “By embedding ecological imperatives as a

source of innovation, we have long made environmental responsibility a pillar of our growth strategy for 25 years.”

Proposed potential brand/product lines Kitchen Items Louis Vuitton has variety of product line including the fashion industry furnitures and home decor items. To extend home items and fit luxury modern life, kitchen item, such as utensils, napkins, and oven, would be the next product line.

Louis Vuitton Hotel One of the most classic products of Louis Vuitton is luggage cases, which associates to travel and hospitality.

According to Statista,global hotel industry retail value has increased from 2010 to 2018, and this upward trend is expected to grow. To extend this concept, Louis Vuitton could develop luxury hotels in France, which is the source of Louis Vuitton, as a first location to offer high-quality service to clients.As a international luxury brand, the hotels may be extended globally.

Current positioning in the market

Services in relation to its top 10 direct competitors The main competitors of Louis Vuitton are Hermes, Chanel, Gucci, Yves Saint Laurent, Burberry, Prada, Versace, Valentino, Balenciaga, and Giorgio Armani. Below is a chart comparing Louis Vuitton’s products, pricing and distribution to its competitors.

Current placement In order to keep the exclusivity of the brand concept, Louis Vuitton only sell through their own website and boutiques. The sales associate in the store are there to shop with each individual customer. Their job is to make the shopper feel as special as possible; like they have a personal shopper, therefore the company has personal sellers in every store. For loyal customers, LV also offers private shopping programs, special customer events, and private product previews; all of which aid in the ability for the sales associates to market the company. A couple Louis Vuitton boutiques can be found in dedicated department stores like Bloomingdale’s and Nordstrom.

However, the sales associates in these boutiques are trained by the company directly to ensure the perfect customer service each of their client gets.

Sales volume distribution by channel Louis Vuitton’s goal is to have as much control over their product and the way it is presented in stores as possible. Their products have an even higher exclusivity because they are mostly sold to customers through their independent stores. This allows the company to control its distribution outlets with a greater transparency. Louis Vuitton has boutiques in selected department stores, but the salespersons are trained directly by the company. Louis Vuitton also has control over the aesthetics of these boutiques in department stores so that the brand image remains consistent. In the long run, these strategies help to reduce cost while maintaining efficiency. Each store location is very well thought out and are located in central and high trafficking areas. Stores are located all around the world. There are at least three hundred retail outlets. Products are also available for purchase through their online channel.

Price in the Marketing mix of Louis vuitton Louis Vuitton’s prices are at a premium. The company invests a large sum in order to maintain its quality and status of the brand name. Louis Vuitton does not offer sales on their products or reductions in their pricing in any way. Due to the high prices, individuals who have the means to buy the company’s products are the only ones who can afford it. It has also been known that Louis Vuitton follows a value-based pricing strategy. Even though the companies prices are high, products continue to sell and consumers are willing to pay the price.

Current promotional activities and annual spend on advertising

Detail current advertising

11/07 Personalized your belt.

For the first time, Louis Vuitton has created the option to customize your own belt. There are two hundred and forty combinations that are possible. The brand offers fourteen leather straps and twelve buckles to choose from. Initials can even be stamped inside the belt strap.

11/06 THE CRUISE 2018 CAMPAIGN

For the Cruise 2018 Collection, Louis Vuitton presents actress Alicia Vikander as the face of the campaign. The emotion that the campaign exudes is a “balance between strength and serenity.” The photos were shot by photographer Patrick Demarchelier. The backdrop for the images are the stunning islands of Ibiza. The campaign evokes another expression of Louis Vuitton embracing travel.

10/31 THE APPLICATION: LV NYC VVV The “Volez, Voguez, Voyagez - Louis Vuitton” app is an immersive experience. Through this app, users can access practical information and experience interactive features. One can play around with filters and explore augmented reality. The app is a creative tool that users can use to personalize their very own trunk or stories of a visit to a store.

Market Analysis of the Brand Extension Size of the market Paris, France Paris is where the flagship store of the company is located and where the brand was founded.

An individual who purchases from Louis Vuitton is aware that it is a French company. There is no better place to create a LV Hotel than where the brand was originally created. By being located in the city, one will experience a true Parisian lifestyle. According to Statista, the annual revenue of French hotels is expected to reach around US$18,000 million from 2018 to 2020. The sale global hotel industry is predicted to reach 55.billion in 2018.

PEST analysis Political - The Paris skyline has been newly freed of height limits. One of the most attractive things about the city is that there are few skyscrapers. Parisians tend to strongly dislike extremely tall buildings in their city. This is something that the LV Hotel will have to take into consideration. When building the structure it needs to be something that will seamlessly blend in with its surroundings. If it stands out to the general public in a bad way, it could hinder its reputation and booking sales.

Economy - The economy is something that is not always stable. This is something that every business has to keep an eye on. When the economy is in a decline hotel booking will decrease. The Louis Vuitton hotel will need to have a contingency plan for this. They can offer lower prices and special deals at times like this, but they will need to make sure it will not cost them too much money. Globalization is also key in our world today which leads to more people traveling for many reasons.

Social - Target market for Louis Vuitton is a wealthy traveler. This will transfer over to the target market for the Louis Vuitton hotel. The brand name reflects a higher end social class. People who can afford this type of hotel experience hint at their social standing.

Technology - Technology will be one of the only ways that someone would be able to book their stay at the Louis Vuitton Hotel. By using the website one can browse the amenities that each room has to offer, check availability and book their stay. There will also be an app that will be created especially for booking purposes. Social media will be heavily used as a marketing tool and to provide links for bookings.

SWOT ANALYSIS

Strengths

Weakness

• Strong brand recognition and value • High customer loyalty • Wide range of products • Extensive consumer target group • Strong global distribution channels • Its advertising and marketing features globally known celebrities • Offers custom made products • Contributes to maintaining environmental standards

• Very intense and close competition • Limited customer base • No discount sales • Business depends largely on economic conditions

Opportunities

Threats

• Strong campaign images using the celebrities and models and actress that give the company a good image • Organizing various campaign and raising brand awareness • Make seasonal offers • Frequent exhibitions and events • Further Expand social responsibility by green way of production

• Intense competition • Celebrity brand endorsements that could affect the brand poorly • Slow economic condition, recession and financial crises potential

Core competencies and competitive advantage Quality control all the way down to customer service to ensure our customers enjoy the luxury lifestyle the hotel offers. Louis Vuitton is one of the oldest luxury brands in the world and has a loyal customer base and aspirational history. There are not many luxury hotels owned by luxury fashion brands. Our customer will continue to experience the exclusivity and spirit of adventure expressed through unique heritage of Louis Vuitton. Voyage has always been one of the main themes of the brand. They have a travel collection of handbags and luggages, as well as books and city guides. The Louis Vuitton Hotel will be an add on of what they are currently promoting, the spirit of travel and exploring.

Demographic segmentation The demographic of the typical Louis Vuitton customer are adults between the ages of 25-65.

These customers are both male and female and are typically very affluent. They make 100,000 dollars a year or more. The Hotel does not specifically target customers of any education level, however many customers outside of celebrities are usually of higher education. The typical Louis Vuitton customer is a white collar worker portraying a tailored appearance. The Hotel targets all races and ethnicities however their biggest target would be individuals who embody and value travel and craftsmanship.

Lifestyle/psychographic/behavioral segmentations The target market of The Hotel are individuals from the upper class. People who hold this status are usually fashion conscious people with a higher income. They think of Louis Vuitton as a status symbol. This target market has a wealthy lifestyle and enjoys traveling. Activities they may enjoy include playing golf, yachting, fishing, hiking, snorkeling, etc. These customers have a variety of interests. Some of them may have a significant collection of famous artwork. These individuals might also have interest in the art of wine tasting.

Customer Profile Customers are generally tourists and travellers in their late 20s to mid-60s, with mid to upper income averages. Our customers live a jet-set lifestyle. They love to travel, explore the world, and experience different cultures.

Name: Simon Bing Age: 55 Occupation: Marketing manager Income: 140,000 Location:Italy Interests: Travel, Reading, Technology, Movies, Jogging, Swimming, Culture Lover.

Name: Cecilia Smith Age: 25 Occupation: Fashion Model Income: 250,000 Location: Los Angeles, California Interests: Yoga, Kickboxing, Vegan food, Lattes with Almond Milk, Anything Matcha, The Beach, Being pampered, Partying, Travel, Social Media.

5PS STRATEGY FOR PROPOSED EXTENSION Reflecting the elegance of LV brand this hotel is designed with a exquisite architecture for guests to experience the ultimate of luxury with prestigious modern hospitality. The Hotel is designed to deliver the luxury of all times to family or friends.

It will have an exceptional range of restaurants, bars, inside and outside pools, different spa styles and a fitness center with private rooms for Yoga, Pilates and Boxing. The LV hotel will offer an exceptional hotel experience.

Complex Room

Pricing strategy Room prices range from $591 - $6,373 Competition-based pricing Room prices are based off of amenities, and competing prices with other luxury hotels - combining that art of hospitality and an emotional experience. According to Statista, the average of revenue per available luxury room was US$205.86( â‚Ź174.9).

Palazzo Versace Price Range - $290 $1,100 G&V Royal Mile Hotel Edinburgh - $200 $600

Placement strategy Paris Urban and sophisticated, Paris is where the flagship store of Louis Vuitton is located and where the brand was founded. An individual who purchases from Louis Vuitton is aware that it is a French company. There is no better place to create a LV Hotel than where the brand was originally created. By being located in the city, one will experience a true Parisian and luxury lifestyle.

Channel We want to stay consistent with the brand’s image and keep the exclusivity feeling across all products.

This Hotel can be booked through its website, LVMH and LV official website, also there would be a link on its Instagram Account to the LV Hotel app to be able to book or make any reservation for an event.

After this promotion strategy everyone will know about our Hotel and will have the desire to stay there when they go to Paris. People will aspire to be part a of that exclusive audience.

Promotion strategy We will use the power of digital platforms to harness and elevate our brand extension. This will allow us to connect with our customers and foster loyalty. We will start promoting The Hotel six months before its opening on Instagram, Facebook, Snapchat and Youtube with teaser videos and pictures of what’s coming up. We will slowly reveal what the look of the hotel is and some rooms and amenities. Sharing a little bit of what is going to be an exclusive hotel for a wealthy class. We are promoting a feel of uniqueness in order to attract their curiosity before its opening.

Two months before the grand opening we will announce that we are doing a grand opening event. Our team will sending out VIP invitations by personal mail. A big event full of celebrities, actors, models, and important customers for the LV brand and press.

Promotion Strategy We are going to add the tab of our LV Hotel on the Louis Vuitton official website, where people can access pictures and videos about the hotel. We will then use LV’s instagram to announce that we are creating a LV’s Hotel. The hotel will have its own Instagram account and website. After that we will use Instagram influencers (models, actors, singers) to create brand awareness.

In addition to Instagram we will also use Facebook for ads and teaser videos. Snapchat will be used in order to share some finished looks and to share the experience of being there. Twitter will share the latest updates of the Hotel.

The Louis Vuitton stores will host teaser videos of The Hotel.

Marketing Mix

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Follow Louis Vuitton Hotel We offer you the best in luxury accomodations, dining and entretainment. www.LouisVuittonhotel.com/

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Experience the best of Paris at Louis Vuitton Hotel #hotel #luxuryhotel #Paris #bestHotel

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The Louis Vuitton Steamer Trunk is an iconic image of luxury and travel. A trunk will be placed in each room for decoration and/or for the use of the customer.

Conclusion Through our initial summary of the company we establish the values, mission and vision of the Louis Vuitton brand. Louis Vuitton is a brand that is known for its rich history, exquisite quality and its association with travel and adventure. From 1854 to present day, Louis Vuitton is one of the oldest luxury brands in the world. Louis Vuitton is one of seventy brands that is part of the LVMH group. The brand’s core values focus on travelling and craftsmanship.

Through our analysis of the companies target customer, competitors, and market analysis, we have created the extension of the Louis Vuitton brand in the form of a Hotel.

By creating a Louis Vuitton Hotel, the brand can extend by providing a luxury service and experience. One can be whisked away on a jet to Paris, leave the airport carrying their Louis Vuitton luggage and arrive at the lavish luxury experience that awaits them. The brand name will continue on with its Voyage lifestyle by creating an unforgettable experience in the heart of the city in which Louis Vuitton was born. Our marketing mix for the hotel maintains the brand’s aesthetic and creates a luxury experience that the target market will not want to miss out on.

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Vuitton, Louis. “Personalize Your Belts.” NEWS - Exclusive Online Magazine | LOUIS VUITTON, Louis Vuitton, 7 Nov. 2017, us.louisvuitton.com/eng-us/lv-now. http://us.louisvuitton.com/eng-us/lv-now TUI. “Global Hotel Industry Retail Value from 2010 to 2018 (in Billion U.S. Dollars).” Statista - The Statistics Portal, Statista, www.statista.com/statistics/247264/total-revenue-of-the-global-hotel-industry/, Accessed 14 Nov 2017 Vuitton, Louis. “LOUIS VUITTON Official USA Website - Explore the World of Louis Vuitton, Read Our Latest News, Discover Our Women’s and Men’s Collections and Locate Our Stores.” LOUIS VUITTON Official USA Website | LOUIS VUITTON ®, us.louisvuitton.com/eng-us/homepage?campaign=sem_ GG-US-ENG-EC-BRAN-BROT&gclid=EAIaIQobChMI7uy_2uS81wIVVh2BCh15kgoUEAAYASAAEgJ4ZPD_BwE. Zigu. “Louis Vuitton SWOT Analysis | USP & Competitors | BrandGuide.” MBA Skool-Study.Learn.Share., www. mbaskool.com/brandguide/lifestyle-and-retail/3424-louis-vuitton.html.