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Summative Assignment ghjklzxcvbnmqwertyuiopasdfgh

Chien-Ning, Ma
2011/1/17

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Word count: 2522

MA Management - Chien-Ning, Ma

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MA Management - Chien-Ning, Ma Summary

Louis Vuitton and Unilever are both high r eputation name brand in consumption market, both of them are encounter some critical marketing issues. The case study demonstrate the similarities and differences between these two brand s current marketing difficulties, in addition develop the short-term and long- term action plans as advice then use the rationales to discuss the actions applicable and effectiveness.

Critical marketing issue of the L.V. and Unilever

LV and Unilever are under several critical marketing issues which are highly influence the sales, it will be evaluated totwo parts: the similarities and differences of these two companies. LV There are few marketing difficulties of Louis Vuitton., first of all, the demand is growing too fastwithout proper supply chains , in specific districts i.e. Japan the products are unavailable in stores; the supply is not correspond the actual demand. Meanwhile, in order to meet the urgent need, the logistic costs were excessive. Secondly,Louis Vuitton is a traditional luxury name brand which is closely related Fashion industrial ; the company have to possess the competencies of core transformation. To avoid being outdate, massive product portfolio andseasonal products are troublesome customers and company; customers hard to choose the classic or fashionable one and 2% off-season products were disposed. The other serious issues are the affection of counterfeit goods and tourists purchase with no endurance and brand loyalty. Unilever The Unilever s critical marketing issues are related to low-income market in Brazil;huge different between wealth SE and poor NE, l ow-income consumers in the NE cannot afford the lowest -layer brand Campeiro; different wash habits i.e. soap and detergents made the company have to execute different promote strategy to residents from area to area. Tiny profit result to limited budget and
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the consumption most take place in local grocery made the advertisement in poverty area is difficult to execute. Another concern isthreatensfrom P&G and localcompetitors.

Differences V.S. Similarities

It is hard to associate these two brands with such different products, but in a broad perspective they are all prestige name brand. In the marketing management they have different and si milar critical issues. First difference, Louis Vuitton is the demand of luxuries over the company supply and the Unilever is struggling to sell their cheap washing products to meet up their supply; in the case, the similarity is both two firms are working hard on increase product demand. Secondly, in order to seizeconsumers preference,Louis Vuitton has to focus on cultivating Brand loyalty and creates the dream products ; at the same time, the Unilever has to fight on price competitionand produce products which customer in need, the main difference is their customer orientation and product design are different; in addition, in this case they both have basic customer but still struggling how to pull new customersin and how to enhance the consumption of basic customer. Thirdly, they both have logistic problem. Louis Vuitton has to transport their goods from France to othercities; the freight costs are extremely high to meet up the urgent need. Compare to the Louis Vuitton, the Unilever s goods are not always urgent butare heavy and need more storage space. They both have excessivelogistic fee and under difficult distribution condition (i.e. Louis Vuittonproducts can t meet the proper transportation due time and the Unilever is in the trouble of allocat ing the products to regional groceries.)Fourthly, the promotion strategy is similar in building up ideal image but the Louis Vuitton is more expert in Hype & Publicity . Finally,Louis Vuitton has its own irreplaceable status whilst the Unilever in wash pro ducts has high substitution possible.

Short-term and long-term action plans

Louis Vuitton
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Consider to the logistic problem and supply did not meet up the demand in certain districts, the priority short-term plan should be to allocate the products in suitable location, such as Japan or Asia.Secondly, reorganize the seasonal fashionable products occupiedproportion in whole product line; since the customer demand is Classic and limited version decrease the unattractive seasonal products or made the majority of fashionable products as limited goods. Thirdly, sue the pirate factory to prohibit the fake products into market and make sure the press will releases to public that purchase or owning a counterfeit is a shame and offence the morality. Finally, treat the tourists as very important people and maintain the customer relationship with those impulsive or temporary customers, if they cannot get the product they order at the moment, arrange personally descent delivery to their front door. In the long run , build upseveral hubsin the world to cater for meet different countries demand; it will need a powerful Customer Relationship Management system to record the consumption behavior of all customers. As the CRM system working efficiently, the company could predict the customers preference in different districts and the desire of fashion or classic . Meanwhile, build up a great relationship with customers is the consistent project for the Louis Vuitton, the purchase experience will influence the Brand loyalty of customers, once the company builds up the solid emotional relationship with the loyalists, there won t be piracy problems and the tourists will become fans of Louis Vuitton then continuously purchase. With CRM and Brand loyalty, the company can publish a catalogue 3 months pre-session, catalogues will be placed in the shop and also online accessible. For customer, they can preview the new season s products and able to place an order for the product; for company, demand can be estimated through the orders made by customers then minimize the shortage and reduce level of waste. Finally, enter the new markets (e.g. Eastern Europe and MiddleEast).

Unilever
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The most urgent problem of Unilever in Brazil is the consumption capacity; it s hard to ask poor people take more money in the short-term, especiallynortheast area.The only strategy to increase consumption immediately is to enhance the customers desire of Unilever s products. Two efficient methods: one is make the price lower than market price; to execute the strategy is add 10% of quantity as promotion but stick to the fixed price. The other efficient way is put more efforts on advertising of the brand, invites an attractive celebrity as endorsement; consider to the tiny profit of the products, try to do the lowest cost advertisement. In addition, hire the local sales specialists (e.g. housewife) to access the small outlets. When it comes to competitions, don t fight the price war with P&G or local brands but emphasize the functions, scents and o rdinary features to win the customers favorite. In the long-term, distinguish the customer need of different area; sett ing the suitable sale strategies to the specific area; for northeast, apply anattractive advertising package (i.e. big quantity as an offer to make it relative cheaper than other competition ), after consumers used to the brand, then back to standard price; in the meantime, cultivate the Brand loyalty . For southeast, emphasize the outstanding function, invite celebrity endorsement and bui ld up customer relationship. Finally, implant word-of-mouth (Arndt 1967)through the local specialists to consolidate the products competitiveadvantage.

Differences V.S. Similarities of two companies plans

The different action plans of these two companies are mainly decided by modernization; one is for developed country and one is for developing country. The Louis VuittonCompany is focus on CRM and internet marketing. According to Chaffey, et al. (2009), develop the internet marketing strategy has to meet your costumers needs then implement the e-marketing plan, in addition evaluate and improve the strategy. By objectives, there is6Ss present on web(Chaffey et al., 2008), Sell, Serve, Speak (communicate), Save (minimums costs) and Sizzle (Branding activities). Louis
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Vuitton is a leader in fashion industry, especially can be benefit byinteractiveness; the e-marketing providetheir customers visual stimulation, product images, video (360 degree images), the use of avatars, getting thereviews & ratingsas timeliness andgiving outfit building and style advice. The internet marketing will assist Louis Vuitton improve its strategy and sales but not that obvious help the Unilever in Brazil. One of important contribution of internet marketing is CRM(customer relationship management), Louis Vuitton can collect the information online but Unilever might have to key in the local sales results in the database.According to Injazz (2003),Companies that successfully
implement CRM will reap the rewards in customer loyalty and long run profitability. The company executive the CRM system can benefit the relationship marketing which is discuss as follow.

The similar actionplans of these two companies are relationship marketing, brand strategy and global marketing. First of all, two companies both need to implement relationship marketing strategy into their brand. According to the Loyalty Ladder (Christopher et al., 1991), customers were from suspects to prospects become first time customers, start from here the brand should cultivate the customers loyalty, keep the consumption become repeated and the customers in addition support then advocate the brand. There is a very strong tense between customer and brand, the marketing strategy is focus on attracting, maintaining and enhance the relationship to firm (Gronroos,1994). Louis Vuitton Company is good at Hype & Publicity operation, but in need of developing a deeper relationship with potential customer. The tourists and counterfeits are all potential consumers of its products. For Unilever in Brazil, consumers have no apparently preference on wash products, the company should start from introduce itself to customer, e.g. acceptable price of quantity and local sale specialists buildin g up friendship with potential customers. The relationship marketing also can develop the brand loyalty bymessage communication i.e. personal sales, advertising, events, packaging, direct marketing, sales promotion and public relation(Hennig-Thurau et al., 2000). The Brand strategy is one of important action plans both two companies should adopt, it
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emphasize the imagination of the marketing (Levitt, Theodore, 1986), that Price Competition is notmarketing, should sell benefits notfeatures. There is always magic of Brands , trying to use creativity and leading the customers not following. Louis Vuitton never plays the price competition which is a good model of brand charm. In the meantime, Unilever in Brazil is facing the price war; still have to stick on the fixed price not to lower its brand image. In the Brand strategy, another significant part is advertising, both of these two company executiveadvertisement to attractive consumers but in a slightly different way; for the name brand Louis Vuitton, the advertising campaign is using White Space in Ads (Pracejus, 2006), the theory shows the use of white space can give a page a classic, elegant, or rich appearance and lead to a prestigeimage. For the Unilever, advertising should belively, vivid and colourful to fascinate the local consumers. Both of Louis Vuitton and
Unilever might engage celebrity as endorsement, but Louis Vuitton will hire superstar whilst Unilever in Brazil might has local idol. The choice might be different but the feedback should be similar. The global marketing is certainly a serious issue of both companies, Levitt (1983) suggested thatDifferent cultural preferences, national tastes, standards and different business institutions are vestiges of the past; the worlds needs and desires have been irrevocably homogenised.Louis Vuitton Company had been expending its retail network into new region of the world, the luxury goods required significant investments in marketing, sponsoring and media coverage and the strategy of globalization marketing helps Louis Vuitton gain enough money to support the expense, The advantage of Louis Vuitton s globalization marketing and advertising is owning the abilities to exploit good ideas on a worldwide basis and introduce products quickly into various world markets, also a consistent international brand and company image. For the Unilever in Brazil is more likely Glocal Culture(GLC) positioning strategy(Kjeldgaard et al., 2006) , which are brands integrate the meanings of the global and the local, i.e. a hybrid blend of global and local norms of social order, values, lifestyle scenarios and images. Global meanings are interpreted and transferred into unique local meanings.As Grey Advertising,Global vision with a local touch,the Unilever is acting global perspective on local marketing strategy such as local sales representative and endorsement. According to Unilever group executiveJ.W.
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Eenhoorn,Unilever in most of its product groups still adheres to the adage think global, act local, they still uses the local market as its power base which is good for local sales. The two companies all limited by geography location, Louis Vuitton have not broadened its massive segments to Middle East and Eastern Europe, and the Unilever is struggling to survive in Northeast Brazil. Kurtz (2009) mentioned that the retail experts regard the location and distribution strategy and the success and failure factor of retail business. General speaking, the retail store should open at population intensive location, for Louis Vuitton, open the store at funds intensive spot is the priority policy; oppositely, the Unilever in Brazil have to push its products to local people crowded place. The geography issue limited the distribution of sales in both companies.

Conclusion
Louis Vuitton Company and the Unilever seems not relative, but basically using the similar marketing strategy in different appliance. The case study demonstrates several critical issues (i.e. demand and supply balance, develop loyalty customers and advertisement) are existedboth in luxury goods and consumer products. There are short-term solutions to meet the urgent need also long-term strategy to develop and maintain the brand reputation and profits. The last part of case study discusses the rationales behind the action plans which base on worldwide famous theories. The internet marketing, relationship marketing, brand m arketing and global marketing are the main
orientation of those action plans. The recommendations of this case study might not really feasible

but gave the new suggestions to the companies.

MA Management - Chien-Ning, Ma Reference

Arndt, J., 1967. Word of Mouth Advertising: A Review of The Literature , New York, Advertising Research Foundation Inc Chaffey, Dave, Fiona Ellis-Chadwick, Richard Mayer, and Kevin Johnston (2009), Internet Marketing: Strategy, Implementation and Practice, Harlow: Prentice Hall, p.25 -27 Chaffey, Dave and Smith P.R. (2008), eMarketing eXcellence: Planning a nd Optimizing Your Digital Marketing, Amasterdam: Butterworth-Heinemann, p.22-39 Christopher, Payne, and Ballantyne (1991), Relationship Marketing: Bringing Quality, Customer Service and Marketing Together, Oxford: Butterworth Heinemann. Gronroos (1994) , Quo Vadis Marketing? Towards a Relationship Marketing Paradigm, Journal of Marketing Management, Vol.10(5), 322 -320 Hennig-Thurau, Thorsten and Ursula Hansen (2000), Chapter 1, in Relationship Marketing: Gaining Competitive Advantage Through Customer Satisfaction and Customer Retention , ed. Thorsten Hennig-Thurau and Ursula Hansen, Heidelberg: Springer, p.10
Injazz J. Chen, Karen Popovich, (2003) "Understanding customer relationship management (CRM): People, process and technology", Business Process Management Journal, Vol. 9 Iss: 5, pp.672 - 688

Kjeldgaard, D. & S. Askegaard 2006, The Glocalization of Youth Culture: The Global Youth Segment as Structures of Common Difference , Journal of Consumer Research, vol. 33, pp. 231 47 Kurtz,David L. H. F. MacKenzie, Kim Snow (2009), Contemporary Marketing ; Cengage Learning Levitt, Theodore (1986), The Marketing Imagination , New York: The Free Press Pracejus, John W., G. Douglas Olsen, and Thomas C. O Guinn (2006), How Nothing Became Something: White Space, Rhetoric, History, and Meaning, Journal of Consumer Research , Vol.33 (June), 82-90