LOUIS VUITTON Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Louis vuitton Case Study Solution

Introduction

Louis Vuitton is a king of luxury goods, formed in 1987 by the merger of Louis Vuitton and Fashion House. Louis Vuitton controls 60 subsidiaries and each subsidiary manages a small number of prestigious brands. It executes a decentralized system; the subsidiaries are managed independently. Louis Vuitton is a well-known brand in luxury consumer goods, including perfumes, travel books, clothing and designer shoes. The company started with providing luxury goods exclusively for elite class and very wealthy people of our society. No doubt times have changed, but the market of these luxury brands has increased greatly. The company targets its products to the elite class consumers. These consumers are price insensitive, this is why they allow the company to charge thousands of dollars for one product. Creativity, innovation, premium pricing are the attributes of these expensive products that give the buyers the satisfaction of having expensive products and extra-added psychological benefits like prestige that they belong to a group of few selected people, who can afford these luxury expensive items. In 2015, the company had sales of 35,665million euros with a net profit of 4,000 million, euros.

The company operates in different industries that include leather and fashion goods, cosmetics, perfumes, watches, jewelries, retailing and wines and spirits. One of the topin the leather goods include Nicholas Kirkwood. Nicholas is a British shoe designer, he launched his shoe business in 2006under the LV group of companies.Similarly, Fresh is a cosmetic brand which operates under the LV group of companies. The company’s signature products include skin care, hair care products and soaps containing natural ingredients like milk, tea and sugar.

Bulgari is a jewelry item, famous for colorful and creative jewelry designs. In 2011, Louis Vuitton had 50% stake in Bulgari. Similarly, TAG Heuer is known for making high quality watches. Louis Vuitton bought TAG Heuer in 1999. Guerlain is a well-known brand of perfumes with 900 fragrances, it remains the name for memorable fragrances such as Insolence, Shalimar and Champs-Elysees. Other famous brands in fashion and leather goods include Berluti, Dior, Emilo, Pucci and Fendi.

Different Price points within the company’s brands family

I have taken three brands of Louis Vuitton that include Bulgari, Tag Heuer and the Louis Vuitton. We can see in the above table that how the price varies of the same brand and the same product. Like watches of Bulgari. The Octo watches of Bulgari have the average price of $9,000 dollars and the Diagono watches of Bulgari have the average price of $6,000 and the percentage difference between the two prices is 33.33%. Diagono watches have 33.33% less price than the Octo watches of Bulgari. Whereas if we look at the prices of ring of the same brand (Bulgari),B. Zero ring has the average price of $2,000 whereas Serpenti ring has the average price of 5,000.The percentage difference between the two prices is 150%, and the average price of Serpenti ring is 150% more than the average price of B. Zero ring. Now look at the price points of Tag Heuer watches.The average price of Monaco watches of Tag Heuer is $3,000 whereas the average price of Aquaracer watches of the same brand is $2000, the price difference between these two prices is of 33.33%.The average price of Aquaracer watches is 33.33% less than the average price of Monaco watches.

LOUIS VUITTON Harvard Case Solution & Analysis

Target Group

I have taken three brands of Louis Vuitton and following are the target groups associated with each of the brands.

Louis Vuitton

Demographic factors

Demographic factors include age, gender and income. The brand targets women aged between 19-55 with the annual income above $80000.

Psychographic factors

Psycho graphic factors consist of social class and lifestyle. The brand targets upper class who pursues prestige such as jet setters.

Behavioral Factors

In the behavioral factors, brand targets heavy users who can afford the high price of the products and also come repeatedly to enrage the brand loyalty .............

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