Louis Vuitton in India
LOUIS VUITTON IN INDIA Question 2 Part 1: Can a luxury brand have a marker in a relatively low-income economy? Positive * Answer to the question with arguments * A lot of quotes from the case and use exhibits * Good to take another example to support their answer (Mexico) How to improve? * We would have add the historical reason of the choice of India * LVMH wanted to enter new markets and developed a long term strategy which was to “tap into the growing market of China, India and central Europe”, which is a natural growth platform. Since the late 19th century, Louis Vuitton had a strong relationship with maharajas (among the wealthiest people in the country). Their order helped LV survive during the Great Depression of the 1920’s. * In general, rich Indian people were flying to European capital such as Paris and London, but also New York and Dubai, to buy LV products, because there were no LV’s stores in India. * About the research that did LV on Indian market: we would have explained it further * They were first targeting High-Net-Worth consumers, which mean consumers with a million dollar or more in liquid financial assets.
They represent the easiest target, because they already must have a luxurious way of life, and so they are familiar with that market. * Then, they planned to target the “cocooners”, who are a part of the burgeoning mid-segment of the Indian consumer market. They have the potential to develop a taste for luxury and become loyal consumers. * In addition: * They were convinced that their entrance on the Indian market would have provided structure and stability to the domestic leather trade that was unorganized at that time.
India could have become a manufacturing hub for the leather luxury industry. * Conclusion: * We disagree with that statement: “The reason being the only need a low percentage of the population to afford their products”. It is one of the reasons why luxury brand can have a marker in relatively low income economy. We would have added than India and China represents 2. 5 billion of people, which is almost half of the world population. It’s the future, and LV had to make his own place in that market. Question 2 Part 1: Where should LV find its niche in India?
Positive * We agree on the answer. How to improve? * LV should find its niche on young people: Stock market is creating new millionaires. * Would have added that the Indian consumers have a desire to be successful and see the luxury products as a symbol. According to the case, women in particular have a distinct voice signaling an important micro trend in the market place. Question 3: What external factors hinder the purchase of luxury goods in countries such as India? Positive * 3 main factors clearly identified How to improve? The per capita income mentioned as a problem for Louis Vuitton is contradictory with the conclusion of the 2nd question, which is: “They only need a low percentage of the population to afford their products”. We think that the low per capita income is actually one of the factors, but the level is changing over the years. The power of purchasing power is growing steadily over the years. * We agree on acro management and the government laws factors * The size of the luxury market in India was estimated to be about $4 billion and expected to grow to $30 billion in 2015. This is enough to tell that the luxury market is pretty well in India!
