Marketing: Ikea and Market Essay

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MSIN7018 - Seminar – Week 1
Louis Vuitton in Japan Questions:
1. What are the characteristics of the Japanese luxury market? What are the country conditions that made Japan a fertile environment for western luxury brands?

CHARACTERISTICS OF JAPANESE LUXURY MARKET
Group oriented culture (pressure to own luxury brand)
Japanese women are very beauty conscious
“Looks were very important”; “dress in a way that corresponded to their social position”
Westerners are more conscious in costs
Japan is very connected to many countries
Traditional culture with super modern
Japan has big middle class, high population density
Few rules and regulations for architecture- (upper bound and lower bound so free to explore)
Japan is very concentrated in population; urban city; economies of scales- easier to open up as population always exposed to advertisements

Describe the entry and expansion strategy of Louis Vuitton for the Japanese market. How would you categorise and list the main threats for western brands operating in the Japanese luxury market?
Good  test the waters first
Also targeting major areas first (Ginza)
Expanded from bags to accessories to watches
Pioneer- advantages in the long term
First multinational luxury, without the help of a Japanese distributor
Export products from France to Japan
Polycentric or Regiocentric marketing strategy
Main Threats:
How to maintain the growth and sustain
How to maintain exclusiveness from luxuries
Fake-bags
 Introduction to limited editions – consumers got confused as to which ones were marketing strategies and which is actually limited edition

Historically, what are the key differences in terms of consumer behaviour between Japan and other luxury markets? Describe the impact of economic booms and busts on the demand for luxury items.

Consumer behaviour
Collectivist culture; all affected by each other and dense population so trends spread out easily
Group oriented society, mass market
Population density: concentrated
Targeted well with the products: cross overs (blossom)
Fact that Japanese really support own country (stereotype)
“ A country that revolved around tradition and culture”
Young buyers and Old buyers (they believe that longevity has good value for money)
Competition not only from luxury brands but from other fast fashion concepts; Shift in the wants from generations; quality isn’t as important anymore, more of affordability and on their eager to resemble top fashion models
Japanese market is cyclical- periods of huge spending often followed by periods of slow growth and moderation; to counter this they had the Christmas sale and they were lucky as euros were increasing so they overcame the slowdown in demand during 2008-2009

Research what has happened since the case was written. Considering this, what options are available for Louis Vuitton to increase revenue in Japan and other countries? Should Louis Vuitton try to expand into lower end markets?
Maybe expand to China because similar to Japan so can replicate the marketing strategy
Should they move the production from France to local places? Or cheaper places ie. Vietnam or China
Children’s wear, Japan’s birth rate is low so maybe short term

CEO’s from countries that they are supposed to manage but still go back to roots of France, illustrates standardization

Lecture: 2 October 2013

Regionalism vs. Globalism
Global trade agreement would allow many countries to enjoy trade with each other free from most restrictions
Regional trade and free trade blocs lower trade barriers among members

Major trade blocs:
1. Free-trade areas
2. Customs Unions
3. Common markets
Creation of the single market and the corresponding increase in trade and general economic activity transformed the EU into the biggest power; EU has two long term goals:
Full monetary union
Full political union

Example of integrating markets and why it
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