Report: Louis Vuitton Brand Extension Strategy in Spain

This report delves into the brand extension strategy of luxury brand Louis Vuitton, specifically focusing on its expansion into the Spanish market with its watch segment. The report begins with an executive summary and an introduction to brand extension, highlighting Louis Vuitton's brand DNA, product portfolio audit, and sustainability profile. It then explores the market landscape, including competitive analysis using Porter's Five Forces model, market trends, and design trends relevant to the Spanish market. The value proposition is examined through target audience review, unique selling points, and quality descriptors. The report also critically evaluates Louis Vuitton's marketing strategies, particularly its social media presence. The brand extension is analyzed in terms of ethical, environmental, and economic considerations. This report provides a comprehensive overview of Louis Vuitton's strategic approach to entering the Spanish market.

BRAND EXTENSION

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................3
INTRODUCTION...........................................................................................................................4
OVERVIEW OF THE BRAND......................................................................................................4
Brand DNA.................................................................................................................................4
Product portfolio audit................................................................................................................5
Sustainability profile...................................................................................................................6
SCOPE OF THE MARKET LANDSCAPE....................................................................................7
Competitive analysis...................................................................................................................7
Market and design trends............................................................................................................8
VALUE PROPOSITION.................................................................................................................9
Target audience review...............................................................................................................9
Point of Sale................................................................................................................................9
Unique selling point ...................................................................................................................9
Quality descriptors of the brand................................................................................................10
THE CRITICAL EVALUATION OF LOUIS VUITTON STRATEGIES...................................10
Social media channels...............................................................................................................10
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

EXECUTIVE SUMMARY
The report has been covered brand extension of the luxurious brand Louis Vuitton where they
will extend to Spain their segment of watches. The report has given a brief explanation about
overview of brands. This overview has covers brand DNA, Portfolio audit of product, and
sustainability. The report has been discussing about scope of market, which included porter's
fiver forces model for analysing competitiveness in brand extension in Spain. Also, trends
related to market of Spain and design trends have explained. The value proportion had also been
explained in the report. This topic constitutes target audience review, USP, point of sale and
quality description. The report ends with a brief description of Strategies of marketing Louis
Vuitton follows. The Louis Vuitton have been following social media marketing.
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INTRODUCTION
Brand extension is a strategy of marketing which is done by a firm in marketing an
established product with a good and developed image by using a same brand name but in
different category of product (Lane, and Fastoso, 2016). This strategy is using by the companies
to leverage and increase equity of brand. Here in this report brand extension of Louis Vuitton in
Watches will be taken. Louis Vuitton is a fashion company of France. Also, it is a luxury retail
company deals in Paris. There products are handbags, watches, shoes, wallets, belts, etc. The
report will lay emphasis on overview of the brand Louis Vuitton by Brand DNA, product
portfolio audit and sustainability of the brand. Also, scope of market will be explained by
competitive analysis and design & market trends in Paris for brand extension. The report will
focus on through value proposition and critical evaluation.
OVERVIEW OF THE BRAND
Brand DNA
BRAND PLAN
Mission &
Vision
To represent most polished qualities of western art of living all over the
world. Products of Louis Vuitton have integrated cultural values with blend
of traditional, innovation and fantasy in it.
Objectives  Offer luxury life to consumers in order to gain creativity and
elegance (Keller, 2016).
 Best at Western luxury living by identical image among the world.
Key issues  The company face problems with unqualified staff.
 Also, the high competition is the key problem company Louis
Vuitton faces by other luxury brands.
Strategies
PRODUCT Louis Vuitton watches
PRICE Louis Vuitton targets high class of people. They follow premium pricing
strategy to price their watches.
PLACE Brand extensions of Louis Vuitton will be done in Spain.
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PROMOTION Promotions will be done by short film, billboards, online advertisement,
local newspapers and Television.
CONSUMERS VALUE PREPOSITION
Research Louis Vuitton will establish their brand towards extension in Spain. The
company is luxurious brand and will extend for their watches only. Though,
the brand Louis Vuitton is new in spain they need to identify customer needs,
priorities, taste and promotions (Athanasopoulou, Giovanis, and Avlonitis,
2015).
Target
segments
Louis Vuitton need to set rich class of Spain as a customer because the brand
is of luxury fashion and it is not possible for a normal class to buy these
products. So, company will need to target rich people of Spain.
Track needs Now, company Louis Vuitton will need to track needs and wants of customers
of brand extension in Spain. Also, their priorities and choices will be
considered by the company.
Brand review For reviewing watches of Louis Vuitton, Company will need to analyse
through brand funnel. It is a tool which measures consideration, awareness,
purchase, loyalty, repeat purchase, etc.
Product portfolio audit
INTRODUCTION
The introduction of Brand Louis Vuitton is high at initial stage. The
company will need to apply promotional practises in Spain during
extension. Although, company shall promote their watches to final
customers to create a customer base. Therefore, cost of promotions
and marketing will be very high at time of extension of Louis
Vuitton in Spain.
GROWTH On this stage, company will earn revenue at an increasing treand
and also their expenses will decline. As the luxurious brand such as
Louis Vuitton have established their image in mind of customers.
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Luxurious products are generally for long term basis and their
customer base will not shift to other competitors as people build
trust in them because the quality they offer and identical attributes
of watches of Louis Vuitton.
MATURITY
This is also called shake out point in which, company will lower
their demand and face extreme challenge. Also, the competitors will
know Louis Vuitton's strategies. So, company need to innovate
according to the trend follow in Spain.
DECLINE
This stage is not possible for Luxury products because their
customers will never choose other luxurious brand than Louis
Vuitton. This is the strength of Louis Vuitton, that they create a
group of loyal customers in every segment they trade (Keller,
2016). Similarly, brand extension in Spain will also be similar as
other country Louis Vuitton trade such as Paris.
Sustainability profile
 Ethical Considerations by Louis Vuitton
Louis Vuitton have their unique values and ethics and believes that simple actions make big
differences and restore friendly relations with the human creativity and the environment to
favour sustainable development. Their actions encourages suppliers and partners and raise
awareness and responsibility within the company. Their ethical practice of luxury goods and
strategies make them socially responsible. Other ethical considerations that Louis Vuitton
follows are related to environmental follows 5 R rule i.e. renew, reduce, recycle, review and
repair (Athanasopoulou, Giovanis, and Avlonitis, 2015).
5 R RULE OF ETHICS
Renew: Craftsman use renewable
resources.
Recycle: They made aware of how to
recycle paper, plastic etc.
Repair: All stores offers repair services
for products.
Review: Use models to review the
energy and products.
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Reduce: Use the latest methods to reduce waste from packaging.
 Environmental considerations by CSR
To protect the environment is a priority of Louis Vuitton. The Louis Vuitton is continuously
giving training to their Employees about the protection of natural resources. The Louis Vuitton
save energy and resources by storing lighting and air condition in their fashion and leather goods.
The Louis Vuitton is using packaging bags made with the paper rather than plastic bags in order
to save the environment. The Louis Vuitton involves the teams in order to cope up with the
environmental challenges. Louis Vuitton focused on CSR with arts drive (Kim, and Park, 2018).
The luxury brand helps the young people by engaging with their arts through a specially created
website Recreativeuk.com. This website is designed to promote the contemporary art of young
people.
 Economic consideration
The Louis Vuitton represents over 50 high brands which appeals the consumers desire for
discretionary spending. This is helpful in maintaining a balance economy. By providing tax
breaks to the wealthy will increase investment and helpful in creating more job opportunities for
the people.
SCOPE OF THE MARKET LANDSCAPE
Competitive analysis
Porters five forces model
Porters forces model will be used for competitive analysis of the luxury fashion brand Louis
Vuitton. These five forces of porter will be discussed below as :
Bargaining power of
Supplier - Very high
power
The power of suppliers in luxury fashion brand like Louis Vuitton
has medium. As there is huge amount of manufacturers over the
world. The brand Louis Vuitton is wholly depended on their
manufacturers of watches to supply them in stores of Spain for
extension. Therefore, they provide an identical image in mind of
luxury fashion brand Louis Vuitton, as they use metals and non
metals in their watches.
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Bargaining power of
Buyer - Medium low
power
The price range set by the Louis Vuitton is high as they focus on
luxury sector. Thus, customers have very little power to make
changes as the prices are intentionally discriminatory. Also, the
switching cost of these luxury brands are very low because of the
created brand image. This act as a strength for the company like
Louis Vuitton and lowers the bargaining power of buyers for luxury
fashion products.
Competitive Rivalry -
Medium high
competition
In the luxury industry competitive rivalry is medium high because
there are many competitor brands. Such as Zara, Oysho, in luxury
fashion brands for luxury fashion brand Louis Vuitton. The company
Louis Vuitton need to make proper strategies for gaining competitive
advantage and to attain a growth in industry of luxury fashion.
Threat of substitute -
Medium threat
The threat of substitute in Louis Vuitton is medium because
consumers can opt for any other Spanish brand like Zara, Pull &
Bear, Oysho etc. Consumers of Louis Vuitton are major focuses on
high income class people. As these people consume luxurious good
as their status symbol so they do not easily shift to other brands.
Therefore, Louis Vuitton watches will face medium substitute
available in Spain (Keller, 2016).
Threat of new entry -
Medium low threat
The threat of entry of new luxury brand is medium low because of
sufficient capital and resources needed to enter as a luxury brand. For
any new brand it is not possible to establish as a luxury brand
because it is difficult for any new brand to compete. Therefore, Louis
Vuitton has medium low threat from new entry.
Market and design trends
 Blue dials watches are in fashion
The blue dials in watches are in trends. Many brands of watches have blue optioned colour in
their dial to attract customers who love to follow trend. Therefore, Louis Vuitton also follow this
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trend and launched their blue range of dials. They will also expose their range of blue dials in
Spain as a part of Brand extension.
 Shapes and small sizes watch
In luxury watches people prefer to buy small and identical shapes of watches. Many models wore
diamond studded watches of luxuries brands in their shows and ramp walk. So, these watches are
liked by many people and Parthos, a luxury brand of Spain offers these watches. Thus, company
for their brand extension follow this trend to attain competitive advantage (Monga, and Hsu,
2018).
 Vintage style watches
In 2019, the Vintage style watches are in trend. Many companies in Spain offers retro style
watches to natives. This style includes white and silver dials, Beige numerals, Arabic numerals
and Salmon. These watches are in trend because they reflect heritage in their designs. Louis
Vuitton offer a good range of Vintage watches in Paris. Although, Brand extension will give
more choices to natives of Spain to try Vintage collection of luxurious brand Louis Vuitton.
VALUE PROPOSITION
Target audience review
The report on luxurious goods are saying that the growing importance for non- western markets
has been supported the supply chain leadership, technological innovation and international
investment in luxurious goods. According to financial year 2017 the sale of luxurious goods is
increased by 14% (Moon, and Sprott, 2016).
Point of Sale
The aggregate sales of luxurious goods of to 100 Companies were US $217 billion. The
Luxurious brand like Louis Vuitton Watches are refocused on their business strategies in order to
capitalise on these things. The rising prosperity in major cities and growing formal demands for
luxury goods is an asset for Louis Vuitton Watches. According to the research the market share
of Luxury goods is increased by 32.2 % (ALAVI, and KHODADADE, 2017). The Louis Vuitton
Watches has an opportunity for continuous innovation and support due to growing market for
luxurious goods in Asia and pacific countries. The Indian economy has gain from recent reforms.
In India luxury goods are still in stages of early developments.
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Unique selling point
Unique selling point (USP) of Louis Vuitton Watches is Spain. Demographic targeting strategy
is used by Louis Vuitton Watches. They are targeting both women and men in Spain. The ages
range from 22 to 65 years old. The targeted audience will be those who has ability to spend on
Louis Vuitton's range of Watch collection. The Louis Vuitton Watches mainly target the Elite
people who has a capacity to purchase luxurious goods. The Marketing strategy of Louis Vuitton
Watches is to enhance their brand via social media channels by doing online advertisement. As
youngsters are highly active on social media channels they can easily target out there. The Louis
Vuitton is using new strategy of promotion of their Brand. They introduce new collection to the
celebrities and the top models and they tag them later this is helpful for increasing the fan
followings of Louis Vuitton Watches. The Celebrities also reposts on their pages this facilitates
Louis Vuitton Watches to reach the desired audience. The Louis Vuitton watches has become
Luxury Marketer through their Creative Campaigns and fashion shows. They also promote their
brand in FIFA world-cup by making Leather Case that has gained recognition worldwide
(Dimitriu, Warlop, and Samuelsen, 2017).
Quality descriptors of the brand
They have rich history and culture that is helpful for them to lead towards the brand extension.
The Louis Vuitton Watches has superior Craftsmanship. The Louis Vuitton Watches has good
quality products which they offer to their customers. The Louis Vuitton is the largest luxury
brand with Exclusivity. They have strong presence in leading commercial hubs. The Louis
Vuitton Watches strongly aim for their product excellence (Guo, and et.al., 2018). They strive
vest in what they do. The Product strategy of Louis Vuitton is to be unique from others. Louis
Vuitton is known worldwide for their watches quality. They have availability of Unique
resources that make just high end watches and also high end complicated watches. The one of
unique attractive model was Tambour Spin Time GMT which have a series of Spinning cubes on
the dial that served as an hour indicator. The Louis Vuitton Watches are focused on an exclusive
horologic-ally legitimate mechanical movement in their luxurious products.
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THE CRITICAL EVALUATION OF LOUIS VUITTON STRATEGIES
Social media channels
The marketing strategy of Louis Vuitton is they advertise their products through different social
media channels like Instagram and twitter. They have twitter following of across 7.16 million.
Instagram followers are approx 21 million. The Louis Vuitton is a second most influential brand
on social media. The Louis Vuitton has consumer's digital interaction by 40 % of all on luxurious
products. This leads them towards winning market share and helpful in engaging customers
digitally and socially. The cohesive hastagging system of Louis Vuitton allows them to tap into
internet traffic related to fashion. There adds are trending among the youngster on Social media
platform. The Louis Vuitton is entering into as relationship with their potential customers
through Social media channels (Hayran, and Gürhan-Canli, 2016). They are doing special to
keep winning the market share.
The Louis Vuitton is an industry which have been slow to embrace social media. The
Louis Vuitton is aiming to upholding the beliefs of peoples that luxury shopping is a privileged
pursuit. The Luxurious strategy of Louis Vuitton aims at creating the highest brand value of their
Luxurious watches and pricing power by leveraging all intangible elements of singularity like
heritage, time, craftsmanship, small series, country of origin and clients. The fashionable strategy
of Louis Vuitton Watches believes in being fashionable and to create a very perishable value in
their products. The premium strategy of Louis Vuitton says that Pay more and get more. They
attract customers by improving their product quality. The Louis Vuitton is lives-streamed the
opening of their New Bond Street store. According to the Research the average online visit of
people on Louis Vuitton page is stunning in every 4.15 minutes. There is visual affair of Louis
Vuitton products on online platform. One of there marketing strategy is that they tagged the
celebrities and models on Instagram page this helps them to target the potential audience and the
celebrities and models also repost on their own page. The easily decipherable hashtags reinforce
this cohesion. This is helpful for increasing the brand value of Louis Vuitton watches. Every
tweet of Louis Vuitton is accomplished by a high resolution photo or video which is there
another marketing strategy.
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Figure 1 : Social marketing
(Source : Social marketing, 2018)
The image is showing total brand equity of Louis Vuitton after they started promoted their
products on social media platform (Ferguson, Lau, and Phau, 2016). There is increment in their
Brand Equity value in the year 2017 by $9.9 Billion. The luxury brand index is showing score of
369.
CONCLUSION
The report is all about brand extension of the luxurious brand Louis Vuitton in Spain.
The report was begun with brand's overview which includes Brand DNA, Product portfolio audit
and sustainability. Then comes Scope of market of Spain which was explained with model
competitive analysis that is Porter's five forces and also, market and design trends were discussed
in the report. After that value proportion were explained which constitutes reviewing target
audience, USP, point of sale and quality descriptor. Atlast, report was ended with the explanation
of Strategies of marketing Louis Vuitton follows.
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