Discussion

Q. Bernard Arnault has built LVMH into a luxury goods empire by making numerous acquisitions. What strategy is evident here ?

Answer :

A multi brand strategies, brand extension.

A Selective acquisition strategies -concentrating on external growth.

Acquisition means killing of competitors i.e, lesser competition

Increase market share leads to monopoly

Discussion
Q. How do LVMH executives adjust prices in response to changing economic conditions ? Answer:

Raised wholesale prices in individual Asian markets . There by discourage discount retailers from stocking up with designer products and then selling them to down-market consumers. Advertising expenses on perfume and cosmetics reduced. Cancel plans of opening new store. Raised prices to counteract the effect of currency devaluation. When tourism is at peak, increase prices by 10-12%

Discussion
Q. Do you think the high retail prices charged for luxury goods are worth paying ?

Answer : YES Affluent consumers eagerly seekout luxury brands such as Armani, Christian Dior,gucci,louis Vuitton,Prada, and Versace etc
They are willing & able to pay high prices for top quality merchandise from fashion houses whose names are synonymous with status, good taste, and prestige If the prices are diluted then every one can afford such goods as a result there will not be any aristocracy,status, and prestige involve with it Luxury goods are percieve not as a product , as an image- a Lifestyle. In short if you want status symbol then if you have to pay more

Discussion
Q. How will luxury goods marketers be affected by the slowdown in tourism that followed the terror attacks of September 11, 2001 ? Answer :

In Europe and USA , the economy plays a greater role in consumer behavior Japanese tourists are significant factor

Heavy taxes are levied on luxury goods in Japan,making prices about 40 % higher than in many other countries
So Japanese buy these goods abroad . In the wake of Terrorist attack they were less keen to travel which affected the luxury good sales If Japanese will travel more then they spend more . Local market sales in Japan picked up

Serious impact on sales to tourist in most countries .