Louis Vuitton is an exemplary brand in China after establishing its first store over two decades. Over the time, the company has internalized the geographic segmentation of the Chinese people. The deeper understanding of the market needs can be attributed to the mutual love between the brand and the consumers. More specifically, the consumers in China are more inclined to the conspicuous consumption which is the basic rule for the fashion since it is not a fundamental need as noted by Tsang (2013).
The brand serves the market with high-quality fashion products which in turn induce the consumers to pay high prices for the products. Secondly, the market loves status which is exactly what the brand provides. Therefore, the brand is successful because of perfectly meeting the market demands. A logo driven production faces a substantial challenge since the customers develop the logo fatigue over time. Consequently, the consumers avoid the logo altogether and seek style and sophistication in products that do not even bear the logo. This has also affected the Louis Vuitton product market in China since the consumers are after uniqueness, and they have a deeper understanding of luxury as shown by Kapferer (2012). However, Louis Vuitton has been proactive and has bypassed the challenge by introducing the custom made products. Also, it also produces luxury bags and accessory without the logo to evade the fatigue that may lower the logo-driven products.
Imation of products is very harmful to the brand owners since the innocent consumers cannot differentiate the fake from the original brand. As such, apart from tarnishing the reputation of the well-established brand, the counterfeits largely devalue the brand owner initial investment which reduces returns as well as prolonging the payback period. In light of these limitations, Louis Vuitton should reverse the glaring effect of counterfeit proliferation by creating authentication guide for various products to help the consumers differentiate the original from imitation as explained by In Jiménez, In Kolsun and Jiménez (2014). Moreover, the company can employ a specialized anti-counterfeits team of in-house staff as well as lawyers to carry out monitoring, scrutinize the suspected products together with employing wholesale and retail policing. This can be conducted both online and offline to curtail the sale of imitation products. Finally, the company can push its manufacturing to selected countries that have strict laws on counterfeits which will substantially scale down the rate of counterfeits.
Heavy taxation of luxury products are heavily taxed drives the Chinese consumers to shop for these goods in other countries. Also, the users prefer overseas shopping due to the wide variety as well as the status it acclaims as a product gotten from foreign countries. Consequently, this trend has hurt Louis Vuitton to an extent of reducing its production growth in the country. Nevertheless, the company has continually wooed the Chinese in the domestic market by proving premiums services as well as facilitating rich shopping experience. Despite the effort, the price difference in the products will pull the Chinese shoppers in foreign countries. Therefore, the company should address the price difference by sharing the tax burden with the consumers.
Conspicuous demand market and maintenance of market share
Bearing in mind that the conspicuous consumption drives the market, it is prudent for the LVMH to invest in high quality and unique products to satisfy the market needs. Also, LVMH should reduce logo driven products and instead factor the consumers’ ideas as well as tap local talents that understand Chinese tastes. Besides, for the LVMH to maintain its market share against the new entrant in the Chinese market, it should engage in rigorous marketing, improve the range of products as well as using cost cutting techniques without compromising the quality of its products.
The essay has indicated that LVMH remain a desired product in China despite the challenges such as the counterfeits and new entrants in China. In addition, the brand can increase customer satisfaction by creating unique products. Finally, marketing and reducing the product prices will increase the total sales.
In Jiménez, G., In Kolsun, B., & Jiménez, G. (2014). Fashion laws: The guides for designers, fashion executives, and attorneys.
Kapferer, J.-N. (2012). The new strategic brand management: Advanced insights and strategic thinking. London: Kogan Page.
Tsang, E. Y.-H. (2013). The new middle classes in China: Consumptions, Politics, and the market economy. Basingstoke: Palgrave Macmillan.