Lvmh and Luxury Goods Marketing

LVMH and Luxury Goods Marketing

1. Bernaud Arnault has built LVMH into a luxury goods empire by making numerous acquisitions. What strategy is evident here?

LVMH or more specifically Bernaud Arnault wants luxury items to appeal to everyone, not just the wealthy and elite as in the past. The major issue in doing this is to keep the core luxury consumers, which means still keeping the product exclusive or exclusive feeling, while making the product available to a larger market. LVMH has used licensing deals in order to make this products not only accessible, but at the same exclusive or prestigious to own.

2. How do LVMH executives adjust prices in response to changing economic conditions?

In response to changing economic conditions executives have raised wholesale prices to make sure that discount retailers do not purchase designer products for resale in outlet stores. LVMH has also raised prices in countries that have experienced currency devaluation like Japan. Also in Japan LVMH cut back on advertising and other promotional expenses to maintain profitability. In some cases LVMH was able to renegotiate leases for longer terms and saving up to one third of the cost.

3. How have or how will luxury goods marketers be affected by the slowdown in tourism that followed the terror attacks of September 11, 2001?

Before September 11, 2001 consumer confidence in the U.S. was extremely high and the economy was doing very well. In turn many consumers wanted “the best” this means luxury brands that are sold by LVMH. Also LVMH Hawaii stores depending heavily on Japanese tourists to purchase their products while on vacation. The economy did bounce back after 9-11. However, with the recent real estate collapse the purchasing of luxury products in the U.S. has decreased.

Wal-Mart

1. Which of the market entry strategy options identified in Figure 13-4 (page 506 of your text) has Wal-Mart utilized in its global expansion?

Wal-Mart uses the Rational/argument. Rational/argument means the ad relates facts or reasons why the purchase should be made. Wal-Mart advertises everyday low prices in every country it sells in. Wal-Mart communicates that because they are such a large company and buy products in bulk they are able to purchase the products at lower costs. In turn, Wal-Mart passes these savings on to the consumer.

2. What are the keys to Wal-Mart's success in the United States? Will those factors help the company as it expands around the globe?

Wal-Mart uses a variety of retail formats in order to reach different consumers. The company uses discount stores, supercenters that feature a full line of groceries and general merchandise, and Sam’s Club,