About Saurabh Pandit (Sam)

Persuasive talks and effective communication with clients flows in my blood. Working as a Consultant I hold experience from multiple functions with Marketing & Sales as a dominant part of the profile.

Increase Price Increase Profits ! – We are Louis Vuitton

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Louis Vuitton

 

For high end market with greater disposable income purchase decisions aren’t just about the functional requirements from the product but also its perceived market value or Brand equity.The luxury item adds to the buyer’s image based on the perceived value.

An assessment of what the customer gets compared with what the customer gives up – Value (Dr. Ho, Deakin)

Purchasing a product of higher cost (sometimes crazy ones) has two reasons

  1. Higher costs are associated with better quality
  2. A status symbol that signifies your ability to afford costly products which psychologically boosts self-confidence & ego adding to higher self-esteem.

This has been an accepted social norm since royalties and the basis for pricing strategies of luxury brands.

Way to create a luxury brand is very difficult. It requires huge investments in communications, excellent product / service quality and always being fashionable. However to maintain these elements at a high level is not easy. Gucci, Louis Vuitton and Chanel are considered three successful luxury brands in the fashion sector, which hit premium class customers.

Compared with other competitors, LVMH was founded early in 1854 with focus mainly on trunks and handbags. The turning point in the history of Louis Vuitton which made them become a luxury brand is the appearance of Monogram Canvas product line.  To face high competitive environment, famous brands need to adopt innovative marketing strategies to create the appeal. The traditional marketing mix strategies gradually transitions into experiential marketing to create emotional factors for customer. The luxury brands seem to focus heavily on creating for their customers a memorable experience when they are using the product, creating linkages in the emotions of users. These factors would help build customer loyalty to the brand. Like the group of luxury brands, Louis Vuitton focuses on providing this experience through product quality, the brand’s history, quality of service, pricing and their distinct packaging. There are many factors that are needed to ensure the success of the brand, however in the scope of this article we will only focus on Louis Vuitton pricing strategy which makes their success.

 About Louis Vuitton products, the high price of their products creates a high quality image and has be seen as a confirmation of product quality. These different strategies in pricing have helped Louis Vuitton attract high-end market. In the history of Louis Vuitton, sale prices were never offered. No one can see LV bag in reduced price, there are no sale periods! Same prices for all group which is considered as confirmation of Louis Vuitton.

Louis Vuitton products are extensively tested to ensure that our quality is always at the highest level and has no flaws. Their products are produced by a combination of manual and mechanized, retains the beauty of handmade products while maintaining high levels of product quality. Therefore, Louis Vuitton has overcome many peers to become one of the most luxurious brands in the world.

Louis VuittonFigure 1: Matrix describing luxury brand positioning

In fact, Louis Vuitton has become a popular brand in recent years. Their target group is not only limited to high-end client; many other groups have also become customers of this fashion brand. However, the question is how to LVHM can sell more products without becoming a mass-selling brand instead of a luxury label. One of the solution to handle this issue is price increasing strategy. Brands want to keep high-end customers and eliminate low-end platforms to enhance their brand image and hope can gain new customers on the top end. They are willing to reduce their profits from low-income group to maintain an image of luxury brand.

So far, Louis Vuitton is apparently following in the footsteps of Hermes on the way to become the most luxury brand. However whether these products having leather Monogram Canvas are worthwhile as the product of Hermes and could they attract loyal customers of other luxury brands to buy them?

Are premium customers going to spend few hundred dollars extra to buy high-grade leather products such as Hermes or buy the more expensive products of Louis Vuitton?

The loyal customer group of other brands would pay more attention to products as they continue price increasing campaign?

 Louis Vuitton

Written by Saurabh Pandit and Jacky

Launch SUV – The overall trend for high-end automakers

Very good blog about Luxury Brand and Diversification!

Marketing Management Blog T1 2015

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The Lamborghini Urus have confirmed that they will launch the new family friendly SUV in 2017.  Lamborghini CEO Stephen Winkelman suggested that it was the automaker’s “expectation” to launch the SUV and the luxury SUV, as it is anticipated that the SUV market is will grow substantially over the next few years.

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As a traditional high end luxury sports car manufacturer, Lamborghini is in famous of producing super fast sports car. At FY 2014, the company has sold 2,530 units across the world.

Lambo sales

Entering the SUV market provides Lamborghini with a truly incremental opportunity to drive sales by offering innovative products outside of their legacy product offering. Increasing their product portfolio will in turn increase their target customer base, providing them with wider distribution and appeal amongst automobile consumers.

Lamborghini have recognized the success of their sister brand Porsche (Cayenne and Macan) having entered into the SUV market, (Porsche Sold…

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