Development of Sale Strategy and Management Plan for Louis Vuitton

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Table of Contents

Executive Summary
Introduction
Background Analysis: InduStry, Competitor and Consumer
Background Analysis: Sales approach and Sales management
Recommendations
Conclusion
References

Executive Summary

We will be analysing the company, Louis Vuitton, identifying the trends within the luxury jewellery industry and the future opportunities available for the brand. It will discuss the several analyses regarding the company of Louis Vuitton and then make recommendations based on information presented within the previous analysis sections. Louis Malletier Vuitton founded Louis Vuitton in 1821, and he was previously a farmer. The company started with flat canvas trunks and then continuously expanded into other industries like jewellery, clothing, and fashion items. The iconic LV monogram was only introduced after the death of Louis Vuitton, George had included it in the print of the luggage to honour his father in 1892, and it also successfully prevented counterfeiting.

Focusing on the jewellery industry and Australia’s market size, it was predicted that the market would be four billion dollars in 2020, as the statists show. In 2015, the market had already reached the size of 4.1 billion dollars. Due to the growth in the e-commerce fashion industry, it has opened new channels for jewellery retailers. The company has to feature the potential for the future industry market and generate sales with its current product portfolio.

To avoid imitation and losing product quality, Louis Vuitton has registered all their designers and artisans, resulting in the exclusivity and uniqueness of their products. Many challenges are confronting the luxury market. Consumers are looking for authenticity and honesty when purchasing products, along with factors of new competitors arising with lower-priced brands that offer comparable quality. In the new digital age, the growth of the online market grew. It helps expand the demographics and geographics and attract new customers.

Introduction

Louis Malletier Vuitton founded Louis Vuitton in 1821, and he was previously a farmer (Koyaana.R, 2020). The first bag was designed in 1858, known as the Trianon trunk. His son, George, invented the locking system in 1886 to make it impossible to pick, and the lock is still used today (Koyaana.R, 2020). The iconic LV monogram was only introduced after the death of Louis Vuitton, George had included it in the print of the luggage to honour his father in 1892, and it also successfully prevented counterfeiting (Louis Vuitton GMX, 2014).

This report will be going through two different background analyses, and the first background analysis will contain the industry, competitor, and consumer analysis. The research used within this report will discuss the luxury jewellery or personal accessories industry. The second section will discuss the sales approach and the sales management found in the chosen company, mentioning the strengths and weaknesses. It will continue to the recommendation section for Louis Vuitton. Four recommendations will be included in this section, stating the justification of the recommendation and how it can be implemented within the organisation.

Background Analysis: InduStry, Competitor and Consumer

Industry Analysis

Focusing on the jewellery industry and Australia’s market size, it was predicted that the market would be four billion dollars in 2020, as the statists show. In 2015, the market had already reached the size of 4.1 billion dollars (Statista, 2016). Due to the growth in the e-commerce fashion industry, it has opened new channels for jewellery retailers. (Statista, 2016). According to the Boston Consulting Group (BCG) matrix, Louis Vuitton company can be considered a star. The company has to feature the potential for the future industry market and generate sales with its current product portfolio (Morgan, 2018).

To avoid imitation and losing product quality, Louis Vuitton has registered all their designers and artisans, resulting in the exclusivity and uniqueness of their products (MBA Skool Team, 2021). Many challenges are confronting the luxury market, as consumers are looking for authenticity and honesty when purchasing products (Brown, 2017), along with factors of new competitors arising with lower-priced brands that offer comparable quality (Danziger, 2019).

The trends that have surfaced recently are re-commerce. During the pandemic, the sales of second-hand jewellery grew as the consumers desired more sustainable purchases, with the bonus of it being good deals (MOF Team, 2022). The sales were conducted in a quiet setting with an expert in the past. However, in the new digital age, the growth of the online market grew. By 2025, it is estimated to grow to 21 per cent. It helps expand the demographics and geographics and attract new customers. (Becker, Berg, Harris, & Thiel, 2021). The availability of genderfluid jewellery lines is more common, as 35% of Generation Z identify themselves as they/them, which opens an opportunity to expand on collections for all types of individuals (MOF Team, 2022).

Competitor Analysis

Louis Vuitton’s competitors in the luxury market are Chanel, Gucci, Hermes, and Dior. However, when focusing on the high-end jewellery industry competitors, they are known to be exclusive, with no discounts offered at their main official branches. However, Hermes does hold sales twice a year and previously had student discounts. The competitors are Chanel, Gucci, Cartier, and Hermes (Bhasin, 2018).

Hermes is more focused on premium luxury, making it less accessible than Louis Vuitton, enhancing Hermes’s exclusiveness (MBA Skool Team, 2022). But it doesn’t reach the potential market available (Louis Vuitton GMX, 2014).

Gucci is known for the variety of products sold compared to Louis Vuitton and Hermes, who are more recognised for their bags (Louis Vuitton GMX, 2014). Compared to others, Gucci and Cartier have an excellent online presence making it more advantageous for them.

Consumer Analysis

The general consumer market is separated into two segments for Louis Vuitton. First, its wealthy middle-aged women aged 35 ~ 54, and the other segment is affluent young fashionable females aged 18 to 34 years old, who have disposable income and are brand aspirants. The second consumer segment can also be known as ‘chardonnay girls’; their crucial motivator is sharing their life and making moments unique. (Perch, 2020)

Background Analysis: Sales approach and Sales management

Sales Approach Analysis

As a luxury brand, Louis Vuitton has a sales approach focused on customers’ desire to acquire status symbols. Thus, consumers act as users and not influencers of style, which the company dictates (Seo & Buchanan-Oliver, 2019). The decision-making process is inspired by a customer’s need to purchase a unique, luxury product. Information search happens either through print media – the main traditional marketing channel on which the brand still relies – or influencers’ social media accounts and Louis Vuitton’s online store.

The choices’ evaluation is limited to a few luxury brands and depends on specific needs, as most luxury products are perceived differently and have easily distinguishable designs. Purchases can be completed in brick-and-mortar stores or on the official website and some resellers (Guilbault, 2021). The sales cycle focuses on investigating the consumer’s needs and introducing a small number of selected articles. Closing is soft, and sales associates can engage in cross-selling, not upselling, as the items are already high-class (Sudjono, 2020). As the brand does not actively advertise or offer its products, the methodology is based on collaboration in different industries. Sales associates act as advisors and storytellers, presenting each product as a part of history (Sudjono, 2020). Therefore, customers are attracted to the brand’s status rather than individual items.

Strengths

With more than 150 years of history.
The Louis Vuitton logo and brand are easily recognisable.
The brand has a well-known global presence as a luxury and retail brand.
Offers custom-tailored products for its few elite customers (MBA Skool Team, 2021).
Louis Vuitton is recognised as one of the most valuable luxury brands (Swant, 2020).
The product portfolio has a wide range of products. (Perch, 2020).
Maintains production within France – reducing the cost of outsourcing (BusinessEssay, 2022).
Efficient collaborations with top designers (Perch, 2020).

Weaknesses

Limited customer targeting (Kenneth, 2013).
Lack of interest in other cultures (Perch, 2020).
Product pricing – overly priced, making it expensive.
Lack of product innovation over the years.
Weak online presence.
The LV monogram within the product design is excessive (BusinessEssay, 2022).

Sales Management Analysis

The information about the sales management structure of Louis Vuitton is limited. However, it is stated that the brand’s parts are autonomous, and the organization is decentralized (MBA Skool Team, 2021). Thus, employees are expected to demonstrate entrepreneurial qualities and have a high level of self-organization. Salespeople are called client advisors, as noted above; in some countries, they do not get commissions for each sale – they have bonus programs instead, which leads to less aggressive and more relationship-based sales (HandbagHolic, 2021; Ingram et al., 2019). Other motivations include an employee discount, benefits, accessories as a part of one’s uniform, goal-based incentives. The sales results are built not on individual sales and internal competition but the overall success.

Recommendations

Recommendation #1 – Reducing production

Louis Vuitton has the opportunity to reduce the production and emphasise some of its collections as limited-edition models (BusinessEssay, 2022). It would utilise the waiting list, establishing the exclusivity and visibility of the brand. This strategy is used by one of the competitors, Hermès, which produces a small supply of bags, driving the demand for limited luxury items. This recommendation is consistent with Louis Vuitton’s current sales approaches of storytelling and relationship building. A limited line of accessories could be created with a story behind it, which would further strengthen the brand’s image.

Recommendation #2 – Social media presence

The second advice is to further pursue growth in the social media sphere, where Louis Vuitton has a presence among aspirational lifestyle influencers. As a frequent collaborator in online and technological ventures, Louis Vuitton can easily integrate new social media advertising campaigns to attract a young audience (Sudjono, 2020). By using social media, the brand can expand its presence outside of print media and its official website. While Louis Vuitton already uses some online media for marketing, its current strategy does not directly engage social media (Sudjono, 2020). The company can reach out to social media influences and make them brand ambassadors, similar to its celebrity connections.

Recommendation #3 – Promoting unisex collections

Based on the growing percentage of young individuals identifying themselves outside the gender binary, the introduction and marketing of unisex collections can attract new customers. Unisex collections fall in line with Louis Vuitton’s strategy of following current developments in the social sphere while being a trendsetter in fashion (Sudjono, 2020). Thus, creating a collection for all customers regardless of gender can be a part of the brand’s recognition of new customer interests.

Recommendation #4 – Jewellery design

Most luxury companies have their own chosen animal as their motifs and are featured within the jewellery lines. For example, Gucci’s competitors have tigers and a bee; Cartier incorporates the panthers; Chanel has lions in their high jewellery collection; Bulgari has serpents. The new group released by Louis Vuitton, the Wild at heart collection, features leopard prints (Louis Vuitton, 2021). Expanding the current collection to the jewellery design will bring more interest from consumers as it is something different from past jewellery designs

Conclusion

Louis Vuitton is a popular luxury brand with a wide variety of products and a long history of success. Currently, it is established in many countries, and its customer segmentation shows two distinct categories, older and younger affluent females interested in high-end living. The brand’s sales approach is rooted fulfilling one’s need for luxury products and experiences. Customers are attracted to stories behind products and non-aggressive selling techniques. However, the brand uses a limited range of advertising channels, lowering the interest among younger customers. It is advised for Louis Vuitton to introduce limited collections, increase its social media presence, promote unisex products, and present a distinguishable jewellery design.

References

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