Home » [NEW] Brand Strategies that made LVMH luxury powerhouse- The Strategy Story | lvmh brands – Nangdep.vn

[NEW] Brand Strategies that made LVMH luxury powerhouse- The Strategy Story | lvmh brands – Nangdep.vn

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What do Dior couture gowns, Sephora stores, Fenty Beauty by Rihanna, Louis Vuitton luggage and Moet et Chandon champagne have in common? Them and about 66 other iconic brands belong to the world’s first and now largest luxury group, LVMH, or Louis Vuitton Moët Hennessy. 

According to Wikipedia, the company was formed in Paris, 1987, by Bernard Arnault, through the merger of fashion house Louis Vuitton with Moët Hennessy and is growing consistently, with $53 Billion in revenue in 2019 alone. The 75 subsidiaries can be categorized under six branches: Fashion Group, Wines and Spirits, Perfumes and Cosmetics, Watches and Jewelry, Selective Distribution, and Other Activities.

Look familiar? Some of LVMH’s brands; photo credit: Chrsitine John, Medium

In a brutally saturated luxury landscape, the group has managed to make fashion and leather goods its most profitable branch, with Wines and Spirits coming in at a close second.

Creativity and innovation are at the heart of the conglomerate’s massive success. There are two parts to this – the first is the carefully executed luxury strategy and the second is an innovative business model that empowers 70+ brands. 

Credit: LVMH

Before we go further, it is important to understand why luxury strategy needs to break rules and what a luxury brand is.

Just being expensive (a relative, comparative word), does not equal luxury. Neither does luxury equal being absolutely perfect. Some might make the argument that a pair of H&M trousers is a luxury to a high school student. But being a luxury to someone is not equal to being a luxury brand. 

Luxury vs premium – let’s break it down

To qualify as a luxury brand, the brand needs: a unique heritage that’s upheld still, luxury price points, a higher dream to represent, top notch products and an influence on culture and customers. 

Here’s the perfect example from ‘The Luxury Strategy’ by Jean-Noel Kapferer and Vincent Bastien, professors at HEC Paris and key experts in the luxury business: 

“BMW had reached 90% of their sales target for the next year automatically. But when the Head of BMW USA was asked whether he’s done for the year, he replied, ‘My job is to make sure that the 18-year-olds in this country decide that, as soon as they have the money, they will be buying a BMW. I have to see to it that when they go to bed at night they are dreaming of BMW.’”

That is what differentiates luxury (eg. Dior, Fendi, Tag Heuer) from simply premium brands (eg. Seiko, Clinique). The latter’s USP is just a higher quality product at a reasonable price. If you look at LVMH’s brands closely, you’ll quickly realise that all of them sell a dream and a story – even more accessible brands of the group, such as Sephora.

Celine Ad campaign; photo credit: LVMH

To understand how it plays out in especially for LVMH in product and marketing, here are a few very interesting “Anti-laws of marketing” that pertain exclusively to the luxury segment, explained elegantly in the book, ‘The Luxury Strategy’: –

DON’T pander to your customers’ wishes

This is a cardinal sin in marketing for, say, an FMCG product, however, not so in luxury. Just because customers like something today doesn’t mean that the design team at Louis Vuitton will change the next collection to make it fit the currently desired aesthetic. Brands such as Louis Vuitton and Celine govern taste. What they create will eventually be copied and trickle down to fast fashion brands such as Zara and Fashion Nova.

Cultivate closeness to the Arts

With creativity at its heart, LVMH has earned a place as a patron of the arts and positioned itself as a supporter of rising talent (not just established names). For example, The Louis Vuitton Foundation art museum in Paris focuses on the avant-garde and Louis Vuitton itself sponsors contemporary music performances. 

An art exhibit at the LVMH Foundation in Paris; Photo credit: SayWho.fr

On to the next part, LVMH Group’s business model comprises of four factors that give it its competitive advantage:

1. Decentralized organizational structure

In decentralized organizations, most decisions are made by mid-level or lower level managers, rather than by the head. Each “Maison” or brand at LVMH operates autonomously across functions and therefore is able to respond quickly. Each fashion brand, such as Dior, has its own creative director, just like each of its perfume brands has its own Marketing Head.

2. Vertical Integration

The group controls its value chains, including production and distribution completely. Luxury is always attached to history and history is attached to a culture, a place, a city. This is why LVMH manufactures its top luxury products in their place of origin, while only relocating less premium lines to facilities outside of it. 

Ad campaign for (translated) “The particular days” exhibit that allowed people to visit production sites at 40 LVMH maisons; Photo credit: LVMH

3. Investment in innovation and its houses

To foster organic long term growth, LVMH invests heavily into its brands, including product innovations, creative teams and initiatives around art. This also puts LVMH at the forefront of “the new” and acts as its own campaign in helping the world discover talent. 

For example, it introduced innovative startups such as Fenty by Rihanna and started the coveted LVMH Prize for discovering young designers (that’s how the fashion world discovered Grace Wales Bonner and Simon Jacquemus).

4.

A balanced international portfolio

 

What we do in our group is the opposite of the bad effects of globalization. We produce in Italy and in France and we sell to China, when usually it’s the opposite.

Bernard Arnault, CEO, LVMH

You might have heard recent news of LVMH’s multi-billion dollar acquisition of US luxury jewelry brand, Tiffany & Co. While most of LVMH’s iconic brands hail from its own home, France, in recent years, LVMH has strategically expanded both physically with selective retailing and via acquisitions of local luxury brands. This portfolio approach allows the group to stay balanced without depending on a particular market.

After reading this, it is almost no surprise that the group is as successful as it is. Despite Covid-19, LVMH saw a 12% growth in its sales in the third quarter of 2020. In conclusion, LVMH’s success can be attributed to strategic acquisitions combined with the constant nurturing of its brands via autonomous creativity. Who thought something that simple could be this effective? Well, I guess that’s just luxury.

Interested in reading Luxury Business Strategies? Check out our collection.

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Hermès Hãng Thời Trang Xa Xỉ Bậc Nhất Thế Giới Đến Từ Pháp
Nhắc tới thời trang xa xỉ, không thể bỏ qua Hermès – thương hiệu thời trang nước Pháp được giới thượng lưu ưa chuộng. Đặc biệt, những chiếc túi xách Hermes Birkin đã và đang làm hàng triệu phụ nữ điên đảo mặc dù chúng sở hữu mức giá… trên trời. Và có lẽ, hiếm có thương hiệu nào dám áp dụng cách marketing “âm thầm” nhưng cực kỳ hiệu quả của Hermès.
Nguồn: zingnews.vn, doanhnhanplus.vn, vi.wikipedia.org, 24cara.vn

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Hermès - Hãng Thời Trang Xa Xỉ Bậc Nhất Nước Từ Pháp

HOW TO PRONOUNCE BRAND NAMES IN ENGLISH


In this video we would learn the correct pronunciation of the following brand names: Louis Vuitton, Hermes, Moleskine, Yves Saint Laurent, Lacoste, Chevrolet, Porsche, BMW, McDonalds’s.
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Bernard Arnault, Chairman and CEO of LVMH | The Brave Ones


The Brave Ones – In collaboration with Credit Suisse: Bernard Arnault is France’s richest man and the mastermind behind the world’s biggest luxury group, LVMH. But even he had his doubters early on.
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Bernard Arnault, Chairman and CEO of LVMH | The Brave Ones

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How to Pronounce French Luxury Brands (CORRECTLY) | Louis Vuitton, Lancôme, Hermès \u0026 More…


Hear more LUXURY \u0026 FASHION BRANDS pronounced: https://www.youtube.com/watch?v=Gyd8foV6deQ\u0026list=PLd_ydU7Boqa2w8PZZrfVYWs3qBsdMn4B
Also hear how to pronounce TOP Italian luxury brands: https://youtu.be/HlnnWuAN5BA Learn how to say and pronounce your favorite French luxury brands with the typical French classy pronunciation.
00:00 Intro
00:33 Longchamp
01:08 Mont Blanc
01:29 Céline
01:39 Yves Saint Laurent
02:10 Christian Louboutin
02:21 JeanPaul Gautier
02:35 Dior
02:44 Hermès
03:04 Chloé
03:11 Guerlain
03:26 Lanvin
03:42 L’Oréal
03:59 Lancôme
04:21 Cartier
04:32 Kenzo
04:44 Louis Vuitton
05:12 Don’t forget to subscribe!
The video include the pronunciation tutorial guide to the following brands:
Longchamp, Mont Blanc, Céline, Yves Saint Laurent, Christian Louboutin, Jean Paul Gautier, Dior, Hermès, Chloé, Guerlain, Lanvin, l’Oréal, Lancôme, Cartier, Kenzo, Louis Vuitton.
Learn how to say words in English, French, Spanish, German Italian, and many other languages with Julien Miquel and his pronunciation tutorials! In the world of wine words and the diversity of accents and local dialects, some words can be extremely hard to pronounce.
Julien’s instructional and educational videos make pronunciation easier as I detail the correct pronunciation as native French speaker but also fluent speaker of French, English, Spanish and Italian.
If you found this video helpful please like the video to support my work.
If you would like help with any future pronunciations please be sure to subscribe!
Thanks for Watching How To Pronounce with Julien and happy pronouncing.
French winemaker Julien explains the intricacies of French wine pronunciation, detailing how to pronounce the name of 16 top famous luxury brands.
FrenchWithJulien

How to Pronounce French Luxury Brands (CORRECTLY) | Louis Vuitton, Lancôme, Hermès \u0026 More...

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