Such as Tokyo, Hong Kong, and New York. LV products are sold in wealthy cities worldwide to maintain and increase the perception of luxury relating to their products. Global luxury brands are acquiring or investing in small Indian brands and Indian manufacturing companies. Also, most of the consumers in India are women who have a strong awareness of authentic luxury products. Present Situation in Global Economy Louis Vuitton (LV) brand is also implementing its worldwide battle against counterfeiting.
Opportunities: Large Market for luxury goods and positive trends in emerging markets Trends that control the global luxury goods market are globalization, consolidation, and diversification (Tavoulari 1). Globalization is a result of the increased availability of these goods, additional luxury brands, and an increase in tourism. Consolidation involves the growth of big companies and ownership of brands across many divisions of luxury products. LVMH is one example, demonstrating to be one of the top luxury companies that dominate the market in segments ranging from luxury drinks to fashion and cosmetics. This growth in the luxury market has greatly extended the availability of luxury goods to a wider audience of consumers.
Through strong family structures, and high educational standards, the middle class in China has gained strength in order to aspire for an improved lifestyle. China is now the forerunner in the luxury sector with a society that is fueled by productivity, with a growing economy, an increasing population, and a demand for luxury products as those who were not able to attain wealth once before have gained access that was once rarity in the past. According to the World Luxury Association, China is the world’s second largest luxury market only surpassed by Japan. With 1.3 billion consumers and double-digit growth rates, Chinese consumers were responsible for 1... ... middle of paper ... ...s to the finer things. Niche markets have to be determined in order to reach the Chinese consumer who is unafraid to purchase goods that appeal to the senses, covey status, wealth and higher quality.
Over the years, Louis Vuitton has been known as the European’s sector most leading line within the market specializing in the sales of luxury products and services throughout Japan as well as the multi-national firm as a whole. The mission of Louis Vuitton states that the organization has a representation of offering the most refined qualities of Western “Art de Vivre” around the world (www.sliclvmh.blogspot.com). The organization has become the most profitable business in Japan due to its superior ratings in the European market with the delivery of unique features and special branding management styles that have integrated culture beyond the norms of the consumers’ mindsets and craftsmanship ideas. The company has focused its business model success on the adaption and willingness to change and adapt to the growing demands of the economy. Since 2008, Louis Vuitton has been listed as the top selling brand in the luxurious marketing sales earning a net profit of 165 billion yen, which was 2.7 times as much as Hermes, 3.1 times as much as Tiffany and 2.5 times the sales of Coach.
China has embarked on a rapid economic growth specifically in urban areas which has resulted on booming consumer market for high end good and services. People of China would account for 20% of global luxury goods for as early as 2015 which will be a huge $27 billion. By 2020, Chinas middle class is expected to burgeon to 45% of the population which would be nearly 700 million people. These reasons make China a very lucrative target market for luxury drink makers like ours. This well documented growth of disposable income amongst Chinese consumers puts forth a very advantageous space in the regional market as global beverage manufacture.
However, according to exhibit 4, the luxury goods market maintained strong growth during the recession. Moët Hennessy Louis Vuitton had problems with tourists mostly from China LVMH buying products from Europe and selling back in China to avoid the duty fees. Socio-Economic Moët Hennessy Louis Vuitton focuses on the higher end of the market. The market is made up of three segments: absolute, aspirational and accessible customers. LVMH focuses on the top two segments; absolute customers are individuals of ultra-high net worth who value brands that are based on heritage and tradition and aspirational customers who are celebrities with high net income.
A Harris Interactive Survey of young Chinese and American adults in year 2011 found that 72% of Chinese respondents considered “brand name” to be an important factor when purchasing clothes (Siegel, 2013). This reflects the conspicuous consumption condition in China that Chinese buy luxury products basically in order to highlight social status and their wealth. In Chinese culture, rich people always wear ‘jewelry and gold’ to reveal his/her high social status. Currently, Chinese economy is experiencing meteoric growth. More and more Chinese families have enough disposable funds to support their extra daily consumptions except dishes (Bergsten.2008).
Luxury products are usually identifiable through exceptional quality and high aesthetic appeal and value, and often belong to the range of products which can be clearly identified either through logo, brand name or design elements. The central features of a luxury brand are: perceived exclusivity; well recognised brand identity; high levels of brand awareness and strong sales and customer patronage. Many of today’s prestige brands were started a century or more ago, and usually one-person operating the brand. The products sold were handcrafted by skilled artisans, usually preserved for the aristrocratic world of royalty and old money. Today, many of these brands are run by corporations which have transformed these small sized businesses into thriving multi-billion dollar retail brands.
According to the NY Times (2016:online) ‘Chinese market account for almost the half of the global luxury market, providing a high demand of goods in different segments’. (http://www.nytimes.com/2016/04/05/fashion/china-luxury-goods-retail.html). Younger and more sophisticated generation of shoppers are emerging in Asia looking for new aspirations and creating a new target market for luxury goods. The consumption has gone beyond the logo items (which can affect many brands), these new consumers look for a lifestyle and quality – it is not only purchasing anymore but about the
Of course all this special treatment has a price. This is part of why the brand is so expensive. Luxurious brands make people have a social status. People who use designer products feel prestigious. The article published in the Fashions Times Magazine called “Why Do We Care About ... ... middle of paper ... .../2008/08/17/designer-brands-why-are-we-so-obsessed/>.