BACKGROUND
LVMH Moet Hennessy Louis Vuitton , commonly known as LVMH , Luxury goods company.
It is a French holding multinational corporation and conglomerate specializing in luxury goods, headquartered in Paris,France. The conglomerate is including the jeweller Tiffany&Co. for 15.8 billion and own brands such as Louis Vuitton and Dior , with revenue reaching about $59 billion in 2019 . LVMH’s portfolio already includes 75 different brands , from wines and spirits to leather goods and cosmetics. ( Businessinsider ,2020)
In 1984, then gain control of Louis Vuitton , Moet Hennessey the merged fashion house and spirits company at 1990 . Here is the Luxury goods conglomerate which LVMH focuses exclusively on fashion and a few beauty and jewelry -related entities which inculded Louis Vuitton founded in France in 1954 , created Moet et Chandon and Hennessy .Givenchy founded in 1952 a couture and ready to wear brand, has been part of the LVMH Group since 1988.Berluti founded in 1895 by Italian Alessandro Berluti, it is men’s shoes , leather goods and men’s ready to wear brand was acquired by LVMH in 1993.Kenzo founded in 1979 , the womenswear and menswear brand was acquired by LVMH IN 1993 for 80 million .Guerlain , it was acquired by LVMH at 1994, the French perfume, cosmetics and skincare brand, which owned and managed by members of Guerlain family from 1828 to 1994.Celine, founded in 1945 m the Paris-based brand offers ready to wear Items, leather goods, shoes and accessories. In 1996 the brand was integrated into the LVMH Group for 2.7 billion French francs. Loewe , The Spanish company specialising in very high-quality leather work which created in 1846 was acquired by LVMH in 1996. Marc Jacobs , LVMH has held a majority stake in the New York based brand , which founded in 1984 .Sephora, the French cosmetics chain , founded in 1969 m brought under the LVMH in1997 .Thomas Pink , specialist in high-end shirts in the U.K , founded in 1984 and acquired by LVHM in 1999. There’s also included Tag Heuer , Gucci Group , Emilio Pucci, Rossimoda , La Samaritaine ,Fendi , DKNY , Hermes, EDUN, Moynat , Bulgari , Loro Piana , Nicholas Kirkwood, J.W.Anderson , Repossi, Rimowa , Christian Dior ,Jean Patou ,Fenty ,Stella McCartney , Tiffany &Co, Phoebe Philo and Off-white.
(The fashion law , 2020)
BRAND AND PRODUCT LIFECYCLE
The brand and product lifecycle is useful for review .Every brand or product has its life cycle .This cycle as a time frame to manage the band/ product in different stage of life spans and affect the development of brands and their product.
Stage 1 , Market development , this is the stage which the product is first brought to market , we can call it is the introduction .
Stage 2 , Market Growth , demand begins and the size of the total market expand rapidly. The brand/product begins to build up their consumers base during this stage .
Stage 3 . Market Maturity , in this stage the demand levels off and grows, only the replacement and new family formation rate.The sales may becomes slow down so the company need to take many marketing approach to level up the sale performance.
Stage 4.Market Decline ,The product begins to lose consumer appeal and sales decrease. There is three operating questions will occur to the alert executive ; (Harvard Business Review)
Accounting to the brand and product lifecycle , LVMH Group at the stage 1 on 1987 , with Moet Hennessy which was established after 1971 merger between the champagne producer Moet & Chandon and the cognac producer Hennessy . In the 1990s , the brand become stage 2 , French Investor Bernard Arnault had the idea to create a group of luxury brands, there is how the company market growth and become successful .The group continues to purchased and gain ownership of different brands , collection of 75 distinguished Houses rooted in six different sector . On 2018 , LVMH made the e-commerce investing in an online fashion market to drive global expansion. This marketing promote its product keeping increase the sales performance and keeping the brand on the stage 2 .
MARKET AND CUSTOMER SEGMENTATION
The strategy of segmentation allows produces to avoid head-on competition in the marketplace by differentiating their offerings , but also following the product lifecycle to segment the targeting customer in group .There are mostly the EARLY MAJORITY and LATER MAJORITY identity audiences who interests to the Brand LVMH group and their products.
Early Majority (34%) — Early Majority tend to be slower in the adoption process, have above average social status, contact with early adopters, and seldom hold positions of opinion leadership in a system (Rogers 1962 5th ed, p. 283)
Late Majority (34%) — Individuals in this category will adopt an innovation after the average member of the society. These individuals approach an innovation with a high degree of skepticism and after the majority of society has adopted the innovation. Late Majority are typically skeptical about an innovation, have below average social status, very little financial lucidity, in contact with others in late majority and early majority, very little opinion leadership.
Market segmentation is a marketing term .Generally , companies take Homogeneity , Distinction and Reaction to identify different makes segments.
After segmenting the market into clusters, the brand then must select one or more segments to target (Primary and secondary group or by phases ) . The brand need to decide on a specific marketing mix, that is a specific product , price , channel or promotional appeal for each distinct Segments . The third step is positioning the product , the consumers in each target segment as satisfying their needs better that other competitive offerings.
As the strongest player in the luxury goods industry , LVMH target high end consumers around the world . By gaining the intention of the wealthy and middle class, they have mastered the art of “less is more”and “limited edition “ therefore , they set up a high price across most of its brands,The VALS (“Values and Lifestyles) is achievement. Image is important to Achievers; they favor established, prestige products and services that demonstrate success to their peers. Achievers are motivated by the desire for achievement. Achievers have goal-oriented lifestyles and a deep commitment to career and family. Their social lives reflect this focus and are structured around family. Because of their busy lives, they are often interested in a variety of time-saving devices so that whey are loyal customers.
TARGETING SEGMENTATION
LVMH targeting the wealthy group of the socielty , They provide the creativity , exclusivity , craftsmanship , high quality , innovation and premium idea to their consumers .
Demographic Segmentation
LVMH they target both genders , men and women with high income and focus on meeting needs rather than fulfilling desires. They represent a very modest market for most products and services.
Geographic Segmentation
LVMH marketing strategy has been expanding in many countries ,such as US,China , India,Russia.
Psychographics Segmentation
LVMH uses lifestyle and motives to further idenitfy its target market.They collaborated with different brands to grain different user.Such as the American streetwear brand Supreme. The japanese contemporary artist Takashi Murakami , American artist Richard Prince .Created the slogan “The art of traveling “as a new idea of luxury lifestyle .
Behavioral
Buyer and customers information is collected , they provide a VIP services for loyal customers also invited loyalty customers to the fashion show to encourage repeated sales and exclusive identalty
BRAND PERSONA BY SEGMENTATION
LVMH leader in high quality products in keeping with their identity , their hertiage and expertise. They targets wealthy middle aged women from 35 to 54 years old and business men and women with high income and disposable income . They also affluent young fashionable aged 18 to 34 years old who are brand aspirants .
PERSONA BY SEGMENTATION
Amy Coles is a fashion editor .She has Passion for fashion, knowledge of fashion industry trends; excellent writing/journalistic talent excellent interpersonal and management skills; competitive spirit; Her charter is matching the targets of the brand .
Objective of the survey
So as to to collect the valuable data from the primary research from shoppers and people who are interested in luxury products .LVMH designed a questionnaire and shared it when every customer purchased product from their website and the team also set up a booth at Fashion expo (Centre-stage 2021) on 10–12 September 2021 at the Hong Kong Convention and Exhibition Centre , the fans of the brand they can do the questionnaire by the iPad, it will redirect to the questionnaire on the LVMH website.
QUESTIONNAIRE
Q1. What is your gender?
[ ] Male
[ ] Female
Q2. What is your age?
[ ] 18–29
[ ] 30–39
[ ] 40–49
[ ] 50–59
[ ] 60 and over
Q3. How much do you spent on clothers every month ?
[ ] below Hk$1k
[ ] HK$1k-HK$5k
[ ] HK$5K-HK 10K
[ ] Over 10K
Q4 . How did you know LVMH ?
[ ] Magazine
[ ] Friend
[ ] colleagues
[ ] Instagram
[ ] Facebook
[ ] Never heard about this brand
[ ] Others: ___
Q5. What kind of luxury product are you interested?
(You may choose more than one)
[ ] Bags
[ ] Shoes
[ ] Clothers
[ ] Watch
[ ] Car
Q6. What will you consider when you purchase product ?
(5 = Most important, 1 = Least important)
__ Innovative
__ Price
__ Tend
__ Design
__Quantity of the material
Analyse the Date for gaining insights for the subject
The data collected from the questionnaire can help the brand to understand their customers background. The analyzed customer insights increase the makreting strategy for the target audiences.
Q1 and Q2 are demographics.Base on the LVMH . The number of young female diver is increasing in these couple of years. With these data it can be used to create a hypothetical profile of this segment.
Q5 is psychographics.Louis Vuitton uses psychographic segmentation such as lifestyle and motives to further identify its target market.
Q4 and Q6 are behavioral. The customers values, and care about the corporate behavior to help the brand to purchase new product and provid sutiable service to the customers .
CRITICAL REFLECTION
The segmentation is the best way to analysis the customers demand , It is more detail then i expend . It help modifier and use for the brand to focus on which is their targeting customers. Although there is brand and customers persona , both acutally base on Demographic ,Geographic ,Psychographics Segmentation and Behavioral which are considered the four main types of market segmentation. I also more understand the Who, How , Why situation , the analysis and insights are clear. Moreover the questionnaire is the valuable method to get the better view on the real time market and customers information . This project helped me to gain knowledge to identified so that certain products can be presented to them in a way that appeals to customers interests.
Bibliography
Businessinsider
https://www.businessinsider.com/lvmh-brands-iconic-luxury-goods-bernard-arnault-2019-10
(ACCESSED 17/12/2020)
The Fashion Law
https://www.thefashionlaw.com/lvmh-a-timeline-behind-the-building-of-a-conglomerate/
(ACCESSED 30/10/20200
Harvard Business Review
https://hbr.org/1965/11/exploit-the-product-life-cycle
(ACCESSED by Theodore Levitt)
ondigitalmarketing.com
https://en.wikipedia.org/wiki/Diffusion_of_innovations#CITEREFRogers1962_5th_ed
(ACCESSED by Rogers 1962 5th ed, p. 283)
ondigitalmarketing.com
