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Electronics Global Strategy In Growing Markets Marketing Essay

In 1947, LG was created as the Lak Hui Substance Industrial Co. by Mr. In-hwoi Koo for processing cosmetic creams. After that, the company produced radios, Televisions, refrigerators, washing machines, and ac units as Goldstar Co. (currently LG Consumer electronics) in 1958. The LG group was a merger of 2 Korean companies, Blessed and Goldstar; the existing LG brand name was acronym from the name of the companies. With more than 82. 000 employees and 110 subsidiaries and marketing devices worldwide, LG Electronics Inc. (LGE) was an effective company of Korean consumer electronics that got the revenues of more than $43 billion. Its products entail 4 strategic business units: Mobile communications, Digital kitchen appliance, Digital screen, and Digital multimedia such as CDMA handsets, Movie players, air conditioners, micro ovens, consumer electronics, and so on.

In this record, we are going to discuss the main element talents of the Korean consumer electronics industry during their formative years and exactly how businesses leverage these benefits to go into developed country marketplaces. From then on, the record mentions especially about the proper growths of LG Gadgets to tackle the emerging markets; and we 're going to find out the commonalities across its strategies in the BRIC countries. Finally, the report will be concluded with the things of learning that can be distilled from its success in appearing market if these advantages help businesses to contend in developed country or not.


Case Question 1

What were the key talents of Korean gadgets industry during the formative years? How performed businesses leverage these benefits to enter developed-country market segments?

During the formative years, almost Korea gadgets is an Original Equipment Company such as Goldstar, Samsung, and Zenith; which received orders from global companies. This should bring them a whole lot of encounters on customer demand, the attribute of market segments, the customized products of some countries. The combination between innovate and education insurance policy inspired more students for technological education, the low-cost skills of Korean employees, the gain access to of effective technology across all businesses, the firmly development of technology in all country. Korea gadgets companies can learn quickly knowledge, technology, skills from European countries, US, Japan because administration allows these overseas firms become joint venture with domestic organizations. For instance: LG - Hitachi, Deawoo - GE, Samsung - Sanyo, so on.

Besides that, government also centered on most areas of Digital industry of country, so they reinforced so much to build up this industry. Foreign investment was reinforced to build up the intermediate parts and part industry, while prohibiting foreign investment in companies producing finished goods. Korean firm with characters of credit for exports automatically received usage of preferential lending options. Export companies were exempted from various indirect fees and received duty breaks for depreciation and tariff payments; they also had usage of duty-free imports of capital goods. Government helped to encourage firm creating their local R&D.

With the expanding and investment of technology, some companies stared to export their products by their own emblem, not as OEM any more like LG and Samsung. Because these were OEM of some global marketplaces, so they already acquired the reference of consumers and global expectations. After that, numerous supporting of federal government, that they had their manpower supplying with skills and abilities from university. Federal government has the duty breaks for depreciation and tariff obligations for exporting companies. Plus the R&D department acquired enough experience to identify the market and present the best answer for company. As the Glodstar products, LGE set up a central R&D to build up and manufacture color Television set (CTVs), VCRs and pcs.


Case Question 2

Were there any specific patterns in conditions of the company's approach to appearing markets? Track the commonalities across its strategies in the BRIC countries.


Brazil is a country in South America large more than 8. 5 million km2, rich in mineral resources, human population 190 million people who have diverse cultures. Brazil is the leading economy in Latin America, rating 10th on the globe. Brazil chooses the road of financial model: "fast progress" - with the advantage that fast market flourishes, the growth rate in average income is high. Besides that, federal has some laws to promote buyers such as preferential tax rates, land subsidies in country, especially in a few underdeveloped rainforest region.

With these advantages, LG began attacking the Brazilian market in the mid-1990s. But throughout that time, Brazil also confronted a great deal of problems. Because their economical model is "fast growth", so that it also makes unequal monetary, political; social progressively fierce; the quality of life is not considered. With the overdue 1990s, almost global companies needed to exit the marketplace because of very high transfer tariffs, significant competition from the gray goods market, suprisingly low brand recognition. Inflation rate increased with high speed, local currency became unpredictable, exchange rates began to plummet with increasing degrees of uncertainty.

LG made a decision to make a long-term strategy, and also expanded their brand in India. That they had 2 factories in Manaus and Taubate to create their products, this plan made Brazil as a local production hub to serve South America and US market segments. LG also let Brazilian authorities know that they are a credibility spouse in term of nationwide growth by join with federal to combat the situation of the rampant smuggling of gray market goods.

Everybody recognizes that Brazil is a country interested in soccer, Brazilian live for football. So LG possessed one strategy to reach millions of soccer supporters - sponsored a soccer team in Sao Paulo that a lot of popular amonst the top night clubs in the united states. By providing established outfits with the LG brand for Sao Paulo team, LG get the moment brand acknowledgement and fixed image in consumer.


LG started in 1993 as a kind of joint venture with a consumer products company named Bestavision. They find the Goldstar type of products to deliver in India. Because the government allowed overseas companies setup their own organizations without local partnership, and the business enterprise of LG and Bestavision failed, LG made a decision to launch LGE India Ltd. (LGEIL) in 1997 using their own wholly held subsidiaries in India. There were many problems that LG was required to defeat like: low brand consciousness about LG brand; LG was one of the last MNCs moved into in India; high transfer duty of government; price sensitiveness of the Indian consumer and competition.

Following the global strategy, LG still came into and focused on the rural market. Because there are a lot of competition from local and global players in urban market; big society of rural market but also large untapped; etc. There is certainly 1 year for them to set up developing procedures in Greater Noida to create televisions, washing machine, etc. to over some the high import rate cost. At the first time, LG created an R&D teams by local employees to customizing its products lines to meet local needs. It helped LG distribute their existing products and also customizing the new unique characteristic of products that matched up the consumer's anticipations. That is an important quality for LG to achieve both goals: marketing and produce. LG acquired differentiated its product using technology and health care system like "golden eyeball technology" of CTVS, "health air system" for air conditionals, etc.

They give attention to emphasizing good-quality products, with excellent technology and network. For customized products, they did not cut prices in production existing product lines, but they made a decision to built new version with less materials cost and also catch the needs of consumers. They kept the made quality of the kitchen appliances and focused on value anatomist and design to make at the lower cost. Such as for example microwave ovens with preparing food menu including 77 types of Indian meals, television is displayed by 10 regional languages, washer with "sari" routine, and so on. It helped LGEIL have all levels of consumers, especially low-class consumers, because company dished up the need of them - high quality but not expensive products. The purchase price range of the products of LG India is quite acceptable and affordable in order to make it easier for each and every class of men and women to go for it thereby increasing the consumer level. For example, the price tag on Sampoorna reduces from 9000 to 5050. This shows R & D team spent some time working very well and complete their tasks, it can help the creation of LG acceptable based on deep knowledge of India's social and linguistic variety.

LG Company invested and created the distribution network encompassing with 65 Remote Area Offices, 60 central area offices, near to 4. 000 access points in all areas, plus they also got their online channel - lgezbuy. com to provide information of products, contrast of prices and attributes across geographic, accept the individuals clients. These regional circulation networks helped LG E to permeate the B, C and D marketplaces faster and much wider.

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As same activity in Brazil, LG started out sponsoring to get more customers. LG became the most significant one sponsor of cricket on the globe, although they originated from a country where cricket was not played. It immediately attacked to millions of cricket fans in this country and prelude to the success of the cricket-game Television set lines. LG also helped bring their products to 4 capitals of Indian cricket team for endorsing. Another technique for other field of India, LGEIL advertised their products by Indian's leading film celebrities. This is considered the greatest film producer on the globe by variety of films produced on a yearly basis and the amount of seat tickets sold at cinemas, it offers its possessed name - Bollywood to spell it out the effective to local consumers.

After that, LG possessed another long-term strategy in trying to value the social welfares in India initiatives. It created a friendly look to the business, people understood that company really do not merely trading on their own country, but also cares for their lives. They subsidized the primary university education and literature for children, built a community school. While most of employees of company in India were residents, they provided medical treatment centers for medical care technique to employees as well as the local community. Also there were some basic levels, but LG shown that their corporation interpersonal responsible done well.

As mentioned above, LGEIL put local employees staffed as the primary labor force in their developing. With the neighborhood employees, company could get great source of anatomist and design skills. LG India's purposing is fulfilling the needs of its consumers not only in the home market but all over the globe. Company is trying to make India as their training hub for global strategy. The company had begun spinning many of these professionals into positions in third countries in the middles east and Africa. This is one of advantages of LG to acquire a leading position by providing fast and impressive techniques on the products. They always create new products with the best technology possible.


LG first joined Russia for the purpose to sales products; they brought in goods made from other countries and deal in Russia. Not the same as Brazil and India, LG operated themselves in and around metropolis of Moscow, plus they just centered on Goldstar brand.

LG set up an R&D centre and regional office in St. Petersburg for his or her first strategy. Right up until Russian technical engineers were known for their ability and skills in technology, company seemed for talent employees to aid their global employees. LG advertised their reputation by starting LG brand shops, retail stations with LG brand portfolio, culture marketing situations such as LG festivals, cooking events, etc.

1998, Russia was influenced by the severe monetary crisis; it made Russia faced your debt moratorium problem. This was enough time LG shown their long-term strategy and faithful attitude to all Russian local and authorities. The more they pushed the mode of operation to dominate the marketplace dropped; they promote the image with consumers through the sponsorship of incidents, more carefully to the requirements for every single market. These activities created a base for their high quality strategy and image to local. In 2005, federal allowed company to work with the Narodnaya Marka logo design for his or her products. That is an important event for LG - officially recognized as a countrywide brand, the successful of international company of these localization strategy.


In this market, LG first reason for entering china is lower-cost creation, and they spent a lot of time to understand the local market conditions and evaluating the feasibility to be successful. Since LG Electronics established its local subsidiary in Huizhou in 1992, the LG Group's 12 subsidiaries attended to control some 34 local companies, including 22 manufacturers. LG Gadgets took the top position in the Chinese home market in the area of TV export, CD-Rom individuals, washing machine, and ac units during that time because of their advantages of technological prowess and the marketability of the products.

In china, they used the new strategy as a "bipolar strategy" - a strategy offer high value-added digital kitchen appliances to the high income earners living in the coastal areas, and low-priced home electronically appliances to standard households living in the interior.

China is a superb resource for operating a business. With many advantages such as low labor cost, low materials cost, government legislation, geographic closeness to Korea market, 16 commercial entities of LG were built in the united states which focused on manufacture Plasma Tv set, white goods, and important research, development in 2006. LG widened their brand to create a manufacturing network to serve countries such as Russia and US. As 98% off employees were local Chinese language and R&D middle, this is a smart strategy of LG in case of localization in China.

For their promoting image, LG initiated an "I really like china" advertising campaign and handed down out free sanitary masks to local citizens during the SARS crisis in China. This activity really effected to customers while others competitors tried out to rundown their business. LG also done well with their Company Social Responsibility by introducing universities, offering scholarships to economically disadvantaged students, sponsoring a touting ethnical festival that could bring traditional Chinese cultural activities to small towns and villages, founding a clinic program to provide medical procedures to children with cleft palates.

Common strategy across BRIC

At the very first time, LG Electronics always put up their local company and R&D team with local employees to comprehend the need and characteristic of every market. They rely upon these studies and created some specification for local. Such as in India, the majority of consumers require on cheap price of products, but still have the same quality of international; LGEIL made a decision to produce the tv set with an inferior display screen size and scaled-down audio system. They didn't forget to provide the high-end products to all or any markets. This is very the top success of the R&D activities. They are aiding global strategy by looking for ability local employees, signifying they localize with an objective for global market. And with local operation, they can save a lot of made products such as materials, employees, etc.

Second thing for their global strategy is they always established their brand name on rural market, where avoid the competition of these large corporations around the world. This is one unique strategy of LG because they focus on lower-class consumers and appropriate way to satisfy consumers in cheap prices but still benefit. The population of rural areas is always greater many times than urban areas. In 2007, LG Consumer electronics come to the $2 billion marks in income in India; this is an excellent result because of their strategy.

By recruiting the neighborhood employees, LG E recognized well about the characteristic with their consumers and this is an edge to strike them. The business is often looking for expertise employees to teach them as a worldwide standard. LG E do sponsors to the passionate of the united states, such as cricket game in India, basketball in Brazil. Normally, they had good corporation communal responsibility that shown local and federal their devotion. All strategies of LG E in BRIC countries are long-term commitment; this make LG has a new position compare with other businesses. LG still will try to triumph over all the barriers if they think that a market is actually profitable.


Case Question 3

What are critical details of learning that may be distilled from its success in rising market?

How these advantages are leveraged to remain competitive in developed countries? Is there advantages transferable?

By some successful experiences of LG in BRIC countries, LG taken to people the strategy to run well an procedure in appearing market. A few of their success encounters are do sponsorship, event to make a graphic to customers; they always experienced their R&D team to customization their product to fulfill the markets predicated on localization. They still retained the global standard on the products and put it into services for each and every market. By this way, their brand name will possess the image of globalization and also get profit for custom-made products. And LG centered on rural market plus they know that major populace of BRIC countries is poor, so they give what the clients want - low price. In case there is operate in developed country, LG can also use this strategy to attack their customers, but it's harder. Because in developed countries, there are numerous sponsorship and activities daily, if their marketing strategy is not unique, LG can get many difficult to compete with others like Sony, Phillip, etc.

Foreign businesses always give attention to 2 things: outsourcing and marketing when enter a country. LG really did 2 things above in BRIC countries because they built their own factories, using local people, manufacture products on the manufacturing plant in each country. They produce their custom-made products and deal them. But maybe this plan will not work in developed country, due to highly cost rates. The purpose for building their outsourcing is minimizing the cost, however in developed country, the price for these activities is very costly. There will be better for the kids if indeed they just do marketing and sales activities in developed country.

Other thing is their circulation network. They expanded their brand name by a whole lot of retail route, offices to most regions of each country. They also can save the price for import, export, copy, and quickly accessible to consumers. This would be the prepare strategy before LG enter into a developed country.



Career LG. (n. d. ). Retrieved 11 24, 2010, from LG Electronics Inc. : http://www. lg. com/global/about-lg/careers/faq. jsp

Corporate infomation. (n. d. ). Retrieved November 20, 2010, from LG Gadgets Inc. : http://www. lg. com/africa_en/about-lg/corporate-info/global-sports-sponsorship/sao-paulo-football-club. jsp

Grand Finale Of LG'S MALLIKA E Kitchen 2010. (n. d. ). Retrieved November 24, 2010, from Food and Nightlife: http://www. foodandnightlife. com/content/grand-finale-of-lg-s-mallika-e-kitchen-2010

LG Record sales and products. (2010, 1 28). Retrieved 11 19, 2010, from Consumer Lifestyle Media: http://www. cln-online. org/index. php?option=com_content&view=article&id=511:lgprofits&catid=40:industry&Itemid=135


Table of Contents

Louis Vuitton

Case Question 1

Why do people buy luxury goods?


Case Question 2

Louis Vuitton is a high-end product. India is a low-income market. Can this dichotomy be reconciled?


Case Question 3

What are the external factors kindering the purchase of luxury goods in a country like India?


Case Question 4

Why do luxury goods marketers form retail clusters?


Case Question 5

Why do certain luxury brands look for store locations in luxury hotels?


Case Question 6

How does an extravagance mall help luxury goods marketers?


Conclusion 39

References 40



Louis Vuitton, a French fashion house officially founded in 1854, is the world's leading of high-end fashion brand in international fashion industry. The well-known label is LV monogram which is highlighted on most products which range from luxury trunks to leather goods is also in an effort to deter counterfeiters. Founder of LV first launched a tiny leather shop in 1821 with the initial products specialized in crafting fine leather suitcases ware. But since known the demand among renowned travelers who needed premium steamer luggage, flat instances, and weekend handbags, the namesake designer, Louis Vuitton, slowly but surely grew into a brandname that offered deluxe travel goods. In the past, as effectively in establishing LV primary reputation, LV expanded the assortment to add carry-on-bags, toiletry cases, small trunks, charms boxes, and finally luxury designer watches. Today, over one hundred and fifty season brand - Louis Vuitton has been disperse throughout European countries as the fashion icon of the most exquisite image.

In this particular case study, we are going to discuss the key reason why people purchase luxury goods, especially is LV; and how the dichotomy between a high-end product and a low-income economy to be reconciled. Then, the article will be continuing with the external factors that hindering the purchase of luxury goods in India, culture typically. After that, brought up more in international marketing, we 're going to determine the key reason why luxury goods marketers form retail clusters, why certain luxury goods look for store locations in luxury hotel. And finally, the record will be finished with the way of a luxury mall work for luxury goods marketers.


Case Question 1

Why do people buy luxury goods?

Nowadays, when the earth becomes globalization, there are no more obstacles in the integration procedure for every country. Therefore, people are entitled to acquire and use global products made by international companies. Different then consumer goods or requirement goods, "luxury goods are cyclical and correlate with GDP in specific locations, often exaggerating the up- and down-swings; in boom times, consumers' demand will increase faster than the progress of economies (as measured by GDP)". More specifically, luxury goods are goods that demand is not related to income. In essence, there are three main factors that lead people by luxury goods. Especially in the current consumer-driven economy, people spend proportionately less on basic needs and more on things structured upon sentiment and desire.

Firstly, they buy luxury good due to its superior functionality and quality. Many of them were old because of hard working time period, so they were wealthy enough that ready to pay high quality for products that got enduring value. They often conducted comprehensive pre-purchase research, then making logical decisions somewhat than emotional or impulsive. This action highlighted the announcements of product quality. And this note were information-intensive appealed to them. Comprising connoisseurs, this category was the biggest.

Secondly, they are simply people who understand luxury products as an incentive. They saw the products as status icons which make the non-public statement that they had "arrived". Highly driven, they were motivated by way of a need to be successful, wanting to showcase their success to others. In addition they were keen on appearing lavish or hedonistic. They wanted to make apparently "smart" decisions that shown the importance of the purchase without leaving them open to communal criticism of any kind.

Thirdly, this is the smallest and contains more youthful consumers, with an increased proportion of guys than the other categories. They found luxury products as a means of self-indulgence. They relished luxury products for their feel-good factor. They were mental in their purchase decisions and were not concerned with product longevity or its long lasting value.

Particularly, in India, people who buy luxury goods fall into the second category. As we know, maharajahs will be the most wealthy and powerful in India in the past due 19th century. They are the one who prefer everything luxury to showcase their positions as "great king". "It was the ongoing requests from Indian royal family members, among other wealthy customers, that possessed helps Louis Vuitton survive the Great Major depression of the 1920s". From then on, even though changes in 1971, these maharajahs lost their traditional keep in post-independent India and their riches with the abolition of annual financial grants or loans from federal government, many of them became business people; but unintentionally, the new technology of customers for LV was made in India including start-up owners of myriad new businesses, professional CEOs in their thirties and early forties, non-resident Indian, small and medium sellers, big-brand franchisees, Bollywood celebrities and "closet spenders". This new technology of customers could be the third category of who purchase luxury goods. They are simply new and not too many of these are really wealthy, nevertheless they still purchase LV as the feel great factor. Hence, they are extremely essential in long-term tactical development in Indian market.


Case Question 2

Louis Vuitton is a high-end product. India is a low-income economy. Can this dichotomy be reconciled?

"India, throughout history, has been a land of extremes and known for the indulgence of its opulent classes". Typically, there tend to be more than 600 maharajahs existed that time. They are simply truly powerful and wealthy enough to be considered as "great king". Being a positive result, the majority of global brands were looking India as market with long-term potential whereby there are high requirements of luxury goods from Indian royal families, so will Louis Vuitton. Until now, almost luxury brands remain survived in Indian market despite of global economical crisis. Evidently evidences will be the Indian market has increased a substantial percent of consumption this season when customers tend to be thinking about walking into the outlets and, importantly, buying rather than simply looking.

Besides that, India is known as a low-income current economic climate, but there are really have several prosperous folks who are superior to the common populace. Since Louis Vuitton made an important observation that "the abundant with India were soaring to London, Dubai, Singapore, New York, and Paris to shop because there have been noting available in India to allow them to buy", the company has articulated the clear long-term goals in India that is open store atlanta divorce attorneys Indian city so that the wealthy class can buy the needed items right in their house country. "THE EARTH Wealth Report 2005-06, published by Merrill Lynch and Capgemini, put the number of buck millionaires in India at 83, 000 in 2005. The survey also said that India saved the world's second speediest growth in the number of HNW individuals, 19. 3 % in 2005". Thus, we can certainly realize the actual market of Indian consumers' purchasing electricity.

Currently, due to the capitalist mind set and growing young population, India offers to luxury brands beneficial advantages such as more wealthy people, increasing understanding, increasing consumerism, and higher way to obtain luxury goods. Firstly, luxury product companies strategizing their entrance into India were mostly targeting high-net-worth individuals because they are those with a million dollars or even more in liquid financial resources. They will be the largest group of shelling out for luxury goods as the number of them as well as their demand increased. Subsequently, India young generation is now travelling in another country more than before, thus, the foreigner brand recognition is also increasing. The more they go out of the country, a lot more they exposure with international brands, especially luxury brands. Then, the demand of these varieties of global brands is increased in India but local market cannot fulfill their demand. That's the reason helps luxury goods generally and Louis Vuitton specifically still existed and developed little by little in this market. Thirdly, there are also an increased numbers in ingestion of non-essential items. The world is getting globalization day by day; the demand of individuals isn't only the needs but also the needs, so that their life becomes more convenient and sophisticated. They don't afraid of giving a large amount of money to invest on an extravagance product that it's worthy of for and satisfied their desires. Of course, there is no more guilt sense associated with shelling out for luxury nowadays. Finally, alongside the boom of extending global, luxury brands opened up increasingly more outlets in as many countries as is possible, including India.

Generally, in the world of opposition, this dichotomy completely can be reconciled.


Case Question 3

What will be the exterior factors hindering the purchase of luxury goods in a country like India?

Depend on several conditions of every country; the factors that are hindering the purchase of luxury goods are various. In this specific case study, we are finding out the exterior factors in Indian market.

Advertising system: Nowadays, "Advertising is something to the community". It is usually revealled the latest fashions and the new popular novelties on the marketplace. Therefore, the result of adverting to the city is vital. Advertising has the electricity of persuade and affect consumer. "Advertising has short-term electricity (conveying new information, building understanding, enhancing credibility, etc. ) and long-term vitality (conveying brand image, attaching psychological beliefs to the brand, building positive reputation, etc. )". Actually, there may be lack of advertising system in Indian market. No famous magazines or newspapers are found in India in those days. Hence, LV also faced with this situation of advertising. This is the significant factor that hindered the purchase of consumer in India, especially luxury goods.

Credit card concern: As a expanding country, Indian financial industry has required strongly for the last few years. The financial sector in India has experienced increased gradually. However, charge card is still a brand new type of bank in the country due to the young industry. Not the same with the united states or UK, mastercard in India has just launched in 2008. With two years operation and development, mastercard is currently an issue that impacts the purchasing of luxury goods. Simply understanding that luxury good is the type of expensive-cost good for advanced consumers, but credit card is not too popular in India. Without bank card, it isn't convenient for them to carry plenty of money to buy luxury goods in home-country stores as well as in another country.

Place for distribution: That is one aspect of the 4Ps in Marketing Combine which is recognized as the core way for passing product from development place to consumption place. "Effective distribution provides customers with convenience by means of availableness (what, where, when - the right product, at the right place, at the right time), access (customers' knowing of the supply and authorization to purchase), and support (e. g. pre-sales advice, sales advertising and merchandising, post-service vehicle repairs)". While luxury brands, especially LV, usually look for store location mainly in luxury department stores, luxury retail clusters and luxury hotels. And these luxury places are only located in the united states capital or the most crowded city. It creates a difficult procedure for consumers when they would like to buy luxury goods.

Besides three main factors, culture is recognized as the broadest and deepest factor influent on consumer action, including India. Culture is an important part in every society and result directly to someone's want and habit. The international marketers, specifically for luxury goods should understand the role of Indian buyer's culture.


Case Question 4

Why do luxury goods marketers form retail clusters?

Luxury retail cluster (LRC) which is propagate over several blocks, usually in a city's downtown center, enabled a luxury products company to showcase its offerings in a fashion that highlighted it brand personality. You'll find so many of reasons for luxury goods marketers form LRC. Among the reason why, "customers are the retail cluster's purpose - and its own passion - with all products, campaigns, syndication and servicing geared at success providing superior value to them". Retail's determinations consider customers as their unrelenting and unremitting driving a car power. LRC also boosts access to customers by gathering products from different categories. Within the demand side, a LRC offers customers chances to acquire several items which are related to the other person within a trip. Simply when investing in a luxury dress, then, customers also want to get more luxury accessories such as leather hand bags or high heel shoes shoes that suitable with the initial dress.

On the other hands, an individual store was reinforced by a graphic spillover from other neighborhood stores inside LRC. Each luxury brand benefits benefits because of its own somehow when building LRC with well-known of high quality products and value chains. On top of that, on the source area, "LRC could entice traffic large enough to give scale to specific store by the sheer number of purchasers". Certainly, a LRC can enroll customers more efficiently and cost effectively. Employing new plans about fund or strategy for a LRC is considered as a key of success on conserving costs and retaining the stable degree of customers.

Furthermore, all the stores inside the LRC are ongoing work to accomplish higher value. If an individual store doesn't do well on their performances, it will be left behind others. Thus, each brand and brand marketer has tried out the best to maintain and improve the quality and its own brand value. Besides that, "an LRC offered a chance for a brand to utilize its store design to make a unique image without interference from other stores in the same cluster".

Generally, luxury goods marketers are right in building an extravagance retail clusters in the goal of sales and cost effectively.


Case Question 5

Why do certain luxury brands look for store locations in luxury hotels?

"The current luxury customer is highly advanced and brand literate". Therefore, the decision of location for luxury brands is more special than others. You can find two sides of benefits when certain luxury brands put store locations in luxury hotels.

Firstly for consumer, these retail locations aim to appeal to the customers' understanding and make sure they are feel very special when purchasing the products. The atmosphere surrounding the dealer is also important in the buyer's frame of mind. More precisely, a luxury hotel is a gathering point for modern culture and a hub for individuals who travel. Moreover, luxury hotel is a place that prosperous people would like to come and enjoy their prosperous life. These are affluence people, so the potential for these to buy luxury goods is greater than other places. Additionally, luxury hotels tend to be the places of upper course on weekend or getaways. It really is convenient to allow them to have both vacations and shopping at the same time. They consider it as a reward after hard-working time. Once soothing and shopping are go together, customers tend to be satisfied on the worthy of services. Finally, purchasing luxury goods of luxury brand in a luxury hotel can make the customers feel special as well as their lifestyle is turned out somehow.

Secondly, for the brand itself, store locations in luxury hotel also support for the brand position. The initial as the luxury brands with main products are luxury goods, they want to improve and develop their luxury image and position in the community. Furthermore, people's recognition about store location of an extravagance brands must be at a luxury place, can not equate luxury goods in other areas such as supermarket or small shopping center. Simply, luxury usually goes with luxury. This becomes a normal consciousness of man when considering luxury. And more, it can benefit people identify luxury brands easily. Also, the brand itself is easily in targeting customers in this luxury location. The brand find out about their highly prospective customers, so that it is convenient for them to are suffering from strategy or reselling approach methods to these customers.

Besides that, there is also drawback of looking store locations in luxury hotels of certain luxury brands. Hotel can be an establishment of lodging services. Additionally it is the place for people enjoying life and soothing themselves. Therefore, hotel is not really a commercial place for buying and selling activities. Sometimes, people see these investing activities in an extravagance hotel are inconvenient for the kids when they are in vacations.

In brief, there are both benefits and drawbacks of store locations in luxury hotels, but it appears that LV performed make good use of advantages to achieve success in Indian market.


Case Question 6

How does a luxury mall improve luxury goods marketers?

Luxury mall, "a collection of stores bonded by shared facilities and a standard infrastructure", is a best different for store location after luxury retail cluster. With the effectiveness of gathering several different luxury brands in a single place, luxury shopping mall is the ideal choice for active customers. Retail space is rented by the store owner, plus they can design and layout the store adopted with their standard quality. By arranging these luxury brand nearer to each other, the luxury mall draws in customers' awareness. It is also worth for each store inside. Furthermore, after the luxury mall does well, the luxury goods are known well too. Therefore, luxury goods marketers need not do a lot of things on create understanding, develop strategy and advertising sales.

In term of 4Ps in marketing combination, there are clearly advantages that luxury shopping center brings for luxury goods marketers. "Marketing mixture is tactical toolkit of product, place, price and promotion that marketers change to be able to gratify their customers and execute their marketplace strategies". Firstly, luxury shopping mall is usually located on the congested area with highly advertising potential, thus, with the retail space is offered inside the luxury mall, luxury goods marketers do not need to find the store location in the goal of bringing in customers and increasing sales rates. Subsequently, costing at luxury mall is set at the same level already. Marketers need not do market research in order to identify the right price at a particular point. Thirdly, products at luxury shopping center are redefined as luxury goods, so, there is no more need on trying to create customer attitude about their luxury brand. Finally, related to the seasonal demand of customers, luxury mall already has various special offers that suitable for each and every season. As consequence, the luxury goods marketers just implemented to the given deals and modified somehow in order to standardize with the brand image.

In circumstance of Louis Vuitton, after starting stores inside two luxury hotels in New Delhi and Mumbai, Louis Vuitton teamed up with other american brands to build up a luxury shopping mall. Certainly, it's participating in an important role in the success of Louis Vuitton in Indian market. "India's first luxury mall was to open up in New Delhi in a couple of months" with total of 130 marquee brands, including of course Louis Vuitton. In the developing strategy of the blissful luxury mall's owner, LV is also involved with all the tasks in next five years with no hard efforts of the marketers. It is the significant success of any foreigner organization in Indian market, Louis Vuitton typically.



Nowadays, luxury goods are no odd to everyone ever again. People buy luxury goods for many different reasons. Prosperous consumers buy luxury goods because of its brand name as well as their personal status in the community. Although in developed countries or expanding countries, there are still high requirements of luxury goods. Specifically Louis Vuitton still survives in India market - a low-income country with popular of luxury goods. That is the reason why. Besides that, many external factors are hindering the purchase of luxury goods just about everywhere. Consumer manners of luxury goods are still limited because of several reasons such as insufficient advertising pattern, banking issue like charge card, or inconvenient circulation route. LV in India is facing with these kinds of limited that hinder the consumer purchasing ability. With current condition, LV does well in Indian market. However, LV should maintain steadily its quality and value chains in order to keep their position on the market and repelling of fake products. Also, LV can increase the customer services to fulfill the new technology of luxury goods consumers, not only about having money but also about the preference for a good life and feel for a lifestyle.

Once there are numerous luxury brands in the market, luxury goods marketers usually form luxury retail clusters and certain luxury brands look for store locations in luxury hotels. It brings advantage to both consumers' passions on satisfied the demand and luxury brand itself on discount sales and cost effectively.


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