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Why Demographics Will Always Lie To You: Louis Vuitton Case Study

#1. Demographics will lie to you, the psychographics of your buyers are more important

Demographics in marketing, is the process of segmenting the markets based on age, gender, income, ethic background, family life cycle and other easily quantifiable characteristics.

For example, Louis Vuitton’s segments their customers by young adults, baby boomers, Generation X, Generation Y and seniors. These customers ages range from 18 years old to retired. Through analysis of these demographics, Louis Vuitton can target customers with higher income brackets who  are affluent, rich and high status. Furthermore, LV targets both men and women, who have high amounts of disposable income, well-off and professionals in their everyday lives.

Psychographics in marketing, are used to segment based on factors such as lifestyle, goals and aspirations and socio-economic factors. For example, when LV identified their demographic as older affluent customers, through psychographics we can future determine that the baby boomer generation are continuing to lead active and fully involved lifestyles. These older affluent indiduals buy products that are both high-quality, comfortable and timeless in design. They will tend to buy more leisurely wear as they reach retirement and my opt for larger travel bags. The baby boomers and seniors represent tremendous current and future market potential for the LV brand. The baby boomers are more likely then younger adults to have a combination of free time, money, and good health that allows them to pursue leisure-time activities especially travel. 

#2. It is about "Why customers buy things" - Come up with your typical customers for your psychographics.

Louis Vuitton positions itself as a jet setter, giving off the emotion message of high superiority, ego, status and power. Lets look less at demographics, and more psychographics to define our buyer personas. Although, age plays a role in better reaching and marketing to our target market, you'll see how it is the customer's psychographics that drive their buying behaviour.

Louis Vuitton targets three distinct categories including the quality seeker, the self-indulger and the status seeker, segmented based on their motivations for purchasing Louis Vuitton products. The quality seeker consists of 33%, the status seeker at 21% and the self-indulger at 46% for profit annually.

Alice: The Status Seeker

An affluent young adult who keeps up to date with the latest blogs in regards to fashion, cosmetics, accessories and celebrities. She seeks high social status and exclusivity of items to increase her self-esteem and feel above others who do not possess Louis Vuitton items. She works full or part time in a retail related field, saves up money from two to three paychecks and uses all disposable income to buy one or two exclusive items every six to eight months on limited Louis Vuitton collections at a retail location. She is very brand specific and is not open to any other alternatives to products that are without the LV brand name. This is because she is motivated to purchases expensive LV products to display an image of superiority and wealth to others. 

Mary: The Quality Seeker

A middle-aged career woman who wants great craftsmanship, luxury, durability and long product lifecycle. She seeks the best quality for her buck and is very specific in making sure each product meets her specific needs and preferences. She is most likely to customize her items and buy items online in the continence of her home. She is also more likely to compare luxury products of Louis Vuitton against that of the competition including Gucci, Prada, Hermes and Chanel. This is because she basis her decisions on rationale and logic, and her decisions cannot be swayed since she can find more ease in comparing products from different brands that may better suit her needs. 

William: The Self-Indulger 

A highly educated entrepreneur or CEO who enjoys luxury wear that is convenient and easy to personalize. He is likely to buy items at all times of the year, as exclusivity isn’t a need for him but enjoys the way the products make him feel. He continues to buy from the Louis Vuitton brand because of prior satisfaction with the products, which leads to brand loyalty. He regularly visits the retail store like a “one stop shop” because he is just there to spend money and enjoy his shopping experience.

Again, these are just a few, their are other sub-groups within these buyer personas that Louis Vuitton caters to including: Young Male Professional, New Rich Millennial and more...

#3. During economic crisis - prices are still high for high-quality shoes, handbags, and cosmetics
These luxury industries don't give up any revenues - their customers are forced to cut out other miscellaneous items to purchase luxury products during bad times. The luxury industry does not believe in putting sales tags on products, a means of maintaining exclusivity and luxury during economic downturns.

#4. There may be a reason why there is nothing like your product or service in your area
Maybe because its not feasible. Is their something similar retailers know that you don't? Do you're research, more often then not - theirs a reason no other retailers are positioned within that market.

#5. Understand "price resistance"

People don't just wake up with a price in mind, but some prices will be good and some will make you go "OMG!" Understand your customers’ perception of price and what motivates their willingness to pay for a product or service. What factors contribute to your customer perceiving more value in your products against those of competitors.

Louis Vuitton positions itself at a high price as a signal of superior quality. Louis Vuitton has continued to increase prices and have invested in creativity and high quality. The company invests in extensive laboratory equipment to test products and integrated manufacturing “quality circles” in the production process. Louis Vuitton operates a pricing integrity strategy amongst the entire distribution network, thus an LV product will never be reduced in price because there are no sale periods.

#5. Don't forget about sizes, rarely does "one-size" fits all approach work

One size does not fit all, especially in the luxury apparel sector. It's all about tailoring products and services to the needs of each buyer persona.

#6. Overall image of your store has an impact on your sell-ability

Louis Vuitton seeks to position itself as the Master of Luxury in each customer’s mind with emphasis on heritage, craftsmanship, exceptional quality, creativity, innovation and art. The Louis Vuitton brand continues to position itself as timeless and authentic. The brand over the years has increased prices, investing in creativity and heightening the focus on quality rather than compromising the brands value during the recession.

The Louis Vuitton brand is currently worth 20 billion dollars and continues to be considered the most valuable luxury brand in the world. I reached this conclusion based on the fact that Louis Vuitton never discounts their merchandise because they never want to undervalue their brand. The brand consistently strives to innovate their products while sill upholding outstanding craftsmanship in each custom made product.

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