Analyzing Louis Vuitton's Strategy for China's Expanding Market

As China continues to experience robust economic growth, with a GDP per capita increase of 6.9% in 2017 and an expanding consumer base projected to include 1 million more births, luxury brands like Louis Vuitton are keenly focused on capitalizing on these opportunities. The company's strategic approach is multifaceted, involving an understanding of the economic environment, effective use of marketing mix strategies (including product, price, place, and promotion), and a comprehensive SWOT analysis to identify strengths, weaknesses, opportunities, and threats in the Chinese market. By aligning its high-end offerings with the increasing purchasing power and demand for luxury goods among China's burgeoning middle class, Louis Vuitton aims to solidify and expand its presence in one of the world’s most lucrative markets. This strategic alignment is supported by a focus on localized marketing activities that resonate with cultural preferences and consumer behaviors unique to China.

Foreign Market Analysis

Table of Contents
INTRODUCTION...........................................................................................................................1
1. ANALYSIS..................................................................................................................................1
1.1 Analysis of export market.....................................................................................................1
1.2 Evaluation of business potential for product in export market.............................................6
2. COMPARATIVE CHOICE.........................................................................................................7
3. DETERMINE TARGET..............................................................................................................8
4. STRATEGY.................................................................................................................................9
4.1 Strategy implement to launch the product in country...........................................................9
4.2 Marketing activities will implement to launch successfully the products in China............14
CONCLUSION..............................................................................................................................16
REFERENCES..............................................................................................................................18

INTRODUCTION
Company will sell their goods and services at global level to improve their customer
base. For above stated aim, it is fundamental for them to examine cost, risk and in addition
advantages to enter into foreign marketplace. As a result, they can introduce their products at
international market in an adequate manner. Additionally, it will increase market share of firm
and they will able to gain foreign currency (Bodie, Kane and Marcus, 2014). It helps them in
improvisation of their revenues. By exporting items into other nation, government will enhance
their economic growth. This will aid country to enhancement of their GDP. Present assignment is
based on Louis Vuitton which is much famous brand and operating their business worldwide.
They are producing variety of products for people, such as watches, accessories, bags, jewellery
and many more.
Now, association wants to export their bags into China. Therefore, it is necessary for
them to analyse market of that nation. For this, they need to evaluate requisite figures of China,
for example: population, GDP, GDP per capita and along with median age. To formulate
strategies and policies effectually, it is needed for manager to conduct SWOT investigation. It
will help to find out opportunities which can be accept by firm because this will provide them
growth and development. Apart from this, it is required for superior to evaluate business
potential in export market. Organisation will opt another option for export of bags i.e. India, if
they are not selling items in China. To accomplish needs of every individual, firm has to segment
their market. Finally, an effective strategy need to be created to launch new item at marketplace.
This report is going to highlight elements of marketing mix. To make produce more successful
some market activities like, promotion, distribution etc. will be used by Louis Vuitton.
1. ANALYSIS
1.1 Analysis of export market
Export market means when products as well as services are sell out to other nations. With
assistance of this, an organisation will develop their image at international level. This will aid
them in improvisation of profits and in addition goodwill.
According to Malhotra, Sivakumar and Zhu, (2011) Export marketing comprises
administration of those activities that are associated with marketing of items which are going to
introduce in other country. This will assist association in expansion of market and along with,
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they can capture attention of numerous people. If organisation is doing their business at global
level then, they need to follow rules and regulations which are created by government.
Louis Vuitton is a luxury retail enterprise which is founded in near 1855. They are doing
their business in various segments, such as shoes, jewellery, watches, bags, books, accessories
and so on (Schwens and Kabst, 2011). They are doing their business in approximately 45 nations
with more than 450 outlets. Now, they want to enlarge their business in China by export bags
over there. They will help them to improve their client base. Along with this, it aids them to
increase range of their products and services. For above stated aim, they have to analyse market
and situation of China. Henceforth, it is fundamental for them to examine essential figures which
are stated as beneath:
 Population: In China, there are more than 1.3 billion people are residing and it is found
out as a large population country in world. There is a policy of one child to control the
populace. As company is going to introduce their bags into China; therefore, chance is
high to improve the customer base. There are various segments of persons are residing
but, Louis Vuitton is targeting to young generation. Products of firm are much classy
which will attract youngsters towards them because these individuals always follow
trends (Chen and Chang, 2011). As a result, firm will easily grow their business in China
in an adequate way.
Illustration 1: Population of China
(Source: Miranda, 2015)
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 GDP: It stands for gross domestic product, this is monetary examination of value of
market related to entire products as well as services which is manufactured in a specific
period i.e. yearly or quarterly (Laufs and Schwens, 2014). With assistance of this,
economic performance of nation will easily evaluated. In other words, it can also be
measured through total cash fagged on investment (I), consumption (C), government
spending (G) and in addition exports (Exports (X) – Imports (M)).
Henceforth, it can be calculated by using formula which is mentioned as below:
GDP = C + I + G + (X – M)
As per research report, it has been found out that GDP of China is almost 11 trillion USD which
is high as comparison to France (GDP = 2.45 trillion USD). Therefore, this will be easy for
company to introduce their goods in China. As gross GDS is very strong; thus, purchasing power
of people is high and they are maintaining their living standard effectually. Along with this,
economic performance of nations is effective which help an enterprise to survive for long term at
marketplace. GDP per head: This can be calculate by using following formula:
Gross domestic product / number of people in nation
With assistance of this, any country will compare their economic performance with other.
If there is an increment in it then, there is enhancement in production of goods and services. This
will states that there is rise in standard of living of individuals. According to research paper,
GDP per capita of China is almost 8,120 USD which is less as compare to France i.e. 36,850
USD. Fundamental reason of this difference is population because populace of China is high
according to France. Therefore, Louis Vuitton can easily export bags as this will aid to improve
their market share.
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 Median age: It describes the age which classified people of nation into two equal teams
and in this, half is related with old individuals and other youngsters. In China, it is almost
25 to 40 years. As people of this age group are much trendy and attract towards new and
unique items. In France, it is almost 40 years; therefore, as organisation is going to export
their bags into China then, this will easy for them to capture attention of numerous
individuals.
Henceforth, it has been understood that, if firm wants to export their business in China then, it is
essential for them to comprehend economic of that nation (Stiebale, 2011). As a result, they can
easily provide their goods and services to people who are residing over there and help them to
raise their standard of living (Maekelburger, Schwens and Kabst, 2012).
Instead of all this, it is required for Louis Vuitton to conduct SWOT analysis for their
enterprise; therefore, they can formulate strategies for their business in an effective and efficient
manner.
Strengths: This can be stated as below: Strong association to quality: Louis Vuitton is a luxury brand which is famous across the
world for their best qualitative items. Similarly, if client is paying high amount then, they
are more concern about quality. Certain standards are made by them and employees need
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Illustration 2: GDP rate of China
(Source: Trading economics, 2018)

to keep it. Thus, it has been understood that they are strong in providing quality goods to
people. Brand recognition: It is easily recognised by individuals as there logo is print on their
bags; so that, people will always remember about it. Top celebrity endorsements: Company comes under top brands; thus, this will be easy for
them to make an advertisement with famous celebrities. As they are going to export bags
in China; so that, they will create ad with support of Angelina Jolie, Scarlett Johansson
and many more. Wide network: Organisation is operating their business in almost 45 countries with more
than 460 outlets. Therefore, they have nearly 1,21,000 staff members who are currently
doing their job with them. They are dealing in variety of products and in addition, selling
their goods online to people. Which aid them to increase their customer base. Along with,
they are taking assistance of many retail stores to sell their items to customers. Exclusive merchandise: Enterprise is much popular for their unique designs of bags.
There goods will be easily identified by persons in the crowd also (Frenkel and Johnson,
2013). Top designers: Product design of Louis Vuitton is creative which aid to attract numerous
people towards them. Designers of firm is very popular across the world and they are
Stephen Sprouse, Manolo Blahnik, Isaac Mizrahi, Helmaut Lang, Romeo Gigli, Vivienne
Westwood and Azzedine Alaia.
Weakness: These are stated as below: Excessive centralization: Company is founded by Louis Vuitton which is known as a
tough manager. He has a copyright or patent on almost all of their products. He only has
the right to take decision regarding business; thus, there is centralization in his powers
(Chaboud And et. al., 2014). Lack of sensitivity to foreign cultures: Louis Vuitton is a French stylist and company is
accepting others designs easily. But there is deficiency in sensitiveness to foreign culture. Over reliance on Japanese market: The brand is much popular in across the world. But,
there most of items are basically owned by Japanese females. Therefore, it can decrease
their abilities to face another marketplaces.
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 Exorbitant pricing: Louis Vuitton comes under luxury brands and they are providing
their goods and services at high prices to customers. Therefore, if they want to target
large market segment then, it is fundamental for them to decide value of their items
moderate. They are going to export their products in China; so that, they need to set price
of goods low to compete their competitors in an effective way (Kontinen and Ojala,
2011). By maintain quality, they can attract many people towards their merchandises.
Opportunities: By obtaining it, firm will easily enhance their profits as well as market share. Growing market potential: As company is doing their business in many nations. Now,
they are going to enlarge their market by exporting bags into China. Which aid them to
enhance their profits and in addition customer base. As a result, they can easily maintain
their reputation at national and along with international level. It is considered as the best
opportunity for firm. Increase in number of working women: It is necessary for organisation to appoint more
females as a staff members at workplace. As they can understand customers appropriately
and sale them products easily (SWOT analysis, 2017). It has been noticed that women can
easily convince individuals to buy an item. Enterprise is going to export bags in China
and there main targets is young girls. Rise per capita income: If it is high then, people can spent much amount to purchase
goods and services. Therefore, firm will increase demand of luxurious products which aid
to improve living standard of people. Tie up with fashion house: Louis Vuitton can take assistance of many famous fashion
house as this will help them to increase their market share. As a result, they can improve
their customer base effectively and efficiently (Navarro and et. al., 2011).
Threats: It will consist: Counterfeiting: It is considered as a biggest danger which is facing by Louis Vuitton.
Thus, if there is presence of fictitiousness then this will affect image of company in an
adverse manner and in addition cut market share. Managing multinational customisation: Enterprise is developing best and unique goods
for people and provide them a facility of customisation. Hence, they will face various sort
of issues or challenges in front of them.
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 Increase in competitors: As Louis Vuitton is going to export their merchandise in China.
There are many companies who are manufacturing qualitative and unique bags for people
at affordable prices. Therefore, if they want to take benefits from them then, it is must for
them to formulate effective strategy (Grant, 2016). Additionally, it is required for them to
set value of items moderate and produce attractive merchandise which will capture
attention of numerous individuals. There are many rivals of Louis Vuitton, such as Prada,
Gucci, Versace, Zara, Burberry and many more.
 Government policies: Firm is going to expand their market into China by exporting goods
and services over there. Therefore, it is must for them to follow those policies which are
formulated by regulatory body. This will assist them to conduct business operations in an
adequate manner.
1.2 Evaluation of business potential for product in export market
Louis Vuitton is a luxury brand which is famous for their quality goods and services.
They are operating their business in more than 45 nations; therefore, customer base is high. Now,
they are going to start exporting of merchandise into China; so that, it is mandatory for them to
conduct research. This will assist firm to know about people and market of that country. There
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Illustration 3: SWOT Analysis
(Source: SWOT Analysis, 2014)

are various reason behind selection of China to export bags over there. There population is much
high which aid enterprise to increase their market share (Dervis, De Melo and Robinson, 2015).
Along with this, political stability of firm is much high as comparison to other country; thus,
there is maximum circumstances of growth and success of company.
People of China is maintaining their living standard in an effective manner. It is required
for manager of firm to determine purchasing power of persons who are residing in China. This
will aid them to decide price of goods and services (Marsh, 2011). Rather than this, they have to
examine their competitor's strategies which are following by them. It will help Louis Vuittion to
take benefits from their contenders. Market of China is entirely differ from France in various
aspects, such as size, population, GPD and so on. Organisation is going to export their items into
China; therefore, they need to examine environment of that nation. By doing this, enterprise will
adopt opportunities which are accessible for them at marketplace. This will assist them to
improve their market share.
Before export, it is necessary for company to take license from government because
without it they are not able to sell their merchandise across the world. They will provide training
to their staff members; thus, they can easily accept responsibilities which are given to them by
superiors. To maintain goodwill, Louis Vuitton can cater after sales services to buyers which
assist in their retention.
Instead of this, it is needed for organisation to examine demand of their goods at market
of China. This will assist to accomplish needs and wants of every segment of individuals (Jones,
Coviello and Tang, 2011). By fulfil requirement of customers within limited period of time, firm
will take benefits from their contenders. For above stated aim, there are many tools and
techniques which can be utilized by firm, for example social sites, survey and so on. If company
is providing qualitative items to people at a moderate price then, they can easily enhance demand
of it. Rather than this, manager of Louis Vuitton will take pre orders of bags which they want to
export into market of China and after that, they will start shipping.
Superior of firm will take assistance of game theory because it can help to determine
preference of clients. It aids to found out that how much amount a clients can pay for any goods
and services. Individuals of China want trendy products to accomplish their needs and wants and
in addition keep up their living standard.
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2. COMPARATIVE CHOICE
After conduct market analysis of China, if manager of Louis Vuitton wants to change it
then, they will choose India to export their goods and services (Baek and Qian, 2011). There are
various reasons behind it, which are stated as beneath: Population: India comes on second number on this basis. At present more than 1.3
billion persons are residing over there (Yang and Lin, 2012). Thus, company will easily
capture attention of numerous individuals which assist them to increase their client base
in an adequate manner. Median age of India is near 25 years; therefore, they can target
youngsters of that nations because people of this age is basically want trendy items to
maintain their standard in front of society. Buying power: GDP of India is more than 2.2 trillion USD; hence, purchasing capacity
of persons is moderate. Price of product is affordable which can be easily purchased by
individuals. As indicated by a research paper, it has been identified that India comes at
third number in the buying power. Economic growth: This is much effective as income of people is increasing
continuously. As a result, they are able to purchase more luxury items as it aids to
maintain their standard of living (Schmid, S. and Kotulla, T., 2011). Flexibility of duties and legislation: An organisation can easily export their goods and
services in India because rules and acts related to it is much easy. Therefore, it is not
difficult for Louis Vuitton to export items over there.
 Political stability: Government of India is going to stable for another ten years; therefore,
chances for alterations of rules and regulations is much less. If company wants to sell
their items over there then, they can do it and this will help them into their long term
survival.
3. DETERMINE TARGET
Company is going to export their goods and services in China as population and GDP is
high as compare to other nations. Organisation is expecting 50 million USD sales in China; so
that, they can maintain their profits. This will aid them to survive at marketplace for longer
period of time. As a result, they can increase goodwill of firm at global level. If sales are
increasing then, this will be easy for them to expand their business in other places.
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It is required for association to accomplish needs and wants of every kind of people; thus,
they will fulfil their requirements within limited period of time (Goudarzi and Ramanarayanan,
2011). For above stated aim, they can classify market into various parts, such as behavioural,
geographical, demographical and in addition Psychographical. Henceforth, manager of enterprise
segment their market as per the basis of demography. According to this, they can divide
marketplace as per age, gender, income, occupation and so on (Raff, Ryan and Stähler, 2012).
There main target is those people who comes under the age of 25 to 40 years. Main reason for
this, there spending power is high as comparison to individuals of other group. They want to
purchase unique and attractive items which help them to maintain their standard in front of
society. Louis Vuitton is manufacturing bags for women only as they always carry stylish bags
with them. Organisation is producing unique design which aid them to attract people towards
them.
4. STRATEGY
4.1 Strategy implement to launch the product in country
It is more important for every organization to use effective strategy to launch the product
in market which leads in getting positive response form customers. It is more important to
informed market strategy because it directly assist in determining company vision, mission and
all the business goals. It directly affect the entire business so that it is necessary to plan and
develop effectively. Basically marketing strategy is an appropriate planning tool to successfully
launch product in market (Ramamurti, 2012). In this company find a new market in which they
easily expand their business and also launch their products to achieving favourable results which
leads in enhancing the overall performance in new market in most effective manner. In this
context, Louis Vuitton is a fashion and luxury retail company in French, which provide various
products to their customers in order to get their better satisfaction. They operate their business in
various countries and location in which they easily generate larger revenue in effective manner.
In current time they wants to expand and well as introduce their bag services in China. Because
the main aim of selected company is to generate more profits by offering their quality products in
over the world. For successfully launch their bags Louis Vuitton use new market development
strategy. But before expanding as well as launching products they have to effectively plan for
identifying needs of the customers in market place. Better planning and implementation of
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