Marketing Report: LVMH's Strategy for a New Product in China

This report focuses on the development and marketing of a new unisex perfume by LVMH in the Chinese market, addressing the slowdown of shares in the region. It begins with an introduction to LVMH and its product portfolio, followed by a description of the new product, which aims to boost sales in the perfumes and cosmetics sector. The report then presents a SWOT analysis, outlining the company's strengths such as brand recognition and exclusive merchandise, and weaknesses like over-reliance on the Chinese market and high prices. Opportunities include the growing market potential in China and rising per capita income, while threats include managing multinational customization and counterfeiting. The report references relevant literature to support its analysis.

Running head: MARKETING NEW PRODUCT
MARKETING NEW PRODUCT
Name of the Student
Name of the University
Author Note

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Executive Summary
This report will focus on the develop of a new product by LVMH in the market place of
China. A SWOT analysis would also be provided in this report, which would help the
organization to strategize their plans effectively and efficiently.

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Table of Contents
Introduction................................................................................................................................3
New Product...............................................................................................................................3
SWOT Analysis.........................................................................................................................3
STRENGTHS.........................................................................................................................3
WEAKNESSES.....................................................................................................................4
OPPORTUNITIES.................................................................................................................4
THREATS..............................................................................................................................5
References..................................................................................................................................6

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Introduction
LVMH, or Louis Vuitton Moet Hennessy, is a French luxury goods head
conglomerate, which has a multinational presence. The organization has its head office
in Paris, and was formed in 1987. The products of the organization ranges from perfumes,
clothing, jewelry, watches, wines, cosmetics, fashion accessories and spirits. Now, the
organization wants to develop a new product which would be launched into the market place
of China, in order to recover the slowdown of the shares in the Chinese market for LVMH
products (Cavender and Kincade 2014).
New Product
The new product which would be manufactured by LVMH is a Unisex Perfume,
which would be available in 5 fragrances throughout the market place of China, who are one
of the biggest buyers of the products sold by this French organization. It would be tagged
with an average price in order to push-up the sales, where it has been seen that the sales of the
perfumes and cosmetics segment were increased by 11% in the last three months. This new
product would help LVMH to increase their shares in the market place of China, where the
projection of increase of the sales in this sector would be 17%.
SWOT Analysis
STRENGTHS
1. Bold association to the quality – The organization possesses a strong association
with the qualities manufactured by them. They are always a benchmark in the context of
quality, for which the customers are ready to pay a premium price for the luxury products of
LVMH.

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2. Brand recognition – The brand identity and recognition is very high for the
organization, as it associates with the status as well as class in the community.
3. Huge network of employees and channels – LVMH has more than 121,000
employees around the world, and are one of the top employers in organizations dealing with
luxury products. The products are sold to more than 50 countries and across 460 outlets.
4. Exclusive Merchandise – They have personalized luggage facilities which are
monogramed in order to identify their level.
5. Endorsements by top celebrities – The brand s endorsed by reputed celebrities all
over the world.
WEAKNESSES
1. Excessive Centralization – As the organization is a tough employer, they rely on
the centralized decision making process which slowdowns the morale of the employees.
2. Over-reliance on Chinese market place – The company is too much depended on
the Chinese market in order to earn revenues.
3. Absence of sensitivity to foreign cultures – The company is not very much
sensitive in the context of recognition of trends in the market place of foreign countries.
4. Unreasonable high price – The products of LVMH are too much high, so only
premium customers have the ability to buy their products.
OPPORTUNITIES
1. Growing market potentiality in the Chinese market place – The company has
the potentiality to grow in the market of China, as they have a tendency to buy premium
products in the luxury goods segment.

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2. Rise in per capita income of the country – The increase in the per capita income
of the Chinese market would help LVMH to buy their products as the demand for the product
would also be increased.
THREATS
1. Managing of Multinational Customization – Customization possesses a threat to
the designers of LVMH who manufactures the products according to the individual cultures
where the organization has their presence.
2. Counterfeiting – This provides a negative image as well as decrease in the market
share to the brand, and it is the biggest threat in the luxury products segment (Pinkhasov M.
and Nair 2014)

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References
Cavender, R. and H. Kincade, D., 2014. Management of a luxury brand: dimensions and sub-
variables from a case study of LVMH. Journal of Fashion Marketing and
Management, 18(2), pp.231-248.
Pinkhasov, M. and Nair, R.J., 2014. The strengths and weaknesses of luxury. In Real
Luxury (pp. 28-55). Palgrave Macmillan, London.