Google (continues improvement strategy)

Google is known to be one of the most innovative companies on the planet. Famous for it’s work
environment that encourages play and creativity, Google employees believe that they are practicing
“Continuous Improvement at breakneck speed.” While most companies think of CI as a set of principles
for driving internal process improvement (or process innovation), Google applies a set of tools and
methods for driving rapid product innovation as well.

The backbone of Google’s Continuous Improvement system is what it calls OKR (Objectives and Key
Results), which help to align the organization behind a common vision and measures of success. This
system gets every employee to commit to a set of measurable improvement objectives that support the
organization’s broader mission, which is “to organize the world’s information and make it universally
accessible and useful.”

Over the past 20 or so years, Google has grown to a 60,000-employee global technology giant and
household name. Employees believe that the culture of continuous innovation is incredible. Projects are
managed to strict deadlines; and the moment one project wraps up, the feature goes live and the team
is immediately swept up into the next project. Continuous Improvement is all about speed and
acceleration. Google backs this up by granting employees paid time during work hours to create and
drive further improvement in the company or product. Google has shown us all what it looks like to
relentlessly pursue a constant purpose “at breakneck speed.”

Amazon (continues improvement strategy)

Amazon is one of the fastest growing companies on the planet, has been for a long time, and for good
reason. The company’s founder, Jeff Bezos, is also listed as the wealthiest human being on the planet
and is well on course to be the world’s first trillionaire.

Despite the fact that Amazon has come under fire recently for its treatment of employees, especially
during the COVID pandemic, you just can’t deny the company’s eCommerce market dominance and
showing no signs of slowing down. It doesn’t stop there, Amazon is also quickly closing in on leadership
in several other industries such as warehousing, distribution, appliance installation, grocery retail,
internet and web services, and so many others.

Step 0 in Continuous Improvement is to become crystal clear on what you’re trying to accomplish. This
has to originate from the CEO and be projected down into every decision, especially hiring, firing, and
compensation, throughout the organization. Amazon places an undeniable focus on continuously
improving the customer and employee experience. In the company’s fulfillment centers, they apply
popular CI methods with an emphasis on team-based kaizen events. Jeff Bezos is famous for requiring
executives to prepare 6 page memos for meetings, of which powerpoint decks are strictly prohibited.
These memos are then read in silence by meeting participants and before being discussed. This practice
reinforces the behavior of fully thinking through the ideas to be discussed and concisely presenting them
in as few as 6 pages. It also requires everyone else involved to fully read the document at the start of
each meeting, which as you can imagine, cuts down on confusion caused by people coming into the
meeting unprepared.

Microsoft/ six sigma (Continues improvement strategy)

Much closer to the present day, Microsoft again utilized Six Sigma to make vast improvements to their
organization. Throughout the late 2010s, they started to reorganize their leadership. Doing so enabled
them to reap the benefits of emerging opportunities in the technology industry. Equally, their aim here
was to cultivate a continuous improvement culture throughout their organization by revitalizing
management structures.

With new leadership in place (Six Sigma demands the best of the best), they transformed their company
culture for the better. Microsoft has always been a reflexive and responsive organization, adapting to
emerging technologies and new market opportunities. Moreover, it’s no coincidence their leadership
reshuffle coincided with increasing sales for portable devices like smartphones and tablets. (Moreover,
this was thanks in large part to companies like Amazon and Apple.) The resulting changes allowed for a
fresher understanding of the market, resulting in increased profits and greater customer satisfaction.

There are multiple Six Sigma techniques at work here. Just as Six Sigma seeks out unnecessary processes
to improve efficiency, Microsoft’s leadership changes allowed for a more streamlined corporate
hierarchy. Microsoft also exercised a strong understanding of the ebb and flow of consumer demand. Six
Sigma stresses the principles of meeting customer need. Here Microsoft recognized a need and
responded to it. This is the key to achieving success for any company, whether in process improvement,
waste elimination, or customer relations. Microsoft is just one of many examples of how to do it
properly.

Global Six Sigma offers both Live Virtual classes as well as Online Self-Paced training. Most option
includes access to the same great Master Black Belt instructors that teach our World Class in-person
sessions. Sign-up today!

McDonalds (customer value strategy)

McDonald's develops its offering following the value proposition of providing steady quality with decent
value pricing that is served quickly and consistently across the globe. For McDonald's to fulfill value
creation and choose its value, it performs marketing by segmenting its markets and consumers,
targeting the attractive segments, and positioning its brand accordingly.

McDonald's performs four types of segmentation: Geographic, Demographic, psychographic, and

behavioral segmentation.

McDonald's segments its markets according to global geographic segmentation: The Americas, Europe,
Asia Pacific, Middle East, and Africa. Each geographic segmentation undergoes sub-segmentation to
cater to different markets and cultures that share similar needs. To target those markets, McDonald's
paid attention to the local variations. For instance, they noticed that people in China & India prefer
chicken over beef, creating an 80% chicken-based menu (Shilpa Kannan, 2014). They also adapted their
menu to match different regions. For instance, they introduced for India meals like McVeggie (Shilpa
Kannan, 2014), Chicken Maharaja-Mac, McSpciy Panee; whereas, in Egypt, they introduced McArabia
and McFalafel (Iceblink, 2013), and in the Philippines, they introduced McSpaghetti to adapt the cultural
taste of the consumers in those regions.

One of the reasons for McDonald's success is having excellent market research and offering realization
process. McDonald's considered local demographics and customer preferences in a multi-cultural
country like India. They faced challenges where the cow is deemed sacred and worshiped and Muslims
don't eat port. After doing proper research, McDonald's concluded that most Indians were vegetarians,
so they introduced "McAlo Tikki" as an alternative to chicken nuggets and other chicken and veggie-
based menus. According to the market research findings and proper segmentation, McDonald's created
a more personalized experience and built a deeper understanding and relationships with the customers.
On the other hand, McDonald's delivered value efficiently, leading to customer management fulfillment.

Mohammad SabbouhExpand search

Marketing Lessons in Value Creation: McDonald's, a Case in Point

Mohammad SabbouhClick here to view Mohammad Sabbouh’s profile

Mohammad Sabbouh

Branch Manager | Value Creator for…

Published Apr 6, 2021

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By Mohammad Sabbouh | April 6th, 2021

Who doesn't know McDonald's? It's fascinating how almost everyone has been in McDonald's at least
once in his life. Whether McDonald's is your favorite restaurant or not, the brand has proved a solid
success over the past 66 years! Today, McDonald's operates through 38,695 outlets in 120 countries,
making it the ever-most popular fast-food chain, outperforming its rivals Wendy's, Burger King, Subway,
Taco Bell, and KFC. The company was ranked number seven for the most valuable U.S. brands of 2020
and globally tenths, with its estimated brand value of 143.8 billion U.S. dollars (Forbes, 2020). What
marketing strategies did McDonald's deploy to deliver such a value while maintaining its consumers'
breadth? How did the company develop its value chain to facilitate the value delivery process?

"It's said that a wise person learns from his mistakes. A wiser one learns from others' mistakes. But the
wisest person of all learns from others' successes." John C. Maxwell, New York Times Bestseller Author

McDonald's sets marketing at the beginning of its strategies while keeping the consumer at the center.
They deliver value through a simple process of 3 phases:

Choosing the value

Providing the value

Communicating the value

McDonald's develops its offering following the value proposition of providing steady quality with decent
value pricing that is served quickly and consistently across the globe. For McDonald's to fulfill value
creation and choose its value, it performs marketing by segmenting its markets and consumers,
targeting the attractive segments, and positioning its brand accordingly.

McDonald's performs four types of segmentation: Geographic, Demographic, psychographic, and

behavioral segmentation.

Consumer Segmentation & Targeting

McDonald's segments its markets according to global geographic segmentation: The Americas, Europe,
Asia Pacific, Middle East, and Africa. Each geographic segmentation undergoes sub-segmentation to
cater to different markets and cultures that share similar needs. To target those markets, McDonald's
paid attention to the local variations. For instance, they noticed that people in China & India prefer
chicken over beef, creating an 80% chicken-based menu (Shilpa Kannan, 2014). They also adapted their
menu to match different regions. For instance, they introduced for India meals like McVeggie (Shilpa
Kannan, 2014), Chicken Maharaja-Mac, McSpciy Panee; whereas, in Egypt, they introduced McArabia
and McFalafel (Iceblink, 2013), and in the Philippines, they introduced McSpaghetti to adapt the cultural
taste of the consumers in those regions.

McFalafel is an example how McDonald's positioned its brand to attract Middle Eastern Cultures

One of the reasons for McDonald's success is having excellent market research and offering realization
process. McDonald's considered local demographics and customer preferences in a multi-cultural
country like India. They faced challenges where the cow is deemed sacred and worshiped and Muslims
don't eat port. After doing proper research, McDonald's concluded that most Indians were vegetarians,
so they introduced "McAlo Tikki" as an alternative to chicken nuggets and other chicken and veggie-
based menus. According to the market research findings and proper segmentation, McDonald's created
a more personalized experience and built a deeper understanding and relationships with the customers.
On the other hand, McDonald's delivered value efficiently, leading to customer management fulfillment.

McDonald's defines its demographic segmentation by taking variables like age, family size, and family
lifestyle and associating them with consumer needs. The company successfully segmented its consumers
to Kids (3 to 7 years), families, students, and working adults: McDonald's launched campaigns and
designed different products and settings for their consumers to target those attractive segments. For
instance, to attract kids, McDonald's launched a 60 seconds commercial advertisement in 1965 called
"Decision Makers," introducing characters like "Grimace," "the Hamburgler," and "Mayor McCheese,"
which helped lure children into their restaurants (Keller Kevin, 2016). They made a demographic study
for their branches that host families more than bachelors and created play areas to target both kids and
families. With the play area concept, social factor plays a role by influencing the parents by their kids to
go to McDonald's. In 1979, they introduced the "Happy Meal," boxes with circus wagons containing the
favorite food for kids, along with fruit snacks and juice. McDonald's introduced student meals for outlets
that they operated for 24 hours for schoolers. In contrast, they catered to working adults' busy
schedules seeking convenience meals, "Grab & Go," Drive-Thru, and McDelivery.

McDonald's performs behavioral segmentation to understand consumer behavior, which classifies

buyers based on their knowledge, use, or response to a product.
The "Signature Collection" mentioned earlier also targeted niche customers who value premium
offerings. For instance, McVeggie was the best offering for vegetarian-based diet consumers.

ShipServ (customer value strategy)

The Problem: ShipServ, an e-marketplace for the marine industry, connects more than 8,000 ships, 200
ship owners, managers, and yards with upwards of 45,000 marine suppliers. In 2008, they realized their
brand image was in trouble: their customers, who weren’t very tech-savvy, deemed them too
impersonal and opaque.

The Approach: To help shake this perception, ShipServ dedicated the entirety of their small marketing
budget toward customer-focused content. They revamped their website, launched a blog, published a
series of whitepapers, created a LinkedIn group to build community, and worked on search engine
optimization.The Results:

Website visitors increased by 59%

LinkedIn and Twitter went from zero to the top 20 traffic sources

Contact-to-lead (landing page contact) conversions increased by 150%

Lead-to-opportunity conversions increased by 50%

Campaign management costs decreased by 80%

The number of sales-ready leads increased by 400%

Measurable increase in brand awareness

Dedicating resources, budget, and manpower to content development is a great first step for B2B
companies entering the content marketing space. But it’s not enough.

To see true business value, the content must be rooted in the customer.

Coca cola (customer value strategy)

As the market leader of beverages soft drink, Coca-Cola should be able to

protect their market share by keeping the loyal customers. According to

Waheed Akhter et al., (2011:1167) customer loyalty is one of the most

important issues organizations face today and keeping loyal customers has

become more important due to significant increase in competition and

concentrated markets. Oliver (1996) in Kotler and Keller (2012:149) defines

loyalty as a deeply held commitment to re-buy or re-patronize a preferred

product or service in the future despite situational influences and marketing

efforts having the potential to cause switching behavior. Loyal customers are

crucial to business survival (Semejin, Van Riel Allard et al., 2005) because

attracting new customers is considerably more expensive than retaining old

customers (Reichheld & Schefter, 2000). The importance of customer loyalty

has been highlighted by many researchers and academicians. Zairi (2000:331)

said ―customers are the purpose of what we do and rather than them depending

on us, we very much depend on them. The customer is not the source of a

problem, we shouldn‘t perhaps make a wish that customers ‗should go away‘

because our future and our security will be put in jeopardy‖. That is the main
reason why organizations today are focusing on maintaining customer loyalty.

Maintaining customer loyalty can be reached by developing customer

value (Anderson et al., 2009:6), giving satisfaction to customer (Gandolfo

Dominici and Rosa Guzzo, 2010:5) and also build trust in a brand (Chaudhuri,

and Holbrook, 2001 quoted by Hasan Afzal et Al., 2010: 44). To determine

the extent of customer value, customer satisfaction and trust in brand with

customer loyalty researcher will conduct research in multinational beverage

industry Coca-Cola, Case Study of Consumer Coca-Cola in North Jakarta.

The researcher will conduct research on consumer Coca-Cola in North

Jakarta in order to know the emotional condition after purchase and consume

these products. Emotional feelings that are expected to represent Coca-Cola

consumer to compare what the consumer experience for consuming CocaCola. When the emotions it
appears it will arise a state of mind that would

cause the reaction to consumer behavior, so it acts as an emotional response to

input of satisfaction/dissatisfaction and trust/distrust consumer.

One of factor in creating customer loyalty is to build customer value.

Anderson et al., (2009:6) defines value as the economic, technical, service,

and social ―benefit-worth in monetary terms” that a customer receives when

purchasing a product or service. By creating superior customer value, the firm

creates highly satisfied customers who stay loyal and buy more. This, in turn,

means greater long-run returns for the firm. Vargo & Lusch, (2004) quoted by

Daniel J. Flint et al., (2010:1) stated that it has become relatively common

knowledge that marketing managers must understand what their customers'

value in order to survive and grow in competitive markets. According to Flint,

Woodruff, & Gardial, (2002) yet merely knowing what customers' currently

value is clearly not enough because what they value changes suggesting that

suppliers must also have the capability to anticipate what customers will

value. Janiszewski (2008:395) stated that creating value and meaning for

consumers is at the core of contemporary marketing, allowing for experiences

that make products, services, or brands an integral part of consumers‘ lives.

Christopher P. Blocker et al., (2011:216) stated that, ―competitive

advantage grows fundamentally out of the value a firm is able to create for

customers.‖ Companies create superior customer value by providing ongoing

solutions to customers‘ articulated needs as well as their latent and future

needs. According to Ulaga and Eggert (2006:120) customer value represents

the trade-off between benefits and sacrifices that stem from a provider‘s

product and relationship resources which customers believe are facilitating

their goals.

Another factor that can be creates customer loyalty by delivering

satisfaction to customers. According to Hoq et al., (2010) customer

satisfaction is the most important factor that affects customer loyalty. Kotler

and Armstrong (2009:23) stated those satisfied and loyal customers are

representing the opportunity to get new customer. Maintaining all existing

customer generally will be more profitable to be compared with attract new

customer. According to Gandolfo Dominici and Rosa Guzzo (2010:5)

customer satisfaction is a business philosophy which tends to the creation of

value for customers, anticipating and managing their expectations, and

demonstrating ability and responsibility to satisfy their needs. Customer

satisfaction is the starting point to build customer loyalty, therefore a longterm relationship. Meanwhile,
Kotler and Keller (2012:150) stated that a

highly satisfied customer generally stays loyal longer, buys more as the

company introduces new and upgraded products, talks favorably to others

about the company and its products, pays less attention to competing brands

and less sensitive to price, offers product or service ideas to the company, and

costs less to serve than new customers because transactions can become

routine. High satisfaction or delight creates an emotional bond with the brand

or company, not just a rational preference.

According to Anderson, et al., (2009) customer satisfaction occupies a

strategic position for the company's existence, because a lot of benefits to be

gained: first, many researchers agree that a satisfied customer tends to be

loyal. Solomon, in Dwi Suhartanto (2001) stated that satisfied customer will

also tend to buy back into the same manufacturer. The desire to buy back as a
result of this satisfaction is the desire to repeat the good experience and avoid

a bad experience. Second, the effect of customer satisfaction tends to consider

the content providers are able to satisfy the first consideration if you want to

buy products or similar services.

According to Bearden et al., (2004) customer satisfaction is central to the

marketing concept and is a dominant cause of customer loyalty. Increased

loyalty on hence revenues, lowers the costs of individual transactions and

decreases price sensitivity. Satisfaction also has benefits within the firm, cost

associated with handling returns and warranty claims are reduced, as are those

associated with managing complaints. Meanwhile, Kotler and Keller

(2009:164), explain that satisfaction is a person‘s feelings of pleasure or

disappointment that result from comparing a products perceived performance

(or outcome) to their expectations. If the performance falls short of

expectations, the customer is dissatisfied. If the performance matches the

expectations, the customer is satisfied. If the performance exceeds

expectations, the customer is highly satisfied or delighted.

Vebbyna Kaunang, Marketing Director Coca-Cola said that Coca-Cola

are trying to fulfill desire of its customer by offering product range matching

with trend various circle, like offering many variety products, price range and

tidiness. Besides, Coca-Cola offers available of product in gathering place and

have activity. So, the reason why Coca-Cola is being truly global company

because of their product meets the varied taste preferences of consumers

everywhere.

Customer loyalty also can be created by building customer trust in a

brand. Trust has been recognized as important factors that influence customer

loyalty. Definition of consumer trust by Rangkuti (2002:13) is all knowledge

of consumers and all conclusions made consumers about the objects, attributes

and benefits. Chaudhuri, and Holbrook, (2001) quoted by Hasan Afzal et al.,

(2010:44) stated that trust is a belief which is focused on specific appropriate

boundaries and limitations. To create loyalty in today‘s marketplace,

marketers have to hold what is becoming subsequent nature to business

marketers and focus on structuring and sustaining trust in the customer-brand

relationship. According to Worchel (1997) quoted by Hasan Afzal et al.,

(2010:44) trust can also be considered as goodwill and willingness that

enables the consumer to take risk. Goodwill is developed on the base of past

experiences. Trust is an expectation, which may cause a positive outcome,

despite the possibility that it may cause a negative outcome.

According to Vebbyna Kaunang, Marketing Director of Coca-Cola, trust

in brand have the important rule in protecting customers based on the

company‘s goal to keeping the loyal customers. According to Chaudhuri and

Holbrook (2001) quoted by Hasan Afzal et al. (2010:44) trust has to be

considered as the corner stone and as one of the most desirable qualities in the

relationship both between a company and its customers and in the relationship

between a brand and its consumers.

Based on previous research background, this research intends to analyze

the influence of customer value, customer satisfaction and trust in brand

toward customer loyalty‖ (Case Study on consumer Coca-Cola in North

Jakarta).
Balenciaga (Quality)

Balenciaga is of a careful and deep analysis regarding the brand positioning

within the luxury market in response to a set of behavioral trends. There is an

increasing concern with various themes related to the stigma of beauty, status,

self-esteem, etc. The brand scoffs and questions the clichés that surround the fashion industry and its
followers. There is a sense of imperfection and authenticity, in which the Generation Z, the so-called
digital natives, relate. Coincidence

or not, this audience today accounts for more than 60% of the company’s sales.

Most of these young people are looking for something that makes them stand

out and feel special, which goes beyond an incredible and elegant finish, characteristic of other
traditional brands. This may not be the public that would invest

€ 5.000 on a jacket, but they do not mind buying a €450 t-shirt or €600 sneakers,

resulting in higher margins and sales volume.

If we look at the company’s communication before this change, we will see

that it was in no way different from others in the fashion world. The focus is on

the products, luxury, status, standard, and the obvious. Balenciaga saw an opportunity to reinvent its
brand, bringing innovation in its positioning.
Today, Balenciaga builds individuality through its positioning. Their success

in digital platforms especially on Instagram is the consequence of a creative

concept that starts with the product. A unique creative concept, which celebrates

and provokes the denial of luxury (anti-luxury) in contemporary times,

attributes to the product itself the self-promotion ability mainly in the digital

environment

By mocking the fashion industry through the irreverence of raising symbols of

mass consumption, Demna Gvsalia creates viral potential in his own creations,

making the product itself a piece communication. A creative provocation that

launches trends and guides the conversation on and off social media dividing

opinions in the fashion world.

Demna Gvsalia is responsible for introducing part of the digital language in

haute couture, and for introducing the meme into fashion. The fact is that the

movement of differentiation of Balenciaga in the fashion world by applying the

meme-baiting” strategy to products reversed the standards in the luxury market

and as a result promoted excellent quantitative results. However, the concern is

whether the meme-baiting will remain or not. Will it dissipate and force Balenciaga to find a new way to
stay relevant? We can’t actually respond to these

questions, but it is possible to confirm that Demna Gvasalia’s ostentatious and

tireless search for imperfection led the brand to achieve its current success

among its audience. Therefore, it would be extremely recommendable if these

questions could be responded through further research techniques, such as content analysis to measure
Balenciaga’s relevance statistics and focus groups in order to get responses from a group of people who
consume Balenciaga’s products

and follow the brand profiles on social media.

Today, Balenciaga is owned by the French luxury group Kering and has as

creative director Demna Gvasalia who is revamping Balenciaga, and unlike the

creative directors of traditional luxury brands, he is inspired by the unusual in

this renewal of brand. Through digital channels (mainly Youtube and Instagram), he is redefining luxury.

Since Demna Gvasalia took over the creative direction of Balenciaga, the image of the brand as a whole
has been completely reinvented. A quick look at its

Instagram proves this change. Considered crazy and bizarre by many people,

Balenciaga’s social networks are the opposite of what you would expect from a
luxury brand. The company does not promote the image of perfection, and uses

beauty standards that we are not used to seeing within the fashion world. The

photos are of low quality and taken in an amateur way, for example. The posts

do not follow a logical reasoning, and do not even have captions, hashtags, or

identification of the products displayed (Figure 1).

For two years, Balenciaga has been standing out in the market, especially

among young people. According to Balenciaga CEO Cedric Charbit during an

interview to Reuters in 2018, “Millennials” are largely responsible for the growth

of the brand: “Millennials represent 60 percent of what we sell. Together with men,

these are growing faster than any other [category]” (Reuters, 2018).

This impressive growth of the brand is due to several factors, but mainly due to

thousands of young people of the “Millennial” generation (who now represent one

third of the global luxury goods market) who believe in the designer’s luxurious vision of street wear,
which is communicated and escalated through social networks.

Figure 2).

Another disruptive approach of Balenciaga is the heavy investment in in

products with a meme-baiting look (products that go viral because they are

“controversial”). An example (Figure 3) is its purse inspired by Ikea shopping

bags (a bag originally for a few cents, but which at Balenciaga costs more than

thousands of Euros). As per OMR (2018) website, Demna commented on the

strategy: “I used the blue Ikea bag during my four years as a student in Antwerp,

due to its size and price. I wanted to do this as an ironic gesture, taking something really cheap and
moving it into the realm of luxury. But it’s authentic

too, which is why it’s going viral over the internet. People can identify

themselves”.
LOUIS VUITTON ( Quality)

(LOUIS VUITTON)

Timeline of Louis Vuitton

Louis Vuitton clearly separates the ownershipfrom production, management and marketingthat may
make the brand have the highest salerevenues among fashionable handbags

Key facts of Louis Vuitton

The trademark “Louis Vuitton” is

a group of fashion productcompany which has LouisVuitton

Malletier as a producerand distributor.

Malletier means a box maker.Louis Vuitton

Malletier is thecompany that produce anddistribute handbags, which isindependently separated from
theHouse of Louise Vuitton whoseCEO is Yves Carcelle.

LVMH Moët Hennessy LouisVuitton is a shareholdingcompany looking after 50 brandsled byBernard

Arnault.LVMH is a combination between 2 big companies which areLouis Vuitton and
Moët Hennessy

that bought more than 50 brands such asChristianDior, Givenchy, Celine, Fendi, Donna Karan, Loewe

Recently the companies havesold some brands out.

Naming the Products of Louis Vuitton

Louis Vuitton will never distribute its products to the market without naming them. If LouisVuitton
named its products by running the numbers, its product probably look simple andlifeless like any other
brand. Hence, even a small product item of Louis Vuitton has a name.Louis Vuitton names its products
according to the products

shape. For example, a smallcircle bag with a holder will be named

“Papillion” whi

ch means a butterfly in French.Besides, some products of Louis Vuitton are named after a city name like
Soho, Broadway

The numbers of the products made will be the same as the products are sold and the production will be
suspended when the sale revenues reach the target set. The idea of this isthat it will look the brand
looks cheap if there are too many products in the market, they willlook normal that anyone can
have.Louis Vuitton distributes the products by itself without any agency and no wholesale. Thecompany
will sell its products to only official agents that has a central management shop inthe area of the world
which is the boutique shop at major cities by using the scale 1 shop perthe population of 1 and there is a
limitation to have the same product designs for 1-2 pieces

Louis Vuitton is the only brand in the world that has no TV commercial, no second productline, no
promotion on sales, no free item to give away. Louis Vuitton also has no set of products for sales, no
outlet, no license for any other third party. Pricing is the round numberonly. Since operating the
business for 161 years, Louis Vuitton never gives any discount for a promotion
The current rise and domination of the Louis Vuitton Moët Hennessy Empire in the luxury brands is not
merely a coincidence or luck but rather something achieved through its unique

strategy that set Louis Vuitton apart from other brands. Louis Vuitton’s core principles

highlight the elements of uncompromising quality, exceptional craftsmanship, the value of artand the pr

otection of heritage. These elements are strongly incorporated in its’ long term

sustainable strategy and can be seen in its marketing mix 4Ps

Customers pay hundreds of dollars for its logo canvas bags, for example, partly because theyhave
bought into the notion that skilled craftsmen make them the old-fashion way. Althoughthe company has
been modernizing gradually for some time that reputation is still important to

the company’s success.

Rather than eradicate the time consuming hand-crafting procedures of the manufacturing process, it is
crucial to keep some of the traditional aspects that the brand is known for. Thisneeds to be maintained
by a balanced supply chain system which merges technicaladvancements with traditional know-how.

Price-high and exclusive

LV consistently pursued a luxury pricing strategy where there are high mark-ups and limitedavailability.
In essence, Louis Vuitton places its emphasis on the absolute value of the products, not price. This is
further supported and developed by Kyojiro Hata, the president of

Louis Vuitton Japan whose principle of philosophy is “Every products of LV are Money”.

Allthese elements drive up the brand cachet and make Louis Vuitton the well known luxury brandof the
earth.

Chanel (Quality)
(CHANEL)

Challenges Faced by Chanel

Nowadays, fast consumption is highly demanded in almost every sector. Even the luxury fashion brands
are facing challenges in that issue. Fast fashion retailers are being preferred to luxury fashion products
by many customers. Luxury fashion brands are offering high class, sophisticated designs with high prices,
and not accessible for everyone. “By contrast, fast fashion ensures permanent assortment rotation, low
prices, and accessible variety, but with a great aesthetic content, which derives from those brands’
ability to imitate the latest luxury fashion brand catwalk offerings” (Byun & Sternquist 2011; Gabrielli et
al. 2013, cited in Amutulli et al. 2015). For instance, imitating luxury fashion brand’s designs, and selling
them in lower prices put Zara in a higher position, in comparison to Chanel, in the list of the most
valuable brands (Forbes 2017).

Another issue that Chanel is facing is digitalisation. Luxury brands are in the middle of a huge paradox,
because luxury fashion is a market “where tradition and creativity collide” (Ritson et al. 2010). Due to
technological developments, online sales also became popular. Chanel wants to protect their traditional
iconic brand identity, as well as catching the new trends. According to Chanel, “fashion cannot be totally
digitised” (Ellison 2018), however they are open to improving their brand experience. For instance,
“Chanel has teamed up with global ecommerce platform Farfetch to develop digital initiatives including
a branded app to help create a personalised in-store experience as well as better target millennial
consumers” (Ellison 2018). Also, “Chanel has launched a number of pop-up game centres, where it
presented its Spring 2018 beauty collection, as well as offering visitors a chance to play customized
classic arcade games” (Mintel 2018).

Technological developments and globalisation led to another important problem for luxury fashion
brands, which is ‘counterfeiting’. Chanel is fighting with the online channels for counterfeiting, the brand
“has successfully won a lawsuit against more than 24 Amazon sellers, reports WWD, who were accused
of selling replica items featuring the famous Chanel logo” (Conlon 2017).