Ch. 4 - The Marketing Environment

Not only is Louis Vuitton one of the most well-known fashion boutiques in the world with one of the richest history, it is also one of, if not the most legendary of fashion houses in the world.

Largest luxury brand with exclusivity
The high prices commanded by Louis Vuitton products is justified not only by its superior quality but also by the high degree of scarcity and exclusivity, evident in their “no discounts or promotions” as well as “immediate disposal of defective products” policies.Louis Vuitton is historically known to serve the powerful and the wealthy. Its target market is both men and women from 22 to 65 years of age. In its marketing strategy, all the key factors play a very important role and are fully executed.

Economic Factors

One of the biggest factors that affects sales of LV goods in India is the tariff. The higher the taxes are for its goods, the smaller the incentive is to buy those goods because demand isn’t going to be as high if prices have to increase in order to make up for the tax. In order for luxury goods too. LV targets the richest people in the country. But on the other hand, most of the population is very poor and wouldn’t be able to purchase such goods, even if they saved up for it. However, there is a select group of rich people who would make setting up luxury stores in India profitable because there are very few stores in India for them to go to. The market is currently set up for an oligopoly because the demand for goods at a luxury store would be inelastic for anyone interested in a luxury item and there are so few stores

Technology factors
Various companies advertise online has tremendously increased due to the growing popularity of the social networking site. LV also gathers various information, opinions and attitude of friends, families reviews from the internet etc through various forums, blogs, chat groups, and websites. There is also growing trend of online shopping facilities and growing E-tailing trend facilities in the UK market. New technologies also have allergic perfumes for those who have allergic problems. Modern technology boosts new sampling innovations. it will increase competition among the market  with anti-ageing skincare formulations have advanced.

Political and legal factors:

Due to LV’s image, it has become one of the most counterfeited fashion brands in the world. Owing to its high price, generally, people cannot afford to buy it. In the recent years, no doubt there are numerous products bearing LV initials in the streets all over the world, but only a small percentage of the products are genuine. Lately, there has been a rise in counterfeiting luxury products because numerous manufacturing has been shifted to countries with poor intellectual property rights and with the opportunity provided to those countries by technology. Although LV has taken various actions to fight against counterfeit but there are still numerous fake LVs out there. Therefore the company has setup a team of people responsible fully on anti-counterfeiting with the help of special investigation agencies and lawyers.

Extravagant parties used for promotion:

As part of Louis Vuitton’s promotional strategy, Louis Vuitton holds extravagant parties. The  parties are thrown in a spectacular manner the extravagance itself and a large number of famous celebrities become topics of conversation which are rapidly picked up on by the mass media. Even though Louis Vuitton must pay if it is to hold these, the advertising results attained far surpass those that would be achieved through the same amount of direct advertising costs.