History Of Lg Electronics Global Company


In 1947, LG was created as the Lak Hui Substance Industrial Co. by Mr. In-hwoi Koo for manufacturing cosmetic creams. After that, the company produced radios, Televisions, refrigerators, washing machines, and air conditioners as Goldstar Co. (presently LG Electronics) in 1958. The LG group was a merger of 2 Korean companies, Blessed and Goldstar; the current LG brand was acronym from the name of the companies. With an increase of than 82. 000 employees and 110 subsidiaries and marketing devices around the globe, LG Electronics Inc. (LGE) was a successful company of Korean consumer electronics that received the revenues greater than $43 billion. Its products involve 4 strategic business units: Mobile communications, Digital device, Digital display, and Digital multimedia such as CDMA handsets, Dvd movie players, air conditioners, micro ovens, consumer electronics, and so forth.

In this article, we will discuss the key strengths of the Korean gadgets industry during their formative years and exactly how firms leverage these advantages to enter into developed country market segments. After that, the record mentions especially about the tactical growths of LG Consumer electronics to address the emerging marketplaces; and we 're going to determine the commonalities across its strategies in the BRIC countries. Finally, the article will be concluded with the factors of learning that may be distilled from its success in emerging market if these advantages help firms to remain competitive in developed country or not.


Case Question 1

What were the main element talents of Korean electronics industry during the formative years? How performed firms leverage these advantages to enter developed-country market segments?

During the formative years, almost Korea consumer electronics is an Original Equipment Supplier such as Goldstar, Samsung, and Zenith; which received requests from global companies. This should bring them a lot of experiences on customer demand, the feature of markets, the custom-made products of some countries. The combination between innovate and education insurance policy inspired more students for specialized education, the low-cost skills of Korean employees, the gain access to of effective technology across all firms, the highly development of technology in all country. Korea consumer electronics companies can learn quickly knowledge, technology, skills from European countries, US, Japan because administration allows these international firms become joint venture with domestic companies. For example: LG - Hitachi, Deawoo - GE, Samsung - Sanyo, etc.

Besides that, federal government also centered on most sectors of Electronic industry of country, so they recognized so much to build up this industry. Foreign investment was recognized to develop the intermediate parts and component industry, while prohibiting international investment in companies producing finished goods. Korean company with words 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 obligations; they also got usage of duty-free imports of capital goods. Administration helped to encourage organization creating their local R&D.

With the growing and investment of technology, some businesses stared to export their products by their own logo, much less OEM any more like LG and Samsung. Because these were OEM of some global markets, so they already possessed the guide of consumers and global standards. After that, with many supporting of federal government, that they had their manpower providing with skills and talents from university. Authorities has the tax breaks for depreciation and tariff repayments for exporting companies. As well as the R&D department experienced enough experience to recognize the market and give the best solution for company. As the Glodstar products, LGE established a central R&D to develop and produce color TV (CTVs), VCRs and computers.


Case Question 2

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


Brazil is a country in SOUTH USA big more than 8. 5 million kilometres2, abundant with mineral resources, human population 190 million people who have diverse civilizations. Brazil is the leading overall economy in Latin America, standing 10th in the world. Brazil chooses the path of economical model: "fast expansion" - with the advantage that fast market flourishes, the growth rate in average income is high. Besides that, federal has some polices to promote buyers such as preferential taxes rates, land subsidies in country, especially in a few underdeveloped rainforest region.

With these advantages, LG started attacking the Brazilian market in the mid-1990s. But during that time, Brazil also encountered a great deal of complications. Because their monetary model is "fast growth", so that it also makes unequal monetary, political; social increasingly fierce; the grade of life is not considered. At the past due 1990s, almost global companies needed to exit the market because of very high transfer tariffs, significant competition from the grey goods market, very low brand consciousness. Inflation rate increased with broadband, local money became unstable, exchange rates started to plummet with increasing degrees of uncertainty.

LG decided to make a long-term strategy, and also extended their brand name in India. That they had 2 factories in Manaus and Taubate to create their products, this plan made Brazil as a regional developing hub to serve SOUTH USA and US markets. LG also let Brazilian administration know they are a credibility spouse in term of national progress by join with federal to combat the challenge of the rampant smuggling of grey market goods.

Everybody knows that Brazil is a country passionate about sports, Brazilian live for soccer. So LG possessed one strategy to succeed in millions of basketball lovers - sponsored a soccer team in Sao Paulo that a lot of popular among the top golf clubs in the united states. By providing standard uniforms with the LG logo for Sao Paulo team, LG get the instant brand popularity and fixed image in consumer.


LG started out in 1993 as a kind of jv with a consumer products company named Bestavision. They find the Goldstar type of products to deliver in India. Because the government allowed international companies create their own firms without local collaboration, and the business enterprise of LG and Bestavision failed, LG made a decision to unveiling LGE India Ltd. (LGEIL) in 1997 with their own wholly held subsidiaries in India. There were many problems that LG were required to beat like: low brand understanding about LG brand; LG was one of the previous MNCs came into in India; high transfer duty of federal government; price sensitiveness of the Indian consumer and opponents.

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 metropolitan market; big population of rural market but also large untapped; etc. There is 1 year to allow them to set up manufacturing procedures in Greater Noida to produce televisions, washer, etc. to over some the high transfer 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 feature of products that matched up the consumer's prospects. This is an important resolution for LG to accomplish both goals: marketing and produce. LG experienced differentiated its product using technology and health care system like "golden eyesight technology" of CTVS, "health air system" for air conditionals, so on.

They give attention to emphasizing good-quality products, with best technology and network. For customized products, they didn't slice prices in manufacture existing products, but they decided to built new version with less material cost and also get the needs of consumers. They stored the manufactured quality of the kitchen appliances and focused on value executive and design to make at the lower cost. Such as microwave ovens with cooking food menu including 77 kinds of Indian dishes, television is displayed by 10 local languages, washer with "sari" pattern, and so forth. It helped LGEIL have all degrees 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 merchandise of LG India is quite sensible and affordable so as to make it easier for each and every class of men and women to do it now thereby increasing the consumer level. For instance, the price of Sampoorna reduces from 9000 to 5050. This shows R & D team has worked very well and complete their tasks, it helps the creation of LG realistic based on deep understanding of India's ethnical and linguistic variety.

LG Company spent and created the circulation network encompassing with 65 Remote Area Office buildings, 60 central area offices, close to 4. 000 access points in all areas, and they also acquired their online channel - lgezbuy. com to provide information of products, comparability of prices and features across geographic, accept the individuals purchasers. These regional syndication networks helped LG E to penetrate the B, C and D marketplaces faster and much wider.

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As same activity in Brazil, LG began sponsoring to get more customers. LG became the most significant solo sponsor of cricket on earth, although they came from a country where cricket had not been performed. It immediately attacked to an incredible number of cricket admirers in this country and prelude to the success of the cricket-game Television set lines. LG also brought 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 actors. This is considered the major film producer on earth by volume of films produced on a yearly basis and the number of tickets sold at cinemas, they have its possessed name - Bollywood to spell it out the effective to local consumers.

After that, LG had another long-term strategy in trying to care about the public welfares in India initiatives. It created an agreeable look to the business, people understood that company really have not only trading on their own country, but also cares for his or her lives. They subsidized the principal school education and literature for children, built a community school. While most of employees of company in India were local people, they provided medical treatment centers for medical care technique to employees as well as the local community. Also there have been some basic levels, but LG shown that their company cultural responsible done well.

As mentioned previously, LGEIL put local employees staffed as the key work force in their manufacturing. With the neighborhood employees, company could get great tool of anatomist and design skills. LG India's purposing is fulfilling the needs of its consumers not only in the local market but all across the globe. Company is trying to make India as their training hub for global strategy. The company had begun spinning many of these managers into positions in third countries in the middles east and Africa. That is one of features of LG to get a leading position by providing fast and progressive techniques on the products. They always create new products with the best technology possible.


LG first joined Russia with the objective to sale products; they imported goods manufactured from other countries and sales in Russia. Different then Brazil and India, LG operated themselves in and around the location of Moscow, plus they just centered on Goldstar brand.

LG setup an R&D center and local office in St. Petersburg because of their first strategy. Right up until Russian technical engineers were known for his or her capacity and skills in technology, company seemed for talent employees to aid their global employees. LG promoted their reputation by opening LG brand shops, retail programs with LG brand collection, culture marketing events such as LG celebrations, cooking events, and so forth.

1998, Russia was influenced by the severe economic turmoil; it made Russia experienced the debt moratorium problem. This was enough time LG shown their long-term strategy and loyal attitude to all or any Russian local and federal government. A lot more they pushed the mode of operation to dominate the marketplace dropped; they promote the image with consumers through the sponsorship of happenings, more carefully to certain requirements for every market. These activities created a foundation for their superior strategy and image to local. In 2005, administration allowed company to use the Narodnaya Marka custom logo because of their products. That is an important event for LG - officially named a countrywide brand, the successful of international company of their localization strategy.


In this market, LG first reason behind stepping into china is lower-cost development, and they spent a lot of time to understand the local market conditions and assessing the feasibility to be successful. Since LG Gadgets proven its local subsidiary in Huizhou in 1992, the LG Group's 12 subsidiaries have come to manage some 34 local companies, including 22 manufacturers. LG Consumer electronics took the very best position in the Chinese language local market in the region of TV export, CD-Rom motorists, washer, and air conditioners during that time because of their advantages of technological prowess and the marketability of their products.

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

China is a great resource for working a business. Numerous advantages such as low labor cost, low material cost, government rules, geographic proximity to Korea market, 16 corporate entities of LG were built in the country which centered on manufacture Plasma Tv set, white goods, and important research, development in 2006. LG broadened their brand to create a creation network to serve countries such as Russia and US. As 98% off employees were local Chinese and R&D center, this is a good strategy of LG in case of localization in China.

For their promoting image, LG initiated an "I love china" advertising campaign and handed down out free sanitary masks to local individuals during the SARS crisis in China. This activity really effected to customers while others competitors tried out to rundown their business. LG also well done with their Company Public Responsibility by introducing classes, offering scholarships to financially disadvantaged students, sponsoring a touting cultural festival that could bring traditional Chinese language cultural experience to small cities and villages, founding a medical center program to provide surgical treatment to children with cleft palates.

Common strategy across BRIC

At the first time, LG Electronics always put up their local maker and R&D team with local employees to comprehend the need and characteristic of each market. They be based upon these researches and created some specs for local. Such as in India, most of consumers require on cheap price of products, but still have the same quality of international; LGEIL decided to produce the tv set with a smaller display screen size and scaled-down sound system. They did not forget to serve the high-end products to all or any markets. This is really the best success with their R&D activities. They can be supporting global strategy by looking for expertise local employees, indicating they localize with a purpose for global market. And with local procedure, they can save a lot of manufactured products such as materials, employees, etc.

Second thing for his or her global strategy is they always established their brand on rural market, where avoid the competition of those large corporations around the world. That is one unique strategy of LG because they concentrate on lower-class consumers and appropriate way to satisfy consumers in cheap prices but still benefit. The populace of rural areas is actually greater often than urban areas. In 2007, LG Gadgets come to the $2 billion grades in profits in India; this is an excellent result for his or her strategy.

By recruiting the neighborhood employees, LG E understood well about the attribute of these consumers which is an edge to attack them. The business is definitely looking for talent employees to teach them as a worldwide standard. LG E have sponsors to the passionate of the country, such as cricket game in India, football in Brazil. In any other case, they had good corporation social responsibility that shown local and authorities their devotion. All strategies of LG E in BRIC countries are long-term determination; this make LG has a different position compare with other procedures. LG still will try to overcome all the barriers if they feel that a market is really profitable.


Case Question 3

What are critical points of learning that can be distilled from its success in rising market?

How these advantages are leveraged to compete in developed countries? Are there advantages transferable?

By some successful encounters of LG in BRIC countries, LG brought to people the technique to run well an operation in emerging market. A few of their success experiences are do sponsorship, event to create a graphic to customers; they always acquired their R&D team to customization their product to gratify the markets based on localization. They still maintained the global standard on their products and put it into new products for each market. By this way, their brand name will have the image of globalization and also get advantage for custom-made products. And LG focused on rural market and they know that major human population 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 assault their customers, but it's harder. Because in developed countries, there are many sponsorship and activities daily, if their online marketing strategy is not unique, LG can get many difficult to contend with others like Sony, Phillip, etc.

Foreign businesses always focus on 2 things: outsourcing and marketing when get into a country. LG really have 2 things above in BRIC countries because they built their own factories, using residents, manufacture products on their factory in each country. They produce their customized products and sale them. But maybe this plan won't work in developed country, due to highly cost rates. The reason for building their outsourcing is reducing the cost, however in developed country, the cost for these activities is very costly. You will see better for them if they just do marketing and deal activities in developed country.

Other thing is their syndication network. They widened their brand name by a lot of retail route, offices to most regions of each country. They also can save the cost for transfer, export, transfer, and quickly accessible to consumers. This would be the prepare strategy before LG enter 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

Background & Release 24

Case Question 1

Why do people buy luxury goods?


Case Question 2

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


Case Question 3

What will be 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 a luxury mall benefit 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 ranging from luxury trunks to leather goods is also as a way to deter counterfeiters. Creator of LV first launched a small leather shop in 1821 with the initial products specialized in crafting fine leather luggage ware. But since recognized the demand among exclusive travelers who wished premium steamer totes, flat situations, and weekend handbags, the namesake custom, Louis Vuitton, gradually grew into a brand that offered deluxe travel goods. In the past, as successfully in establishing LV original reputation, LV expanded the assortment to include carry-on-bags, toiletry conditions, small trunks, jewelry boxes, and eventually luxury designer watches. Today, over a hundred and fifty yr brand - Louis Vuitton has been pass on throughout Europe as the style icon of the most exquisite symbol.

In this specific case study, we will discuss the reason why people purchase luxury goods, especially is LV; and the way the dichotomy between a high-end product and a low-income economy to be reconciled. Then, the statement will be persisted with the external factors that hindering the purchase of luxury goods in India, culture typically. After that, talked about more in international marketing, we 're going to determine the reason why luxury goods marketers form retail clusters, why certain luxury goods look for store locations in luxury hotel. And lastly, the statement will be ended with the way of a luxury mall be employed by luxury goods marketers.


Case Question 1

Why do people buy luxury goods?

Nowadays, when the planet becomes globalization, there are forget about obstacles in the integration procedure for every country. Therefore, people are entitled to get and use global products created by international companies. Not the same as consumer goods or requirement goods, "luxury goods are cyclical and correlate with GDP in specific parts, often exaggerating the up- and down-swings; in increase times, consumers' demand tends to grow faster than the development of economies (as assessed by GDP)". More precisely, luxury goods are goods for which demand is not related to income. Basically, there are three main factors that lead people by luxury goods. Especially in today's consumer-driven current economic climate, people spend proportionately less on basic essentials and much more on things founded upon feelings and desire.

Firstly, they buy luxury good due to its superior features and quality. Many of them were old because of hard working time frame, so they were rich enough that prepared to pay top quality for products that acquired enduring value. They usually conducted extensive pre-purchase research, then making logical decisions alternatively than mental or impulsive. This step highlighted the messages of product quality. And this concept were information-intensive appealed to them. Comprising connoisseurs, this category was the largest.

Secondly, they may be people who perceive luxury products as a reward. They saw the products as status icons which make the personal statement that they had "arrived". Highly driven, they were motivated by the need to be successful, wanting to showcase their success to others. They also were keen on appearing luxurious or hedonistic. They wished to make seemingly "smart" decisions that exhibited the importance with their purchase while not leaving them open to interpersonal 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 way of self-indulgence. They enjoyed luxury products for their feel-good factor. These were emotional in their purchase decisions and were not worried about product longevity or its enduring value.

Particularly, in India, people who buy luxury goods fall season in to the second category. As we know, maharajahs will be the most rich and powerful in India in the late 19th century. They are the one who choose everything luxury to showcase their positions as "great king". "It had been the ongoing purchases from Indian royal individuals, among other prosperous customers, that possessed helps Louis Vuitton make it through the Great Major depression of the 1920s". After that, but the changes in 1971, these maharajahs lost their traditional hold in post-independent India and their riches with the abolition of total annual financial grants or loans from authorities, most of them became business people; but accidentally, the new generation of customers for LV was made in India including start-up owners of myriad new businesses, professional CEOs in their thirties and early on forties, non-resident Indian, small and medium suppliers, big-brand franchisees, Bollywood stars and "closet spenders". This new technology of customers could be the third group of who purchase luxury goods. They are really new rather than too many of them are really rich, however they still purchase LV as the feel good factor. Hence, they are very essential in long-term proper development in Indian market.


Case Question 2

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

"India, throughout background, is 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 looked at as "great king". To be a positive result, the majority of global brands were looking India as market with long-term potential whereby there are high needs of luxury goods from Indian royal households, so does Louis Vuitton. As yet, almost luxury brands remain survived in Indian market despite of global economical crisis. Evidently evidences are the Indian market has increased a significant percent of ingestion this year when customers are more considering walking in to the outlets and, importantly, buying rather than simply looking.

Besides that, India is known as a low-income market, but there are actually have several rich individuals who are superior to the common people. Since Louis Vuitton made an important observation that "the rich in India were traveling to London, Dubai, Singapore, NY, and Paris to look 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 in every Indian city so the wealthy class can purchase the needed items right in their house country. "THE PLANET Wealth Article 2005-06, shared by Merrill Lynch and Capgemini, put the number of dollars millionaires in India at 83, 000 in 2005. The article also said that India registered the world's second speediest growth in the number of HNW individuals, 19. 3 % in 2005". Thus, we can easily realize the market of Indian consumers' purchasing electricity.

Currently, due to the capitalist mind set and growing young people, India offers to luxury brands beneficial advantages such as more prosperous people, increasing understanding, increasing consumerism, and increased supply of luxury goods. Firstly, luxury product companies strategizing their entry into India were mainly targeting high-net-worth individuals because they are people that have a million dollars or more in liquid financial property. They will be the largest group of spending on luxury goods as the amount of them as well as their demand increased. Second, India young technology is now going in foreign countries more than before, thus, the foreigner brand consciousness is also increasing. The more they go out of the country, the more they exposure with international brands, especially luxury brands. Then, the demand of these varieties of global brands is increased in India but home market can not gratify their demand. That's the reason helps luxury goods generally and Louis Vuitton especially still existed and developed steadily in the forex market. Thirdly, there are also an increased figures in use of non-essential items. The planet gets globalization daily; the demand of individuals is not only the needs but also the wants, so that their life becomes far more convenient and sophisticated. They don't really afraid of providing a large amount of money to spend on a luxury product that it's worthy of for and satisfied their wants. Of course, there is no more guilt sense associated with shelling out for luxury nowadays. Finally, alongside the boom of growing global, luxury brands opened up increasingly more outlets in as much countries as it can be, including India.

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


Case Question 3

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

Depend on several conditions of each country; the factors that are hindering the purchase of luxury goods are various. In this specific research study, we have found out the external factors in Indian market.

Advertising program: Nowadays, "Advertising is a service to the community". It really is usually revealled the latest fashions and the new popular novelties on the marketplace. Therefore, the result of adverting to the community is essential. Advertising gets the electricity of persuade and impact consumer. "Advertising has short-term vitality (conveying new information, building understanding, enhancing credibility, etc. ) and long-term electric power (conveying brand image, attaching mental values to the brand, building positive reputation, etc. )". Actually, there may be lack of advertising platform in Indian market. No famous magazines or newspapers are located in India in those days. Hence, LV also faced with this example of advertising. This is actually 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 forced strongly going back couple of years. The financial sector in India has experienced increased slowly and gradually. However, charge card is still a new type of bank in the united states because of the young industry. Not similar with the united states or UK, bank card in India has just launched in 2008. With two years operation and development, bank card is currently an issue that impacts the purchasing of luxury goods. Simply understanding that luxury good is the sort of expensive-cost best for complex consumers, but bank card is not too popular in India. Without visa or mastercard, it isn't convenient for them to carry a huge amount of money to buy luxury goods in home-country stores as well as abroad.

Place for syndication: That is one component of the 4Ps in Marketing Mixture which is considered as the core method for transferring product from creation place to ingestion place. "Effective circulation provides customers with convenience by means of supply (what, where, when - the right product, at the right place, at the right time), access (customers' awareness of the supply and authorization to get), and support (e. g. pre-sales advice, sales advertising and merchandising, post-service repairs)". While luxury brands, especially LV, usually look for store location mainly in luxury malls, luxury retail clusters and luxury hotels. And these luxury places are only located in the united states capital or the most packed city. It makes a difficult strategy 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 can be an important part atlanta divorce attorneys society and impact directly to someone's want and habit. The international marketers, especially for luxury goods should comprehend the role of Indian buyer's culture.


Case Question 4

Why do luxury goods marketers form retail clusters?

Luxury retail cluster (LRC) which is disperse over several blocks, usually in a city's downtown core, enabled an extravagance products company to showcase its offerings in a manner that highlighted it brand personality. You'll find so many of known reasons for luxury goods marketers form LRC. Among the reason why, "customers are the retail cluster's purpose - and its own interest - with all products, promotions, syndication and servicing geared at success providing superior value for the kids". Retail's determinations consider customers as their unrelenting and unremitting generating push. LRC also increases access to customers by gathering products from different categories. On the demand part, a LRC gives customers chances to get several items which are related to each other within a trip. Simply when purchasing a luxury dress, then, customers also want to purchase more luxury accessories such as leather handbags or high heel shoes shoes that suitable with the original dress.

On the other hands, a person store was strengthened by an image spillover from other community stores inside LRC. Each luxury brand increases benefits for its own somehow when creating LRC with well-known of high quality products and value chains. Also, on the source part, "LRC could catch the attention of traffic large enough to provide scale to specific store by the absolute number of shoppers". Certainly, a LRC can sign up customers more efficiently and cost effectively. Employing new insurance policies about financing or strategy for a LRC is recognized as an integral of success on conserving costs and keeping the stable degree of customers.

Furthermore, all the stores inside the LRC are ongoing work to attain higher value. If a person store doesn't prosper on their shows, it'll be left behind the others. Thus, each brand and brand professional has attempted the better to maintain and enhance the quality and its brand value. Besides that, "an LRC offered a chance for a brandname 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 forming a luxury retail clusters in the purpose of deal and cost effectively.


Case Question 5

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

"The current luxury customer is highly sophisticated and brand literate". Therefore, the choice of location for luxury brands is more special than the others. You will discover two attributes of benefits when certain luxury brands put store locations in luxury hotels.

Firstly for consumer, these retail locations try to entice the customers' recognition and make them feel very special when purchasing the merchandise. The atmosphere throughout the store is also important in the buyer's frame of mind. More precisely, a luxury hotel is a gathering point for contemporary society and a hub for individuals who travel. In addition, luxury hotel is a place that wealthy people wish to come and enjoy their rich life. They are simply affluence people, so the potential for them to buy luxury goods is higher than other places. Also, luxury hotels tend to be the places of upper course on weekend or holidays. It is convenient to allow them to have both holiday seasons and shopping at the same time. They contemplate it as a reward after hard-working time. Once soothing and shopping are go along, customers are more satisfied on the worth services. Finally, purchasing luxury goods of luxury brand in a luxury hotel can make the customers feel very special as well as their lifestyle is proved somehow.

Secondly, for the brand itself, store locations in luxury hotel also support for the brand status. The initial as the blissful luxury brands with core products are luxury goods, they want to improve and develop their luxury image and status locally. Furthermore, people's understanding about store location of a luxury brands must be at an extravagance place, can not equate luxury goods in other areas such as supermarket or small mall. Simply, luxury usually complements luxury. This becomes a standard consciousness of man when thinking about luxury. And even more, it can help people identify luxury brands easily. Also, the brand itself is easily in targeting customers in this luxury location. The brand know about their highly prospective customers, so that it is convenient for them to are suffering from strategy or providing approach solutions 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 relaxing themselves. Therefore, hotel is not really a commercial place for investing activities. Sometimes, people see these investing activities in a luxury hotel are inconvenient for the kids when they are in holidays.

In quick, there are both benefits and drawbacks of store locations in luxury hotels, but it appears that LV do make good use of advantages to be successful in Indian market.


Case Question 6

How does a luxury mall help luxury goods marketers?

Luxury shopping mall, "a assortment of stores bonded by distributed facilities and a common infrastructure", is a best substitute for store location after luxury retail cluster. With the effectiveness of gathering a number of different luxury brands in one place, luxury shopping center is the ideal choice for occupied customers. Retail space is rented by the store owner, plus they can design and layout the store used with their standard quality. By preparing these luxury brand closer to each other, the luxury mall attracts customers' awareness. Additionally it is worth for every single store inside. Furthermore, once the luxury mall is doing well, the luxury goods are known well too. Therefore, luxury goods marketers do not need to do a lot of things on create awareness, develop strategy and advertising sales.

In term of 4Ps in marketing mix, there are clearly advantages that luxury shopping mall brings for luxury goods marketers. "Marketing combination is tactical toolkit of product, place, price and campaign that marketers change to be able to satisfy their customers and put into action their marketplace strategies". Firstly, luxury shopping mall is usually on the crowded area with highly advertising potential, thus, with the retail space emerges inside the blissful luxury shopping center, luxury goods marketers need not find the store location in the goal of attracting customers and increasing sales rates. Second, prices at luxury shopping center is set at the same level already. Marketers need not do general market trends in order to recognize the right price at a particular point. Finally, products at luxury mall are redefined as luxury goods, so, there is absolutely no more need on wanting to create customer mind set about their luxury brand. Finally, related to the seasonal demand of customers, luxury mall already has various deals that suitable for every single season. As final result, the luxury goods marketers just adopted to the given offers and adjusted somehow to be able to standardize with the brand image.

In case of Louis Vuitton, after starting stores inside two luxury hotels in New Delhi and Mumbai, Louis Vuitton teamed up with other western brands to develop a luxury shopping mall. Certainly, it's playing an important role in the success of Louis Vuitton in Indian market. "India's first luxury shopping mall was to open up in New Delhi in a couple of months" with total of 130 marquee brands, including of course Louis Vuitton. Within the developing strategy of the luxury mall's owner, LV is also involved with every one of the jobs in next five years minus the hard efforts of the marketers. It's the significant success of any foreigner company in Indian market, Louis Vuitton typically.



Nowadays, luxury goods are no unusual to everyone nowadays. People buy luxury goods for many different reasons. Prosperous consumers buy luxury goods because of its brand name as well as their personal status locally. Although in developed countries or expanding countries, you may still find high demands 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 exterior factors are hindering the purchase of luxury goods almost everywhere. Consumer manners of luxury goods remain limited because of several reasons such as lack of advertising pattern, bank issue like credit card, or inconvenient syndication route. LV in India is facing with these kinds of limited that hinder the consumer purchasing electricity. With current condition, LV is doing well in Indian market. However, LV should maintain steadily its quality and value chains to keep their position in the market and repelling of imitation products. Also, LV can increase the customer services to meet the new technology of luxury goods consumers, not only about having money but also about the style for a good life and feel for a lifestyle.

Once there are extensive luxury brands on 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' pursuits on satisfied the demand and luxury brand itself discounted and cost effectively.


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