Case study: Consumer Decision

Process towards Louis Vuitton

Brand

Subject: Consumer Behaviour and Neuro

Marketing

Guided by: Prof. M. Annaji Sarma

Submitted by: Mahak Samdani
Mitali Handa
Sanskruti Agarwal
Satakshi Bisht
Consumer Behaviour
“Consumer behaviour is the actions and decision processes of people who purchase goods and services
for personal consumption”.

-Engel, Blackwell, and Mansard

Consumer behaviour is the study of how individual customers, groups or organizations select, buy, use,
and dispose ideas, goods, and services to satisfy their needs and wants. It refers to the actions of the
consumers in the marketplace and the underlying motives for those actions.

A consumer behaviour analysis should reveal:

• What consumers think and how they feel about various alternatives (brands, products, etc.);
• What influences consumers to choose between various options;
• Consumers’ behaviour while researching and shopping;
• How consumers’ environment (friends, family, media, etc.) influences their behavior.
There are three categories of factors that influence consumer behavior:

1. Personal factors: an individual’s interests and opinions that can be influenced by demographics
(age, gender, culture, etc.).

2. Psychological factors: an individual’s response to a marketing message will depend on their

perceptions and attitudes.

3. Social factors: family, friends, education level, social media, income, they all influence consumers’
behaviour.

Louis Vuitton
Louis Vuitton Malletier, commonly referred to as Louis Vuitton or shortened to LV, is a French
fashion house and luxury retail company founded in 1854 by Louis Vuitton. The label's LV monogram
appears on most of its products, ranging from luxury trunks and leather goods to ready-to-wear, shoes,
watches, jewellery, accessories, sunglasses and books. Louis Vuitton is one of the world's leading
international fashion houses; it sells its products through standalone boutiques, lease departments in
high-end department stores, and through the e-commerce section of its website. For six consecutive
years (2006–2012), Louis Vuitton was named the world's most valuable luxury brand. Its 2012
valuation was US$25.9 billion. The 2013 valuation of the brand was US$28.4 billion with revenue of
US$9.4 billion. The company operates in 50 countries with more than 460 stores worldwide.
 Interpretation by - Mahak Samdani

This case study helps us understand consumer behaviour and their buying decisions towards Louis
Vuitton a French fashion house. There are various factors which affect the consumer buying behaviour.

Marketing factors
• Distribution: Louis Vuitton sells its products through small boutiques in high-end department
stores, and through the e-commerce section of its website which gives a sense of luxury.
• Location: LV stores are located in prestige shopping malls, whereby the customers are being
well-taken care of and being served as a queen when they shop.

Demographic Factors
• Income: A person with high level of interest but low income and less purchasing power will
not be able to buy the product.
• Age: People who are mature and capable of earning good amount of money and are financially
stable with sense of self-esteem are most likely to buy LV products.
• Gender: The study reveals that females prefer buying LV products more as compared to males.

Social factors
• Social Status: LV brand and its products are frequently associated with the rich and famous,
celebrities, models all over the world. The people believe that carrying a LV product will
enhance their status and wealth. This reflects the social factor in making choice for buying
decision of consumers. A person with high social class and good standard of living will be more
inclined to buy LV product to maintain their status in society.

Psychological factors
• Knowledge: Knowledge is a familiarity, awareness, or understanding of someone or
something, the information can be easily accessible from blogs, chat groups and official
websites of the brand. Pricing and product catalogues are mostly displayed on the website with
all new arrival designs, exclusive designs. This helps person to make their choice before going
to the store to actually buy the product.
• Perception: Perception is the way in which something is regarded, understood, or interpreted.
After gathering all the information, the customer perceives LV product as a symbol of prestige
and wealth of the owner. He perceives it in a way that anyone and everyone can’t afford to buy
it. The brand is perceived in a way which makes consumers feel confident and valued.
• Motivation: Motivation is the process of stimulating people to actions to accomplish their goals.
The person may get motivated to buy a LV bag due to their social class, maybe there is a party
and most of the high class women carry luxury brands bags so to match their standard one may
make a purchase immediately.
• Attitude: Attitude is a tendency to respond positively or negatively towards a situation or a
product. LV being a successful and luxury brand doesn’t provide a good retail experience to
satisfy all customers, they focus only on celebrities or famous people. This has developed
negative attitude and 65% people no longer want to remain loyal towards the brand.

Cultural Factors
• Culture represents the customary beliefs, social forms, and material traits of a racial,
religious, or social group. The case study tells us that LV has major market share in Asia,
Asian people are more likely to show off their wealth and luxury belongings to society. They
have a feeling that they look better by using luxury brand products.
 Interpretation by - Mitali Handa

This case study revolves around the key factors affecting buying behaviour of the consumers of Louis
Vuitton. There are many factors that influences the target audience of Louis Vuitton (LV) to purchase the
merchandises from LV namely:

Internal Factors:

1. Psychological Factors:
• Knowledge:
It is the awareness or familiarity gained by experience of a fact or situation communicated by the
brand. Knowing about new product launches or buying an existing product is not restricted to only
Brick-and-Mortar store, with consumers increasing demands brands are trying to become
omnipresent. Louis Vuitton’s merchandises can be found online as well. This knowledge in turn
enhances brand’s awareness.
• Attitude:
A person’s beliefs and values also impact the buying decision of the consumer. How a person feels
or acts on his values can help determine his attitude. Louis Vuitton does not focus on ‘customer
delight’ until and unless the consumer is a big shot. Many of the existing consumers from Singapore
believe their experience was bad at the store due to substandard and inferior shopping experience.
• Motivation:
It is the motivation that converts the intention to buy something into an actual purchase. Motivation
can be measured in varying parameters like the consumer’s motivation to buy Louis Vuitton bag
after being so expensive. Motivation can also be measured in the sense of the ‘value’ of the product
or satisfaction derived out of merchandise against the money given. Thus, brand tries and increase
the motivation level of the buyer by luring them through discounts, advertisements, cold calling and
messaging etc.
• Perception:
Perception is the mental image we create after having any knowledge and experiences, it is the
manner in which we associate ourselves with the world. The way any consumer perceives any
communication of the brand would be the image formed by the consumer towards the brand. For
example, LV is perceived as a luxury brand which not everybody could buy.

External Factors:

2. Cultural (Cultural & Social class): Culture plays a vital role in forming anybody’s personality and
influences consumer’s buying behaviour. The target audience of LV is the one who wants to show
that they have power and money to buy LV bags thus it is important for Louis Vuitton to position
the brand rightly in the target market. It is a prevailing belief in the Asian countries that the person
who owns branded luxury merchandises hold higher rank in the society and LV has tapped this into
an opportunity for its business.
3. Personal Factors:
• Consumer’s State of Mind:
Consumer’s mood, state of mind, time constraint and shopping environment all contribute whether
the footfall will be converted into sales or not. For example, if the consumer asks for advice from
fashion consultant and the consultant does not give a satisfactory response, the consumer will get
displeased and out of exasperation will not buy anything from the brand.
• Economic Factor:Income and standard of living is the deciding factor whether to enter the LV
showroom or not. As it has successfully identified itself as a luxury brand thus people with high
income brackets only would buy from LV.
 Interpretation by - Sanskruti Agarwal

This case study helps us understand the thinking process a consumer undergoes in analysing the
deciding factors for consumer behaviour towards selecting and purchasing.

For this particular brand study of Louis Viton (LV) we gather that the brand has positioned himself
appropriately towards its selected target market. Factors that further influence the consumer behaviour
can be very personal and tailored. It eventually affects different people differently.

Here, the social factor plays a major role in terms of status and role; wherein the buyer is a person
who holds power and high position in the society, hence, their buying behaviour will be influenced
largely by their status. A LV bag talks for itself when carried, due to its exorbitant pricing and brand
positioning.

Personal factors largely affect the consumer buying pattern. The consumer’s age and lifecycle have a
potential impact as it depicts the wants and needs of a particular person at the particular time of their
life span. A LV bag will be much appreciated by a 27 year women married to the CEO of a MNC in
comparison to her 15 year old self. Further, the consumer’s economic situation plays a significant role.
Preference of the rich consumers and the poor consumers differ notably comparing their incomes and
savings. In case of quality, brand image, novelty, and costs, there is wide difference between the rich
and the poor buyers. Lastly, lifestyle directs the kind of purchases a consumer makes; it is the pattern
of living expressed through the person’s activities, interest and opinions. A LV bag fits the lifestyle of
an individual doing business in New York, than a start-up owner in Philadelphia.

A series of internal and immeasurable Psychological factors also dominate the consumer buying needs.
Motivation relating to a strong desire to achieve outcomes drives consumers towards taking decisions.
This simply adds to the wants of the consumers making it accessible. A LV bag is something and
individual wants, desires and can afford, but of owning one due to a colleague’s recent purchase is a
purchase backed up with motivation. This will eventually help in recognition, appreciation, respect,
social status as well as self-actualization. Perception immensely works as a deciding factor,
consciously and subconsciously; is the process of selecting, organizing and interpreting information
inputs to produce a meaningful image about a particular product. When a customer watches
advertisements, promotions, customer purchases and reviews, social media feedback, etc. relating to a
LV product, they develop an impression about the product. Learning and knowledge is the data
gathered by readings and awareness towards a particular segment or industry. A well updated consumer
will know about the type of brands available and their offerings, as well as their competitors and their
pricings. This a deciding factor as it helps develop perception and drive motivation over a period of
time so that the consumer takes an informed decision as an LV bag is more of a thoughtful purchase
than an impulse buy. Ultimately, attitude and belief is something that always affects the consumer
buying behaviour. Based on this attitude, the consumer behaves in a particular way towards a product,
defining the brand image of the product. A belief can be altered due to poor post purchase service,
building a negative attitude towards an LV sale.
 Interpretation by - Satakshi Bisht (MFM II)

This case study revolves around a research done to know the consumer behaviour process towards
Louis Vuitton and the key factors influencing the process. Based on this case study analysis, discussion
and suggestions are made for the brand in future.

Consumer behaviour process - The consumer behaviour process starts by recognizing the problem,
recognizing what is the need to carry an LV bag and it was found that carrying a branded bag enhance
their social status and wealth. After this stage, the second step is to search for the information related to
the product and such information is easily available through blogs, forums, website etc. The third step
includes customers evaluating the brand and comparing the brand with its competitor like Gucci,
Chanel etc., the evaluating criteria being cost of the bag , color of the bag , celebrity endorsement .Once
the evaluation is done customer makes the buying decision, after this outlet from which product will be
purchased is chosen ,generally the store are located at posh areas. After the purchase is done the
consumer faces cognitive dissonance. 65% of the respondents from survey of people owning LV bag
were not loyal to brand because they told that they were not treated well in the store, they were not
attended well in the store.

Influencing Factors -Consumer behaviour is influenced by demographics, psychographics,

motivation, knowledge, attitudes, beliefs, and feelings. The perception of consumer towards LV is that
it is a luxury brand selling products which shows the prestige and wealth of owner.

• Knowledge is the information that a customer has about the brand or product, mostly the Louis
Vuitton knowledge is recognized by the customer as its product are handmade and their history
is all about success and achievements.
• Another factor influencing buying decision is attitude, which refers to what a person feels or
believes about something. Though LV is a remarkably successful brand, some people have a
negative attitude towards it due to bad shopping experience at stores.
• Motivation is another factor influencing buying decision is motivation, according to Maslow
theory the motivation here to buy LV bag is personal need like status, wealth. When it comes to
making purchase decisions customers’ motivation could be affected by such issues as financial
position (e.g., Can I afford the purchase?), time constraints (e.g., Do I need to make the
purchase quickly?), overall value (e.g., Am I getting my money’s worth?), and perceived risk
(e.g., What happens if I make a bad decision.)
• Another influencing factor is culture and situation. Culture helps the brand to do better
positioning by enhancing its status symbols in its wealthy market such as China, Japan, India,
and other developing countries. Situation also plays important role in the process, for example
when the LV store does not have the required bag then the customer can shift to competitor’s
product.
To sum up the case study it can be said that Louis Vuitton should examine the main influences on what,
where and how customers buy their goods. By understanding these factors, they will be able to make
good marketing strategies. Louis Vuitton should also take into consideration the fact that customers
have negative attitude towards the store experience and should use this information to compete more
effectively in marketplace.