The marketing of luxury goods is a worldwide business trend focusing on prestige rather than profits from sales. The Moet Hennessy-Louis Vuitton (LVHM) SA is the most prominent company selling luxurious goods all over the world. The company is a dealer of over 60 brands of goods, with the vision of selling the dream product to customers (Cavender and Kincade 231). Business enterprises within LVHM operate under family ownership, with small luxury brands being disseminated to the consumers. The strategy helps in fulfilling marketing objectives, which are, diminishing risks associated with brand cycling and reducing the cost or eradicating redundancy (Cavender and Kincade 233). This paper, therefore, discusses the marketing management of LVHM.
The LVHM Advertisement
The executive committee of LVHM ventured into luxury advertisements in television programs, which is instrumental for popularizing its products. However, being the first broadcast in prestigious goods marketing, the expense of running the plan would diminish the value of returns (Cavender 26). It follows the fact that television broadcasting is extremely expensive, and customers’ attention would be captured by other products being displayed. Consequently, it would not be easy to make a profit when few customers get active in buying the products (Cavender 44). Following the plan’s outcome, it is conceivable that the consumers targeted by the LVHM managers through television campaigns were potential buyers.
Threats from the Currency Value and Exchange Rates
The low value of the currency with respect to foreign exchange rates is a threat to luxury business since it significantly shifts the demand from prestige to low-cost products. For instance, the devaluation of Yen resulted in instability of marking luxurious goods in Japan, which eventually threatened Louis Vuitton’s cosmetics sales (Cavender and Kincade 243). Consequently, the devaluation of the euro in exchange with dollars required a consistent escalation of prices to maintain the revenue returns. It implies that cutting the costs by 10 percent then exchanging the currency from dollars to euros would result to decrease in the profits generated from the sales (Cavender and Kincade 244). Thus, a weak currency is a threat to the success of luxury goods since the demand shifts to affordable products.
Opportunities in Marketing Prices
Appropriate adjustments of prices of products in specific markets stand as the working solution to the shift of demand from luxury. The demand law states that when all factors are constant, higher prices lead to low demand (Chu, Huang and Zhou 909). Management of the business of prestigious goods whose preference is little by LVHM has been successful in Asia. When wholesale prices were elevated in specific shops, stocking of products by retailers seeking discounts was diminished, especially for the designed leather and cosmetics (Cavender 29). It implies that the demand for luxury goods is high at low supply, but with appropriate adjustments of prices and limiting retail stocking.
The LVHM Strategic Plans
A multi-brand plan drives the business activities of Moet Hennessy-Louis Vuitton (LVHM) SA. Through the strategy, customers’ attention is broadened to eliminate the monotony in the market (Cavender 35). The decisions are made concerning the changing market trends. However, approval of LVHM retailing and advertising plans is done by the chairperson of the company. Moreover, adjustments on prices to gain profit and consumers’ attention constitutes the key strategies that have yielded success of the luxury business (Cavender and Kincade 244). Thus, proper management of prices, retailing shops, and advertisement of products has led to the success of Moet Hennessy-Louis Vuitton (LVHM) SA business all over the world.
Works Cited
Cavender, RayeCarol and Doris Kincade. “Management of a Luxury Brand: Dimensions and Sub-variables from a Case Study of LVHM.” Journal of Fashion Marketing and Management, vol. 18, no. 2, 2014, pp. 231-248.
Cavender, RayeCarol. “The Market of Sustainability and CSR Initiatives by Luxury Brands: Cultural Indicators, Call to Action, and Framework.” Sustainability in Luxury Fashion Business (2018): 29-49. Web.
Chu, Chih-Ning, Ting-Yuan Huang and Wenkia Zhou. “The Pricier the Merrier: How the Law of Demand Informs Value-Based Pricing: An Abstract.” Finding New Ways to Engage and Satisfy Global Customers, edited by Rossi, Patricia and Nina Krey. Springer, Cham, 2018, p. 909.