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Conglomerate branding within the luxury goods sector

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Conglomerate branding within the luxury goods sector

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Content 1

Conglomerate
Branding
Within
the

Luxury
Goods
Sector

By

Jessica
Claire
Eastburn

A
Thesis
Presented
to
the

FACULTY
OF
THE
USC
GRADUATE
SCHOOL

UNIVERSITY
OF
SOUTHERN
CALIFORNIA

In
Partial
Fulfillment
for
the
Degree

MASTER
OF
ARTS

(STRATEGIC
PUBLIC
RELATIONS)

May
2015

Copyright
2015

Jessica
Claire
Eastburn

2

TABLE
OF
CONTENTS

INTRODUCTION…………………………………………………………………………………………………………….4

SECTION
I:

LUXURY
AS
A
CONCEPT……………………………………………………………………………6

The
History,
Concept,
and
Categories
of
Luxury…………………………………………………….6

Symbolic
Role
of
Luxury
Goods……………………………………………………………………………..8

Luxury
as
a
Business
Model………………………………………………………………………………..10

Access
to
Luxury………………………………………………………………………………………………...13

SECTION
II:

LUXURY
BRANDING……………………………………………………………………………...17

Brand
Image
and
Corporate
Luxury
Branding……………………………………………………..17

Advertising………………………………………………………………………………………………………..18

Flagship
Locations……………………………………………………………………………………………...22

SECTION
III:
LVMH.………………………………………………………………………………………………….24

History………………………………………………………………………………………………………………24

Leadership…………………………………………………………………………………………………………25

Corporate
Structure…………………………………………………………………………………………...26

LVMH
Portfolio…………………………………………………………………………………………………..28

The
Advantage
of
Parent
Companies…………………………………………………………………...34

SECTION
IV:

LOUIS
VUITTON…………………………………………………………………………………..37

Cash
Cow…………………………………………………………………………………………………………...38

Content
Analysis………………………………………………………………………………………………...39

Social
Equity……………………………………………………………………………………………39

Trade
Publications…………………………………………………………………………………..43

3

Logos………………………………………………………………………………………………………47

Advertising……………………………………………………………………………………………...49

Celebrity
Endorsers…………………………………………………………………………………50

“Core
Values”
Campaign…………………………………………………………………………..51

Stores……………………………………………………………………………………………………...54

SECTION
V:

SEPHORA……………………………………………………………………………………………...58

Background……………………………………………………………………………………………………….58

The
Concept
of
“My
Luxury”……………………………………………………………………………….60

Content
Analysis………………………………………………………………………………………………..61

Digital
and
Social
Brand
Equity………………………………………………………………...61

Coverage
in
Business
and
Trade
Publications……………………………………………71

Logos
and
Symbols………………………………………………………………………………….75

Advertising……………………………………………………………………………………………..77

Celebrity
Endorsers…………………………………………………………………………………79

Stores……………………………………………………………………………………………………...80

SECTION
VI:

RECOMMENDATIONS
FOR
FUTURE
BRANDING…………………………………...85

APPENDIX………………………………………………………………………………………………………………..90

REFERENCES………………………………………………………………………………………………………….111

4

INTRODUCTION

The
need
for
brands
to
establish
and
maintain
their
own
identities
and
voices
is
more
vital

today
than
ever
before.

Be
it
a
coffee
roaster,
a
winery,
or
a
car
company,
each
brand
must

communicate
who
exactly
it
is
to
customers.

A
product
alone
can
no
longer
speak
for
itself.

In
today’s
market,
the
brand
values
and
characteristics
perceived
by
customers
play
a

major
role
in
their
decision
on
which
product
to
choose.

Within
the
luxury
sector,
these

values
play
even
more
of
a
role.

Customers
purchasing
items
from
luxury
brand
categories
seek
exclusivity
and
prestige

along
with
a
high
quality
product,
but
they
also
need
to
be
assured
that
the
company
they

are
selecting
has
paid
respect
to
the
traditions
of
luxury.

When
considering
that
many

brands
in
this
segment
are
owned
by
multinational
conglomerates,
finding
a
balance

between
the
parent
company’s
overarching
voice
and
allowing
the
individual
brands
to

maintain
their
individuality
is
a
complicated
task.

If
the
holding
company
remains
silent
in

branding
strategy,
the
individual
brands
within
its
portfolio
may
not
only
struggle
to

convey
who
they
are
to
target
audiences,
but
also
risk
potential
profits.

The
same
negative

outcome
can
also
occur
if
the
parent
company
applies
overly-‐restrictive
branding

strategies.

This
paper
will
explore
branding
guidelines
for
luxury
conglomerates
to
best
nurture

success
for
a
company’s
many
brands,
while
still
adhering
to
the
values
of
the
parent

5

organization.

First,
this
paper
will
examine
the
various
categories
and
overall
concept
of

luxury
to
better
understand
the
emotional
pulls
customers
have
for
specific
brands
and
the

industry
as
a
whole.

This
study
will
also
review
different
luxury
branding
tools
that

businesses
use
to
bolster
attention
and
recognition
for
their
brands.

Finally,
through
a
case

study
on
luxury
conglomerate
LVMH
Moet
Hennessy
Louis
Vuitton,
the
author
will
explore

what
has
and
has
not
worked
for
the
luxury
giant
as
it
develops
brand
strategies
for
its

ever-‐expanding
group
portfolio.

Primary
research
in
the
form
of
content
analysis
on
two
of

LVMH’s
brands,
Louis
Vuitton
and
Sephora,
was
completed
to
discover
the
different

branding
methods
utilized
by
two
very
different
companies
within
the
luxury
sector.

The
conclusive
goal
of
this
paper
is
to
discern
whether
or
not
a
more
dominant

conglomerate
brand
strategy
is
effective
in
reaching
target
audiences
within
the
luxury

market,
or
if
allowing
acquired
brands
to
maintain
autonomous
control
over
their

individual
branding
yields
greater
results.

Based
on
the
copious
number
of
changes
and

advancements
in
branding
over
the
years,
discovering
which
strategy,
or
the
correct

combination
of
the
two,
is
more
efficient
will
result
in
recommendations
for
the
future
of

conglomerate
branding
in
the
luxury
sector.

6

SECTION
I:
LUXURY
AS
A
CONCEPT

The
History,
Concept,
and
Categories
of
Luxury

While
luxury
brands
today
can
enjoy
a
level
of
notoriety
never
before
seen,
the
general

concept
of
luxury
as
a
whole
is
far
from
modern.

For
as
long
as
there
have
been
wealthy

and
powerful
individuals,
the
objects
they
desire
have
reflected
their
expensive
lifestyles.

Be
it
religious
temples,
ancient
architecture,
or
Egyptian
tombs,
luxury
has
been
on
full

display
for
centuries.

Until
the
Revolution,
the
French
monarchy
epitomized
living
in

luxury,
their
affluent
appetites
thriving
on
items
defined
by
beauty
and
ostentation.

The

Palace
Versailles,
with
its
elaborate
gardens,
Hall
of
Mirrors,
and
Grand
Trianon,
embody

luxury
in
architecture.

When
considering
the
intricate
garb
and
embellished
accessories

worn
by
those
walking
the
grounds,
calling
the
monarchy’s
way
of
life
anything
less
than

luxurious
would
be
erroneous.

Finding
examples
of
luxury’s
presence
in
history
produces
numerous
examples,
and

similarly,
there
are
just
as
many
definitions
of
the
term.

In
his
book
The
Idea
of
Luxury:
A

Conceptual
and
Historical
Investigation,
John
Berry
typifies
luxury
as
objects
of
desire
that

provide
pleasure.
1

According
to
Danielle
Veldre,
consumers
define
luxury
in
terms
of

personal
relevance—
“old”
definitions
of
luxury
may
have
been
about
the
actual
product,

1

Berry,
Christopher
J.
1994.
The
idea
of
luxury:
A
conceptual
and
historical
investigation.
Vol.
30.
Cambridge

[England]
;New
York,
NY,
USA:
Cambridge
University
Press.

7

but
today,
“new”
luxury
is
centered
on
experiencing
its
values.
2

A
more
broad,
yet

comprehensive
definition
of
the
word
can
be
found
in
Merriam-‐Webster’s
definition:
a

condition
or
situation
of
great
comfort,
ease,
and
wealth;
an
item
that
is
expensive
and
not

essential,
and
something
that
is
helpful
or
welcome,
but
not
always
available.
3

While

academics
may
go
back
and
forth
on
finding
one
definition,
the
easily
acceptable
definition

from
Merriam-‐Webster
will
be
used
in
this
research.

Today,
when
luxury
comes
to
mind,
it
is
not
a
single
product
or
brand.

Instead,
it
is
a

lifestyle
in
general—
mansions,
meticulously
organized
closets
filled
with
the
latest
fashion

trends,
planes,
private
yachts,
jewelry
boxes
overflowing
with
extraordinary
gemstones—

essentially
anything
and
everything
a
person
could
want,
often
in
the
most
lavish
form

possible.

Rather
than
simply
being
products
elite
individuals
can
buy,
these
extravagant

purchases
are
synonymous
with
the
overall
luxury
lifestyle
that
millions
of
individuals

around
the
globe
aspire
to
but
can
only
dream
of.

According
to
Kapferer,
luxury
is
closely

tied
to
the
dynamics
within
society
—
the
need
to
compare
oneself
to
others
—
there
is
no

specific
brand
cinched
to
the
concept.
4

Not
Chanel,
not
Ferrari,
not
De
Beers;
no
one
brand

can
encompass
it.

Just
as
the
types
of
products
that
fall
under
the
“luxury”
label
are
completely
unlike
non-‐
luxury
goods,
differences
within
the
luxury
sector
are
just
as
vast.

Individuals
purchasing

2

Veldre,
Danielle.
(2005).
Experience
a
'new'
luxury.
B
&
T
Weekly,
21.

3

Merriam-‐Webster
Dictionary.
Merriam-‐webster.com.
http://www.merriam-‐webster.com/dictionary/luxury

4

Kapferer,
Jean-‐Noël.
"Luxury
after
the
Crisis:
Pro
Logo
or
No
Logo?"
The
European
Business
Review,
2010,

42-‐46.

8

luxury
goods
may
desire
the
various
sub-‐categories,
but
for
some,
one
specific
luxury

segment
may
be
enough.

Be
it
fashion,
automobiles,
wines
and
spirits,
jewelry,
or
any

other
good
qualifying
as
luxury—
if
an
individual
wants
a
luxury
version
of
something,
it
is

either
available
or
can
become
available
in
an
opulent
form.

The
variety
of
luxury
products

available
is
diverse,
however,
the
values
honored
within
the
sector
are
shared
throughout

the
industry.

Customers
purchasing
luxury
items
tend
to
value
artisanal
craftsmanship,

quality
of
materials
used,
time
spent
during
production,
and
trust
that
the
tradition
of
the

brand
is
being
upheld.

Dedication
to
authenticity,
prestige
and
the
reliability
of
the
item
all

encourage
customers
to
continue
their
relationship
with
the
brand.

Even
for
customers

who
do
not
require
superior
craftsmanship
in
what
they
buy,
aspirations
to
experience
the

emotions
and
possess
the
accessories
relating
to
the
world
of
luxury
are
enough
to

motivate
their
purchases.
5

Symbolic
Role
of
Luxury
Goods

Within
the
general
consumer
marketplace,
most
products
are
taken
at
face
value
alone.

Creativity
and
subjectivity
as
values
for
many
general
consumer
products
—
for
example,
a

hammer
and
nails
from
a
local
hardware
store
—
are
not
vital
to
result
in
purchases
from

shoppers.

In
non-‐luxury
goods,
brand
personality
and
image
still
hold
high
importance,
yet

when
compared
to
the
luxury
sector,
there
is
far
less
for
a
brand
to
convey
symbolic
value.

And,
although
many
customers
may
consider
luxury
goods
ostentatious,
superfluous,
and

5

Brun,
Alessandro,
and
Cecilia
Castelli.
"The
Nature
of
Luxury:
A
Consumer
Perspective."
International

Journal
of
Retail
&
Distribution
Management
41,
no.
11/12
(2013):
823-‐47.

9

showy,
dedicated
luxury
customers
find
comfort,
acceptance,
and
esteem
when
buying
and

using
these
products.

For
those
who
find
exorbitant
enjoyment
and
value
in
purchasing

luxury,
that
reverence
is
for
more
than
the
tangible
object.

Luxury
goods
symbolize
wealth

and
taste.

The
different
may
be
of
ephemeral
nature,
but
that
only
feeds
into
the
“dream
of

luxury.”

This
dream
is
where
aspirational
value
comes
into
play,
often
stemming
from

brand
recognition
and
spawning
an
ever-‐increasing
desire
for
one
or
more
luxury
brands.

For
those
aspiring
to
own
luxury
brands,
the
value
of
a
luxury
company
is
increased
further

when
the
individual
sees
luxury’s
transportive
nature.

Even
dreaming
briefly
of
a
product

allows
non-‐customers
to
enter
into
a
new
idealized
world
absent
of
the
problems
present

in
reality.

So
although
customers
are
what
support
the
brands,
non-‐customers
can
play
just

as
important
of
a
role
in
perpetuating
longing
and
adoration
for
luxury
products.

These

“luxury
aspirationals”
can
help
fuel
the
continued
need
for
the
luxury
sector.

Luxury
both

exists
and
thrives
because
many
cannot
access
it.
6

If
luxury
were
to
be
made
too
accessible,

those
who
dream
of
one
day
becoming
customers
will
lose
interest,
essentially
resulting
in

lost
perception
of
luxury.

The
value
that
individuals
place
on
luxury
goods
is
what
allows
businesses
to
continue

improving
and
reimagining
their
craft.

Among
many
other
characteristics,
luxury’s
value

stems
from
dedication
to
authenticity,
heritage,
refinement,
and
reliability.

When
devoted

luxury
customers
internalize
these
values,
they
are
encouraged
to
continue
supporting

their
favorite
brands.

Consumer
behavior
within
this
sector
favors
hedonistic
ideals,
and

6

Kapferer,
Jean-‐Noël.
"Luxury
after
the
Crisis:
Pro
Logo
or
No
Logo?"
The
European
Business
Review,
2010,

42-‐46.

10

among
those
consumers,
women
hold
much
higher
regard
for
indulgent
products.

According
to
Freire,
women
perceive
more
social
value
and
immense
symbolic
rate
of

luxury
brands
through
possession
of
such
goods
than
men
do.
7

This
raised
esteem
allows

luxury
houses
to
sell
luxury
goods
for
female
customers
at
higher
prices
than
those
for

male
customers.

Luxury
as
a
Business
Model

Just
as
luxury
goods
differ
from
general
consumer
products
on
price
point
and
other

attributes,
so
does
the
luxury
business
model.

According
to
Kapferer,
this
model
is

contradictory
to
many
current
business
models,
regardless
of
the
sector
(Figure
1).
8

Be
it

outsourcing
production
to
developing
countries
that
allow
for
the
lowest
possible
wages;

specifically
targeting
individuals
most
likely
to
purchase
their
products,
or
working
to

lower
the
price
of
goods
to
create
the
greatest
possible
number
of
customers,
most

manufacturers
of
non-‐luxury
goods,
whether
privately
owned
or
under
the
control
of
a

larger
holding
company,
generally
focus
on
maximizing
profits
regardless
of
implications

made
to
the
brand
image.

Luxury
goods
companies,
in
comparison,
have
succeeded
in
not
only
ignoring
this
popular

business
model,
but
have
sometimes
entirely
rejected
it
by
creating
a
model
specific
to

7
Freire,
N.
Anido.
"When
Luxury
Advertising
Adds
the
Identitary
Values
of
Luxury:
A
Semiotic
Analysis."

Journal
of
Business
Research
67
(2014).

8

Kapferer,
Jean-‐Noël.
"Abundant
Rarity:
The
Key
to
Luxury
Growth."
Business
Horizons,
2012,
453-‐62.

11

itself.

While
most
companies,
particularly
those
who
operate
globally,
delocalize
their

production
process
offshore,
many
luxury
companies
choose
to
produce
their
products

locally.

According
to
Kapferer,
luxury
is
seen
as
the
ambassador
of
local
culture
and
refined

art
de
vivre.

9

Additionally,
many
luxury
companies
differ
from
other
high-‐earning

companies
in
that
most
refuse
to
enter
into
licensing
agreements.

For
licensors
to
make
a

profit
after
paying
to
sell
goods
under
the
brand
name,
they
must
reduce
prices
to
generate

a
larger
overall
profit.

Doing
this
is
completely
contrary
to
the
concept
of
luxury
as
a

whole.

If
luxury
goods
are
to
be
sold
for
less,
the
absolute
monetary
value
as
well
as
the

rarity
of
the
product
will
be
lessened,
and
even
more
alarming
to
luxury
aficionados,
the

exclusivity
of
luxury
goods
falls
further.

In
turn,
those
accustomed
to
the
elite
and
elusive

condition
of
luxury
goods
will
lose
their
interest
in
the
specific
brand.

Additional
negative

reasons
to
avoid
brand
licensing
is
the
fact
that
luxury
goods
consist
of
high
quality

materials
and
often
extensive
amounts
of
time
during
production,
something
that
large-‐
scale
licensors
do
not
employ.

9

Kapferer,
Jean-‐Noël.
"Abundant
Rarity:
The
Key
to
Luxury
Growth."
Business
Horizons,
2012,
453-‐62

12

Figure
1:
General
and
Luxury
Business
Model
Comparison

FOCUS GENERAL
BUSINESS
MODEL LUXURY
BUSINESS
MODEL
Production Delocalization for lowest
possible production costs
No delocalization. Luxury viewed as an
ambassador for local culture and art de
vivre
Communication
with

Audiences
Only communicate to
potential customers
Communicate to both customers and
non-customers (this allows creation of
brand aspirationals and recognition)
Client
Relationship For larger corporations, a
personal relationship is not a
key focus. Customers may
interact with in-store staff,
but the emphasis on a
personalized experience is
not as vital
One-on-one relationship. Clients seen as
highly important, and the in-store
experience should be personal
Value
Chain Ingredients and materials
purchased at low costs to
maximize profits
No outsourcing
Must have full control to ensure the best,
most authentic ingredients/materials
Licenses Issue licenses to generate
larger profits in new markets
Avoid issuing licenses to maintain
control of the brand
Source:
Kapferer,
2012

The
luxury
goods
business
model
also
differs
from
mass
merchandise
in
that
it
pays
close

attention
to
marketing
toward
those
outside
of
the
target.

Whereas
most
businesses
rarely

waste
time
or
money
communicating
to
individuals
who
either
cannot
afford
or
do
not

desire
their
products,
a
vital
component
to
what
shapes
the
concept
of
luxury
involves

having
those
who
are
outside
of
the
elite
economic
sector
able
to
afford
these
products,
be

13

able
to
recognize
and
desire
said
products.

Without
the
name
recognition
and
chache

invested
by
luxury
brands
to
build
demand
—
however
unobtainable
—
by
the
general

public,
a
key
part
of
what
makes
luxury
goods
so
alluring
is
absent.

Access
to
Luxury

Historically,
access
to
luxury
goods
was
a
very
exclusive
privilege.
10

With
wide
economic

gaps
between
elites
and
the
rest
of
the
population,
a
very
small
percentage
of
the

population
could
afford
such
unnecessary
expenses.

Aside
from
the
inability
to
afford
such

rare
products,
if
an
individual
living
outside
of
the
Western
Hemisphere,
especially
in
an

underdeveloped
area,
wanted
a
luxury
good,
it
was
very
unlikely
that
they
would
actually

be
able
to
buy
it.

Unless
the
product
could
be
shipped,
traveling
to
developed
areas
was
the

only
method
of
acquiring
such
coveted
items.

Today,
the
distribution
limitations
that
halted
access
to
luxury
goods
have
lifted,
making
it

easier
for
a
greater
number
of
consumers
to
buy
the
different
luxury
items
they
desire.

Although
prices
have
not
become
significantly
more
affordable
over
time,
individuals
in

more
isolated
locations,
particularly
those
in
developing
or
“Third
World”
countries,
now

have
the
ability
to
receive
exactly
what
they
want
if
they
have
the
financial
means
to
obtain

it.

With
the
number
of
wealthy
individuals
in
historically
untapped
markets
like
Asia
and

the
Middle
East
now
buying
luxury
goods
at
an
increasing
pace,
many
luxury
companies,

10

Chevalier,
Michel,
and
Mazzalovo,
Gerald.
2012.
Luxury
Brand
Management:
A
World
of
Privilege
(2nd

Edition).
Somerset,
NJ,
USA:
John
Wiley
&
Sons.
Accessed
March
8,
2015.
ProQuest
ebrary.

14

both
individually
and
conglomerate-‐owned,
have
made
the
move
to
market
to
consumers

in
these
lucrative
markets.
11

According
to
Okonkwo,
these
luxury-‐hungry
markets
will

generate
joint
revenues
that
will
eventually
surpass
traditional
luxury
markets
in
Europe

and
North
America.
12

Customers
in
these
new
markets
now
demand
luxury
goods,
and

companies
are
responding
to
that
demand.

As
economies
strengthen,
it
appears,
so
does
the
taste
for
luxury.

Gross
domestic
product

in
many
developing
countries
that
were
previously
ignored
by
luxury
goods
makers
has

continued
to
rise
over
the
years,
particularly
within
BRIC
nations
(Brazil,
Russia,
India,
and

China).

According
to
a
2013
study
by
Bernstein
Research,
luxury
market
growth
is

completely
correlated
with
GDP
growth,
as
a
nation’s
middle
class
increases
and
optimism

thrives
when
accompanied
by
economic
growth.
13

Further
supporting
luxury
companies’

decision
to
move
into
these
markets
is
the
fact
that
unlike
consumers
in
Europe,
most

citizens
living
in
BRIC
nations
do
not
focus
on
saving
for
retirement.

Instead,
they
place

higher
value
on
buying
new
products
that
will
increase
their
present-‐day
status
in

society.
14

Luxury
companies
expanding
to
these
locations
are
not
making
the
move
slowly,
either.

Continued
growth
in
Asia,
for
example,
has
become
a
highlight
for
luxury
companies,

11

Kapferer,
Jean-‐Noël.
"Abundant
Rarity:
The
Key
to
Luxury
Growth."
Business
Horizons,
2012,
453-‐62

12

Okonkwo,
Uché.
"The
Luxury
Brand
Strategy
Challenge."
Journal
of
Brand
Management:
287-‐89.

13

Kapferer,
Jean-‐Noël.
"Abundant
Rarity:
The
Key
to
Luxury
Growth."
Business
Horizons,
2012,
453-‐62

14

Kapferer,
Jean-‐Noël.
"Abundant
Rarity:
The
Key
to
Luxury
Growth."
Business
Horizons,
2012,
453-‐62

15

including
many
of
LVMH’s
subsidiaries.
15

This
move,
which
has
been
welcomed
with
open

arms
by
customers
living
in
these
areas,
has
also
created
rising
concerns
over
whether
or

not
this
expansion
would
result
in
lessened
value
on
the
products.

Before
being
so
readily

accessible,
the
value
on
luxury
goods,
be
it
a
bottle
of
Dom
Perignon
or
the
newest
Aston

Martin,
was
insurmountably
high.

Concern
regarding
increasing
availability
stems
from

the
idea
that
the
“exclusivity”
value
of
luxury
goods
will
be
diminished
as
more
individuals

buy
them.

An
additional,
albeit
less
value-‐eroding,
concern
has
been
recognized
in
that

although
brand
recognition
and
value
are
heightened
once
the
product
has
reached
a

degree
of
market
penetration,
there
is
eventually
a
tipping
point
into
over-‐exposure
that

occurs
once
the
number
of
customers
starts
to
increase.
16

Although
both
concerns
are

valid,
over
the
last
few
years,
growing
global
sales
within
the
luxury
sector
have
proven

that
the
move
into
developing
countries
can
yield
quite
promising
results.

In
opposition
to
the
luxury
business
model
most
often
used,
some
luxury
companies
have

moved
away
from
the
traditional
guideline
of
keeping
production
localized.

Instead,
some

luxury
organizations
have
started
to
delocalize,
similar
to
production
process
in
most
mass

merchandising
businesses.

Low
labor
wages
in
developing
markets
have
resulted
in

smaller
production
costs
and
increased
gross
margins.

These
economic
upsides
allow

companies
to
reallocate
funds
to
areas
like
communications,
where
additional
efforts
can

be
made
to
increase
brand
recognition.

Prada,
for
example,
intrigued
investors
when
the

15

"LVMH
Letter
to
Shareholders:
August
2014."
LVMH.
August
1,
2014.
Accessed
November
10,
2014.

16

Kapferer,
Jean-‐Noël.
"Abundant
Rarity:
The
Key
to
Luxury
Growth."
Business
Horizons,
2012,
453-‐62

16

company
made
the
move
to
China
because
it
allowed
Asian
investors
to
purchase
shares
on

the
Hong
Kong
stock
exchange.
17

17

Kapferer,
Jean-‐Noël.
"Abundant
Rarity:
The
Key
to
Luxury
Growth."
Business
Horizons,
2012,
453-‐62

17

SECTION
II:

LUXURY
BRANDING

Brand
Image
and
Corporate
Luxury
Branding

When
focusing
on
corporate
luxury
branding,
narrowing
in
on
precisely
what
constitutes

luxury
is
vital
to
identifying
an
organization’s
brand
strategy.

Aside
from
dedication
to

artisanal
craft
of
the
luxury
products,
the
way
in
which
the
company
views
itself
and
its

products
is
vital
to
shaping
the
brand
image.

In
his
research,
Okonkwo
found
that

following
the
realization
of
the
need
for
branding
as
a
business
practice
in
the
1990s,

companies
that
invested
generously
in
brand
building
have
had
a
much
higher
competitive

positioning
than
those
companies
with
core
values
that
favored
a
larger
focus
on
products

and
services
instead.
18

Without
successful
corporate
branding
within
the
luxury
sector,

communications
efforts
to
potential
customers
will
fall
flat.

The
market
for
consumer

goods
is
congested
with
options,
and
if
a
brand
does
not
effectively
differentiate
itself,

customers
will
not
be
drawn
to
it.

Being
devoid
of
customer
appeal
is
disastrous
for
any

business,
and
luxury
companies
are
no
different.

Even
heritage
brands
with
a
long
history

of
success
must
spend
a
great
deal
of
attention
to
shaping
this
brand
image.

They
may
be

able
to
boast
decades
of
success,
but
if
they
ignore
reinforcing
their
branding,
existing
and

potential
customers
alike
will
lose
interest
and
likely
find
a
competitor
to
fulfill
their

desires
for
luxury
goods.

18

Okonkwo,
Uché.
"The
Luxury
Brand
Strategy
Challenge."
Journal
of
Brand
Management:
287-‐89.

18

Part
of
shaping
this
corporate
brand
image
is
possible
by
gaining
senior
management’s

support
in
viewing
branding
strategies
as
an
integrated
business
process,
not
simply
a

marketing
function.
19

Without
support
from
management,
branding
efforts
can
still
find

some
success,
but
reaching
optimal
branding
results
is
far
less
likely.

Embedding
branding

strategies
within
all
components
of
the
organization,
particularly
aligning
with
its
culture

and
vision,
results
in
a
positive
image
from
customers
and
from
those
who
have
not

purchased
from
the
brand
before,
but
easily
recognize
the
company
and
aspire
to
one
day

become
a
customer.

Advertising

Adhering
to
luxury
values
and
the
brand
image
is
essential
to
ensuring
that
a
new

advertisement
will
not
completely
destroy
the
efforts
a
company
has
made
to
carefully

shape
its
image.

Whereas
Dr.
Pepper
may
proclaim
its
soda
is
“always
one
of
a
kind”
in
ad

copy,
luxury
companies
tend
to
utilize
the
symbolic
value
of
the
images
seen
on
the
ad
and

the
association
these
images
have
with
the
specific
brand
(Appendix).

Rather
than
relying

on
an
image’s
face
value,
a
luxury
advertisement
encourages
individuals
to
dream
of
the

world
of
luxury.
20

Dreaming
of
this
world
of
luxury
is
what
fosters
the
desire
to
buy
the

advertised
product.

19

Cavender,
Raye
Carol,
and
Doris
Kincade.
"Management
of
a
Luxury
Brand:
Dimensions
and
Sub-‐variables

from
a
Case
Study
of
LVMH."
Journal
of
Fashion
Marketing
and
Management
18,
no.
2
(2014):
231-‐45.

20

Freire,
N.
Anido.
"When
Luxury
Advertising
Adds
the
Identitary
Values
of
Luxury:
A
Semiotic
Analysis."

Journal
of
Business
Research
67
(2014).

19

Brand
associations,
cultural
symbols,
and
the
idea
of
an
escape
from
one’s
life,
even
if
only

momentarily,
are
all
vital
in
generating
success
from
a
luxury
ad.

Each
of
these
themes
can

be
found
in
the
2014
advertisement
and
commercial
for
Dior
Parfums’
scent,
J’adore
Dior

(Figure
2).

This
campaign,
titled
“the
Future
is
Gold,”
featured
actress
Charlize
Theron

draped
in
a
gold
gown
and
jewels,
strutting
through
a
gold-‐lit
setting.

Aside
from
the
name

of
the
scent,
there
is
no
written
content
on
the
ad.

Instead,
Dior
relies
on
the
indulgent

associations
that
customers
will
discern
when
viewing
the
ad.

The
attire,
lighting,
setting,

and
overall
attitude
of
the
campaign
all
embody
elegance
and
luxury-‐-‐
precisely
what
Dior

wants
potential
customers
to
desire.

Figure
2

20

Incorporating
the
symbiotic
characteristics
of
luxury,
particularly
in
regard
to
wealth
and

taste,
gives
brands
the
freedom
to
incorporate
as
much
creativity
and
subjectivity
as
they

desire
into
each
ad.

Depending
on
the
specific
product,
whether
a
legacy
item
that
has
not

changed
in
years,
or
a
cutting-‐edge
offering
being
introduced
to
the
world
for
the
first
time,

brands
are
able
to
select
various
shapes,
colors,
and
lighting
levels
to
specify
the
ad
to

perfectly
match
the
brand
image.

Analysis
of
a
Dior
Parfums
advertisement
exemplifies

this
notion.

In
2008,
Dior
released
an
ad
for
the
scent,
Miss
Dior
Cherie,
that
depicted
the

exact
characteristics
it
wanted
to
convey-‐-‐
light,
airy,
carefree,
luxurious,
and
whimsy

(Figure
3).

The
print
ad
was
accompanied
by
a
commercial
advertisement
imagined
and

directed
by
Sofia
Coppola.

In
the
ad,
model
Maryna
Linchuk
is
seen
floating
above
Paris

with
the
help
of
colorful
balloons
while
holding
a
large
bottle
of
the
featured
scent.

The

light
colors,
shown
in
the
balloons,
pink
Dior
dress,
and
day-‐lit
background,
generate

associations
of
light
and
carefree
attitudes.

Additionally,
setting
the
ad
in
Paris
allows
Dior

to
associate
its
brand’s
Parisian
design
legacy
and
roots
in
luxury
to
persuade
potential

customers
that
this
specific
scent
embodies
everything
they
could
want.

21

Figure
3

Despite
the
relative
freedom
luxury
companies
may
have
in
shaping
the
image
and

messaging
of
their
content,
questions
over
the
necessity
of
advertising
within
the
luxury

segment
are
not
a
new
concern.

Current
customers
and
most
of
those
who
can
afford
to
be

customers
are
likely
already
aware
of
the
luxury
brands
and
the
products
they
offer,
even
if

in
name
recognition
alone.

The
tradition
and
allure
of
heritage
brands
is
already
present

within
this
group,
so
the
percentage
of
recognition
growth
is
far
smaller
than
when

compared
to
individuals
who
cannot
afford
luxury.

For
marketing
to
those
who
aspire
to

one
day
be
customers,
conflicting
views
exist
regarding
the
necessity
of
directing

messaging
toward
them.

The
side
opposed
to
luxury
companies
communicating
values

potential
customers
can
identify
with
consider
such
a
waste
of
resources.

Their
view
is

22

that
brand
recognition
amongst
those
who
can
only
dream
of
luxury
does
not
actually
aid

the
business
in
pushing
product.

The
position
in
favor
of
luxury
product
advertising
falls
in
line
with
the
luxury
business

model.

As
this
model
prioritizes
recognition
by
non-‐owners,
halting
advertisements
and

messaging
to
non-‐buyers
in
general
would
weaken
overall
recognition
efforts,
eventually

contributing
to
a
resulting
decline
of
the
brand’s
value.

Those
holding
this
stance
consider

that
luxury
advertising
increases
recognition
and
reinforces
intrigue
that
viewers
hold
for

the
brand.

Without
this
recognition
and
intrigue
for
luxury
brands,
those
who
aspire
to

become
a
part
of
the
luxury
world,
they
argue,
would
lose
interest
in
the
specific
brand.

Flagship
Locations

Flagship
stores
bring
an
entirely
new
level
of
branding
potential
for
luxury
companies
by

allowing
customers
opportunities
to
physically
experience
the
brand.

These
locations
are

typically
specific
to
fashion
and
jewelry
brands,
however,
other
sectors
within
the
luxury

industry
have
utilized
flagships
stores
to
display
the
breadth
and
depth
of
their
products.

Flagship
stores
include
products
available
for
consumers,
but
the
ultimate
goal
of

producing
profits
takes
a
secondary
role
for
most
businesses.

Instead,
the
focus
is
on

utilizing
these
locations
to
provide
experiences
that
can
shape
the
consumers’
views
of
the

overall
brand
image.

A
business’
first
flagship
location
is
usually
based
in
its
home
country,

but
once
success,
expanding
the
number
of
flagships
in
foreign
locations
increases
the

23

brand’s
ability
to
generate
newsworthiness
and
recognition
in
areas
that,
while
previously

a
promising
market,
also
hold
high
potential
for
reaching
new
and
already
dedicated

groups
of
brand
followers.

One
example
of
a
flagship
location’s
importance
is
the
British
fashion
giant,
Burberry.

With

the
2008
opening
of
its
Dubai
Mall
flagship
store,
the
brand
generated
a
great
deal
of

fanfare
within
the
region.

Although
affluent
Dubai
shoppers
were
not
strangers
to
the

brand,
Burberry’s
emergence
into
the
area
succeeded
in
greatly
raising
awareness.

The

opening
of
locations
like
Burberry’s
Dubai
store
does
precisely
what
is
required
by

flagships,
especially
those
in
new,
international
markets—
it
strengthens,
stimulates
and

supports
relationships
between
the
brand,
retailer,
and
three
vital
groups:
the
distribution

partners,
fashion
media,
and
customers
in
foreign
markets.

21

Having
explored
the
foundational
concepts
around
luxury
branding,
the
author
now

presents
three
case
studies—
LVMH,
Louis
Vuitton,
and
Sephora—
to
demonstrate
how

luxury
branding
messages
from
well-‐known
luxury
holding
companies
and
their

subsidiaries
are
conveyed.

Following
these
detailed
examinations,
the
author
posits
how

said
brands
can
continue
to
flourish
while
maintaining
their
elite
luxury
status.

21

Moore,
Christopher
M.,
Anne
Marie
Doherty,
and
Stephen
A.
Doyle.
"Flagship
Stores
as
a
Market
Entry

Method:
The
Perspective
of
Luxury
Fashion
Retailing."
European
Journal
of
Marketing:
139-‐61.

24

SECTION
III:
LVMH

History

Following
the
merger
of
Louis
Vuitton
and
Moet
Hennessy
in
1987,
LVMH
Moet
Hennessy

Louis
Vuitton
set
out
to
create
an
empire
of
luxury
goods.

By
retaining
the
legacy
of
both

Louis
Vuitton
and
Moet
Hennessy
brands,
the
LVMH
Group
positioned
itself
to
not
only

dominate
the
vast
areas
of
luxury
consumer
goods
with
its
current
brand
portfolio,
but
also

continue
to
grow
in
the
future.

This
growth
began
once
LVMH
entered
a
large-‐scale

acquisition
spree
that
resulted
in
the
creation
of
the
first
major
conglomerate
in
the
luxury

industry.

With
the
majority
of
acquisitions
occurring
in
the
late
1990s,
LVMH’s
portfolio

did
not
consist
solely
of
older,
celebrated
luxury
companies,
but
younger,
edgier
companies

as
well.

Despite
the
cachet
achieved
from
owning
brands
including
Dior,
Bvlgari,
Fendi,
and

Moet
and
Chandon,
LVMH
gained
some
notoriety
by
purchasing
companies
that
lacked
the

long-‐time
established
success
and
reputation
of
its
current
portfolio,
yet
this
strategy
was

an
example
of
the
conglomerate
looking
toward
the
future.

These
new
companies
included

the
likes
of
Urban
Decay,
Hard
Candy,
Marc
Jacobs,
and
MAKE
UP
FOR
EVER.

The
group’s

acquisitions
did
not
result
in
negative
consequences,
either.

From
1996
to
2000,
the

conglomerate
achieved
an
unprecedented
pattern
of
growth
that
averaged
14
percent

growth
in
sales
per
year.

22

22

Cavender,
Raye
Carol,
and
Doris
Kincade.
"Management
of
a
Luxury
Brand:
Dimensions
and
Sub-‐variables

from
a
Case
Study
of
LVMH."
Journal
of
Fashion
Marketing
and
Management
18,
no.
2
(2014):
231-‐45.

25

Leadership

Much
of
the
success
achieved
by
LVMH
has
been
attributed
to
the
holding
company’s

longtime
Chairman
and
CEO,
Bernard
Arnault.

Since
taking
over
the
reins
of
the
company

in
1989,
Arnault
has
run
the
organization
with
a
leadership
style
now
emulated
by
many
of

his
competitors.

Prior
to
leading
LVMH,
Arnault
proved
his
management
and
strategy

prowess
at
the
Financiere
Agache
holding
company,
where
he
rejuvenated
the
company’s

ability
to
generate
profits
with
new
strategic
developments.
23

While
in
this
position,

Arnault
spearheaded
the
transformation
of
the
Christian
Dior
Couture
brand.

Due
to
an

over-‐abundance
of
extensive
licensing
activities
and
widespread
product
distribution
in

the
1970s,
the
once-‐prestigious
French
label
had
experienced
a
serious
downfall.

In

addition
to
reconstructing
the
organization’s
management
system,
Arnault
created

strategic
goals
for
Dior
that
included
more
strategic
expansion
of
brand
offerings,
regaining

strict
control
over
products’
production
and
distribution,
adding
a
quality
of
modernity

into
the
brand,
and
an
aggressive
global
sales
expansion.
24

Arnault
has
continued
utilizing

his
expertise
throughout
his
time
at
LVMH
to
keep
it
at
the
top
of
the
luxury
goods
market.

23

"Bernard
Arnault."
-‐
Chairman
and
CEO,
LVMH
Moët
Hennessy.
Accessed
January
7,
2015.

http://www.lvmh.com/investor-‐relations/lvmh-‐at-‐a-‐glance/executive-‐committee/bernard-‐arnault.

24

Cavender,
Raye
Carol,
and
Doris
Kincade.
"Management
of
a
Luxury
Brand:
Dimensions
and
Sub-‐variables

from
a
Case
Study
of
LVMH."
Journal
of
Fashion
Marketing
and
Management
18,
no.
2
(2014):
231-‐45.

26

Corporate
Structure

From
the
start,
LVMH
decided
to
forego
traditional
holding
company
branding
strategies
by

allowing
its
companies
to
continue
an
almost
entirely
autonomous
management
strategy.

Doing
so
was
initially
thought
to
be
essential
to
protecting
the
individual
brand
identity
as

well
as
ease
of
the
overall
acquisition
process.

The
brand
identity
consists
of
identifiable

attributes
that
both
make
up
the
brand
itself,
as
well
as
how
it
is
perceived
by
its
numerous

audiences.

To
protect
the
brand
identities
within
LVMH’s
portfolio,
Arnault
worked
to

ensure
that
very
little
interaction
occurred
between
the
recently
acquired
companies
and

the
parent
entity,
and
that
no
interaction
occurred
among
the
various
acquired
companies.

While
this
worked
for
some
of
the
acquisitions,
many
of
the
smaller
companies
failed
to
live

up
to
LVMH’s
developmental
goals,
due
to
the
lack
of
business
capabilities
by
brand

managers
to
support
growth
on
a
global
scale.
25

Urban
Decay,
Ebel,
and
Hard
Candy
all
fell

under
this
category,
and
eventually
were
divested
from
LVMH.

The
failures
of
some
of
LVMH’s
smaller
brands
encouraged
the
conglomerate
to
reengineer

its
corporate
strategy
in
2002
to
a
“back
to
basics”
approach.

This
new
approach
included

initiatives
focusing
on
sharing
best
practices
amongst
all
portfolio
brands;
giving
necessary

assistance
and
value,
and
capitalizing
on
scale
economies
by
portfolio
brands
to
preserve

25

Cavender,
Raye
Carol,
and
Doris
Kincade.
"Management
of
a
Luxury
Brand:
Dimensions
and
Sub-‐variables

from
a
Case
Study
of
LVMH."
Journal
of
Fashion
Marketing
and
Management
18,
no.
2
(2014):
231-‐45.

27

success
of
existing
brands,
such
as
Louis
Vuitton
and
Hennessy.

It
also
helped
create

exponential
growth
for
potential
star
brands
like
Celine
and
Fendi.
26

Although
it
had
initially
allowed
its
brands
to
have
almost
sole
control
over
strategy,
upon

shifting
its
overall
brand
strategy
in
2002,
LVMH
set
out
to
achieve
a
heightened
brand

architecture.

According
to
Keller,
this
approach
involves
defining
the
relationship
and

structure
of
different
brands
under
a
holding
company,
including
the
ways
in
which
they

engage
with
each
other.
27

While
working
to
strengthen
this
architecture,
LVMH
paid

particular
attention
to
fixing
the
detrimental
effects
caused
by
over-‐licensing.
Over-‐
licensing
occurs
when
a
company
expands
into
new
licensing
agreements
without

considering
how
the
resulting
surplus
of
goods
by
one
brand
will
decrease
the
perceived

luxury
value.

Prior
to
being
bought
by
LVMH,
both
portfolio
brands
Donna
Karan
and
Dior

both
struggled
in
this
regard.

Knowing
that
brand
image
revitalization
is
no
quick
fix,
but

often
requires
significant
investments
and
many
years
to
reverse,
LVMH
officials
were
very

aware
of
the
need
to
be
highly
selective
of
future
licensing
agreements.

Finally,
the
need
to
revise
sub-‐branding
was
a
necessary
alteration.

Despite
competitor

heritage
lines
like
Gucci
and
Chloe
achieving
significant
success
in
this
segment,
LVMH

luxury
heritage
lines
in
general
avoided
sub-‐branding
in
favor
of
extending
its
numerous

26

Cavender,
Raye
Carol,
and
Doris
Kincade.
"Management
of
a
Luxury
Brand:
Dimensions
and
Sub-‐variables

from
a
Case
Study
of
LVMH."
Journal
of
Fashion
Marketing
and
Management
18,
no.
2
(2014):
231-‐45.

27

Cavender,
Raye
Carol,
and
Doris
Kincade.
"Management
of
a
Luxury
Brand:
Dimensions
and
Sub-‐variables

from
a
Case
Study
of
LVMH."
Journal
of
Fashion
Marketing
and
Management
18,
no.
2
(2014):
231-‐45.

28

product
lines.

Parfums
Christian
Dior’s
Miss
Dior
is
just
one
example
of
this
concept.

The

perfume
sector
of
the
company,
which
was
launched
in
1947,
first
introduced
Miss
Dior
in

2005.

Although
originally
named
Miss
Dior
Cherie
and
renamed
in
2011,
this
addition

within
an
already
existing
product
line
resulted
in
success
for
the
brand
without
engaging

in
sub-‐branding.

While
success
resulted,
the
name
change
did
produce
some
confusion
by

customers
and
industry
insiders.

The
switch
from
Miss
Dior
Cherie
to
Miss
Dior
forced
the

original
Miss
Dior,
which
dates
back
to
1947,
to
change
its
own
name
to
Miss
Dior

Originale.

Among
younger
brands
within
the
fashion
and
leather
goods
product
category,
Marc

Jacobs’
foray
into
sub-‐branding
is
exemplary
of
how
sub-‐branding
can
produce
beneficial

results.

Since
its
inception,
the
Marc
by
Marc
Jacobs
clothing
brand
has
demonstrated
the

effective
means
of
introducing
a
luxury
fashion
label
to
younger
target
consumers.

While

still
adhering
to
Marc
Jacobs’
quirky,
yet
luxurious
undertones,
the
Marc
by
Marc
Jacobs

clothing
and
accessory
lines
push
further
by
constantly
providing
playful,
cheeky
products

to
customers
who
identify
with
that
brand
persona.
28

LVMH
Portfolio

Within
the
LVMH
portfolio,
over
50
luxury
brands
create
the
mix
that
constitutes
the

successful
conglomerate.

While
LVMH
has
continued
to
add
additional
brands
to
its
list,

28

Cavender,
Raye
Carol,
and
Doris
Kincade.
"Management
of
a
Luxury
Brand:
Dimensions
and
Sub-‐variables

from
a
Case
Study
of
LVMH."
Journal
of
Fashion
Marketing
and
Management
18,
no.
2
(2014):
231-‐45.

29

the
separation
of
brands
and
subsidiaries
into
operating
groups
did
not
occur
until
the
end

of
the
1990s.

Arnault
created
these
categories
to
allow
the
brands
to
grow
by
leveraging

their
specific
characteristics
and
strengths
within
their
respective
markets.

Each
company

under
the
conglomerate
has
been
divided
into
one
of
five
different
operating
groups:
Wines

and
Spirits;
Fashion
and
Leather
Goods;
Perfumes
and
Cosmetics;
Watches
and
Jewelry,

and
Selective
Retailing,
as
detailed
below.

I. Wines
and
Spirits:

29

COMPANY
YEAR
FOUNDED
YEAR
ACQUIRED
BY

LVMH

Moet
&
Chandon
1743
Original
founding

company

Dom
Perignon
1668
Previously
owned
by

Moet
&
Chandon

Veuve
Clicquot
1772
Previously
owned
by

Moet
&
Chandon

Krug
1843
1999

Mercier
1858
Previously
owned
by

Moet
&
Chandon

Ruinart
1729
Previously
owned
by

Moet
&
Chandon

Chateau
d’Yquem
1593
1999

Chateau
Cheval
Blanc
1832
2009

29

"Wines
&
Spirits."
Moët
&
Chandon,
Wines
and
Spirits,
Premium
Wines.
Accessed
March
4,
2015.

http://www.lvmh.com/the-‐group/lvmh-‐companies-‐and-‐brands/wines-‐spirits.

30

Hennessy
1765
Original
founding

company

The
Glenmorangie

Company

1843
2005

Ardbeg
1815
Acquired
by
the

Glenmorangie
Company

in
1997

Belvedere
1996
2002

Domaine
Chandon

California

1973
Previously
owned
by

Moet
&
Chandon

Bodega
Chandon

Argentina

1959
2008

Domaine
Chandon

Australia

1986
Previously
owned
by

Moet
&
Chandon

Domaine
Chandon

India

2013
Previously
owned
by

Moet
&
Chandon

Domaine
Chandon

China

2013
Previously
owned
by

Moet
&
Chandon

Cloudy
Bay
1985
2003

Cape
Mentelle
1970
Previously
owned
by

Veuve
Cliquot

31

II. Fashion
and
Leather
Goods:

30

COMPANY
YEAR
CREATED
YEAR
ACQUIRED
BY
LVMH

Louis
Vuitton
1854
Original
founding
company

Celine
1945
1996

Loewe
1846
1996

Berluti
1895
1993

Kenzo
1970
1993

Givenchy
1952
1988

Marc
Jacobs
1984
1997

Fendi
1925
2001

Emilio
Pucci
1947
2000

Thomas
Pink
1984
1999

Donna
Karan
1984
2001

Edun
2005
2009

NOWNESS
2009
2009

Lora
Piana
1924
2013

Nicholas
Kirkwood
2004
2013

30

"Fashion
&
Leather
Goods."
Louis
Vuitton,
Fashion
and
Leather
Goods,
Haute
Couture.
Accessed
February

16,
2015.
http://www.lvmh.com/the-‐group/lvmh-‐companies-‐and-‐brands/fashion-‐leather-‐goods.

32

III. Perfumes
and
Cosmetics:

31

COMPANY
YEAR
CREATED
YEAR
ACQUIRED

BY
LVMH

Parfums
Christian
Dior
1947
1988

Guerlain
1828
1994

Parfums
Givenchy
1957
1988

Kenzo
Parfums
1988
1993

BeneFit
Cosmetics
1976
1999

Fresh
1991
2000

MAKE
UP
FOR
EVER
1984
1999

Acqua
di
Parma
1916
2001

Perfumes
Loewe
1972
1996

Fendi
Perfumes
1985
2001

Nude
2007
2007

IV. Watches
and
Jewelry:

32

COMPANY
YEAR
CREATED
YEAR
ACQUIRED
BY

LVMH

TAG
Heuer
1860
1999

31

http://www.lvmh.com/the-‐group/lvmh-‐companies-‐and-‐brands/perfumes-‐cosmetics/parfums-‐christian-‐
dior

32

http://www.lvmh.com/the-‐group/lvmh-‐companies-‐and-‐brands/watches-‐jewelry

33

Zenith
1865
1999

Hublot
1980
2008

Chaumet
1780
1999

Bulgari
1884
2011

De
Beers
1888
2001

FRED
1936
1995

V.
Selective
Retailing:

33

COMPANY
YEAR
CREATED
YEAR
ACQUIRED
BY

LVMH

DFS
1960
1997

Starboard
Cruise
Services
1958
2000

Sephora
1969
1997

Le
Bon
Marche
Rive
Gauche
1852
1998

33

http://www.lvmh.com/the-‐group/lvmh-‐companies-‐and-‐brands/selective-‐retailing

34

VI. Other
Activities:

34

COMPANY
YEAR
CREATED
YEAR
INVOLVED/

ACQUIRED
BY
LVMH

Group
Les
Echos
1908
2007

Royal
Van
Lent
1849
2008

Jardin
d’Acclimatation
1860
2004

Samaritaine
1870
2001

The
Advantage
of
Parent
Companies

Idealistic
thoughts
behind
starting
a
company
typically
avoid
plans
of
being
acquired
by
a

large
conglomerate,
but
holding
companies
provide
businesses
—
particularly
those
within

the
luxury
sector
—
leverage
to
further
their
brand
potential
while
building
upon
past

success.

That
is
not
to
say
that
small,
localized
business
will
never
completely
attain

success.

Instead,
the
accomplishments
achieved
by
these
more
modestly
sized
companies

are
what
intrigues
holding
companies
in
the
first
place.

When
acquired,
parent
companies

allow
brands
various
opportunities
to
expand,
both
geographically
and
financially.

34

http://www.lvmh.com/the-‐group/lvmh-‐companies-‐and-‐brands/other-‐activities

35

The
notion
of
this
“parenting
advantage”
can
be
summed
up
as
“including
strategies,

structures,
and
processes
that
the
parent
holding
company
employs
in
each
of
its

businesses
to
amplify
overall
value.”

According
to
Moore
and
Birtwistle,
parenting

advantage
centers
on
the
extent
to
which
a
business
gains
a
competitive
advantage
due
to

its
link
with
a
parent
company,
and
vice
versa.
35

By
utilizing
specific
models
and
rules
that

conglomerates
incorporate
into
their
business
practices,
acquired
brands
can
adopt
these

models
and
use
them
to
shape
their
business
specialty
into
more
fruitful
outcomes.

Working
with
similar
“sibling”
companies
owned
by
a
parent
company
also
allows
these

businesses
the
opportunity
to
push
their
business
goals
while
minimizing
the
likelihood
of

producing
the
exact
same
product
or
repeating
similar
mistakes.

Depending
on
the
specific

business
model,
one
company
might
even
benefit
from
leveraging
their
products
to
be

more
visible
when
featured
at
another
company’s
business.

Yet
while
parenting
advantage
can
produce
great
benefits
for
companies
within
a

conglomerate’s
portfolio,
there
are
resulting
advantages
and
disadvantages
for
the

individual
brands.

Moore
and
Birtwistle
mentioned
the
idea
of
a
“favorite
child”
as
a

common
one
within
holding
companies.

Whether
it
is
because
one
business
acts
as
the

company’s
primary
“cash
cow”
or
creative
or
personal
preferences
by
management,
it
is

difficult
for
holding
companies
to
avoid
declaring
a
favorite,
whether
directly
or

subliminally.

Favoritism
then
results
in
unhappy
companies
that
view
themselves
as
the

35

Moore,
Christopher
M.,
and
Grete
Birtwistle.
"The
Nature
Of
Parenting
Advantage
In
Luxury
Fashion

Retailing
–
The
Case
Of
Gucci
Group
NV."
International
Journal
of
Retail
&
Distribution
Management:
256-‐70.

36

overlooked
“middle
child.”

These
brands
can
often
feel
neglected
or
insignificant
within

the
holding
company
dynamic.

A
lack
of
influence
when
meeting
with
other
sibling-‐brand

leaders
can
cause
distress
for
smaller,
or
less-‐favored,
brand
leaders.

Additionally,
these

lesser
brands
also
face
more
challenges
when
attempting
to
implement
strategy
changes

that
may
differ
from
those
that
have
produced
strong
results
for
more
favored
brands.

Depending
on
the
level
to
which
a
holding
company
incorporates
parenting
advantages,

businesses
within
its
portfolio
can
either
thrive
or
struggle
to
find
their
footing.

Upon

analysis
of
LVMH,
the
author
decided
to
further
examine
two
specific
brands,
Louis
Vuitton

and
Sephora,
to
better
understand
how
a
conglomerate
can
apply
best
practices
for
two

very
different
luxury
organizations.

Both
businesses
were
selected
due
to
higher
presence

of
LVMH
collateral,
including
mentions
on
the
company
website
and
in
annual
and
semi-‐
annual
reports.

Despite
being
so
distinctive,
each
company
can
be
considered
examples
of

“favorite
children”
within
the
LVMH
portfolio.

37

SECTION
IV:

LOUIS
VUITTON

Since
its
founding
in
Paris
in
1854,
Louis
Vuitton
has
created
its
own
vision
of
luxury
in

each
piece
it
produces.

The
company
quickly
gained
notoriety
by
producing
chic
and

innovative
luggage
for
English
nobility.

Rather
than
making
rounded
luggage,
as
was
the

norm
at
the
time,
Vuitton
produced
flat
trunks
covered
in
waterproof
canvas
instead
of

leather
to
increase
functionality:

the
pieces
shed
water
and
can
be
stacked.
36

Even
early

on,
as
Louis
Vuitton
items
became
more
popular,
the
need
to
protect
the
brand
against

knock-‐offs
was
recognized
as
highly
important.

This
resulted
in
the
printing
of
the
Louis

Vuitton
monogram
on
the
canvas.

This
protection
to
fight
off
replication
resulted
in
the

now-‐iconic
logo
that
is
universally
recognized.

By
1896,
the
unparalleled
success
of
the
LV

Monogram
ushered
in
an
enduring
sense
of
modern
luxury.

Louis
Vuitton
still
prides
itself
on
creating
both
innovative
and
elegant
items.
In
addition
to

its
iconic
luggage,
today,
Louis
Vuitton
creates
ready-‐to-‐wear
garments,
shoes,
leather

goods,
jewelry,
watches,
accessories,
sunglasses,
and
books.

The
ever-‐expanding
brand

now
operates
17
production
workshops,
exclusive
shops
worldwide,
and
an
international

logistics
center.
37

36

Joy,
Annamma,
Jeff
Jianfeng
Wang,
Tsang-‐Sing
Chan,
John
F.
Sherry
Jr.,
and
Geng
Cui.
"M(Art)
Worlds:

Consumer
Perceptions
of
How
Luxury
Brand
Stores
Become
Art
Institutions."
Journal
of
Retailing,
2014,
347-‐
64.

37
"Fashion
&
Leather
Goods."
Louis
Vuitton,
Fashion
and
Leather
Goods,
Haute
Couture.
Accessed
February

16,
2015.
http://www.lvmh.com/the-‐group/lvmh-‐companies-‐and-‐brands/fashion-‐leather-‐goods/louis-‐
vuitton.

38

Cash
Cow

While
LVMH
may
have
a
massive
portfolio
of
high-‐profile
brands,
it
is
no
secret
that
Louis

Vuitton
(LV)
acts
as
the
company’s
“cash
cow.”

With
over
50
companies
in
the
LVMH

portfolio,
Vuitton
still
manages
to
produce
almost
two-‐thirds
of
LVMH
total
operating

profits.
38

So
despite
the
brand’s
launch
of
the
trendiest
purses,
intricate
dress
designs,
and

latest
cosmetics,
it
is
the
traditional
pieces
—
the
monogram
bags
and
luggage
sets
from
LV

—
that
best
support
the
LVMH
conglomerate.

There
is
no
question
that
LV
enjoys
its
place

at
the
top
of
the
luxury
sector,
built
by
a
long-‐standing
tradition
of
excellence
that
often

makes
it
one
of
the
first
pieces
a
new
consumer
entering
the
world
of
luxury
desires.

Along
with
LV’s
domination
over
the
LVMH
portfolio
and
the
luxury
market
as
a
whole,

come
restrictions.

As
LV
remains
close
to
the
traditional
pieces
that
have
shaped
the

brand,
they
have
less
room
to
take
risks.

With
modernization,
LV
has
had
to
work
to
retain

the
sense
of
old-‐world
elegance
while
consecutively
taking
part
in
the
fresh,
new
notions

and
trends
of
today’s
world.

Although
LV
has
actively
engaged
in
the
somewhat
recent

necessity
of
digital
and
social
media,
the
brand
still
has
been
restricted
from
making
a

louder
splash
within
the
fashion
world.

The
freedom
to
take
risks
that
creative
directors
at

younger
fashion
houses
even
within
the
LVMH
portfolio
have,
is
not
a
reality
for
LV.

Additionally,
Vuitton’s
place
as
the
main
revenue
generator
for
LVMH
also
means
that

38

Socha,
Miles,
With
contributions
from
Amanda
Kaiser,in
Milan,
in
London
Samantha
Conti,
and
Tsukasa

Furukawa.
"Milking
Fashion’s
Cash
Cows."
WWD
186,
no.
92
(Nov
03,
2003):
88.

http://search.proquest.com/docview/231271181?accountid=14749.

39

while
LV
itself
is
securely
positioned
within
the
conglomerate
when
compared
to
smaller

brands,
it
also
means
that
it
must
support
lesser-‐performing
sibling
companies
when
their

sales
are
less
than
impressive.

In
other
words,
LV
can
only
afford
to
take
a
few
risks,

because
LVMH’s
overall
existence
is
so
intertwined
with
the
brand’s.

CONTENT
ANALYSIS

Social
Equity

Through
its
social
media
accounts,
Louis
Vuitton’s
brand
equity,
which
has
been
defined
by

Muhammad
Mohsin
as
the
total
of
the
numerous
values
that
people
attach
to
a
brand,
has

been
enhanced
thanks
to
active
customer
and
aspirational
customers’
engagement.
39

Its

presence
on
Facebook,
Instagram,
Twitter,
and
Pinterest
have
allowed
the
heritage
brand

to
expand
its
level
of
relevance
to
younger
generations
who
spend
large
quantities
of
time

on
the
different
platforms
(Figure
4),
aspire
to
acquire
status
luxury
items
and
also
have

considerable
disposable
income.

The
brand’s
Facebook
account,
the
first
of
the
social

accounts
the
author
analyzed,
has
nearly
17.7
million
page
likes
and
over
240,000
people

talking
about
the
brand.
40

The
photo-‐heavy
account
has
a
more
serious
personality,
which

adheres
to
the
brand’s
heritage
image
(Figure
5).

On
Instagram,
LV
maintains
the
same

39

Mohsin,
Muhammad.
2009.
Encyclopaedia
of
Brand
Equity
Management,
Volume
I.
Mumbai,
IND:
Himalaya

Publishing
House.
ProQuest
ebrary.

40

Louis
Vuitton.
Facebook.

40

personality,
keeping
its
4.2
million
followers
engaged
with
798
posts
as
of
March,
2015.
41

With
both
pictures
and
videos,
the
brand’s
Instagram
posts
include
the
latest
collections,

events,
ad
campaigns,
“Instagram
takeovers”
from
creative
directors,
and
fashion
shows

(Figure
6).

There
is
typically
at
least
one
post
per
day,
and
depending
on
special
events
and

announcements,
up
to
four
posts
per
day
keep
followers
up
to
date
with
the
brand.

PLATFORM
FOLLOWERS
POSTS
7
DAY
POST

AVERAGE

Facebook
17.7
Million
Total
number

not
listed

5

Instagram
4.2
Million
798

26

Twitter
4.2
Million
2,285

13

Pinterest
63,989
Pins:
2,035

Boards:
18

25

Figure
4
–
social
media
figures
as
of
March
20,
2015

41

Louis
Vuitton
Official
(@louisvuitton)
Instagram
Photos
and
Videos.
Instagram.

41

Figure
5

Figure
6

42

The
Louis
Vuitton
Twitter
account
continues
the
use
of
image-‐heavy
posts
by
sharing
much

of
the
same
content
as
on
its
Facebook
and
Instagram
accounts
(Figure
7).

Consisting
of

over
2,200
tweets,
the
account
engages
with
4.2
million
followers.
42

Finally,
the
official
LV

Pinterest
page
consists
of
2,035
pins
and
18
boards
that
engage
over
63,000
followers.
43

The
different
boards
intrigues
followers
by
focusing
on
the
latest
men’s
and
women’s

collections,
street
style,
art
exhibits,
LV
stores,
and
iconic
brand
images
(Figure
8).

Figure
7

42

Louis
Vuitton
Twitter.
Accessed
January
9,
2015.

43

"Louis
Vuitton
Official
(LouisVuitton)."
Pinterest.
Accessed
January
9,
2015.

43

Figure
8

Trade
Publications

As
a
leader
in
the
luxury
sector,
Louis
Vuitton
may
not
have
to
work
quite
as
hard
as
other

companies
to
attain
trade
coverage,
but
that
in
no
way
means
the
brand
should
minimize

efforts
to
obtain
it.

Instead,
LV’s
coverage
topics
serve
as
an
indicator
of
where
the
luxury

sector
is
headed
in
the
future.

Rather
than
focusing
solely
on
upcoming
collections,
the

brand
aims
for
coverage
on
all
aspects
of
the
business
(Figure
9).

Through
the
author’s

analysis
of
five
articles
from
key
trade
publications
showed
that
each
focused
on
a
different

facet
of
the
brand:

Audience
Engagement;
Brand
Image;
Ad
Campaign;
CSR,
and
Art

Community.

This
assessment
allows
considerations
for
future
coverage
and
business

strategy
to
be
identified.

44

Topic
Publication
/

Date

Article
Title
Key
Article
Points

Insights

Audience

Engagement

Women’s
Wear

Daily

Nov.
6,
2014

Louis
Vuitton
Tops

Stylophane’s
List
of

Most
Engaged

Fashion
Brands

LV
receives
most

likes
when

compared
with

other
fashion

brands
in
Oct.
2014

Heritage
values
are

important,
but

luxury
brands
must

embrace
digital
and

social
efforts
now,

and
new

technologies
in
the

future

Brand
Image
Financial
Times

Jan.
4,
2010

The
Public
Image:

Louis
Vuitton

“Heritage”
&

“Hand-‐Crafted”
are

luxury

catchphrases

LV
uses
these

terms
in
campaigns

more
than
any

other
brand

Luxury
competitors

may
attempt
to
be

perceived
as
having

these

characteristics,
but

LV
leads
in

association

Marketing
&

Communications

Telecomm-‐
unications
Weekly

Jan.
17,
2009

Louis
Vuitton's

Core
Values

Campaign

Celebrates
the

Greatest
Journey
of

All

Travel
as
essential

component
to

mankind

Spotlight
the
travel

theme
ahead
of

latest
collection

LV
receiving

recognition
outside

of
luxury
sector

places
it
ahead
of

competitors
by

achieving
larger

audience

Associating

accomplished

brand
advocates

furthers
brand

values
ahead
of

latest
trends

Corporate
Social

Responsibility

(CSR)

Financial
Times

Oct.
1,
2014

The
Fondation

Louis
Vuitton,
Paris

LV
&
Parent
LVMH

want
to
bring

artists
they
work

with
to
the
public

Frank
Gehry-‐
designed
building

will
be
home
to
LV

fashion
shows

LV
associations
to

art
and

architecture

communities

expands
brand

recognition
and

perception
to

larger
audience

Art
Community
Women’s
Wear

Daily

Jan.
19,
2015

Louis
Vuitton's
L.A.

Extravaganza

Digital
exhibit

shows
Creative

Director’s
second

collection

Experiential
digital

events
&
efforts

create
increasing

recognition
and

brand
perception

Figure
9

45

The
first
article
analyzed
focuses
on
the
brand’s
ability
to
cultivate
audience
engagement

on
a
social
media
platform.

Louis
Vuitton
Tops
Stylophane’s
List
of
Most
Engaged
Fashion

Brands
was
written
by
Arnold
Karr
in
November
2014
and
published
in
Women’s
Wear

Daily.
44

The
article
discusses
how
internet
marketing
company
Stylophane
compared
the

number
of
likes
on
Facebook
posts
that
fashion
brands
received
from
followers.

In
October

2014,
LV
conquered
the
competition
with
1.23
million
likes.

So
although
much
of
LV’s

brand
focus
is
on
retaining
its
heritage
image,
continued
expansion
via
social
media
is
very

important.

In
January
2010,
the
Financial
Times
published
an
article
written
by
Vanessa
Friedman
that

discussed
the
importance
of
public
image.

The
Public
Image:
Louis
Vuitton
emphasized
how

terms
like
“hand-‐crafted”
and

“heritage”
have
dominated
branding
efforts
by
luxury

companies
following
the
recession.
45

While
many
companies
have
latched
on
to
these
and

similar
terms,
few
have
done
so
to
the
extent
that
Louis
Vuitton
has.

LV’s
use
of
a
core-‐
focused
advertising
campaign
allows
itself
to
highlight
its
heritage
appeal,
while
also

displaying
its
most
recent
trends.

Articles
like
this
are
highly
beneficial
for
the
brand

because
it
reinforces
industry
leadership,
precisely
what
Louis
Vuitton
and
parent

company
LVMH
strive
toward.

44

Karr,
Arnold.
"Louis
Vuitton
Tops
Stylophane’s
List
of
Most
Engaged
Fashion
Brands."
Women's
Wear
Daily,

November
6,
2014.
Accessed
January
9,
2015.

45

Friedman,
Vanessa.
2010.
The
public
image:
Louis
vuitton.
FT.com
(Jan
04),

46

Telecommunications
Weekly’s
article,
Louis
Vuitton's
Core
Values
Campaign
Celebrates
the

Greatest
Journey
of
All,
published
in
January
2009,
centers
on
the
same
core-‐focused
ad

campaign
that
was
mentioned
in
Friedman’s
Financial
Times
article.

Rather
than

mentioning
the
campaign
as
supporting
evidence,
this
article
focuses
on
the
campaign’s

adherence
to
the
importance
of
travel
in
one’s
life.
46

The
specific
ad
features
astronauts

Buzz
Aldrin,
Jim
Lovell,
and
Sally
Ride.

Obtaining
coverage
in
a
vertical
rather
than
core

trade
publication,
gives
LV
the
opportunity
to
expand
recognition
beyond
its
loyal

customer
base,
resulting
in
added
value
to
the
brand
image
by
non-‐brand
loyalists
who

could
become
“brand
aspirationals.”

A
second
article
published
in
the
Financial
Times,
written
by
Adam
Thompson
in
October

2014,
discusses
how
LV
has
created
a
convergence
of
fashion
and
art.
The
Fondation
Louis

Vuitton,
Paris
spotlights
the
Frank
Gehry
designed
building,
which
opened
in
2014,
and
the

ways
in
which
LVMH’s
Fondation
Louis
Vuitton
not
only
provides
a
location
for
LV
fashion

shows,
but
more
importantly,
allows
customers
and
the
public
alike
the
opportunity
to
be

closer
to
timeless
pieces
of
art.
47

While
the
foundation
is
owned
and
operated
by
parent

company
LVMH,
its
name,
Fondation
Louis
Vuitton,
expands
brand
recognition
to
both
the

art
and
architecture
communities
and
the
general
public,
all
which
enhance
LV’s
overall

brand
perception
as
an
artisanal
maker.

46

Louis
Vuitton;
Louis
Vuitton's
core
values
campaign
celebrates
the
greatest
journey
of
all.
(2009).

Telecommunications
Weekly,
,
192.

47

Thomson,
Adam.
(2014).
The
Fondation
Louis
Vuitton,
Paris.
FT.Com

47

Finally,
an
article
published
in
WWD,
Louis
Vuitton's
L.A.
Extravaganza,
explains
LV’s
art

exhibit
“Series
2,”
which
took
place
in
Los
Angeles
in
January
2015.

Written
by
Marcy

Medina
in
January
2015,
the
article
explains
how
the
exhibit
is
a
digital
experience
that

focuses
on
LV
Creative
Director
Nicolas
Ghesquiere's
second
collection.
48

Being
published

in
WWD,
most
readers
would
be
familiar
with
both
the
brand
and
its
director,
however,

highlighting
its
expansion
into
experiential
digital
events
elevates
the
brand
in
terms
of

relevance
in
a
modern,
increasingly
digital
world,
balancing
heritage
with
its
position
as
a

leader
that
is
driving
the
latest
tech
trends
in
the
industry.

Logos

A
successful
logo
can
ignite
the
aspirational
values
a
non-‐customer
has
for
the
brand
and

should
trigger
feelings
of
desire.

The
Louis
Vuitton
monogram
icon,
a
simple
“LV,”
has
been

enough
over
the
years
to
do
just
that

(Figure
10).

Synonymous
with
exclusivity,
the
logo,

which
has
been
in
place
since
1896,
has
symbolized
luxury
for
customers
and
non-‐
customers
alike.

Over
the
years,
this
iconic
logo
has
been
more
and
less
visible
at
different

times,
yet
even
when
its
visibility
was
minimized
as
a
design
element,
LV
products
have

maintained
the
same
logo
over
the
years.

Most
often,
the
monogram
logo
is
seen
in
a

custom
black
font
with
“Louis
Vuitton”
written
in
capital
letters
underneath
on
a
white

background.

The
simplicity
of
the
color
choice
resembles
the
simple,
refined
taste
of
the
LV

brand.

The
black
font
also
embraces
the
brand’s
themes
relating
to
elegance,
excellence,

48

Medina,
Marcy.
(2015).
Louis
Vuitton's
L.A.
Extravaganza.
WWD,
209(24),
8

48

and
class.

The
logo
is
clear
and
resists
trendy
flair
in
favor
of
long-‐time
duration;
similar
to

the
products
Louis
Vuitton
produces.

Keeping
the
same
logo
for
over
a
century
also

supports
LV’s
heritage
role
within
the
luxury
industry.

Figure
10

Comparing
the
logo
to
another
equally
iconic
company
outside
of
the
luxury
sector,
Coca-‐
Cola,
is
an
effective
means
of
understanding
why
the
company
has
refrained
from
major

changes.

Coca-‐Cola
unquestionably
has
a
dedicated
following,
and
not
just
in
regards
to

those
drinking
the
beverage.

Coca-‐Cola
is
one
of
a
small
number
of
companies
that
enjoy

such
large-‐scale
brand
adoration,
although
this
level
of
brand
loyalty
has
generated
some

serious
criticism
throughout
the
years
whenever
the
company
has
decided
to
alter
its
logo.

49

Since
1897,
Coca-‐Cola
has
gone
through
eight
different
logos,
that,
while
featuring

relatively
small
color
variations,
has
upset
dedicated
brand
fans
(Appendix).
49

Although
they
may
have
been
irked,
dedicated
Coca-‐Cola
fans
have
not
abandoned
the

brand
altogether
due
to
logo
changes.

While
the
changes
have
not
been
disastrous
for

Coca-‐Cola,
they
present
a
lesson
to
LV;
as
a
heritage
company,
LV
must
continue
its

positioning
as
a
brand
dedicated
to
a
tradition
of
elegance.

The
Louis
Vuitton
company
that

created
luggage
for
English
nobility
over
100
years
ago
is
the
same
Louis
Vuitton
that
is

producing
exclusive
pieces
for
today’s
luxury
shoppers.

Coca-‐Cola
was
able
to
evolve
its

logo
over
time
because
while
they
too
have
a
long
history,
their
product
is
not
a
luxury

purchase,
and
the
lesser
investment
commitment
gives
them
some
freedom
to
take
risks.

The
same
may
not
necessarily
apply
to
LV.

Advertising

Assessing
Louis
Vuitton’s
advertisements
shows
just
how
much
value
is
placed
on
the

company’s
brand
image.

The
various
ads
throughout
the
years
have
changed
in
regards
to

theme
and
tone,
but
the
core
symbolism
has
remained
the
same.

Exclusivity
and
elegance

are
always
present
regardless
of
the
product
being
advertised,
regardless
of
the
year
it
is

released,
and
regardless
of
the
models.

The
unspoken
communication—
that
LV
embodies

49

"The
History
of
the
Coca-‐Cola
Logo
Coca-‐Cola
Logo
Font."
Coca-‐Cola
GB.
Accessed
February
4,
2015.

50

luxury—is
found
in
each
and
every
advertisement.

Be
it
a
print
ad
or
a
short
video,
Louis

Vuitton
evokes
aspiration
from
consumers.

Celebrity
Endorsers

In
addition
to
the
overall
rhetoric,
semantics,
and
symbolism
within
Louis
Vuitton’s

advertising,
celebrity
endorsements
have
played
a
large
role
in
the
luxury
line’s
vision.

Aside
from
using
models,
LV
has
also
worked
with
well-‐known
actors,
singers,
film

directors,
athletes,
and
astronauts
in
their
many
different
ads.

Figure
11
shows
some
of
the

numerous
celebrity
endorsers
LV
has
worked
with
to
increase
the
likelihood
of
achieving

sales
goals.

The
images
below,
which
span
from
2001
to
2009,
all
support
LV’s
brand

image
of
luxury.

Some
of
the
celebrity
endorsers
have
caused
controversy
with
their
work,

such
as
Madonna
and
Kanye
West
for
example,
but
nonetheless
these
individuals

inarguably
live
lives
of
luxury.

So,
although
some
of
the
choices
may
appear
to
stray
from

the
traditional
characteristics
of
LV’s
heritage
image,
the
values
of
innovation
and

creativity
that
these
luxury
products
must
convey
are
still
present,
and
very
much

promoted.

Additionally,
by
using
cutting
edge
personalities
to
represent
the
brand,
LV
is

able
to
embrace
modernity
and
risk-‐taking
without
altering
its
tradition
of
elegant
goods.

51

Figure
11
–
source:
fashionmarketingsecrets.com

“Core
Values”
Campaign

The
use
of
heritage
themes
is
no
surprise
when
looking
at
luxury
superstar
Louis
Vuitton’s

advertising.

While
the
brand
has
remained
loyal
to
the
characteristics
and
themes
it
has

worked
so
hard
to
convey
for
decades,
in
2007
the
company
embarked
on
a
new
means
of

displaying
its
heritage.

Louis
Vuitton’s
“Core
Values”
campaign
was
created
to
show
the

tradition
of
luxury
that
has
always
been
present,
but
also
depicts
the
personal
emotions

associated
with
travel.

Through
self-‐discovery
and
a
sense
of
an
individual
journey,
the

“Core
Values”
campaign
captures
celebrity
endorsers,
both
young
and
old,
in
locations

across
the
globe.

52

While
most
campaigns,
especially
those
within
the
realm
of
luxury
fashion,
include
models,

actors,
or
singers,
the
“Core
Values”
campaign
also
features
athletes,
politicians,

photographers,
directors,
and
dancers.

The
first
year
of
the
campaign
featured
three

different
celebrity
influencers
who
were
all
unique,
yet
equally
influential,
in
their
own

ways.

Famed
photographer
Annie
Leibovitz
captured
French
movie
star
Catherine

Deneuve
at
the
Paris
train
station
(Figure
12),
former
Soviet
Union
politician
Mikhail

Gorbachev
in
a
car
along
the
Berlin
Wall,
and
the
tennis
power
couple
Andre
Agassi
and

Steffi
Graf
in
New
York.

Figure
12

53

What
made
the
“Core
Values”
campaign
different
from
prior
ones
was
that
rather
than

paying
the
endorsers,
donations
were
made
in
their
names
to
various
charitable

organizations.

As
Louis
Vuitton
and
each
of
the
celebrity
endorsers
are
passionate
about

environmental
responsibility
and
sustainable
development,
donations
were
made
to
Green

Cross
International
on
behalf
of
Gorbachev,
who
serves
as
the
organization’s
founder
and

chairman,
and
to
the
Climate
Project
on
behalf
of
Deneuve,
Agassi,
and
Graf.

Based
on
the
success
of
the
first
year
of
the
“Core
Values”
campaign
in
2007,
another
round

of
philanthropic
celebrity
endorsers
were
selected
to
be
the
subject
of
Leibovitz’
camera.

The
next
three
ads
were
similar
to
the
first
group
in
that
they
radiated
luxury
while

embodying
a
quiet,
peaceful
sense
of
travel.

The
next
group
was
made
up
of
actor
Sean

Connery
near
his
home
in
the
Bahamas;
Rolling
Stones
icon
Keith
Richards
in
a
hotel
room,

and
the
father-‐daughter
duo
of
Francis
Ford-‐Coppola
and
Sofia
Coppola
lounging
in
the

Buenos
Aires
countryside
(Figure
13).

While
the
Coppola’s
family
image
is
similar
to
its

predecessors
in
conveying
luxury,
whimsy,
and
beauty,
this
shot
also
manages
to

characterize
Louis
Vuitton’s
rather
unique
generational
value.

Many
luxury
brands
may
be

available
to
consumers,
but
few
can
capture
the
tradition
that
LV
holds,
and
how
the
brand

exemplifies
a
very
specific
kind
of
luxury
that
can
and
should
be
passed
down
from

generation
to
generation.

54

Figure
13

Stores

Louis
Vuitton
operates
16
flagship
store
locations
across
the
world
(Figure
14).

Each
is

designed
to
signify
the
elegance
associated
with
the
LV
brand.

While
individual
stores
sell

LV
luggage,
accessories,
and
garments
that
display
beauty
and
creativity,
none
compare
to

the
design
of
the
flagship
locations.

The
branding
achieved
by
these
locations,
particularly

those
in
non-‐U.S.
markets,
is
exponential
when
creating
and
attracting
brand
recognition.

55

CONTINENT
NUMBER
OF
STORES
SPECIFIC
LOCATIONS

EUROPE
4
PARIS

LONDON

ROME

MUNICH

NORTH
AMERICA
3
SAN
FRANCISCO

NEW
YORK

LAS
VEGAS

ASIA
8
SINGAPORE

MACAU

TAIPEI-‐
2
STORES

KOBE

TOKYO

HONG
KONG-‐
2
STORES

AUSTRALIA
1
SYDNEY

Figure
14
-‐
via
Louis
Vuitton
store
locator

In
retail,
the
layout
of
any
store,
whether
it
be
a
luxury
space
or
a
big-‐box
consumer
goods

store,
is
carefully
planned
and
orchestrated
to
keep
consumers
satisfied.

Product

availability
aside,
if
a
store’s
layout
is
void
of
the
right
organizational
structure,
consumers

will
find
other
options.

This
layout
structure
is
even
more
important
within
the
luxury

sector.

Although
less
product
may
be
offered
than
in
a
conventional
department
or
big-‐box

store,
luxury
brands
have
the
availability
to
design
the
layout
of
a
flagship
to
perfectly

display
their
products,
without
having
to
compete
with
competitor
brands
for
space.

With

this
freedom,
luxury
companies
have
embraced
layouts
in
their
flagship
stores
that
might

be
considered
similar
to
those
found
in
museums
across
the
globe.

Essentially,
museums

display
art
in
ways
that
highlight
their
beauty,
creativity,
and
uniqueness.

They
create

feelings
of
awe.

They
leave
room
for
visitors
to
marvel
over
them,
and
consider
what
the

artist
must
have
been
imagining
and
feeling
when
they
created
the
piece.

In
a
flagship

store,
luxury
brands
can
utilize
similar
strategies.

56

Incorporating
artistry
within
a
luxury
company’s
brand
identity
is
no
secret.

Creative

directors
in
charge
of
the
latest
designs
do
not
see
their
pieces
as
generic
or
absent
of

vision;
they
design
and
shape
collections
with
inspiration,
just
as
artists
do.

When
shaping

the
layout
of
a
flagship
store,
maintaining
that
art
aesthetic
is
just
as
essential.

Stunning
art

would
never
be
housed
in
a
cluttered
museum
or
studio
that
masked
its
beauty,
so
neither

should
luxury
products.

In
Joy
et
al’s
article,
the
authors
discuss
the
notion
that
the

sensorially
immersive
experience
of
being
in
a
museum,
full
of
entrancement
and
awe,

should
be
replicated
within
the
confines
of
luxury
stores.

Presenting
products
as
works
of

art,
allowing
visitors
to
experience
its
beauty,
all
helps
to
shape
the
brand
identity
of

complete
aesthetic
delight.
50

As
one
of
the
most
influential
heritage
brands
in
the
luxury
sector,
Louis
Vuitton
supports

this
notion
and
imagining
their
departure
from
this
layout
structure
would
produce
more

shock.

Within
each
LV
store,
pieces
are
arranged
in
a
way
that
completely
displays
their

designs.

Products
are
not
crammed
together,
instead,
they
are
displayed
with
enough

space
so
that
each
item
is
impossible
to
be
missed
or
ignored.

Glass
cases
hold
the
latest

pieces,
allowing
shoppers
to
marvel
at
their
designs
without
getting
too
close.

This

separation
of
shoppers
and
the
products
encourages
perceptions
that
these
pieces
are
of

even
more
value,
being
figuratively
untouchable
for
those
who
do
not
belong
in
the

50

Joy,
A.,
Wang,
J.
J.,
Chan,
T.,
Sherry,
J.
F.,
and
Cui,
G.
"M(Art)
Worlds:
Consumer
Perceptions
of
How
Luxury

Brand
Stores
Become
Art
Institutions."
Journal
of
Retailing,
2014,
347-‐64.

57

exclusive
world
of
luxury.

Creating
distance
between
luxury
world
outsiders
and
the

available
products
within
shapes
LV’s
brand
identity
and
reputation
among
aspirational

customers.

LV’s
reputation
as
a
brand
that
produces
art-‐worthy
pieces
propagates
intrigue

by
those
who
aspire
to
one
day
be
owners,
and
gives
current
customers
added

reinforcement
for
their
exclusive
relationship
with
the
luxury
giant.

Structuring
store
layouts
similar
to
museums
is
only
one
example
of
Louis
Vuitton’s
close

ties
with
art.

Many
luxury
companies
may
structure
their
stores
similarly,
as
this
approach

does
after
all
increase
perceptions
of
beauty
and
awe
amongst
visitors,
but
LV
can
boast

closer
associations
to
artistic
aesthetics
and
the
art
community
in
general
than
most

companies.

In
a
2014
interview
with
Miles
Socha
of
Women’s
Wear
Daily,
LVMH
Chairman

and
CEO
said,
“Since
the
19
th

century,
there
have
been
strong
links
between
the
brand

Louis
Vuitton,
its
founders
and
artists
–
and
it
has
endured
ever
since.

We’ve
participated

in
numerous
artistic
events,
world
fairs,
and…collaborated
with
many
artists.”
51

51

Socha,
Miles.
"Behind
the
Vision."
WWD
208,
no.
83
(Oct
21,
2014):
7.

58

SECTION
V:
SEPHORA

Background

Since
first
opening
its
doors
in
France
in
1970,
cosmetics
retailing
giant
Sephora
has

revolutionized
the
beauty
industry
by
providing
customers
an
“open-‐sell
environment”

with
products
ranging
from
skincare,
body,
fragrance,
color,
to
haircare,
and
smilecare.

Many
of
these
are
high-‐end
cosmetics
lines
that
were
licensed
from
the
leading
luxury

brands.

Offering
a
wide
range
of
both
traditionally
classic
and
newer
brands,
Sephora
also

markets
its
own
product
line
within
its
stores.

As
of
2015,
Sephora
operated
1,900
stores

in
29
countries
spanning
the
world,
with
over
360
stores
across
North
America.

The
first

United
States
location
opened
its
doors
in
New
York
in
1998.

The
beauty
chain
was

acquired
by
LVMH
in
1997.
52

In
2006,
Sephora
continued
its
expansion
by
opening

locations
in
U.S.
JCPenney
retail
department
stores,
and
today,
there
are
Sephora
locations

inside
JCPenney
stores
across
the
U.S.

While
much
smaller
than
its
normal
sized
stores,

these
stores
are
positioned
at
the
center
of
JCPenney
stores’
floorplan
and
feature
the

signature
Sephora
aesthetics
and
product
offerings.

Sephora’s
website
(sephora.com),
was
launched
in
the
United
States
in
1999
and
serves
as

Sephora’s
largest
retail
cosmetics
store
in
North
America
when
considering
selection
of

52

Loeb,
Walter.
"Sephora:
Department
Stores
Cannot
Stop
Its
Global
Growth."
Forbes.
April
18,
2013.

Accessed
December
15,
2014.

59

products
and
brands
as
well
as
sales.
53

Beginning
in
2007,
Sephora
launched
its
client

loyalty
program,
Beauty
Insider,
as
a
means
of
retaining
clients
by
offering
perks,
including

special
products,
exclusive
information
and
access
to
new
trends
and
tips
in
the
beauty

industry.

Two
years
later,
Sephora
upped
incentives
for
loyal
customers
by
launching
V.I.B.

(Very
Important
Beauty
Insider),
a
heightened
level
for
Beauty
Insiders.

This
premium

program
gave
members
access
to
additional
exclusive
events,
gifts,
and
select
products.

While
Sephora
enjoys
a
very
dedicated
customer
base,
there
are
numerous
competitors

that
are
threatening
the
brand.

Between
department
stores
like
Neiman
Marcus,
Saks
Fifth

Avenue,
and
Macy’s;
chain
beauty
stores
like
Lush
and
Ulta;
grocery
stores,
and
drug
stores

like
CVS,
Walgreens,
and
Duane
Reade—
all
carrying
cosmetics—
there
is
a
massive
market

of
brick-‐and-‐mortar
stores
providing
beauty
products
for
consumers.

The
number
of
e-‐
commerce
stores
competing
within
the
beauty
industry
is
even
larger.

In
addition
to

traditional
stores’
websites,
online
retailers
like
Amazon,
Ebay,
and
Drugstore.com
and

“tailored”
concierge
services
like
Birch
Box,
all
provide
a
plethora
of
products
for

consumers.

Further
complicating
the
competitive
mix
are
individual
brands
that
Sephora

sells,
such
as
Nars,
Tarte,
and
Urban
Decay,
that
also
sell
from
their
own
websites
as
well
as

through
Sephora.

53

"About
Us."
Sephora.
Accessed
December
23,
2014.

60

The
Concept
of
“My
Luxury”

Within
the
beauty
industry,
there
is
no
question
that
Sephora
offers
luxury
options.

From

popular
options
like
Chloe’s
Roses
de
Chloe
fragrance
and
Urban
Decay’s
Naked
eye
shadow

pallets
to
Yves
Saint
Laurent’s
Rouge
Pur
Couture
gloss
stain
and
Nars’
Blush/Bronzer
Duo,

there
is
no
shortage
of
luxury
beauty
products
stacked
and
shelved
in
Sephora
stores
and

warehouses.

Yet
while
Sephora
sells
lipstick
and
blush
just
like
any
other
beauty
store,
the

question
of
whether
or
not
these
products
can
truly
be
categorized
as
“luxury”
has
been

brought
up
by
many.

When
a
shopper
spends
$2,500
on
a
Fendi
handbag,
can
a
$35
blush

from
Perricone
MD
actually
qualify
as
a
luxury
purchase?

Those
who
favor
“my
luxury,”
which
refers
to
a
small
luxury
purchase,
are
sure
of
this.

Although
the
difference
between
a
$45
Dior
BB
(beauty
balm)
cream
and
a
$2,000
Edun

suede
coat
is
no
small
price,
the
BB
cream
is
still
a
splurge
when
the
same
kind
of
product

is
offered
by
Cover
Girl
for
$7.

When
a
woman
purchases
said
BB
cream
from
Sephora,
she

feels
a
sense
of
luxury.

This
customer
knows
she
could
easily
find
a
relatively
similar

beauty
product
at
a
nearby
“big
box”
retailer,
yet
she
chooses
to
purchase
the
more

expensive
option
because
she
feels
the
gratification
that
comes
with
acquiring
a
luxury

product.

According
to
Kapferer,
the
concept
of
“my
luxury”
allows
a
break
from
reality
and

allows
the
individual
to
escape
into
a
world
of
beauty,
pleasure,
and
a
sense
of
eternity.
54

54

Kapferer,
Jean-‐Noël.
"Abundant
Rarity:
The
Key
to
Luxury
Growth."
Business
Horizons,
2012,
453-‐62.

61

During
the
Great
Depression,
the
“lipstick
effect,”
a
concept
that
has
been
attributed
to

beauty
pioneer
Estee
Lauder,
is
a
prime
example
of
how
“my
luxury”
works
for
consumers.

Despite
the
horrid
economic
situation
of
the
1930s,
lipstick
sales
actually
rose
between
the

start
and
end
of
the
Depression.
55

The
“lipstick
effect”
occurs
when
individuals

experiencing
psychological
stress
purchase
small,
affordable
luxury
purchases
—
for

example
Givenchy
Le
Rouge
lipstick,
which
retails
today
for
$36
—
to
achieve
a
feeling
of

luxury
despite
not
being
able
to
afford
more
expensive
luxury
items.

Even
if
consumers
are

stressed
about
their
overall
financial
situation,
many
are
able
to
rationalize
paying
for

something
as
small
as
expensive
perfume
or
mascara
to
help
them
escape
into
the
ideal

world
of
luxury.

In
Kapferer’s
article,
“Key
to
Luxury
Growth,”
he
argues
that
these

purchases
provide,
in
many
ways,
a
placebo
effect
for
consumers.
56

Without
the
big
name

attached
to
the
product,
there
is
no
real
satisfaction.

That
sense
of
luxury
only
comes
when

a
name,
for
example
Dolce
and
Gabbana
or
Chanel,
is
attached.

CONTENT
ANALYSIS

Digital
and
Social
Brand
Equity

Sephora’s
digital
brand
exemplifies
why
it
is
so
vital
for
luxury
brand
companies
to
up
the

ante
in
not
only
establishing,
but
maintaining
and
extending
a
company’s
digital
presence

55

Kapferer,
Jean-‐Noël.
"Abundant
Rarity:
The
Key
to
Luxury
Growth."
Business
Horizons,
2012,
453-‐62.

56

Kapferer,
Jean-‐Noël.
"Abundant
Rarity:
The
Key
to
Luxury
Growth."
Business
Horizons,
2012,
453-‐62.

62

as
well.

Many
companies
today
are
expected
to
have
interactive
websites,
mobile

applications,
and
social
media
accounts;
Sephora
not
only
embraces
these
tools,
but
is

continuing
to
grow
and
strengthen
its
digital
presence
to
increase
consumer
education
and

interaction.

The
company’s
website
experienced
a
much-‐needed
revamp
in
2012
that

synced
its
digital
presence
with
Sephora’s
overall
branding.

Just
like
the
stores,
the
website

is
clean,
stocked
with
tips
and
tricks,
and
has
a
huge
number
of
products
for
customers
to

browse
through.

Branding
aside,
the
digital
reboot
supports
customers
in
finding
the
exact

product
they
desire,
rather
than
having
to
search
through
a
plethora
of
somewhat
similar

items.

In
addition
to
offering
the
largest
selection
of
products
from
the
company’s
private

label
and
the
many
beauty
brands
it
sells,
the
Sephora.com
website
also
offers
personalized

beauty
services
to
aid
consumers
during
their
shopping
experience.

The
first
of
these
services
is
provided
via
consumer
data
tracking.

When
registered
Beauty

Insiders
enter
Sephora’s
website,
they
are
offered
targeted
suggestions
based
on
previous

transactions.

These
past
purchases
are
stored
in
the
company
database,
allowing
the

company
to
tailor
what
options
each
consumer
sees.

In
addition
to
cross-‐referencing

recent
purchases,
descriptive
data
provided
from
each
Beauty
Insider’s
profile
(eye
color,

skin
type,
skincare
concerns,
skin
tone,
hair
color,
and
hair
type),
enables
the
company
to

suggest
specific
products
that
work
with
different
characteristics
(Figure
15).

63

Figure
15-
source:
Sephora.com

Sephora
leverages
their
online
presence
further
through
the
creation
of
numerous
digital

platforms.

“Sephora
TV”
allows
viewers
to
“turn
beauty
on”
by
watching
videos
filled
with

advice,
the
latest
trends,
and
how-‐to’s
to
inspire
customers
to
up
their
beauty
game.

Additionally,
the
video
channel
features
how-‐to’s
from
the
many
different
brands
they
sell.

“Beauty
Talk”
is
the
company’s
community
portal
for
anything
and
everything
relating
to

the
beauty
conversation.

Visitors
can
create
a
Beauty
Talk
profile
to
join
in
on

conversations,
search
for
topics
ranging
from
fragrance
to
skincare,
or
seek
advice
from

64

“the
experts.”

The
beauty
giant
also
created
“The
Glossy,”
a
blog
within
the
Sephora

website
that
provides
visitors
with
beauty
news,
inspiration,
how-‐to’s,
interviews
with

beauty
industry
insiders,
and
videos
shared
from
Sephora
TV.

Similar
to
other
blogs,
“The

Glossy”
is
formatted
to
allow
readers
to
share
stores,
search
through
posts,
see
what
topics

are
trending
in
the
blog,
and
‘like’
different
videos
and
articles.

Finally,
Sephora’s
“Beauty
Board,”
which
was
released
in
March
2014,
is
similar
to
both

Instagram
and
Pinterest
(Figure
16).

Essentially,
the
mission
of
this
platform
is
to
sell

more
product
and
increase
customer
engagement.

This
user-‐generated
social
channel
asks

Sephora
customers
to
interact
by
posting
pictures
of
themselves
while
using
beauty

products
available
at
the
store.

Customers
then
tag
the
products
they
used
in
the
image.

When
these
products
are
tagged,
other
customers
can
learn
about
the
product
details,
read

reviews,
learn
how
a
specific
product
was
used,
and
buy
them
as
well.

Users
can
search

specific
keywords
to
find
the
tagged
posts,
similar
to
how
Pinterest
users
may
search
for

something.

Customers
are
also
joined
on
the
platform
by
accounts
created
by
many
of

Sephora’s
brick-‐and-‐mortar
locations.

With
millions
of
users
on
social
media
platforms
and
the
ever-‐growing
number
of

consumers
active
in
social
shopping,
Sephora’s
foray
into
user-‐generated
content
is
a
no

brainer.

In
an
article
posted
in
Women’s
Wear
Daily,
Julie
Bornstein,
chief
marketing
and

digital
officer
of
Sephora
Americas,
is
quoted
saying
"Beauty
Board
is
taking
a
lot
of
what

65

consumers
at
large
are
doing
and
making
it
more
practical—
a
place
for
consumers
to

browse
for
inspiration
and
discover
products
to
buy
at
sephora.com.”

57

Figure
16

Each
of
these
digital
channels
strengthens
Sephora’s
digital
brand
equity,
increasing
the

potential
that
customers
will
continue
shopping
at
Sephora
and
that
they
will
recommend

the
company
to
friends
and
family.

The
resulting
branding
benefits
continually
grow
from

these
activities,
especially
fueled
by
the
peer
influence
afforded
by
social
media.

Aside

from
its
giant
scope
and
scale
as
a
retailer,
Sephora’s
brand
is
perceived
as
modern,

57

Naughton,
Julie.
"Sephora
Builds
Social
Network."
Women's
Wear
Daily.
January
31,
2014.

66

educational,
and
fun
for
customers.

Rather
than
only
providing
the
website
for
when

customers
need
to
buy
a
specific
product,
Sephora’s
highly
engaging
digital
strategy
has

spawned
brand
adoration
from
dedicated
customers,
including
some
who
visit
the
site

daily.

Sephora’s
active
social
media
program
has
also
enhanced
brand
equity;
throughout
each

channel,
Sephora
maintains
its
position
as
a
beauty
insider
and
invaluable
resource,

constantly
sharing
the
latest
products,
while
communicating
with
a
playful
tone
that

customers
can
appreciate
(Figure
17).

While
many
of
parent
company
LVMH’s
other

brands
maintain
a
more
elegant
persona
on
social
media,
Sephora
shares
company
news

and
products,
while
keeping
up
with
current
events
and
cultural
trends.

PLATFORM
FOLLOWERS
POSTS
7
DAY
POST
AVERAGE

Twitter

@sephora

1.6
Million
Tweets:
19.8
Thousand

Videos/Photos:
1373

19

Instagram

@sephora

2.4
Million
1,093
15

Facebook
6
Million
Followers

135,823
Page
Visits

Total
number
not
listed
11

Pinterest
352,136

Pins:
8,846

Boards:
68

50

Figure
17
–
social
media
figures
as
of
March
20,
2015

67

Figure
18

The
Sephora
Twitter
account
engages
its
1.6
million
followers
by
actively
tweeting
about

the
latest
products
to
hit
the
shelves.
58

Tweets
are
image-‐heavy
and
provide
options
to

customers’
many
wants
and
needs.

The
account
shares
pictures
posted
on
Instagram,

Pinterest,
and
publications
like
The
Glossy;
YouTube
videos;
contests;
tips,
and
news
of
the

latest
collaborations
by
the
company’s
featured
brands
(Figure
18).

Sephora’s
Instagram

account
exerts
the
playful
tone
that
customers
have
come
to
know
over
the
years.

The

account
remains
active
to
retain
its
audience’s
interest
by
generally
posting
at
least
one

image
per
day.

Whether
these
posts
include
pictures
of
the
products
themselves,
being

58

"Sephora
Twitter."
Twitter.
Accessed
January
9,
2015.

68

used
during
Fashion
Week,
or
to
announce
new
contests,
the
account
is
successful
in

maintaining
follower
interest
and
engagement
(Figures
19
and
20).
59

Figure
19

59

"Sephora
(@sephora)
Instagram
Photos
and
Videos."
Instagram.
Accessed
January
9,
2015.

69

Figure
20

The
Sephora
Facebook
account
keeps
its
audience
of
more
than
6.3
million
interested
by

sharing
much
of
the
same
content
featured
on
Twitter,
Instagram,
and
Pinterest
(Figure

21).
60

In
addition
to
being
image-‐heavy,
most
posts
also
include
links
to
the
Sephora

website,
beauty
tips
and
tricks,
or
questions
about
what
customers
want
to
see
more
of
and

what
inspires
them.

Finally,
Sephora’s
Pinterest
account
includes
over
349,000
followers

who
search
the
company’s
67
boards
and
nearly
8,700
pins.
61

These
pins
are
additionally

shared
on
the
company’s
various
social
channels.

Sephora’s
Pinterest
account
is
successful

in
the
numerous
ways
it
achieves
customer
engagement
(Figure
22).

By
using
email
to

encourage
Pinterest
activity,
recommending
that
customers
try
pinning
their
shopping

lists,
and
including
“Pin-‐It”
buttons
on
products
throughout
the
company
website,
Sephora

has
and
continues
to
be
a
leader
among
competitors
on
the
social
platform.

60

"Sephora."
Facebook.
Accessed
January
9,
2015.

61

"Sephora."
Pinterest.
Accessed
January
9,
2015.

70

Figure
21

Figure
22

71

Coverage
in
Business
and
Trade
Publications

As
a
luxury
beauty
company
that
is
part
of
the
publicly
traded
LVMH,
coverage
in
key

business
and
trade
media
is
a
given.

Over
the
years,
Sephora
has
successfully
received
said

coverage
on
numerous
topics.

While
media
coverage
analysis
throughout
Sephora’s

lifespan
would
be
informative,
the
author
chose
to
narrow
her
analysis
to
the
time
period

following
the
beauty
giant’s
digital
revamp
in
2012
(Figure
23).

Doing
so
provides
data

that
gives
insight
into
what
the
organization
has
done
right
thus
far,
and
what
efforts
and

topics
might
be
most
successfully
in
garnering
future
coverage.

Since
the
2012
overhaul,

Sephora
as
a
company
has
generated
coverage
in
many
major
business
and
trade

publications
including
Forbes,
Fortune,
Women’s
Wear
Daily,
Business
Insider,
and
the

Global
Cosmetic
Industry.

Although
there
have
been
countless
other
articles
discussing

Sephora’s
strategy
and
operations,
the
author
chose
to
concentrate
on
these
five

publications,
and
analyze
five
specific
articles.

.

Topic
Publication/

Date

Article
Title
Key
Insights

Business

Strategy

Forbes

April
18,
2013

Sephora:
Department
Stores

Cannot
Stop
Its
Global
Growth

2013
Possessed
20%
of
U.S.

Market

Women’s
Wear

Daily

Oct.
17,
2014

Sephora’s
Big
Goal:
No.
1
in

Every
Market

2014
U.S.
sales
produced

40%
of
global
profits

Focus
on
stores:
new

locations
&
augmented

services

Tech
Business
Sephora
CMO
Debunks
a
Women
are
56%
more

72

Insider

May
21,
2013

Major
Stereotype
About

Women
and
Tech

active
in
visiting
online
sites

than
men

Strong
need
to
integrate

online
services
that

promote
in-‐store
visits

Fortune

July
27,
2014

Shopping
With...Bridget
Dolan
Customer
experience
and

benefit
over
all
other
efforts

Without
helping
the

customer,
any
and
all
tech

services
are
a
waste
of
time

and
money

Forbes

Sept.
14,
2014

Sephora’s
Winning
Formula:

Highly
Relevant
Personalized

Data

Personalized
data
allows

brands
to
find
exactly
what

a
customer
wants/needs

Without
individualized

information
from
the

customer,
no
technology

can
be
entirely
beneficial

Figure
23

Within
the
business
strategy
angle,
both
Forbes
and
Women’s
Wear
Daily
(WWD)

published
articles
that
highlight
Sephora’s
operations
post-‐revamp.

The
first
of
the
Forbes

articles,
Sephora:
Department
Stores
Cannot
Stop
Its
Global
Growth,
written
by
Walter
Loeb

in
April,
2013.

In
his
article,
Loeb
addressed
Sephora’s
success
in
the
United
States

fragrance
and
cosmetic
market,
pointing
out
that
by
2013,
the
beauty
store
had
captured

20
percent
of
the
market,
a
major
accomplishment
when
considering
the
fact
that
retail

73

department
stores
still
carry
a
large
number
of
leading
brands,
some
of
which
are
not

available
at
Sephora.
62

The
second
article
focusing
on
business
strategy
was
published
in
Women’s
Wear
Daily.

The
article,
Sephora’s
Big
Goal:
No.
1
in
Every
Market,
was
published
in
October
2014
and

written
by
Jennifer
Weil.

Similar
to
the
Forbes
article,
this
feature
describes
the
success

Sephora
has
found
in
international
markets
and
its
goal
of
becoming
the
cosmetic
leader,

regardless
of
the
specific
market.

According
to
Weil,
industry
experts
have
claimed
that

while
France
and
the
United
States
are
the
company’s
key
markets,
the
cosmetic
giant

currently
controls
markets
in
France,
Poland,
the
Czech
Republic,
and
the
Balkans.

63

Although
the
company
does
not
claim
the
top
spot
in
the
U.S.,
Weil
notes
that
at
the
time
of

publication,
nearly
40
percent
of
global
sales
were
credited
to
American
shoppers,
ranking

second
to
Macy’s.

Additionally,
the
significance
of
stores
was
also
key
in
this
feature.

Between
opening
new
stores,
renovating
existing
locations,
and
the
ever-‐growing
list
of

augmented
services,
such
as
beauty
classes
and
individualized
services,
Sephora’s
focus
on

expanding
locations
and
customer
ease
is
vital
to
its
success.

Both
articles
on
business

strategy
published
in
Forbes
and
WWD
give
Sephora
the
opportunity
to
expand
recognition

and
increase
its
brand
perception
as
a
leader
within
the
luxury
industry.

62

Loeb,
Walter.
"Sephora:
Department
Stores
Cannot
Stop
Its
Global
Growth."
Forbes.
April
18,
2013.

Accessed
December
15,
2014.

63

Weil,
Jennifer.
(2014,
Oct
17).
Beauty:
Sephora's
big
goal:
No.
1
in
every
market.
WWD,
208,
1-‐7.

74

In
terms
of
tech-‐centric
coverage,
Business
Insider,
Fortune,
and
Forbes
each
published

articles
since
the
2012
digital
revamp.

In
Business
Insider’s
May
2013
article,
Sephora
CMO

Debunks
a
Major
Stereotype
About
Women
and
Tech,
Sephora’s
Chief
Marketing
and
Digital

Official,
Julie
Bornstein,
discusses
how
the
relatively
recent
shift
of
increasingly
tech-‐savvy

women
is
forcing
retailers
to
up
their
game.

With
women
spending
56
percent
more
time

on
retail
websites
on
their
mobile
devices
than
men
do,
many
retailers
have
switched

technology
efforts
to
target
female
consumers.

Bornstein
notes
that
these
efforts
are
most

effective
when
making
online
activities
social,
mobile,
and
with
dedicated
integration

between
online
and
offline
experiences.

Sephora
engages
in
the
latter
by
encouraging

online
interest,
for
example,
the
company’s
“Color
IQ”
service,
which
translates
into
in-‐
store
visits,
and
ultimately,
purchases.

In
July
2014,
Fortune
published
an
article
by
Sheila
Marikar
titled
Shopping
with
Bridget

Dolan.

The
article
discusses
the
importance
of
creating
new
technologies
that
support
the

customer.

Dolan,
VP
of
Interactive
Media
at
Sephora,
reiterates
that
each
of
Sephora’s
new

services
focuses
on
integrating
technology
that
benefits
customers
during
their
the

shopping
experience,
for
example,
the
Color
IQ
service.

The
last
of
the
tech-‐centric
articles,

Sephora's
Winning
Formula:
Highly
Relevant
Personalized
Data,
was
written
by
John
Ellett

and
published
in
Forbes
in
September
2014.

Similar
to
the
Fortune
article,
Ellett

interviewed
Bridget
Dolan,
VP
of
Interactive
Media
at
Sephora.

Although
both
articles

discuss
Sephora’s
entrance
into
augmented
services,
this
writer
delves
deeper
into
why

personalized
data
is
key
to
retaining
and
growing
the
company’s
customer
base.

In
the

75

interview,
Dolan
explains
that
the
core
reason
for
all
of
the
new
technology
services
are
for

one
purpose
only
—
the
customer.

Prior
to
designing
any
services,
Sephora
realized
that

without
individualized
information,
no
technology
would
be
able
to
truly
help
customers.

Within
all
five
of
the
articles
analyzed,
the
author
found
a
central
theme
regarding
the

importance
of
focusing
on
customers
first,
and
then
developing
new
technologies
and

incentives
to
lure
and
engage
customers.

Any
consumer
who
is
seeking
a
“luxury”

experience
expects
a
certain
level
of
attention
to
detail
and
customization,
and
it
appears

that
post-‐revamp,
the
company’s
new
services,
particularly
digital
and
social,
are
intended

to
generate
attention.

Had
they
failed
to
enhance
the
customer’s
shopping
experience,

however,
the
time
and
money
spent
developing
these
services
arguably
would
be
wasted.

Logo
and
Symbols

Simply
put,
the
Sephora
logo
embodies
modernity
and
minimalism.

While
it
includes

additional
colors
at
various
times,
for
example
teal
or
gold
on
special
occasions
and

holidays,
the
logo
is
most
often
black
and
white
(Figure
24).

The
modern,
capitalized
sans-‐
serif
black
font
sits
atop
the
store
tagline,
“The
Beauty
Authority.”

With
a
white

background,
the
logotype
also
includes
a
black
column
to
the
right
of
the
type.

The

simplicity
of
the
logo
in
many
ways
counters
the
colors
housed
inside
the
walls
of
Sephora

stores.

This
major
contrast
is
no
error
though;
it
reflects
the
dominance
of
the
Sephora

wordmark.

Flashy
designs
are
not
needed
on
the
logo
nor
in
stores;
the
strong
text

treatment
speaks
for
itself.

The
black
and
white
logo
can
work
with
any
color
mixed
in,
just

76

as
each
and
every
Sephora
location
has
products
that
can
be
mixed
together
work
for
the

vast,
diverse
group
of
people
who
call
themselves
customers.

Figure
24

Similar
to
the
logotype,
the
Sephora
symbol
exhibits
the
same
modern,
simple
design

(Figure
25).

In
addition
to
the
store
name
at
the
bottom,
the
black
and
white
symbol
also

includes
the
“Sephora
flame.”

Resembling
a
stretched
“S,”
the
white
flame
can
be
found
on

Sephora
brand
products,
the
website,
store
bags,
and
advertising
collateral.

Both
the
logo

and
symbol
incorporate
the
color
red
at
different
times.

The
color
palette
in-‐stores
and
on

the
website
continue
the
use
of
black,
white,
and
red.

Store
walls
are
normally
painted

white
and,
depending
on
the
individual
store,
can
feature
red
carpets,
black
and
white

stripes
on
the
walls,
or
black
beams
along
the
store.

Regardless
of
the
specific
decor
in

each
store,
the
overall
aesthetic
of
Sephora
stores
is
clean,
modern,
and
polished.

The
same

can
be
said
about
the
company’s
website.

While
the
products
shown
on
the
website
are

colorful,
the
website
continues
minimalist
black
and
white
format
designs
with
occasional

77

usage
of
red.

The
consistent
use
of
the
logotype
and
symbol,
whether
utilize
in-‐store
and

online,
works
to
promote
Sephora’s
branding.

Figure
25

Advertising

Similar
to
other
consumer
cosmetics
companies,
Sephora’s
ads
highlight
the
latest
products

to
hit
their
shelves.

Depending
on
the
specific
products
shown,
the
theme
of
the
ad
can
be

dark
and
edgy
or
muted
and
sweet.

Regardless
of
the
tone
of
the
ad,
Sephora’s
brand

characteristics
of
being
diverse
and
up-‐to-‐date
speak
loudly.

In
stores
as
well
as
in
display

ads,
Sephora
has
made
an
effective
habit
of
selecting
one
specific
facial
feature,
such
as

eyes,
and
displaying
multiple
products
to
bring
them
to
customers’
attention
(Figure
26).

78

Figure
26

Prior
to
beginning
research
for
this
thesis,
the
author
was
curious
whether
or
not
Sephora

demonstrated
favoritism
for
cosmetic
products
owned
by
other
companies
within
parent

conglomerate
LVMH’s
portfolio.

While
Sephora
sells
over
250
different
beauty
brands,

aside
from
Sephora-‐branded
private
label
products,
LVMH
owns
nine
additional
brands

sold
by
the
beauty
retailer
(BeneFit
Cosmetics;
Fresh;
MAKE
UP
FOR
EVER;
Dior
Parfums;

Givenchy
Parfums;
Kenzo
Parfums;
Acqua
di
Parma;
Guerlain,
and
Nude).

Of
the

advertisements
analyzed
by
the
author,
at
least
one
LVMH-‐owned
product
was
featured
in

each
ad
(figure
27).

While
it
should
be
noted
that
each
of
the
products
highlighted
in
the

ads
were
new
to
the
store,
it
would
be
foolish
for
one
to
presume
that
there
were
limited

numbers
of
new
products.

This
fact
should
not
be
a
surprise,
however.

An
obvious
perk

for
brands
like
BeneFit
and
MAKE
UP
FOR
EVER
upon
being
acquired
by
LVMH
would
be

79

cross-‐promotional
benefits
from
sibling
companies
like
Sephora.

Just
as
LVMH’s
cash
cow

Louis
Vuitton
supports
many
of
the
other
brands
within
its
parent
company’s
portfolio,

Sephora
appears
to
similarly
“keep
it
all
in
the
family,”
albeit
to
a
lesser
extent
than
LV,
by

featuring
products
from
their
sibling
cosmetic
and
beauty
companies
more
often
than

other
manufacturers’.

Figure
27

Celebrity
Endorsers

Another
way
Sephora
differentiates
itself
from
other
luxury
businesses,
is
that
it
does
not

utilize
celebrity
endorsers
for
the
purpose
of
promoting
ads
or
events.

Instead,
the

company
“endorsements”
appear
in
the
form
of
featuring
beauty
industry
influencers
such

80

as
prominent
beauty
bloggers,
as
well
as
products
from
celebrities
who
have
their
own

beauty
lines.

One
successful
example
of
this
relationship
is
with
tattoo
artist
and
reality

television
star
Kat
Von
D.

Sold
exclusively
at
Sephora,
Kat
Von
D
products
include
items

such
as
lipstick,
foundation,
and
eyeliner
(Appendix).

Partnerships
like
this
are
favorable

for
Sephora
as
they
increase
overall
product
inventory
but
more
importantly,
represent

possibilities
for
attracting
new
customers
who
may
be
fans
of
the
respective
celebrity
or

beauty
insider.

Stores

Within
the
walls
of
each
Sephora
store,
hundreds
of
products
are
arranged
in
dazzling

display
for
consumers.

All
shoppers,
men
and
women,
young
and
old,
can
find
something

that
meets
their
needs.

Each
store
layout
is
designed
to
keep
an
individual
brand’s

products
together,
but
the
company
also
makes
it
easier
for
customers
to
find
a
specific

product
by
grouping
together
like
products
from
different
competitors
along
center

walkways.

For
example,
a
mascara
display
could
include
products
from
Dior,
Benefit,

Lancome,
and
Too
Faced.

Comparing
similar
products
aids
customers
who
do
not
have
a

specific
brand
in
mind,
allowing
them
to
consider
the
benefits
of
each
product.

In
addition
to
boasting
a
large
array
of
products
for
customers
to
choose
from,
Sephora

encourages
customers
to
experience
its
inventory
through
a
self-‐service
approach.

When

customers
enter
the
store,
they
can
try
out
each
and
every
product
they
desire,
be
it
a

81

lipstick,
perfume,
or
nail
polish.

This
open-‐sell
approach
means
that
each
product
in
stock

is
available
to
be
tested
by
a
customer,
which
differs
considerably
from
most
retail

competitors.
Sephora’s
approach
prioritizes
customer’s
ease
when
finding
a
product
they

want
to
try,
and
avoids
wasting
the
time
a
customer
would
experience
if
they
needed
to

request
an
employee
search
the
stock
room
for
a
specific
product.

Additionally,
displaying

all
products
in
the
store,
ready
to
be
tested,
allows
customers
to
shop
on
their
own,
if
they

so
choose.

A
customer
can
spend
as
much
or
as
little
time
as
they
desire
in
the
store.

While
shoppers
partial
to
browsing
items
on
their
own
favor
this
approach,
it
does
not

mean
that
those
preferring
assistance
will
have
difficulty
finding
it.

The
Sephora
shopping

experience
is
elevated
by
support
from
beauty
experts
in
each
store.

Experts
are
trained

and
ready
to
provide
knowledgeable
advice
on
beauty
questions
or
customers
concerns.

Customers
can
receive
a
free
15-‐minute
mini-‐makeover,
for
example.

The
Sephora
“Beauty

Studio”
offers
walk-‐ins
where
experts
discuss
tips
on
applying
faux
lashes
or
the
perfect

smoky
eye,
and
polishing
one’s
brows.

Sephora
also
offers
three
different
free
“IQ”
services...

The
“Skincare
IQ”
service
is
an
in-‐
store
consultation
where
a
skin
care
expert
helps
customers
find
customized
picks
for
their

specific
concerns
(Figure
28).

By
asking
questions
such
as
“What
is
your
top
concern
of
the

following:
your
face
or
eyes?”
and
“Is
your
skin
sensitive
or
easily
irritated,”
experts
are

able
to
gauge
the
needs
of
each
customer.

For
individuals
who
are
unable
to
visit
one
of

82

Sephora’s
many
locations,
the
website
also
offers
a
Skincare
IQ
quiz
to
help
customers

make
informed
decisions
when
purchasing
a
new
product.

Figure
28

The
“Fragrance
IQ”
service
is
similar
in
that
it
makes
personalized
recommendations.

The

Fragrance
IQ
in-‐store
technology
asks
questions
regarding
the
customer’s
preferences
and

gives
them
three
complementary
custom
samples
of
their
scent
matches
afterwards.

Aside

from
the
answers
given
on
the
quiz,
the
scent
match
can
also
be
made
when
visitors

explore
scents
similar
to
the
ones
they
currently
enjoy
or
by
searching
fragrances
based
on

scent
type.

Sephora
also
makes
it
easy
for
customers
who
are
unable
to
visit
a
store
by

providing
them
with
a
fragrance
buying
guide.

Finally,
the
“Color
IQ”
service
aids

customers
as
they
search
for
the
perfect
foundation
(Figure
29).

This
service,
in
which

Sephora
partnered
with
color
expert
Pantone,
is
free
for
all
customers
and
identifies
an

83

individual’s
Color
IQ
number
and
is
able
to
pinpoint
the
specific
foundation
match
from

over
1,500
different
formulas.

64

Figure
29

In
addition
to
the
free
services
offered,
Sephora
delivers
upon
customers’
expectations
for
a

“luxury”
experience
by
also
offering
premium
services,
including
custom
makeovers
and

64

"Sephora
Pantone
Color
IQ."
Accessed
January
4,
2015.

84

sessions
with
personal
beauty
advisors.

Both
services,
while
free
for
the
highest
level
of

loyalty
customers,
known
as
VIB
Rouge
members,
are
complimentary
for
any
consumer

after
spending
a
specified
minimum
on
product
purchases.

For
example,
a
45-‐minute

custom
makeover
that
teaches
visitors
different
expert
techniques
is
complementary
with
a

$50
minimum
purchase,
while
customers
who
spend
$125
can
receive
a
90-‐minute

consultation
with
a
personal
beauty
advisor.

During
this
consultation,
customers
receive
a

custom
makeover
and
a
personal
shopping
session,
all
of
which
reinforces
that
exclusive,

personalized
experience
sought
after
by
“luxury
aspirationals.”

All
of
Sephora’s
services,
whether
offered
free
or
requiring
purchases
of
specific
dollar

amounts,
all
push
Sephora’s
brand
as
a
sought-‐after
retailer
and
elevate
consumer

experiences
of
“luxury”
related
to
the
company.

While
each
specific
service
increases
the

likelihood
of
customers
making
purchases,
how
shoppers
associate
the
different
services

with
their
expectations
of
luxury
and
how
customers
perceive
the
overall
helpfulness
of

Sephora’s
merchandising
strategies
and
staff
do
more
for
reinforcing
the
brand
than

conventional
marketing,
communications,
or
advertising.

The
company’s
emphasis
on

offering
various
forms
of
experiential
marketing
provide
customers
with
access
to
new
and

different
products
and
increases
incentives
for
customers
to
remain
engaged.

Whether
this

translates
to
additional
Beauty
Insiders
joining
the
loyalty
program,
new
customers
buying

based
on
positive
word-‐of-‐mouth,
or
overall
increased
brand
perception,
Sephora’s
brand

image
of
being
an
advanced,
in-‐the-‐know
beauty
insider
that
provides
unique,
luxury

access
to
the
most
desired
cosmetics
is
greatly
enhanced.

85

SECTION
VI:
RECOMMENDATIONS
FOR
FUTURE
BRANDING

Considering
LVMH’s
success
with
its
numerous
branding
strategies
and
its
roster
of

premium
businesses,
several
recommendations
for
the
future
of
luxury
conglomerate

branding
are
apparent.

Cultivate
cross-marketing
within
the
portfolio.

Although
the
mission
of
protecting
brand

identity
is
important,
discouraging
brand
interaction
decreases
the
opportunity
for

businesses
to
learn
from
each
other.

Allowing
subsidiary
companies
the
freedom
to
work

together
by
sharing
operational
learnings
with
increased
interaction
can
elevate
brand

equity
for
businesses
throughout
a
holding
company’s
portfolio.

Additionally,
such

interaction
allows
for
individual
brands
to
leverage
potential
cross-‐marketing
with
sibling

companies.

An
example
of
this
is
found
when
looking
at
LVMH’s
Sephora
and
MAKE
UP

FOR
EVER
brands.

In
many
of
the
Sephora
ads
the
author
analyzed,
a
new
MAKE
UP
FOR

EVER
product
was
often
featured.

Even
with
thousands
of
other
products
and
hundreds
of

brands
in
its
inventory
from
which
Sephora
can
choose,
MAKE
UP
FOR
EVER
was
often

visible.

Sephora’s
ads
marketing
this
specific
makeup
brand
obviously
enhances
consumer

awareness
and
aids
chances
of
product
purchases.

Following
this
model
and
matching
up

other
LVMH
brands
can
also
impact
the
likelihood
of
success
for
both.

Converse
brand
equity
by
limiting
licensing.

The
importance
of
avoiding
brand
expansions

that
result
in
over-‐licensing
is
a
suggestion
that
can
be
backed
by
numerous
examples.

As

86

mentioned
previously,
prior
to
being
acquired
by
LVMH,
the
Donna
Karan
and
Dior
brands

both
found
their
perceptions
as
luxury
brands
to
be
dwindling.

Numerous
licensing

agreements
caused
the
labels
to
have
a
surplus
of
goods
in
the
marketplace,
which
resulted

in
diluting
the
exclusivity
of
the
brand
and
depreciating
its
value
—
both
in
price
and

perception.

By
licensing
more
conservatively,
a
luxury
brand
can
continue
expanding
its

portfolio
without
inundating
customers
with
too
many
product
options,
some
of
which
may

denigrate
brand
equity.

Create
new
brand
loyalists
through
“my
luxury.”

There
is
no
question
that
“luxury”
as
a

concept
is
meant
to
be
perceived
as
exclusive,
but
numerous
luxury
brands
have
found

success
in
selective
product-‐line
expansions
that
may
cater
to
more
than
the
wealthiest

customers.

The
concept
of
“my
luxury,”
which
was
discussed
in
the
Sephora
case
study,

exemplified
that
while
there
may
be
immense
price
variation
between
a
lipstick
and
a

limited
edition
handbag,
appropriately
branding
and
marketing
these
items
may
give

companies
the
opportunity
to
market
“luxury”
to
middle-‐range
consumers
who
have
high

brand
aspirations.

This
idea
of
democratization
within
a
small
segment
of
the
luxury

industry
does
not
harm
the
luxury
goods
industry
at
all
—
instead,
it
opens
the
door
for
an

increased
number
of
brand
loyalists.

Combine
varied
social
media
posts
to
maximize
audience
engagement.

Social
media
is
no

longer
a
new
trend,
and
for
brands
to
reach
and
maintain
customers
who
will
continue

supporting
them,
a
robust
presence
is
imperative.

Utilizing
the
different
social
platforms
as

87

a
tool
to
sell
the
latest
pieces
is
essential.

While
being
careful
not
to
turn
off
the
customer

with
too
many
posts
aimed
at
sales,
by
including
promotions,
the
latest
products,
and

where
to
purchase
online,
brands
can
generate
additional
sales
and
overall
interest
from

customers.

Yet
while
it
is
vital
to
include
posts
focusing
on
selling
products,
it
is
also

important
to
include
a
mix
within
the
posts
that
audiences
will
find
entertaining.

The
latest

products
should
be
accompanied
by
posts
of
backstage
images,
news,
cultural
and
company

events,
standout
press
clippings,
and
images
of
celebrity
brand
supporters
wearing
or

using
the
products.

Maintaining
a
combination
of
various
post
styles
increases
intrigue

social
audiences
have
for
the
brand,
which
has
the
potential
to
result
in
elevated
brand

loyalty.

Call
attention
to
the
creative
talent
behind
the
brand
on
social
platforms.

Aside
from
obvious

posts
about
the
latest
products,
luxury
goods
companies,
particularly
those
within
the

fashion
and
jewelry
segments,
can
benefit
from
pushing
the
creative
talent
behind
the

brand.

These
individuals
are
key
components
to
what
makes
the
brand
unique,
and

companies
should
leverage
that
via
social
media.

Whether
this
talent
be
a
designer
with

their
own
personal
brand,
for
example,
Marc
Jacobs
or
Donna
Karan,
or
the
artistic
or

creative
director
behind
a
brand,
highlighting
the
creative
personality
behind
the
brand
is

very
effective.

Louis
Vuitton’s
own
artistic
director,
Nicolas
Ghesquiere,
has
made
his

presence
felt
on
LV’s
social
channels
since
taking
the
position
in
2013.

Through
Instagram

takeovers
during
Fashion
Week
that
not
only
share
behind-‐the-‐scenes
shots
but
insights

into
his
inspiration,
LV
gives
social
media
audiences
more
information
on
the
creative

88

talent
behind
the
brand.

Extra
information
and
images
help
audiences
stay
engaged
with
a

brand;
choosing
not
to
put
a
spotlight
on
a
brand’s
creative
talents
is
only
wasting
potential

engagement.

Combine
online
and
offline
strategies
for
experiential
shopping.

While
luxury
goods
have

historically
relied
on
more
traditional
marketing
and
shopping
experiences,
the
industry

can
convert
that
successful
experience
into
the
digital
and
social
realm,
which
is
vital
to
any

brand
desiring
to
remain
relevant.

Growing
the
in-‐store
experience
continues
to
be

imperative,
yet,
whether
it
is
a
heritage
brand
or
a
newer
line,
luxury
goods
companies

must
find
ways
to
fulfill
a
customer’s
desires
for
making
their
shopping
experience
social.

Additionally,
mobile
shopping
is
increasing,
so
luxury
brands
must
make
their
websites

mobile-‐friendly.

Developing
integrated
online
and
offline
strategies
are
important
for

maintaining
and
increasing
relevance
as
well
as
sales.

Whether
these
services
are
intended

to
make
it
easier
for
a
consumer
to
decide
which
product
to
buy
or
simply
give
them
more

options,
integrating
the
two
types
of
shopping
experiences
ultimately
elevates
a
brand’s

overall
value
as
a
“luxury”
offering.

Consider
the
impact
of
celebrity
endorsements
to
elevate
brands.

When
promoting
luxury

products,
Louis
Vuitton’s
success
in
its
“Core
Values”
campaign
highlighted
the
fact
that

while
young
models
remain
important
in
ads,
utilizing
celebrity
endorsers,
with
particular

focus
on
older,
accomplished
individuals,
can
generate
great
benefits.

The
intrigue
that
the

public
has
for
many
of
these
individuals,
for
example
Muhammad
Ali
and
Keith
Richards,

89

who
were
both
featured
in
LV
ads,
can
generate
far
more
discussion
than
featuring
an

unknown,
albeit
flawless,
face
of
a
young
model.

LV’s
campaign,
which
ran
from
2007-‐
2011,
was
not
missed
by
the
luxury
industry;
numerous
other
competitors
have
started

using
older,
more
distinguished
celebrity
endorsers
in
their
advertisements.

A
recent

example
of
this
is
Celine,
another
fashion
brand
under
the
LVMH
umbrella,
which

partnered
with
renowned
writer
Joan
Didion
at
the
start
of
2015
(Appendix).

Outside
of

LVMH,
consumers
in
early
2015
also
witnessed
Joni
Mitchell
becoming
the
face
of
Saint

Laurent,
a
subsidiary
of
the
Kering
holding
company
(Appendix).

The
realization
that
older

individuals
who
have
achieved
success
in
their
lives
can
be
far
more
impactful
for
brands

than
typical
young
models
is
a
trend
that
should
continue
in
the
future.

By
generating

greater
levels
of
conversation,
brands
have
the
opportunity
to
increase
their
recognition
to

a
growing
group
of
brand
aspirants.

90

APPENDIX

FOCUS
GENERAL
BUSINESS
MODEL
LUXURY
BUSINESS
MODEL

Production
Delocalization
for
lowest

possible
production
costs

No
delocalization.
Luxury
viewed
as
an

ambassador
for
local
culture
and
art
de

vivre

Communication
with

Audiences

Only
communicate
to

potential
customers

Communicate
to
both
customers
and
non-‐
customers
(this
allows
creation
of
brand

aspirationals
and
recognition)

Client
Relationship
For
larger
corporations,
a

personal
relationship
is
not
a

key
focus.
Customers
may

interact
with
in-‐store
staff,
but

the
emphasis
on
a

personalized
experience
is
not

as
vital.

One-‐on-‐one
relationship.
Clients
seen
as

highly
important,
and
the
in-‐store

experience
should
be
personal

Value
Chain
Ingredients
and
materials

purchased
at
low
costs
to

maximize
profits

No
outsourcing.

Must
have
full
control
to
ensure
the
best,

most
authentic
ingredients/materials

Licenses
Issue
licenses
to
generate

larger
profits
in
new
markets

Avoid
issuing
licenses
to
maintain
control

of
the
brand

Figure
1

Figure
2

91

Figure
3

PLATFORM
FOLLOWERS
POSTS
7
DAY
POST

AVERAGE

Facebook
17.7
Million
Total
number

not
listed

5

Instagram
4.2
Million
798

26

Twitter
4.2
Million
2,285

13

Pinterest
63,989
Pins:
2,035

Boards:
18

25

Figure
4

92

Figure
5

Figure
6

93

Figure
7

Figure
8

94

Topic
Publication
/

Date

Article
Title
Key
Article
Points

Insights

Audience

Engagement

Women’s
Wear

Daily

Nov.
6,
2014

Louis
Vuitton
Tops

Stylophane’s
List
of

Most
Engaged

Fashion
Brands

LV
receives
most

likes
when

compared
with

other
fashion

brands
in
Oct.
2014

Heritage
values
are

important,
but

luxury
brands
must

embrace
digital
and

social
efforts
now,

and
new

technologies
in
the

future

Brand
Image
Financial
Times

Jan.
4,
2010

The
Public
Image:

Louis
Vuitton

“Heritage”
&

“Hand-‐Crafted”
are

luxury

catchphrases

LV
uses
these

terms
in
campaigns

more
than
any

other
brand

Luxury
competitors

may
attempt
to
be

perceived
as
having

these

characteristics,
but

LV
leads
in

association

Marketing
&

Communications

Telecomm-‐
unications
Weekly

Jan.
17,
2009

Louis
Vuitton's

Core
Values

Campaign

Celebrates
the

Greatest
Journey
of

All

Travel
as
essential

component
to

mankind

Spotlight
the
travel

theme
ahead
of

latest
collection

LV
receiving

recognition
outside

of
luxury
sector

places
it
ahead
of

competitors
by

achieving
larger

audience

Associating

accomplished

brand
advocates

furthers
brand

values
ahead
of

latest
trends

Corporate
Social

Responsibility

(CSR)

Financial
Times

Oct.
1,
2014

The
Fondation

Louis
Vuitton,
Paris

LV
&
Parent
LVMH

want
to
bring

artists
they
work

with
to
the
public

Frank
Gehry-‐
designed
building

will
be
home
to
LV

fashion
shows

LV
associations
to

art
and

architecture

communities

expands
brand

recognition
and

perception
to

larger
audience

Art
Community
Women’s
Wear

Daily

Jan.
19,
2015

Louis
Vuitton's
L.A.

Extravaganza

Digital
exhibit

shows
Creative

Director’s
second

collection

Experiential
digital

events
&
efforts

create
increasing

recognition
and

brand
perception

Figure
9

95

Figure
10

Figure
11

96

Figure
12

97

Figure
13

CONTINENT
NUMBER
OF
STORES
SPECIFIC
LOCATIONS

EUROPE
4
PARIS

LONDON

ROME

MUNICH

NORTH
AMERICA
3
SAN
FRANCISCO

NEW
YORK

LAS
VEGAS

ASIA
8
SINGAPORE

MACAU

TAIPEI-‐
2
STORES

KOBE

TOKYO

HONG
KONG-‐
2
STORES

AUSTRALIA
1
SYDNEY

Figure
14

98

Figure
15

99

Figure
16

PLATFORM
FOLLOWERS
POSTS
7
DAY
POST
AVERAGE

Twitter

@sephora

1.6
Million
Tweets:
19.8
Thousand

Videos/Photos:
1373

19

Instagram

@sephora

2.4
Million
1,093
15

Facebook
6
Million
Followers

135,823
Page
Visits

Total
number
not
listed
11

Pinterest
352,136

Pins:
8,846

Boards:
68

50

Figure
17

100

Figure
18

Figure
19

101

Figure
20

Figure
21

102

Figure
22

Topic
Publication/

Date

Article
Title
Key
Insights

Business

Strategy

Forbes

April
18,
2013

Sephora:
Department
Stores

Cannot
Stop
Its
Global
Growth

2013
Possessed
20%
of
U.S.

Market

Women’s
Wear

Daily

Oct.
17,
2014

Sephora’s
Big
Goal:
No.
1
in

Every
Market

2014
U.S.
sales
produced

40%
of
global
profits

Focus
on
stores:
new

locations
&
augmented

services

Tech
Business

Insider

May
21,
2013

Sephora
CMO
Debunks
a

Major
Stereotype
About

Women
and
Tech

Women
are
56%
more

active
in
visiting
online
sites

than
men

Strong
need
to
integrate

online
services
that

promote
in-‐store
visits

Fortune

July
27,
2014

Shopping
With...Bridget
Dolan
Customer
experience
and

benefit
over
all
other
efforts

Without
helping
the

customer,
any
and
all
tech

services
are
a
waste
of
time

and
money

103

Forbes

Sept.
14,
2014

Sephora’s
Winning
Formula:

Highly
Relevant
Personalized

Data

Personalized
data
allows

brands
to
find
exactly
what

a
customer
wants/needs

Without
individualized

information
from
the

customer,
no
technology

can
be
entirely
beneficial

Figure
23

Figure
24

Figure
25

104

Figure
26

Figure
27

105

Figure
28

106

Figure
29

Additional
figures
mentioned:

Dr.
Pepper:

107

Coca-Cola

108

109

Kat
von
D

Celine

110

YSL

111

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Abstract (if available)

Abstract This paper will explore branding guidelines for luxury conglomerates to best nurture success for a company’s many brands, while still adhering to the values of the parent organization. First, this paper will examine the various categories and overall concept of luxury to better understand the emotional pulls customers have for specific brands and the industry as a whole. This study will also review different luxury branding tools that businesses use to bolster attention and recognition for their brands. Finally, through a case study on luxury conglomerate LVMH Moet Hennessy Louis Vuitton, the author will explore what has and has not worked for the luxury giant as it develops brand strategies for its ever-expanding group portfolio. Content analysis on two of LVMH’s brands, Louis Vuitton and Sephora, was completed to discover the different branding methods utilized by two very different companies within the luxury sector. The conclusive goal of this paper is to discern whether or not a more dominant conglomerate brand strategy is effective in reaching target audiences within the luxury market, or if allowing acquired brands to maintain autonomous control over their individual branding yields greater results.

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