Louis Vuitton in Japan, Research Paper Example

Louis Vuitton’s signature luggage has had circulated within the international luxury travel market as a mark of distinction and exotic leisure. Amidst the popularity of travel to the Orient in 19^th century Europe, Vuitton’s experience as a layetier or packing workman, and later designer was influenced by the requirements of clients voyaging to distant locales. By the 1960s, Asian clients travelling to Europe purchased LV as a totem of foreign, yet cosmopolitan caché. In 1968, Asia’s first LV sales office was opened in Tokyo. Due to high profile, yet limited distribution of the bags and luggage, LV quickly became one of the most widely “recognized, coveted and counterfeited symbols in luxury fashion” in Japan.

Since the opening of the first sales office in Japan, LV has built a robust market with a loyal consumer base (Hata, 2004). In 1987, LV expand its ‘home market’ reach in the international market, and Asia’s national markets were an obvious choice for dynamic growth in that expansion of GDP in the preceding decades had been “remarkable, especially in Japan where it is number one in terms of market share of handbag sales [ . . .] Japan account[ing] for 31 percent of world wide net sales for LV products” (Kotabe, Helsen, pp.648, 1997). Within a brief period of time, approximately half of all young Japanese women would be the possessors of a LV handbag, and ninety percent owners of at least one LV item. (Hata, 2004). Ten years later, popularity of LV products had increased sharply.?Yamada, 2007). In Japan, LV has never suffered a heavy loss in their business. For instance, ‘In 2002, LV rang up record sales high in Japan in spite of its negative GDP and rising unemployment rate’ (Hata, 2004). Characteristic of Japan’s national economy, LV’s entrance into the market converged readily with consumption of luxury brand goods as gifts. Japan’s ‘culture of the gift’ furthers the depth of consumer segmentation in the market, as the psychology surrounding consumer choice of prestige products is attended by an inference of honor, a long-term value at times only found in the repository of high wealth consumer goods.

The artefact or symbolic power available to consumers through LV’s brand identity, provides the French design house with a broad market of consumers whom behave consistently across the board in Japan, where despite cycles in economic fluctuation, the luxury business continues to boom. (Kotabe, Helsen, 1997) Despite price point, LV’s innovative products are especially well suited to this nation’s consumer society, as the product is almost fail proof in terms of revenue stream; even where the security of conservatism becomes more popular in response to economic fluxes, LV products meet the challenge by offering the tradition of quality translatable for use by Japanese consumers of all ages. The proposed study advances the idea of the gift as a rationale within Japanese consumer society, and looks at the ways in which the French company, LV has approached Japan’s national market to further the company’s competitive advantage.

Background

A study of national consumer market identity in Japan, the foregoing project proposal outlines the background and contemporary story behind the international exchange of elite culture through the French luxury leather goods of Louis Vuitton. Founded in Paris in 1854, the LV signature luggage and trunk collections were first introduced as world class travel ecutremont to an emerging leisure class of consumers. Known for impeccable quality and high profile customers, the award winning French design house has responded to shifts within the global market since its inception. From its 1867 presence at the Exposition Universelle in Paris to company expansion to Asia in 1987 with store openings in Tokyo, Osaka, Taipei, Taiwan and Seoul, LV has continued to provide both old and new customers with high quality, luxury brand identification. Central to the inquiry is how the European, and specifically French product line has built strength in consumer loyalty in Japan’s national market?

Existing studies on the relationship between Japanese consumerism, and the European world of products looks extensively toward the incorporation and subsequent enculturation of popular Western Culture within the currency of Japan’s marketplace. The proposed project generates a perspective that includes both historical background pertaining to the LV design house in the context of its own cultural milleu in France over time, and the importance of trade between Europe and Japan prior to ‘home market’ entrance of the luxury goods company into the Japanese market. The story behind Japan’s emergence as a critical segment within LV’s consumer market, and retention of its robust relationship to Japanese consumers even throughout economic downturn says much about quality and about the mystic behind particular relationships of exchange between the East and the West historically.

From 1500 to 1820 Japan’s relationship to European markets was impacted by a more general route of trade between the various nations and Asian countries. Notwithstanding access to European goods at this time, it was Europe that saw economic gains through its exchange with Asia with expansion of employment opportunities, provision of new consumer goods for which demand was highly elastic (Maddison, 2007). International monopolies resulted in response to Europe’s mercantilist mechanism, and ‘political power’ oft rested on the capacity of a nation’s trading companies to control the importation of tea, coffee and domestic items (i.e. porcelain, silk and wallpaper). These everyday luxuries were an acquired taste in Europe, and came to have a significant presence in the European consumer market which was enhanced by currency exchange, financial instruments, and the overall field of desire generated by the exposure to such luxury goods.

A renewed interest in Asia and particularly Japan in this period is prefaces the birth of Louis Vuitton’s luxe leather goods voyage collections as European’s developed a growing interest in travel to the Orient. Reflective of this burgeoning interest were popular literary renderings of Japan, in books such as Richard Hildreth’s (1855) Japan As It Was and Is which influenced the Early Modern culture of Europe by way of an imaginary world of adventure informed by the cultural legacies of traders such as Marco Polo. Hence, there was ready translation of the refinement articulated through this literary genre specifically dedicated to Japan to other cultural products identified as ‘Japanese’ (Wordell 1997).

The mutually recursive relationship between the West and Japan is much discussed within contemporary discussions on the Orient. Following Edward Said’s (1978) seminal work Orientalism, Wordell’s inquiry looks at the nature and constitution of the West’s legacy of colonial and imperialist practice. Invoking the presence of a binary system of conceptual differences (i.e. Self/Other) as the concomitant ideological strategy in imperialist interpretations of unequal difference, the question on the place of the West within Japan comes to the fore. What is of particular interest to this project, is the inculcation of Said’s critique of a Western ideological ‘impulse’ to stereotype the East as a distinctly and almost irretractable feminine and romantic subject; a tale of unrequited love between a subjugated Japan and its masculine hero, the West. Hardly a universal convention recognized to be recognized with any seriousness by Japanese in Japan, this disjuncture in convention, and in representation of national identity was a common narrative instrument at work within popular press that served to disseminate Modernist discourses of imperialist domination (i.e. the exoticism of Asia as Woman).

Translation of Japan from the literary realm to the marketplace of 19^th and early 20^th century Europe is seen in the storytelling influence of Japanese illustrative cartooning available in popular press, and evolution of interest into the aesthetic realm of fine art first in Eduard Manet’s Japanese woodcut work, and then in Impressionist paintings. French painting was especially impacted by the presence of Japan as an iconic interest, and portraiture included the Japanese textiles and luxury fashion products au currant to French elite exhibition. Claude Monet’s (1876) La Japonaise offered a third term by which class could be rearticulated outside of Europe, and then reintegrated through the leisure pursuits of middle class audiences. In Europe, Japan had become an almost inextricable element within fashion; and hence by its very essence a ‘civilizing’ artefact of Europe itself. Nearly simultaneous to the cosmopolitan longings of LV’s Impressionist period France, the urbanization of Japan was born in response to the Meiji reforms. Following the ascension of the throne by young Emperor Meiji in 1867 and the country opened its once reticent doors to Westernization and international trade.

In France, Louis Vuitton work as layetier influenced his interest in specialty design of trunks and other luggage that might be used by 19th century, wealthy Europeans whom he encountered on their leisurely travels. Obligatory changes of dress at this time required extensive wardrobes, as well as a sufficient packing for the transportation of household and other necessities. Not surprisingly, accomplished layetiers like Vuitton found enthusiastic support. From the very start, LV catered to French aristocracy, and the Empress Eugénie became one of many of his elite clientele. Innovation in design made demand for Louis Vuitton’s modern trunks so great that it facilitated factory expansion at Asnières-sur-Seine.

In 1885, Louis Vuitton opened the first international location in London on Oxford Street, and the atelier’s dedication to global influence came to mirror the efficacy of his designs that were already at this time widely imitated outside of France. As with other well loved designers of this time, law did not precede the rule of popular taste, and Vuitton was forced to counter what would today be considered copyright infringement with mere design changes to elements of his canvas designs with stripes, and then in in 1888, the infanous brown and beige Damier pattern bearing what would be the trademark ‘marque L. Vuitton déposée’. Post the exhibition of his product line at Chicago World’s Fair in 1893, LV introduced a new variation of the Monogram Canvas trunk, “with its quatrefoils, flowers and the LV monogram following the late Victorian vogue of using Oriental symbols” in 1896 (Whittaker    ).

By World War I, Louis Vuitton had opened stores in New York, Bombay, Washington, Alexandria and Buenos Aires. The war period in the 1930s marked a new era in travel products, as the travel consumer demanded lightweight weekend totes and duffels. With the dawn of mass mediated film and photography in the early 20^th century, identification of luxury leather goods with noted aristocrats, such as the creation of Hermés Kelly Bag in response to photographic press on Grace Kelly carrying her Hermés bags. At LV the popular 1930s Speedy revision in the 1960s is often associated with the cinematic celebrity of actress Audrey Hepburn. French luxury brands, then, became synonymous with consumer class consciousness, and LV’s global reach as a luxury resource for international clientele was furthered through merger with other esteemed companies.

Japanese consumers responsive to a market paralleling Europe’s expansion between 1950 through the 1970s saw even higher capacity to purchase luxury goods as the country shifted its national GDP to 8.1 percent per capita growth annually. As one of LV ‘s target markets in the company’s 1987 expansion to the Asian market, Japan was a low risk, high wield national market with a savvy and supportive media culture dedicated to luxury identification. In 1987, LV and exclusive champagne and brandy manufacturer, Moët-Hennessey formed LVMH, and thereby ushering in a new era in the house’s history with an increase in 49% in profit margin. Human resource changes to the company, with hire of President, Yves Carcelle and Art Director, marc Jacobs in the 1990s, expanded the company’s product line into ready-to-wear clothing which resulted in a huge success. For Japanese consumers and investors, the enhancement of luxury through acquisition and expansion of brand elitism presented an even more interesting opportunity once accompanied by ready-to-wear. The opportunities for gift giving in corporate settings which required a hierarchy of distinction, for example, could now be adequately met through a coherent framework of respect that could address generational and professional differences.

Since the 1980s, Japanese consumers have been overwhelming responsive to the luxury goods market, and particularly in regard to brands marketed toward elite travel options. If LV was in its origination a mark associated with European travel to the Orient, in the twentieth century, the French leather goods product line has been equally if not more identified with travellers from Asia, and particularly Japan travelling to the West. Unlike most other countries in the world, even as Japan’s GDP advanced country to an economic plateau its technology based national economy insured that the country increased its wealth exceeding most other countries of classified as ‘advanced’ economies until the early 2000s, when national consumer spending and revenues stagnated for the first time. Japan’s influence in the technology sector has of course greatly impacted Japanese consumption, and advertising influence generated from luxury sites is of keen interest as companies vie for competitive positioning in the market. Consistent with other old guard European fashion houses, LV continues to craft one message, elaborated through a distinctly French cultural story. Japanese consumers visiting the site are not, then, catered to by way of Japanese identity; the purchase is decisively European.

Between 2005 and 2008 the economy rebounded, and at that time projected a rate of growth once again proximate to the European market. The most recent crisis since 2008 has affected consumer spending in Japan, but with a high level of retention in the luxury market as reflected in the continuity of an upper income tier in almost all national markets, and particularly in those occupying the status of advanced countries. The aforementioned discussion prefaces the proposed study, and provides a historical map by which the flow goods reflects the movement of capital, and by proxy the transmission of Japanese and European elite identities within the global market.

Objectives

To evaluate how LV became Japan’s most popular luxury brand while matching up the luxury brand competitors through analysis of the following econometrics:

• Since entrance into the Japanese market, LV persisted as a preferred brand of consumer good associated with luxury;
• Of the total luxury leather goods market, 28 percent of market share has been captured by LV (Kotabe, Helsen, 1997);
• In 2004, sales from Japan accounts accounted for 30 percent of worldwide sales (Hata, 2004);
• Analysis of competitive market share (i.e. Chanel, Coach, Gucci, Hermes, and Prada) and evaluation of factors distinguishing LV from competitors.

To analyse the strategy of LV in Japan since 1980s.

Since 1980s, LV has been expanded by strategy using advantages related to cultural factors and design associated with brand image. The objective contains the following five (5) elements:

• To define the LV’s key factors to success in Japan;
• To provide a comprehensive picture of how LV has stimulated such high demand in Japan;
• To understand critical factors associated with Japanese consumption patterns, and decision making of goods during market shifts;
• To disseminate the historical framework of LV’s strategy in the Japanese market, of which there is currently varied information;
• To analyze current challenges to sustainability faced by LV Japan and how the global firm has transformed according to changes in operations and stakeholder relations (i.e. employee, investor, and consumer) since the 1980s.

Methods

Methodological consideration on the project is based on a tri-partite research design, and will be conducted in three Phases: Phase I: Market Analysis; Phase II: Qualitative Data Collection; and Phase III: Data Analysis. The study is directed toward interpretation French design house, Louis Vuitton presence in the Japanese market, and how the company has come to build a strong base of loyal consumers that continues to exceed expectations in spite of accelerated downturn in the global economy.

 Phase I: Market Analysis

Documentation analysis about LV will be carried out to clarify what strategy was undertaken by LV to enter Japanese market. In addition, comparative econometric aggregate of the market will be drawn into comparison with data on luxury brand competitors, and reviewed for differentiation in planning and execution operations, public relations, and investment strategies by LV and its competitors.

Phase II: Qualitative Data Collection

 Interviews

Qualitative data collection on the project will enable insight into executive management strategy, and consumer retail response to the company’s forecasting from the position of Chief Manager of LV Japan. The initial interview will be followed-up by additional semi-structured interviews with staff according to recommendation. This research will be conducted by a face-to-face interview if the interviewee will have time to meet, otherwise it will be conducted by e-mail, phone or Skype. The interview(s) will serve as grounded study of the topic and will inform other primary and secondary data analysis..

Questionnaires

Surveys with fifty (50) consumer informants will be conducted by e-mail and on-line Social Network Service (SNS). The results from the consumer segment will contribute first-hand information on Japanese consumer choice, and in particular query into purchase of luxury goods, and reaction to the products.

Phase III: Data Analysis

Statistical Models

SPSS application to the qualitative data will render statistical findings from the information that will go toward dissemination of the data for publication. Phase III will be dedicated to activities such as transcription of the interviews, and coding of the study’s findings for statistical modelling of micro-econometric and market segments.

SWOT Analysis

For comprehensive assessment of the primary and secondary data, the final phase of the research design will employ a Strengths, Weaknesses, Opportunities and Threats (SWOT) Analysis of LV Japan, and recommendation drawn from best practices models of evaluation toward dissemination of findings in the study. Core competencies that go into the product life-cycle will be addressed, and put into comparison with new insights from actual portfolio performance. Additional insights into value chain (VC) activities (i.e. quality and identity control) and facilitation of current operations in outbound logistics, marketing, sales and services can also be analyzed here. Outcomes from the statistical derivatives of the qualitative data, and also original narrative response, can be reinserted into the SWOT analyses, and will contribute to analysis of the econometric data for further interpretation of the company’s performance.

Limitations

Limitations to the study are denoted by the following concerns:

1. The materials of documentation analysis will be limited to the materials written in English or translated into English. Some documents are written in French.
2. Sample size will be limited. To draw cross section to the study, the review of subjects will be delineated by gender, nationality, age, and income. The Target sample will be representative of Japanese women, who are over 20 and having a full-time job. Rationale for the sample is based on the known population of LV’s consumer segmentation model.
3. Restriction of the research timeline indicates that the period of the study will be restricted, and all data and analyse dissemination must be according to the stated schedule.

Timeframe

• Preliminary input to formation of the study, 5/10 – 6/10
• Phase I: Market Analysis, 6/10
• Phase II: Qualitative Data Collection, 6/10-7/10
• Phase III: Data Analysis – 7/10
• Draft of Manuscript – 8/10
• Final Revision of Manuscript – 9/10

Resources

Preliminary contact with Louis Vuitton, Japan ensures ready access to the target company, and its representative, Chief Manager of LV Japan. Indicated response proposes willingness with signatory agreement as a human subject to contribute to the research on behalf of the corporation.

The UNU Library and the adjacent City of [. . .] library will enable study of related publications and other visual materials about LV and the company’s luxury brand competitors.

Reliable internet reference libraries and media sources will augment the research and further capacity on the project through contribution to the project’s literature and citation.

Implications of the Study

In interest of the field of Global Market Studies, the proposed study on brand identity in a national economy follows the success of Louis Vuitton in Japan’s unique consumer society. Support from the [Foundation – Fellowship Title] will enable dissemination of the empirical data collection on the project, and furtherance of scholarship with honorable mention. Copies of articles from the chapters of the manuscript and all other publications from the project will be provided to the [Foundation].

References

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Aaker,D.A. (1997) Managing Brand Equity, The Free Press.

Aaker,D.A. and E.A. Joachimstaler : (2000) Brand Leadership, The Free Press

Arnault, B. (2000) La Passion Creative, BP publications

Gerschel,S (2006) Louis Vuitton Icons, Assouline

Hata. K. (2004) Louis Vuitton Japan: The building of Luxury, Obunsya Press.

[1]Hitt, Black & Porter (1995). Management. Upper Saddle River: Pearson Education, Prentice Hall.

Kotabe. M. Helsen K. (1997) Global Marketing Management, Wiley. Marchand, S (2001) Les Guerres Du Luxe, Librarie Artheme Fayard.

Maddison, A. (2007). Contours of the World Economy 1-2030 AD: Essays in Macro-Economic History. Oxford: Oxford University Press.

Mauss, M., (2000). The Gift: The Form and Reason for Exchange in Archaic Societies. New York: W. W. Norton & Company.

Nadia Plesner (2008)?[Online] “Answer to Louis Vuitton“. Available from: http://www.nadiaplesner.com/Website/AnswerToLouisVuitton.pdf [accessed 7th May 2009]

Said, Edward (1979). Orientalism. New York: Vintage.

Schrift, A.D., ed. (1997). The Logic of the Gift: Toward an Ethic of Generosity. New York: Routledge.

Willsher K (2004)?[Onlline] “Louis Vuitton’s links with Vichy regime exposed“. The Guardian.Available from: http://www.guardian.co.uk/secondworldwar/story/0,14058,1230301,00.html. Retrieved on 2008-11-29 [accessed 5th May 2009]

Whitaker, M. B. (2009) Louis Vuitton. Oxford Art Online. Available at: www.oxfordartonline

Charles B. Wordell (1998) Japan’s Image in America: Popular Writing about Japan, 1800-1941. (Kyoto: Yamaguchi Publishing House).

Yamada, T (2007) Fashion News Vol.119, INFAS Publications, pp. 456-481 Unknown, (2004), Business Week.