Case study luxury brands

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Case study
on luxury brands Gucci, Louis Vuitton and Vertu

This case study is focusing on the basic necessary components of creating an exclusive luxury brand (or prestige brand), the importance of the retail environment when using experiential marketing strategy, and the threats which a business faces in the high-end market. When a new brand wants to penetrate the high-end market or remaincompetitive in the long run, it is highly important to create and excercise the right marketing policy.

Luxury brands
A luxury brand is a brand of which a majority of its products are luxury goods, but it may also include certain brands whose names are associated with luxury, high price or high quality, though few, if any, of their goods are currently considered luxury goods or are perceivedto be status symbols.
Luxury goods are very sensitive to economic upturns and downturns, have high prices and profits, and are very tightly controlled. For example since the 1980s, the Gucci brand is now largely sold in directly-owned stores in order to licence the brand widely. LVMH (Louis Vuitton Moet Hennessy) is the largest luxury good producer in the world. This multi-brand counts 50 brandsincluding Louis Vuitton, the world's first designer label. The LVMH group made a profit of €2bn on sales of €12bn in 2003. Other market leaders include PPR(Pinault-Printemps-Redoute, after it purchased the Gucci Group) and Richemont.

Success Factors
There is a wide range of key success factors in launching a new brand from the marketing investment decision to the innovation to the retailing.The most important issue is marketing. These brands invest a huge amount of money in advertising and promotion. Gucci for example uses controversial and shocking ads to grab the attention and to create awareness. The balance of emotional and rational communications of a luxury brand is strongly emphasised while connecting to the customers through a variety of brand advertising.
Brands (especiallythose in the fashion industry) traditionally use heavy visual effects to create emotional connection. Gucci uses this method to boost its products.The Louis Vuitton promotions are less outrageous. They create a classic aura which expresses eliteness, a feeling of belonging to the upper-class. That is why LV often sponsors yachting and motorsport events. Vertu is relatively new in the market, so forthem creating awareness is the first most imortant thing to awake demand among the target audience. The status of owning luxury brands is important for the consumer, as they feel it expresses their class or self-expression. Advertising also ensures that other people, who cannot afford the luxury item are also aware of its exclusivity and expense. This is crucial in creating the feeling that theluxury goods are kind of status symbols for a privilegded group.
The image of a brand is the base of the marketing strategy. A company as economic producer has to develop a persolnality, a bunch of symbols (such as lucrative name, logo, slogan and desing scheme) that will be the essence of the brand, to which the clientele can relate to. Creating the memorability of the brands' products orservices, the brand recognition can be reached through the influence of advertising, design, and media commentary. A brand is a symbolic embodiment of all the information connected to a company, product or service. The key objective is to create a relationship of trust and a system of commonly shared values.
Louis Vuitton is the most antique brand established in 1850. The historical background alreadygives a patina to the brand, since it was known for its handmade lugagges and bags made of carefully selected exquisite leather. Because of the origins and reputation of the brand, the image of the company is more classic and noble. Even the stores' displays are elegantly and prominently decorated, therefore the permanent reinvention and rejuvenization of the image is quite bounded. The brand has...