Consumer Behaviour Luxury Bags
Executive Summary In this article you will get to know about 3 top competitive luxury brands, Louis Vuitton, Chanel and Gucci. Louis Vuitton positioned itself in the luxurious goods industry, and has successfully embedded consumer’s mind with a sense of prestige and elegance in their branding. Gucci claimed a unique positioning in innovation and craftsmanship, trendsetting and sophistication. Chanel brand positioning has been perceived as elegant, exclusivity, and timeless as known to consumer Chanel stands for vintage and classic.
By finding the 3 luxury brands target audience; we used tools such as Market Segmentation such as demographic, psychographics. Through demographics we are able to group them in age, gender, income level and ethnicity and in psychographics we are able to group them in personality, values, attitudes, interests, or lifestyles. They are highly competitive as their target audience are intended for middle to high class ladies. Louis Vuitton target audience: Wealthy middle-age women and young fashionable female adults who could afford the prestige luxury brand.
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Gucci Target audience: Fashionistas, trends followers from middle and upper-middle class women as they might not have been able to afford the high-end brands. Chanel Target Audience: Status conscious woman who want to identify what Chanel represent which is: elegance, simplicity, modern and class. We will be comparing each brand unique selling points. Louis Vuitton Unique Selling Proposition: Consumers are aware that LV products will never be on sale, and so being the market leader, it is seen as a prestigious brand. With the good quality that is assured in every product, the price that is being paid for is definitely worth it.
Gucci Unique Selling Proposition: Style and design are what attracts trend followers, with the latest fashion updates; Gucci is able to capture the attention of those fashion people. Chanel Unique Selling Proposition: Every single detail that are on the handbags, are clearly visible with no flaws. Chanel’s famous for their tweed fabric, embroidery, chains and buttons. 2. Background of the Firm 2. 1. Product Positioning Positioning of products is an important aspect to all brands, as it also refers to consumer’s belief about the product value, features and benefits.
It is also a comparison against the other available alternatives that are being offered by the competitors. These beliefs tend to be based on consumer’s experience, rather than awareness created by advertising and promotions. Louis Vuitton Since the 19th century, products that are being manufactured by Louis Vuitton has not changed, which their luggages are still made by hand. Louis Vuitton manages their products through its stores that are located in the different regions, allowing it to control the quality made and pricing set, and also preventing counterfeit products from entering their distribution channel.
The renowned brand that is known all over the world, has positioned itself in the luxurious goods industry, and has successfully embedded consumer’s mind with a sense of prestige and elegance in their branding. Till today, Louis Vuitton continuously maintains the standard of their craftsmanship and perfection that guarantees the lasting quality products are categorised as, prices ranging from a few hundred on those canvas wallets to thousands of dollars on leather handbags. They design in a way that it is as elegant as they are innovative and most exquisite products to create products whose unique value is being recognized worldwide.
Gucci Gucci is one of the world’s leading luxury brands. They have design, produced and distributed high-quality luxury goods including ready to wear, handbags, small leather goods, luggage, shoes, gifts, fragrances and eyewear. They also directly operate stores in major market throughout the world and wholesales products through franchise stores, duty free boutiques and leading department and specialty stores. They continuously focus their strength on the values which has been founded for close to their 90 years history: exclusivity, quality, Italian made, Italian craftsmanship and fashion authority.
Differentiating themselves from its competitors, Gucci is able to claim a unique positioning which pairs up modernity and heritage, innovation and craftsmanship, trendsetting and sophistication. A prestigious and internationally renowned brand; it is easily recognizable and exclusive to the wealthy and famous people. The logo is recognized as having the ability to imply importance, prestige, and a higher social status. The essence of Gucci is its exclusivity; it portrayed a vibrant image through the designs, fashion shows and advertising.
Their brand positioning is that it is distinctive and has aura exclusivity among the targeted audience. Chanel Chanel was designed at the times whereby ladies were slaves to fashion, and what the male designers wanted them to wear. Proposing a change, Coco Chanel designed clothing’s which were classically elegant and surprisingly comfortable to wear. Chanel’s brand positioning has been perceived as elegant, exclusivity, and timeless. They become a global leader in fragrance making and marketing in the 1990’s, and the heavy marketing investment has helped to increase revenue.
Product lines such as accessories, high end clothes, cosmetics were then slowly expanded and also known for its quilted fabric and leather which has a ‘secret’ quilting pattern sewn at the back to keep the material strong. Being inspired by the jackets worn by the jockeys, Chanel has used the material for clothing and accessories. 2. 2. Target Audience Market segmentations has help marketers to successfully identify the different target audience that they will need to concentrate on, by using different means of marketing mix, enabling them to fulfill the needs and wants of the targeted consumers.
Demographics describe the profile of a particular market segment. Psychographics are the attitudinal traits people exhibit in their approach to life. The target audience for Louis Vuitton would be intended for wealthy middle-age women and young fashionable female adults who could afford the prestige luxury brand. This target audience would include women from ages 35 to 54 years old who earn at least salary of $5,000 per month and women from ages 22 to 34 years old who earn a mean salary of $3,000 per month.
Louis Vuitton could also be targeting female celebrities as they are also high fashionable and wealthy, and may be more inclined to purchase this purse and other Louis Vuitton luxury products when they see other celebrities in their ads. 2. 3. Price Point Louis Vuitton is internationally recognized in the fashion world and among world’s most successful brands. For the continuous increase in brand awareness and improvement in brand equity, Louis Vuitton uses celebrities, utilizing the services of famous actresses and models in its marketing campaigns. The products of Louis Vuitton are luxury goods and fashion accessories made of leather.
The brand of Louis Vuitton is strong enough to influence consumer perceptions. The brand is considered an elusive concept in the firm and mostly the marketing department is striving to improve the brand equity by continuously adding value to the brand. The value of Louis Vuitton brand is measured not only through the advantages it provides, but also the current competitive arena and the potential benefits it offers in hand made leather products. 3. Compare & Contrast Two Closest Brand Competitors | | | | |Brand |Louis Vuitton |Chanel |Gucci | | |[pic] | |[pic] | |Model | |[pic] | | | | | | | |Spokesperson |Angelina Jolie |Blake Lively |Rihanna | | |Madonna |Jessica miller |Jennifer Lopez | | | | |Drew Barrymore | |Dimension | | | | |Size (LxHxD) |11. 8″x 8. 3″x 6. 7″ |13. 5″x 5 x 10. 5″ |13″x 8. 7″x 7″ | | |Sophisticated |Single zipper closure with a signature |Black leather with signature | |Descriptions |Epi leather with Louis Vuitton initials |CHANEL interlocking ‘C’ logo charm |Double handles with 3. ” drop | | |Rolled leather handles |Spacious interior is lined in complimentary|Adjustable and detachable shoulder strap with | | |Zip for secure closing |burgundy leather |20″ drop | | |One interior pocket |Two inside zipper pockets and a flat bottom|Zip for secure closing | | |One flat exterior pocket | |Inside zip, cell phone, and pda ockets | | | | | | |Price (USD) |$1270 |$1500 |$1235 | 1. . Examine the Brand and Product Positioning. Louis Vuitton differentiated them by having the perceived value of consumers that it is a brand which is definitely worth paying the price for the products. The products which are hand-made added a little more value as compared to products that are machine made. Gucci focused their strength on the values which has been passed down for decades, therefore allowing them to have a unique positioning in the luxury industry. Also portraying a vibrant look through the designs and fashion shows, teenagers nowadays might be more attracted to such products.
And as for Chanel, they are seen as having that elegance, classic and vintage thing in them. Their products suits consumers who dines in high end restaurants or those attending evening event dinners. Consumers may have in mind the different product attributes that they will look out for when purchasing a product, factors can also include the pricing of the product, benefits of having the product and quality of the product. From consumer’s point of view, if they were to base on factors which they made to purchase one of these 3 bags, they would likely link it to the value of the product, how well the brand is selling in the market, if it is reputable or not, and durability of the product. 2. . Identify the Target Audience Gucci:
Gucci’s target audience has primarily included ages from 22 to 36 fashionistas, trends followers with an income of minimum $2,000. They had expanded their Target Audience to celebrities and middle and upper-middle class women ages from 30 to 50 with an income of at least $3,000 as they might not have been able to afford the high-end brands. Chanel: Chanel Target audience are status conscious woman from the age of 35 above with an income of $5000 a month who wants to identify what Chanel represents which is: elegance, simplicity, modern and class. 3. 3. Price Point Louis Vuitton is internationally recognized in the fashion world and among world’s most successful brands.
For the continuous increase in brand awareness and improvement in brand equity, Louis Vuitton uses celebrities, utilizing the services of famous actresses and models in its marketing campaigns. The products of Louis Vuitton are luxury goods and fashion accessories made of leather. The brand of Louis Vuitton is strong enough to influence consumer perceptions. The brand is considered an elusive concept in the firm and mostly the marketing department is striving to improve the brand equity by continuously adding value to the brand. The value of Louis Vuitton brand is measured not only through the advantages it provides, but also the current competitive arena and the potential benefits it offers in hand made leather products. 3. 4. Each Brand Unique Selling Proposition. Each and every brand has its own unique selling proposition.
It is what makes consumers remember and think of whenever they intend to make a purchase decision, something which helps the brand to be more outstanding compared to their competitors, and being able to use that unique selling point to attract the customers over to purchase their products. Louis Vuitton Unique Selling Proposition: Consumers are aware that LV products will never be on sale, and so being the market leader, it is seen as a prestigious brand. With the good quality that is assured in every product, the price that is being paid for is definitely worth it. It is famous for its monogram canvas designs imprinted on the wallets and handbags, and due to the increasingly rising of counterfeit goods Louis Vuitton takes the case seriously.
They have been actively pursuing those offenders through the courts worldwide, and also making the effort in controlling the products that are being distributed to other suppliers. Louis Vuitton offers a personalized painting service for hard sided Monogram or Damier canvas luggage that is being purchased in their stores, also offering a hot stamping service, whereby consumers can choose 3-4 initials that they would like to have it imprinted onto their leather goods etc. Louis Vuitton also has products that are made to order which combines LV Signature designs with consumer’s personalized adoptions. Regardless of consumers preference for particular leather or a certain type of lining, made to order variations has successfully fulfil the desire for an individual leather goods. Gucci Unique Selling Proposition:
Style and design are what attracts trend followers, with the latest fashion updates; Gucci is able to capture the attention of those fashion people. With different seasons of new handbags, each and every product is able to bring out a different ‘feel’ in the consumers whenever they carry their handbag. Gucci managed to combine the eastern and western designs that are able to give a different tilt around the world to seize the heart of any women. Gucci’s products are all exclusive, and it is also being enhanced. Designer handbags are specially made to cater to different consumers who pursue different styles. Chanel Unique Selling Propositions: Every single detail that are on the handbags, are clearly visible with no flaws.
Chanel’s famous for their tweed fabric, embroidery, chains and buttons. Their signature logo would be the two C’s that are interlocked with each other, one facing forward and the other one backwards7. Chanel has been proactively hunting down manufacturers that have been releasing counterfeit goods, and to prevent them from harming their brand’s image, all authentic Chanel handbags are actually serialized. This would help to ensure consumers need not worry about getting the fake goods. 4. The Consumer Decision Making Process (CDP) 4. 1. The Understanding of CDP Important To Marketers. [pic] This figure shows the stages in the Consumer Decision-Making Process.
Need Recognition, which is caused by a difference between what consumer perceives to be the ideal versus the actual state of affairs. When consumers recognise needs, they become motivated to enter a decision –making process to resolve the felt needed. Examples: Louis Vuitton marketers create needs through hiring spokesperson like Angelina Jolie and Madonna to represent their brand as a form to arouse consumer desire and to influence their purchase decision. Information Search, that consists of two factors, internal and external search. Internal search is an attempt to scan information stored in memory through past experiences or making a routine, repetitive purchase.
External search are through personal sources such as collecting information from family, friends and the market place. Through Personal experience such as actual handling, examining, testing the product and public sources including magazines, newspaper and TV reports Marketers dominated sources like advertisement, salesperson, point-of-sales materials and websites to gain information. For an example, buying a luxury handbag such as Louis Vuitton will need more information sources and time before making a purchase decision. Using internal search such as from memory where Louis Vuitton is one of the market leader in prestige brand. External search would be from forums or websites to get better knowledge and idea about the brand.
Alternative Evaluation is what consumers identified from search that leads to a product or brand being compared and selected to satisfy the needs or motives that initiated in the decision process. The types of attributes used to compare are salient attributes such as price and the reliability which are important to consumer. Determinant attributes such as different types of benefits. Examples like advertising and promotion so as to create new reinforce existing or even change a negative attitudes. Where the target audience had a few choices in their mind such as, Louis Vuitton, Chanel and Gucci, she would start to compare the branding, the material. Purchase decision whereby consumer may develop a purchase intention or predisposition to buy a certain brand from a specific retailer or in-store choices.
Purchase intention can change during purchase stage as consumer might be influenced by factors like discount, salesperson or promotions. Times taken on actual purchase also depend on the level of involvement followed by the consumption of the product or services. Lastly, Post purchase evaluation as it is to determine the level of performance of the product or services after using it. It is important for marketers to acquire feedbacks be it positive or negative. Consumer satisfaction will influence the likelihood of future purchase, brand loyalty whereas, consumer dissatisfaction will lead to negative attitudes toward the brand and lessening the likelihood of repurchase or might even end up choosing other alternatives brand.
Example: After the customer had bought the Louis Vuitton bag and she love it so much she would influence her friend to get one too therefore more and more people would choose Louis Vuitton then other alternative brands. 4. 2. Understanding Of CDP Help Marketers To Guide Their Target Audience To Choose The Firm Product As The Choice Product. Marketers study CDP as to understand the problem solving processes of the target audience use in making a purchase decision. Marketers can then develop effective promotional strategies and programs to create top-of-mind awareness to keep its brands in the consumers’ evoked set and likely to avoid consumers choosing other alternative brands.
With strong market share usually needs to maintain a high level of brand awareness through advertising, promotion and eye-level shelf position in retail stores whereas for brands with low market shares likely will find ways to disrupt consumers’ routine choice process to get them consider different alternatives. High level of advertising along with sales promotion effort through offering free sample and offers discount likely may encourage consumer to reconsider their routine choice. Another important factor is the product or services characterized by limited problem solving or extended problem solving. Marketers should provide consumers with detailed information about the brand and how it can satisfy their needs.
For example through display, issue brochures during point of purchase, provides knowledgeable sales people to explain the features and benefits of the company’s product or services over competitors, offering a toll free number or even website to create cross-organisational marketing communication process that is customer centric and data driven. 4. 3. Understanding of Maslow’s Hierarchy Help Marketer in Divesting Its Marketing Mix. Maslow’s hierarchy of needs is the shape of a pyramid, with the largest and most fundamental levels of needs at the bottom, and the need for self-actualization at the top. The pyramid consist five layers, the most and bottom part is the physiological needs. Physiological needs are Air, water, and foods are metabolic requirements.
Clothing and shelter provide necessary protection from the elements. Safety needs is the physical needs relatively satisfied, the individual’s safety needs take precedence and dominate behavior. Safety and Security needs include: The third layer of human needs is social needs and involves feelings of belongingness. The impact individual’s ability to form and maintain emotionally significant relationships in general, such as: Friendship, Intimacy and family. Esteem needs, People need to engage themselves to gain recognition and have an activity or activities that give the person a sense of contribution, to feel self-valued, be it in a profession or hobby.
Self-actualization, are the needs that pertain to what a person’s full potential is and realizing that potential becoming everything that one is capable of becoming. Consumer carry luxury handbags are an Esteem Needs. They feel good carrying luxury handbags mainly because this make them feel prestige, a sense of a high status that reminds them and others that they belong to an exclusive group. Likewise, build up their confidence and security. Marketing mix are often referred to as the ‘ Four P’s’ Product – It is a tangible good or an intangible service that is mass produced or manufactured on a large scale with a specific volume of units. Price – The price is the amount a customer pays for the product.
The business may increase or decrease the price of product if other stores have the same product. Louis Vuitton set a premium pricing by building up their luxury brand image and they will never let their products go on sale. Place – Place represents the location where a product can be purchased. It is often referred to as the distribution channel. It can include any physical store as well as virtual stores on the Internet. Louis Vuitton’s stores and retailers are almost all over the world. They are direct channels and principle owned. | Promotion – represents all of the communications that a marketer may use in the marketplace. Promotion has four distinct elements: advertising, public relations, personal selling and sales promotion.
Louis Vuitton emphasize more on the personal selling and reinforce their luxury brand image by advertising famous celebrities as their spokesperson like Jennifer Lopez , Kate Moss and Scarlett Johanson on high-end fashion magazines like Vogue, Hyper Bazzar and Elle etc. They also do a few public relations like sponsorship like, “Louis Vuitton Cup 2007” and “LVMH Young Artists Award” 5. Conclusion The consumer decision-making process (CDP) represents a road map of consumers’ mind that marketers use it to help guiding product mix, communications and sales strategies. There are 5 steps in consumer decision making process, Need Recognition, Information Search, Evaluation of Alternatives, Purchase and Post-Purchase Evaluation. By understanding CDP, marketers can study consumers on how they move through decision making. Thus marketers can then cater products to satisfy consumers’ needs and desires.
When marketers know the specific needs of consumers they are able develop products and marketing programs to reach them more efficiently such as advertising in magazine, internet, billboard or even media by doing so marketers can attract those consumer attention and start to look out for more information upon the product. Both internal and external search influence the purchase decision, the effort needed to acquire information, past experience relevant and the usage of time to retrieve it. The knowledge on how consumers acquire information from external search is important to marketers in formulating communication strategies as it is a way to understand consumer perception. Consumer most likely would visit the website and get to know more about the product firm background and what other consumer feel about the product after purchasing the product.
If the responses in the forums are good verdicts consumer would start to look out for alternative choices to compare with the product they might want to get from and start to evaluate the product from the brand, the functions, the quality and the pricing. Attributes as a summary construct represent an individual’s overall feelings towards and evaluate an object which is important to marketers based on the assumption that they are related to consumers’ purchase behaviour through marketing stimuli. After evaluating the different choices consumer had come up with the best product that they need but however purchase intention can change during purchase stage as consumer might be influenced by factors like discount, salesperson or promotions.
Times taken on actual purchase also depend on the level of involvement followed by the consumption of the product or services. As marketers, Maslow’s hierarchy is one of the first theories as a basis for understanding consumers’ motives for action. Marketers need to understand consumers’ needs and Marketing Mix to define their actions in the market. Meeting consumer needs, consumers will more often choose those products over those of competitors. Maslow’s hierarchy of needs is the shape of a pyramid, with the largest and most fundamental levels of needs at the bottom, and the need for self-actualization at the top. The pyramid consist five layers, Physiological need, Safety needs, Social needs, Esteem needs and Self-actualization.
After understanding consumers need in Maslow’s hierarchy, marketer come up with the marketing mix which consists of, The Product, Price, Place and Promotion. Marketer starts to create a product that fulfils consumer need and setting the price that are under their targeting segmentation. Place and promotion are where marketers want to attracts their target audience. By using the example for luxury handbags, the target segment would be those executive working ladies therefore the place would most like be in the area there all the office are located which is in the central area. 6. Referencing 1. 1913. (n. d. ). Louis Vuitton – Wikipedia, the free encyclopedia.
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