Unit: 04 Marketing Principles

By Shraddha Sharma

Contents

Macro environment

Micro environment

Segmentation and it’s bases

Positioning

Target strategy for a product

Customer behavior

Perceptual map

Political

•Tax policy•Employment laws•Environmental regulations•Trade restrictions and tariff•Political stability

Economic

•Economic growth•Interest rates•Exchange rates•Inflation rates

Social

•Health consciousness •population growth •Age distribution •Career attitudes•Emphasis on safety

Technological

•R&D activity•Automation•Technology incentives•Rare of technological change

Demography• study of human population•Includes various criteria's like sex, income, age, education etc.•Manufacturing depends upon the size of the population

A macro environment is a wide, broad set of economic conditions rather than the conditions in a specific sector or industry within an economy.

2.1

Impact of macro environment on LV

Impact of macro environment on LV

EconomicalIn 2010, Louis Vuitton raised classic accessory prices in the Eurozone approximately 9% due to rising leather and cotton prices, IBT

Technological Counterfeiting is taking a toll around the globe and it can be highly related with the growing technology.It has both good and bad impact on the brand.

SocialLV has a very powerful presence on social media, it is also ranked as no.1 among other luxury brands. It has 2 twitter pages, facebook page, fb app, branded you tube channel and also an LV Flickr photo stream.

Political The brand is growing in the Asian market as the number of high-end customer also rises.In other countries it still faces some challenges like supply chain and transportation due to rise in fuel prices.

DemographicThe impact of this factor varies from country to country. In China, the market of LV is dipping as the people feel that the brand has become too ordinary. Whereas, in Japan it is a must to have an LV bag for everyone.

2.1

Micro Environment

competitorspublic

suppliers

customers Marketing intermediaries

Workers and their unions

The immediate small-scale environment of an organisation or a part of an organisation, especially as a distinct part of a larger environment is known as micro environment.

2.1

Porter’s Five Forces Analysis

2.1

Industry competitors

Buyer

Buyers - As they target the rich and high middle class people, there customers are relatively low.

Substitutes –threat of substitutes are present around them as high label brand such as Prada, Hermes, Armaani etc also have the same line of products

Suppliers –they have low numbers of them as they do not purchase raw material from just any random shop.

Entrants – low number of new entrants will come in because of the quality and the old brand name of the company.

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Bases for segmenting

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2.2

Demographic

-income, occupation, gender etc.

- Most popular bases for segmenting

Geographic

-different units

-regions, states etc

- Need and wants varies from region to region

Behavior

- Loyalty towards a brand of a customer

Psychographic

- Lifestyle

- individual’s attitude and interest

Bases for segmenting

Positioning

It is a marketing strategy that helps a brand to occupy a distinct position, relative to competing brands, in the mind of the customer

This is a perceptual map which shows the actual position of brand as compared to it’s rivalries.

2.2

Targeting strategy

LV has introduced this fun and colorful collection of bags in September.

It is being loved not only by their customers but also by the ones who are not very fond of this brand (as per the reviews online).

It is mainly attracting more of the younger crowd as it more about colors in this collection and it has a variety of purses, say zippy coin wallet, mini pochette which generally attracts more of girls who are in their teenage.

2.3

Selecting a targeting strategy for the product

Demographic- The LVs evasion collection directly targets the youth

segment more than any other age group. - It is also for those who wants to own a luxury brand

but because of very high prices they do not buy them.

- This collection are little low at rate as compared to its other lines.

Psychographic - Evasion shows a drastic innovation in the brand’s

design. It has gone a step forward to keep up with the trend.

- It instantly appeals to the customers because of their design and frolic colors.

2.3

Buyer’s Behavior

2.4

Environmental factors affecting buyer’s behavior

Cultural

Cultural trendssocial

Social

Family Social roles and status

Psychological

MotivationPerceptionLearningBeliefs and attitude

Personal

Age LifestylePurchasing powerPersonality

Consumer and organisational buying

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problem recognition or

need awareness

information search

possible alternatives

purchase decision

post-purchase evaluation

2.4

Perceptual maps of luxury brands summer spring handbags collection 2015

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Price

Quality

2.5

Cherche midi bag

evasion

Inside bag

Wallet on chain

Micro belt bag

Social presence

The brand LV already has the strongest social presence among it’s rivalries.

Whereas, it should go more aggressive by asking famous celebs to give them more shout outs on the social media.

It should also consider the complaints or the negative feedback they get for their not-so-good service to customers and should take a step to improve it.

The brand should start a system where they handover a membership card to their loyal customers and provide them with offers, discounts and other services so they are retained.

2.5

References

Assael, H., Reed, P. and Patton, M. (1995) Marketing: Principles and Strategy Harcourt-Brace, Sydney.

Philip kotler (2008) Marketing Management, mahoney dusil, M.E.G.S. (2015, SEPTEMBER 23,

2015). LOUIS VUITTON HANDBAGS AND PURSES. [Weblog]. Retrieved 09/10/2015, from http://www.purseblog.com/louis-vuitton/louis-vuitton-evasion-collection-christmas-animation-2015/

fashion (2014) Does Louis Vuitton’s Strategy Shift Make You More or Less Likely to Buy LV Bags?, Available at: http:// www.handbagnewshow.com/post-996.html (Accessed: 8th October 2015).