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INTRODUCTION

Marketing is a method which is used for promote and advertise the particular product of the company. This report is related to the marketing of luxury goods of LVMH. LVMH (Moet Hennessy Louis Vuitton SA) is a famous brand in the world that selling the luxury products. There are more than 60 brands which gives the $24.2 billion sales from selling of those products. (Hanssens, N., 2008) The aim of the LVMH is providing luxury products which are available at affordable prices. The report describes the various questions related to the LVMH brand which makes it more recognizable company through out the world.

Question 1: Strategy to make the LVMH into luxury goods empire by number of acquisitions

Company has changed its philosophy by selling the luxury products to the middle class. The aim of LVMH has provide the products to both high and low income group at affordable prices (Sarno and Taylor, 2003). To make the company as a empire in luxury goods has several strategies are producing the diversify products so that firm can easily make the strong grip in the different markets as well as on different segments, decentralize the management of the company so that its sister concern companies take the decision easily without involving the parent company (Maurer and Valiani, 2007).

Another strategy which has adopted by the firm is cost cutting approach  in which the company can eliminate the redundancies in procurement of material and cost added in manufacturing (Wiedmann and Hennigs, 2012). The owner of LVMH thought that if the company used the portfolio approach than there is a chance of reducing the risk of failure in fashion industry. The logic behind this idea is if the market of jewellery or watches demand going down than there will no losses in selling the cloths and fashion accessories (El‐Masry and Abdel‐Salam,  2007).

The strategy which made for the customers is offer them wide range of luxury items and if the tastes of consumers becomes change or any area of the market comes at the decline stage than their will not no chance of loosing money(Turunen and Laaksonen, P., 2011). To eliminate the high competition in fashion industry, LVMH does the various acquisitions and this strategy help the firm to recognize the brand in luxury goods (Xu and Guo, 2012). Another strategy that has followed by LVMH firm is getting the high bargaining position in the market in which manager can easily negotiated the prices of the leases of the retail space or for advertising.

Question 2: Possible risk at in first ever television advertising campaign of LVSM

In 2008, some of the companies think that television advertising were more expensive and there budget for all other advertising sources was limited. But the thinking of LVMH was different from the other companies (EMEA Equity Research , 2012). Company believes that TV advertising is a medium of mass marketing which can helps them to promote the luxury goods of the firm. At the time of advertising, LVMH face various problems and possible risk such as firm has no experienced in the field of TV advertising and they has no expertise person or guide who helped them for making the good TV advertising (Cavender and Kincade, 2014).

Another possible risk involved in the field of TV advertising is perceptions of the customers about the brand of LVSM. Company established the business at global level but they were no idea about customers perceptions and brand image in the market (MacDonald, R., 2007). If the advertising idea on TV becomes failed than it could affect the brand equity of LVMH so it was the major risk for the company. Another risk which was involved in the first ever television advertising campaign is selection of channels (Kapferer, J., 2012). Firm has no idea about the selection of the channels which had been seen by the people mostly and it was the first attempt in TV advertising. The bargaining power of the TV broadcasting was also high and it was vary country to country so this could be the possible risk for LVSM (Okonkwo, U., 2007).

Question 3: How will revenues of LVMH be affected when Dollar prices are converted to Euros

The currency value has changed country to country and it has also affected by economic condition of the country. So it is required for LVMH company to adjust the prices of the luxury goods according to change in economic conditions (Nobbs, Moore and Sheridan, 2012). In the addition to this, firm has to take several steps like raise the wholesale prices of the products in the different market of Asian country, advertising cost on the perfumes as well as on cosmetic should be reduced, drop the idea of opening the new stores in the poor economic country (Hanssens, N., 2008). Another steps can be raising the prices of the luxury goods at the time booming of tourism or on special occasions or festivals, for currency  devaluation raise the prices of the cosmetics, clothing etc (Maurer and Valia


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