Instruction:
1. Each student will read the case(s) ahead of time before attending to the class.
2. Your group will be assigned to one or several questions in class.
3. After a thorough group discussion, your group will outline/summarize your answers into a PPT file and drop it onto the Blackboard’s drop-box.
4. Your group will present and lead the discussion of the question(s) assigned to you. Although the group in charge will be the major discussants for the assigned question(s), it is highly recommended to have the rest of the class involved and participated in the discussion.
Questions:
1. What are the specifics of the Japanese fashion luxury market? What are the opportunities and challenges for Louis Vuitton in Japan?
Japanese fashion luxury market is very unique. As a capital of luxury, Japan is first on the list if we look at the amount of revenue obtained from luxury brands. Japan is a home for many luxury brands like: Bulgari, Burberry, Coach, Tiffany & Co and many more including the LVMH group. Japan is a small geographic region that is famous for having hundreds of stores selling many luxury brands. Japanese luxury market is associated with the word “quality”. Japanese customers are very picky and pay attention to details. Japanese luxury market has become a mass market thanks to brands like Prada, Hermès and Louis Vuitton. Young Japanese beauty conscious women and their money are a never ending fuel to market and offer anything they desire with the best standards, quality and prestige. Japanese customers have a psychological need to own something luxurious, this way they are accepted in society and represent their social position and class.
There are plenty of opportunities for Louis Vuitton in Japan. Demand for high fashion in this country is still very high and will remain like that. Even in tough economical times many people in Japan will be in high need to own luxurious goods. Japanese people proved for years that they appreciate luxury and value of products they purchase.
With opportunities come challenges. Obviously as any successful business, Louis Vuitton faces a huge challenge concerning its ability to further penetrate Japanese market and challenge with reaching the potential growth. When the risky dependence on Japanese market is visible, then the question become: how to reach to markets in United States, China or India without compromising strong Japanese cultural characteristics. The challenge for Louis Vuitton is also to overcome counterfeit of their goods. Nowadays counterfeiters have skills and ways to copy designer’s bag in a very good way. Also it is easy to purchase fake bags on illegal and legal markets. They look exactly this same as an original product. These counterfeiting activities can damage image of Louis Vuitton. Counterfeiting counts for about $600 billion dollar industry. Louis Vuitton has to protect its image. If the real fans of LV see a person living in a very poor and money challenged areas wearing Louis Vuitton products, then he or she will lose the desire to the brand and loyalty to it will disappear this same time. Opportunity that Louis Vuitton can take advantage of is to create extra service for the customers to teach them how to recognize a fake LV goods. Customer service at Louis Vuitton’s store should be extremely professional and always assist any customer that have any questions, remarks or just needs attention. That special treatment could potentially encourage more customers to experience that shopping spree at LV instead of going to other designer’s stores or buy a fake product. Another challenge is to keep the top position in the fashion industry in Japan. Nowadays Louis Vuitton has many competitors, which are established brands like Michael Kors, Gucci, and Prada, etc. It is crucial for LV in Japan to differentiate itself as the precursor with strong cultural Japanese ties. Another big challenge is to keep balance between the global expansions