Lv Japan

Louis Vuitton (LV) is one the “House of brand” of LVMH Moet Hennessy Louis Vuitton S.A.  However, I considered LV as “Branded House” to focus on this brand in this assignment.

1. What has made Louis Vuitton’s business model successful in the Japanese luxury market?

Firstly, the French headquarters had been relying on the Japanese business savoir-faire, believing Japanese managers to be more likely to make efficient market-driven decisions as they understood the local people.  LV succeeded in the Japanese luxury market by the following marketing mix.

4P-Product: 1. Ready-to-wear products and Shoes (Brand extension): LV had successfully entered in Japanese market by Marc Jacobs who started ready-to wear products as a designer.  3. Limited editions (Line Extension): They mixed tradition and innovation on this new market and their existing products to reach local customers by collaborating with the Japanese artist who is Takashi Murakami.  He was known as the “Japanese Andy Warhol” and re-created a colorful pop version of Louis Vuitton’s monogram.  Those limited editions gave freshness and cheerfulness to the monogram.  Quality is also key factor for successful brands in the Japanese market.  As brands went global, the temptation for many was to immediately find new outlets and new channels of distribution and to decide on the price in different countries.  However, LV was highly disciplined and focused on quality.  (Exhibition. 1)

4P-Price: Under a policy of offering its products at appropriate prices, LV had lowered their prices in 2008 due to appreciation of the Japanese yen.  Even though they don’t discount their price other retailers do at seasonality, I believe this price reduction is reasonable change.  

4P-Place: They decided to opt for a controversial strategy and to establish its own subsidiary which exports products from France without licensing and Japanese distributor.  At first, they entered into the Japanese market through department stores which has the same interior design in its flagship stores in Paris to remain making a French luxury purchasing experience and controlling entirely the shop-in-shops.  After few years, they opened own retail store firstly in Tokyo, then in other big cities.  New generations of shops revolutionized the whole purchasing experience of luxury goods. The architecture of the stores has become part of the brand's identity and they had shifted towards new approach in which the experience in a store would accord with the emotion brought out by the products.

 4P-Promotion: LV took advantage of the Japanese demand for high fashion. Thus, Japan represented a fantastic laboratory to test new selling methods. For example, it is difficult to urbanize their shops in Europe.  However, they can design audacious and amazing stores in Japan.  Thus, Japan was able to have always a trend-setting brand strategist in Japan, a country that revolved around tradition and culture.  The Japanese clientele were receptive to LV, as they were truly avid for new produces and very demanding of the quality of products they bought.  LV had always been a trend-setting brand strategist in Japan on behalf of a laboratory.  

1. What are the opportunities and challenges for LV in Japan?

Opportunities: This is based on the following two of 3C.

3C-Company: LVMH has ready-to-wear products, accessories and shoes which LV got into the new market for them.  The ready-to-wear: This market had most incontestably been affected by the new trends in Japanese women’s choice instead of original products like bags since Japanese 20s to 30s women knew themselves and the market had evolved towards more sophistication.  A major new accessory line: This is called Monogram Outage, which combined the iconic brand’s monogram canvas with a new camouflage print design, however overdoing the profitable “limited edition” strategy would confuse consumers as they would no longer be able to differentiate between a real limited edition and a marketing ploy.

3C-Customer: Females who might have babies and use internet shopping.  Children line: Their customers are women in a wide range and there are many chances to buy goods for their children or grandchildren.   Establishing an Internet business: Since they have their own distribution channel in Japan, they can create their own channel in web as well.  

Challenges: This is based on one the three 3C.

3C-Competiter: Counterfeiting, Fast fashion like H&M which is fashionable and good quality

Counterfeiting: Japanese consumers had been eager to buy LV bags at inexpensive prices and the counterfeits are hard to distinguish from authentic products.  Even though they own a couple of authentic bags, they don’t mind to buying fakes for rainy days or daily use as substitute.