In the past, marketers have designed persuasive and informative advertising messages which they strategically place in various media with the hope of catching the attention of intended audience. Marketers hope that the messages will convince consumers and result in behavioral change that will benefit their brands. However due to a proliferation of advertising messages and media platforms it is no longer certain that advertising is achieving its objectives any more.
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Customers are being bombarded with many advertising messages than they cannot even remember from numerous media such as billboards, TV ads, web based advertising, mobile phone advertising besides the traditional media such as radio and print. The modern customers who are more informed now than the past views advertising as intrusive, insensitive and at times respect, quite often such advertising messages are being ignored; this is referred as media clutter by marketing professionals.
It is because of such Ads that free TV and radio channels are popular today that has also made US government enact laws barring unsolicited telemarketing calls. The purpose of this paper is to demonstrate the effectiveness of experiential marketing concepts of ‘in store’ merchandising, in growing sales, strengthening brand position and delivering endless value and satisfaction to customers. The company in this study is Louis Vuitton which manufactures and sells high end fashion and luggage items.
Experiential marketing is the opposite of inappropriate, opportunistic and disrespectful advertising. It is a concept that seeks to create fresh lasting connection between brands and consumers in the market place through innovative marketing strategies and campaigns that dazzle consumers’ senses, touch their heart and stimulate their minds positively (Schmitt, 1999). Experiential marketing uses credible voices, sensory experiences and respects consumers in its tactics and strategies (Lenderman, 2006).
Unlike traditional advertising which bombards helpless customers with endless base advertising, experiential marketing seeks to create direct, positive and meaningful connections between brands and consumer on one to one basis (Pine and Gilmore, 1999).
Because it is respectful, sophisticated, viral and unique method that connects consumers and brands, it gives marketers a distinctive competitive advantage in a crowded market place. It also avoids wasteful spending associated with traditional advertising because it ensures intended audiences get the message (Schmitt, 1999).
Due to its unique nature experiential marketing require more resources than conventional advertising, if well planned and executed, the outcomes justify the additional budget.
But Companies must be willing to create positive experience for their customers during each encounter. It is these positive experiences that encourage repeat buying, facilitates cross selling of products and services, create loyal customers, generate word of mouth sales. This leads to higher turnover, lower cost of operations and higher profitability in the long term (LSAglobal.com)
Louis Vuitton is a French fashion house that was founded in 1854 in Paris and its products have for a long time been the symbols of prestige and wealth. The company started out as a luggage bag maker and specialized in making lightweight, airtight and comfortable bags. Today, in addition to luggage carriers, it also makes luxury trunks, leather goods; ready to wear shoes, books, accessories and jewelry. The company is present in most major countries worldwide.
Company’s Marketing Mix
Product: The Company’s product consists of high end bags, trunks and accessories made from leather or canvas. Louis Vuitton’s product range include high quality leather bags and trunks, shoes, leather bound books, accessories, jewelry and watches (Louisvuitton.com, 2011). The products are all hand crafted and use the high quality of inputs such as leather, wood and metals and all products bear the unique Louis Vuitton logo which according to brand analyst is among the 34 most valuable brands in the world (Louisvuitton.com, 2011).
Place: Louis Vuitton products are sold in exclusively owned company shops. These shops are found in high end departmental stores such as Neiman Marcus and Saks Fifth, Bergdorf Goodman, Nordstrom Rack, Lord and Taylor as well as in upscale shopping districts all over the world (Louisvuitton.com, 2011).
All Louis Vuitton shops are staffed with the Company’s staff and employees. Before 1980’s the company allowed limited sales through independent retailers but since then it has taken full control over distribution of its products. It is thought that the threat of counterfeit products entering its distribution network is the cause of this strategy. Exclusive shops also enable the company to control pricing and deliver highest quality of service.
The architecture of its store has been described by the company as guided by the passion to shape each store into a unique space. This indicates clearly the intention of the company to create unique and enduring customer experience in its stores.
The company has stores in all the major cities of the world from Asia to Europe, Oceania, Africa, North America and South America (Louisvuitton.com, 2011). According to the company the biggest and best designed shop is found on the Champs Elysees in Paris whereas the most luxurious shop is found in London (Louisvuitton.com, 2011).
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Price: The prices of all Louis Vuitton products reflect the luxurious high end positioning of the brand. Louis Vuitton brands are symbol of prestige and wealth and are targeted at the very rich market segment and the prices of its products augment the brand image and positioning.
Promotion: Louis Vuitton uses carefully selected celebrities to market its products. These celebrities include Madonna, Jennifer Lopez, Mikhail Gorbachev, Steffi Graf, Andre Agassi, and Catherine Deneuve (Louisvuitton.com, 2011). The appearance of powerful and highly successful personality associates the Company’s product with success, wealth and power. Finally, the company uses billboard advertising in selected cosmopolitan cities.
The company advertises in high end fashion magazines such as Vogue, Elle, Instyle and Harper’s Bazaar and has also adapted recent developments in information technology by using Twitter, Google, YouTube, internet newsletters and web based fashion magazines such as Style.com (Louisvuitton.com, 2011).
The company also has produced a well designed infomercial that is called ‘Where will life take you’ (Louisvuitton.com, 2011). This is a 90 seconds commercial that promote the company and its products; the film is part of the experiential marketing concept and uses themes, color, sound and visual schemes that stimulate the thoughts and emotions of consumers.
The company operates in an industry with intense rivalry. Its main rivals include Gucci, Yves Saint Laurent, Alexander McQueen, Stella McCartney, Sergio Rossi, Bottega Venneta, Boucheron, Dolce and Gabbana, Prada and Armani amongst others (Louisvuitton.com, 2011).
A review of the above stated marketing mix, clearly indicate that the company positions itself at the high end of fashion market. Its products are made of high quality materials, are handmade to personal specifications, are exclusive in nature and are distributed from selected locations (Louisvuitton.com, 2011). In fact the high price tag matches the products’ position
According to fashion experts, the fashion industry is divided into five distinct segments, haute couture, luxury, affordable luxury, mainstream and discount (Wikinvest.com, ). Haute couture is the most expensive and exclusive; it comprises of a handful of companies which provide custom made products for the world most wealthiest and powerful individuals. According to an industry report, Givenchy a brand that is owned by Louis Vuitton is among the few brands that belong in this segment (Wikinvest.com, 2011).
The luxury segment ranks slightly below the haute couture in terms of quality and price and targets the wealthy segment of the market.
This is the segment that most Louis Vuitton products belong to. Affordable luxury targets aspiration customers who are not rich enough to buy luxury brands but will accept lower priced brands. This segment is also susceptible to counterfeit luxury brands. Mainstream brands are said to be good products that substitute exclusivity for popularity, while discount brands on the other hand cater to low income market segments (Wikinvest.com, 2011).
The profile of Louis Vuitton customers would be successful, wealthy and powerful individuals, who seek unique, well designed stylish and exclusive products made using high quality inputs and the price matches the buyers’ abilities. The stores location are also appropriately positioned and designed with the ambience necessary to attract customers.
Task: to analyze a store experiential in depth and develop recommendations to optimize the possible concept.
The aim of this task is to establish if the experiential retail concept meet the expectations of its target customers and whether the perceptions of the consumers have on the positioning of a brand when they visit a store corresponds to the position which had been set for the brand. It also aims to determine if the adoption of experiential concept for the stores has any positive influence on sales and what behaviors or attitudes expressed by consumers justify the continuation of the experiential concept in branding.
There are two approaches that can be used to determine the profile of the customers for purposes of this study; one through direct interview or through observation, interview could be either written or verbal. Considering the sensitivity of individuals in this segment and their status in the society, rich and powerful individuals, it was considered imprudent and intrusive to interview them. So the study relied on secondary information that they provided during purchases.
This information included credit card details and information provided in warranty documents amongst others. From this information it is possible to establish the location of the buyer, occupation, income, age group, nationality, race, religion, gender amongst other important variables. This information was matched against the purchases made to establish trends, tastes and preferences.
Close observation of the buyer’s behavior revealed that most customers were tourists and holiday makers who have time to shop and money to spend. It is these classes of people who are likely to be found in shopping districts on regular days.
They also have time to browse because purchases involving high end products require time to compare products, prices and arrive at a decision. For such customers a quiet and relaxed environment that reflects the holiday atmosphere is the best; as such they shop items to reward themselves or for gift items to take back home.
In addition, weekend shoppers and season shoppers during Christmas period and other festive seasons consist of people who seek gift items or particular items that they require. These shoppers are often driven by purpose and they are likely to spend less time in the shop and will not consider strictly the prices indicated. Such customers require knowledgeable sales staff who can provide them with personalized attention and services that they desire.
The positioning of the brand is reflected in the location it chooses for its shops and their atmosphere. These two aspects reinforce the high end, luxurious and exclusive characteristic of the brand and its target customers. The experience of customers within the shop and in its neighborhood is such that they feel totally rewarded by the shopping activity.
For this reason the company carefully selects the location where its stores are located; they therefore ensure that the location is at high end shopping district or inside high end specialty stores. The location of the store within such location is also important since the company tries as much as possible, to locate their store on the ground floor of shopping malls for easy accessibility and in a location that is clearly visible for all who visit the malls.
The ‘in store’ experience is the moment of truth for experiential marketing; to achieve this multi sensorial stimulators are used. These include store design, layout ambience, controlled lighting, selected and controlled music, use of color and color concepts, choice of material used to construct the store, the use of space.
An observation of the store (see appendix, pictures attached) which indicates that the store is well designed, the product displayed in well laid out stands, the windows are bright and shiny for maximum view from outside and the material used is high quality woods and bright metal that denotes quality.
The materials used to decorate the store are mostly plush and dark in color which connotes power and wealth. The store uses soft, controlled and directed lighting (see attached pictures) to ensure that products are well illuminated. The use of lighting is to makes products bright and attractive. The store also makes use of colored neon lights to create special effects which add to the customer’s experience.
Products are well labeled (see pictures) to strengthen the brand image and reinforce exclusivity. The company extensive use of the brown color which is the predominant color in its products and stores communicates to customers the image of reliability, elegance, sophistication, orderliness, simplicity and friendliness (Gemstonegifts.com). Brown color can also be associated with naturalness and wholesomeness.
Impact of Experiential Marketing Concepts
The adoption of experiential marketing results in better consumer interaction with the company and its brands. This positive interaction at the moment of truth creates a long lasting impression in the mind of consumers and makes first purchases to be superfluous thereby encouraging repeat buying.
It encourages consumers to buy other products offered by the company in another product category, for example a satisfied Louis Vuitton bag customer may wish to try its Givenchy line of perfumes and accessories. Experiential marketing therefore creates loyalty and these customers are likely to give good testimonies to other prospective buyers leading to referral purchases and word of mouth advertising.
Experiential marketing is the true sense of marketing because it seeks to create lasting experiences between customers and brand through enhanced customer satisfaction. Customers are expected to react to experiential marketing through responses to the company’s marketing activities, buy more of the company’s product and talk more positively about the company.
Traditionally, marketers have relied on advertising messages to communicate their products and services to consumers. However due to a proliferation of brands, the media space is cluttered with firms seeking to capture the attention of customers. This is not easy because customers are more informed and are looking for more value than ever before.
Experiential marketing is a new mindset in marketing that unlike conventional marketing seeks to create fresh connection between customers and the brand using unique ways. This is because of its unique nature that promotes customer satisfaction, increase sales and brand loyalty. Good experiential marketing require time, money and good planning to develop and implement as demonstrated in the above study on Louis Vuitton.
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