HOW DID LOUIS VUITTON ENTER INTO THE JAPANESE MARKET ORIGINALLY?
I will now discuss how Louis Vuitton originally entered into the Japanese market.
Louis Vuitton was the first multinational luxury house to open its own shop-in-shops in Japan, without the help of a Japanese distributor. The company formed a license agreement with these high-class Japanese flagship stores to sell their products and to develop an interior design comparable to that found in its flagship stores in Paris. This plaid an important role in terms of brand awareness, market positioning, customer engagement, and long-term benefits. This allowed Louis Vuitton to showcase the entire brand story to the consumer under one roof and make use of all the tools available.
Louis Vuitton then decided to opt for a controversial strategy and to establish its own subsidiary, the company turned out to be a pioneer. They then began to export products from France to Japan. This direct exporting involved contacting potential customers overseas directly and selling to them. This option provided Louis Vuitton with the greatest control however it was the most costly exportation method.
A few years later, in 1981, Louis Vuitton opened its first retail store in Tokyo during the economic boom. This timing was in favour of Louis Vuitton as consumers had more disposable income which was evident as 20 million Japanese women out of a population of 127 million people owned a bag of the brand. The company followed its expansion strategy and, by 2007, controlled 54 stores through a directly owned shop network in Japan.
Louis Vuitton ensured that its market driven decisions and production remained closely aligned to Japan. The French headquarters relied on the Japanese business behaviour believing Japanese managers were more likely to make efficient decisions, as they understood the local people. The company also took advantage of the Japanese demand for high fashion, as it remained a source of creative ideas and...