Louis Vuitton or shortened to LV – is a French fashion house founded in 1854. The label is well known for its LV monogram, which is featured on most products, ranging from luxury trunks and leather goods to ready-to-wear, shoes, watches, jewellery, accessories, sunglasses, and books. Louis Vuitton is one of the world’s leading international fashion houses. Louis Vuitton sells its products through small boutiques in high-end department stores, and through the e-commerce section of its website.
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In this report, there will be some market research conduction, which is often needed to ensure that we produce what customers really want and not what we think they want. There are two main approaches: primary and secondary research methods. For primary research data, we select one focus group of target customer and then we conduct a survey with 50 correspondents. Secondary literature involves using existing information that others have already discussed and experienced about the customer service level of LV stores. By then, the understanding from various data obtained will be analyzed as well as the involved influence factors during the luxury apparels purchasing process.
Obviously, in order to improve in marketing plan and strategy, it is essential for marketers to understand the consumer behavior process and the key factors influencing the process. With intensive research conducted, this report aims to provide the understanding of Louis Vuitton target market as well as the consumer purchasing process towards Louis Vuitton brand. Base on that, there would be analysis, discussion and recommendation for Louis Vuitton in the future.
Product description and Target market
Louis Vuitton has maintained its leading position in the world fashion industry for decades as a luxury brand. It can be seen clearly that Louis Vuitton bag is a tangible product. Being different from services which cannot be seen and touched, Louis Vuitton bag can be touched, felt physically with the fingertips by the users. For instance, even if the customer see the products’ images online and make an order, it is still not a tangible product until the consumers can hold the product in their hands, feel the leather, the zip, smell the fragrance. Louis Vuitton bag is not only functional in containing things as a bag itself but also help people feel confident and valued since Louis Vuitton is a luxury and fashionable brand.
3.2 Target Market
From our research, we identify this brand into two main target market segments, which are from the demographic marketing segmentation and geographic marketing segmentation.
Demographic segmentation includes some components such as: age, gender, income, occupation, social class and so on. Louis Vuitton’s target market consists of individuals who have a higher income and thus they have found that the higher the income of an individual, the higher the propensity to purchase luxury goods. Louis Vuitton’s target market is also one that can identify with the communicate messages of Louis Vuitton because the company has created images that are in accordance social identity theory. People are posited to take action and to consume products at least in order to follow the ideas consistent with their ideal-self image. The products can also be bought for personal use or for gift. Therefore, for this segmentation, our targeted clients are both sex, aged between 25-50 years old, who have earned an income between 50,000 SGD ~ 200,000 SGD yearly and most of them would be graduate professionals with sense of self-worth and high social status.
Geographical segmentation divides markets into different geographical areas. Marketers use geographic segmentation because consumers in different areas may display certain characteristics and behaviors in that particular region. This segmentation will help the brand to do better positioning by enhancing its status symbols in its wealthy market such as China, Japan, India and other developing countries. One of the most important markets of Louis Vuitton is not from Paris where its original is, but Asia. The brand has pursued a consistent approach to developing the foreign market, never compromising in the face of difficult operational obstacles, and, as always, controlling every aspect of the business. This unique approach has powered Louis Vuitton to its current position as the most successful luxury brand in China. And it is said that the mainland Chinese were Louis Vuitton’s third-largest customer segment in the world nowadays  .
After thorough research and analysis, this report will focus mainly on demographic market segment for the remainder.
Consumer Behavior Process
The first stage that all purchasers will go though is the problem recognition stage.
From our survey among 50 correspondents, most of the purchase recognition stages are from the needs of a luxury handbag to carry. These people believe that carrying a branded product will enhance their status and wealth as well as fashionable.
Most of the users are mature (25+), female, working population with stable financial background. There is also an increasing number of young users, who are fashionable trend-followers and these users are usually less price-concerned and its products are frequently used by the rich and famous, celebrities, models all over the world.
Once the consumer has recognized a problem, they start to search for information on products and services that can solve that problem. First time buyer will engage a little bit of time to recall their awareness about brands. And each brand will carry a series of models which are suitable for different occasions. They are tote bags, evening clutches, top handles and even accessories. From the needs recognition trigger in the earlier steps, there will be a wide range of choice. External search may include the opinions and attitudes of friends, families, reviews from the internet, etc. This information can be easily attainable from those discussion forums, blogs, chat groups and some official websites of each brand. Pricing and product catalogues are mostly displayed on the website with all new arrival designs, exclusive designs and also some sale-off for online purchases as well.
Evaluating and selecting alternatives
At this time, the consumer compares the brands and products that are in their evoked set. They will have some choices in mind for a luxury bag such as Louis Vuitton, Channel, Burberry, Gucci, and Salvatore Ferragamo. How the marketing team can increase the likelihood that their brand is part of the consumer’s decision process is the key value of branding strategies. A buyer’ evaluative criteria would be the cost of a bag, the colour and whom the celebrities are being captured carrying the bag. It also depends on the surrounding or working environment where the consumer is in, especially for those first time buying a luxury brand handbag. The data obtained from the research shows that 60% of total correspondent have the choices to buy LV bag in their first purchase.
However, for those have bought it before, the evaluation and selective will depends on loyalty, brand satisfaction or the attractiveness of new design of that brand. At this stage, there will be high involvement of switching brands. From our survey, 65% of correspondents of those who have owed an LV bag don’t want to be loyal with the brand and tend to select another brand for their next purchase. Consumers evaluate alternatives in terms of the functional and psychological benefits that they offer. Since this is the fashionable products and the consumption may follow the trendy designs in different seasons. For Louis Vuitton, they have variety of colours and leather types for several occasions. Consumer can select the classic material named Monogram Canvas, Monogram Denim, Monogram Idylle, Monogram Multicolore, Monogram Miroir, and Monogram Vernis. For those young-age-customer groups who are going for another line of design, they can look for Damier Ebene, Damier Azur. And for leather bags, LV carries Normad Leather, Suhali Leather, which brings the prestige and professional to working executives. After choosing the brands, consumer will proceed to the step of looking for the design and colour even though it may happen in reserve cycle to some other buyers, who choose the design and colour first and then go for brand selection.
Outlet selection and product purchase
Once the alternatives have been evaluated, the consumer is ready to make a purchase decision. Sometimes purchase intention does not result in an actual purchase. The marketing organization must facilitate the consumer to act on their purchase intention. The organization can use variety of techniques to achieve this.
For branding and luxury handbag boutiques like Louis Vuitton, they are located in prestige shopping malls, whereby the customers are being well-taken care of and being served as a queen when shopping. Therefore, we will never experience that an LV boutique outlet is located in any wet-markets or any neighbour-hood shopping market. All the shoppers believe in the luxuries where the shop is located.
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For some detail customers, there might be a call to the LV shop in advance to check the stock availability regarding the model, the design that she wants, and also the price amount. For some shopaholic consumers, they may just need to visit the shop themselves and pick the one that they feel like it. And this process is taking shorter time which all stages happens in the shop itself for those experienced LV bag users.
It is common for customers to experience concerns after making a purchase decision. This arises from a concept that is known as “cognitive dissonance”. The customer, having bought a product, may feel that an alternative would have been preferable. In these circumstances that customer will not repurchase immediately, but is likely to switch brands next time. As mentioned above, 65% of correspondents of those who have owed an LV bag in our survey don’t want to be loyal with the brand and tend to select another brand for their next purchase. There are a few negative voices from Louis Vuitton Shoppers such as: “No one bothered to greet me, other than the security guard at the door!”, “Long queue, slightly condescending assistant-not the VIP experience it should be.”, “I don’t look like a typical LV customer, so the salespeople were in a hurry to have me out of ‘their’ store as fast as possible.”
To manage the post-purchase stage, it is the job of the marketing team to persuade the potential customer that the product will satisfy his or her needs. Then after having made a purchase, the customer should be encouraged that he or she has made the right decision.
Consumer behavior is influenced by demographics, psychographics (lifestyle), motivation, knowledge, attitudes, beliefs, and feelings. Consumer behavior concern with consumer need consumer actions in the direction of satisfying needs leads to his behavior of every individual depend on thinking. The marketing department needs to understand what benefits consumers are seeking and therefore which attributes are most important in terms of making a decision.
Perception is how we see ourselves and the world we live in. Buyer’s mind has been stored that the Louis Vuitton bag is a branded luxury item which shows the prestige and wealth for its owner. To consumer this is their reality, though it does not mean it is an accurate reflection on what is real until they experience it. For instance, one person may be able to focus very strongly on a certain advertisement and be able to retain the information after being exposed only one time while another person may need to be exposed to the same advertisement many times before he/she even recognizes what it is. Consumers are also more likely to retain information if a person has a strong interest in the motivation. So marketers must be creative and use various means to deliver their message. Once the message reaches consumer, it must be interesting enough to capture their attention.
Knowledge is the sum of all information known by a person. It is the facts of the world as he/she knows it and the depth of knowledge is a function of the breadth of worldly experiences and the strength of an individual’s long-term memory. Obviously what exists as knowledge to an individual depends on how an individual’s perceptual filter makes sense of the information it is exposed to. Louis Vuitton product knowledge has been recognized by most of consumer that it is handmade – product with long history of achievements and success. Moreover, nowadays, customer can easily access to all the information about LV brand through their official websites, whereby buyer can view all the new arrival products, new catalogue, new designs as well as all pricing listed in the stores. This developing method to encourage consumers to explore more information will help in brand awareness enhancement.
Another influence factors is attitude, which refers to what a person feels or believes about something. Additionally, attitude may be reflected in how an individual acts based on his or her beliefs. Once formed, attitudes can be very difficult to change. Thus, if a consumer has a negative attitude toward a particular issue it will take considerable effort to change what they believe to be true. Although Louis Vuitton is a successful brand, they don’t provide a retail experience that satisfies customers, unless you are a celebrity or dress like the rich and famous, the sales staffs usually ignores you. This is one of the main problems of LV marketers at the moment. One customer’s feedback is the key issue shaping a purchase decision for others. Many responses from LV bag shopper in Singapore were bad experiences with the shop attendants and brand loyalty is no longer in their mind.
Motivation relates to our desire to achieve a certain outcome. Many internal factors we have already discussed can affect a customer’s desire to achieve a certain outcome but there are others. For instance, when it comes to making purchase decisions customers’ motivation could be affected by such issues as financial position (e.g., Can I afford the purchase?), time constraints (e.g., Do I need to make the purchase quickly?), overall value (e.g., Am I getting my money’s worth?), and perceived risk (e.g., What happens if I make a bad decision?). Highly motivated shoppers will want to get mentally and physically involved in the purchase process. As they consider the LV bag is a luxury items, therefore for those first -time buyer, the process will take longer along the higher perceived risk even though they have strong motivation to buy a LV bag.
Consumer purchasing decisions are often affected by factors that are outside of their control but have direct or indirect impact on how we live and what we consume. One example of this is cultural factor. Culture represents the behavior, beliefs and, in many cases, the way we act learned by interacting or observing other members of society. In this way much of what we do is shared behavior, passed along from one member of society to another. This influenced factor will help the brand to do better positioning by enhancing its status symbols in its wealthy market such as China, Japan, India and other developing countries. It has been reported that the important market of Louis Vuitton is not where its original is, but the Asia countries such as: China, Singapore, Hongkong, Korea, Japan, etc. The culture of Asian people is likely to show off their wealthy and their luxury belongings to others. They believe that they will look better and high-class level with all those branded items.
A purchase decision can be strongly affected by the situation in which people find themselves. In general, a situation is the circumstances a person faces when making a purchase decision, such as the nature of their physical environment, their emotional state, or time constraints. Not all situations are controllable, in which case a consumer may not follow their normal process for making a purchase decision. For instance, if a person needs a product quickly and a store does not carry the brand they normally purchase, the customer may choose a competitor’s product instead of reserving the LV boutique stores. Therefore the efficiency of the staff’s professionalism and the handling skills are very important in serving customer’s request. They can politely talk to customer and persuade them to wait for the stock from another store.
Companies are interested in consumer behavior because they can develop marketing strategies to influence consumers to purchase their products based on consumer analysis. The success of a company’s marketing strategy will depend on how buyers react to it. To find out what satisfied customers, marketers must examine the main influences on what, where, when and how customers buy goods and services  . By understanding these factors better, marketers are better able to predict how consumers will respond to marketing strategies. Ultimately, this information helps companies compete more effectively in the marketplace and leads to more satisfied customers.
Although Louis Vuitton is a successful brand, they don’t provide a high customs satisfaction. Improving customer in-store service satisfaction should be a means but not the end. The loyalty enhancement for a branding strategy is the important attribute to purchases. If they only focus on product attributes, they can only achieve a great awareness of branding, but no impact at all on improving sales performance as customer is unlikely to repeat purchase.
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