LV vs Gucci - A marketing research project

[stoshiro]

Hello everyone.

I am brand new to this forum, but from what I have seen so far, there appears to be a vast population of extremely education and knowledgable members.

First, let me begin by introducing myself. I am from Southern California, USA. I am in my early 30's married to a woman who loves LV bags. Although my income can not completely sustain her habit for buying bags, we do ok and she does have a small collection. So, I do have some experience in this area.

The reason for this post is this: I am currently enrolled in a major university to obtain my MBA degree. We are having a marketing project where we must compare 2 brands of products.

Our group chose LV vs Gucci, specifically in the handbag product line. Our focus is to be on various marketing aspects of both companies. Comparing the two strategies on advertising, marketing, brand image, etc. Also, some possible suggestions as to how to improve either of the two market share.


I would like to get some input from you on your thoughts about the differences between the two companies in the above respects.

Additionally, if there are any employees from either of the two companies who could possibly provide interviews via email or some other media, that would be extremely helpful.

Thank you all in advance for your time and for actually reading this post. I know how passionate member can get about bags, so I'm sure I came to the right place.

Thank you.

 

[jun3machina]

well i know that Lv increased some of their prices for bags which infuriated many of their customers, due to the fact that the more popular monogram series is a large percentage synthetic vinyl, and very little leather. and although gucci has a monogram series as well on canvas, i believe their newer bags are mainly leather....a lot of people dispute other companies with LV because of the materials used in the bags and the price points. (monogram canvas VS leather) i dont know if that information would help but it may be interesting to look into their price points for materials, and then compare retail value of their bags. im sure its most likely cheaper to manufacture the monogram canvas than it is leather...and im sure there are a lot of knowledgable people here that can expand on all of this for you.

 

[iluvfashion]

Gucci Group vs LVHM

Hello and welcome..

How to improve market share would be answered after all the research is done with strengths and weaknesses analyzed so it would be too soon to make any comments but I can give you a few pointers. Gucci has done terribly financially until about 11 or so years ago. With the addition of the Texan designer Tom Ford they turned the company around. Stock is on OTC right now, while LV is privately held. Gucci is owned by Gucci group and LV by LVMH Moet Hennessy. Gucci's product line is limited to luxury goods whereas LVMH makes anything from wines and spirits like Moet & Chandon to cosmetics and leather goods. LVMH also owns Le Bon Marche department stores, duty free shops and Sephora Cosmetics stores. Some subsidiaries include BeneFIT cosmetics, Tag Heuer and Pucci.
Gucci is the most profitable line Gucci Group has, which is owned by French retailer Pinault Printemps-Redoute. Gucci brand includes YSL, Balenciaga and Stella Mc Cartney. From what I read last they were planning on raising the sales by capitalizing on leading-edge fashion, product innovation and quality while developing Gucci's ranges of handbags. While Tom has helped making Gucci a brand name LVHM is still the world's largest luxury goods company. I hope this helps.

I believe LV is cashing in on branding more than Gucci is. Personally I do not like the LV brown logo bags-only the vernis line attracts me. Overall I would vote for Gucci handbags, which seem to have more innovative styles.

 

[Pluma002]

Brand Image

Hello! Here's my two cents on the brand image of LV & Gucci bags:

I really think the image of both brands is largely based on celebrities who carry these bags. I think a lot of the "marketing" for bags in general comes out of gossip magazines and tabloids citing what the next "IT" bag is. Candids of celebrities carry the purses instantly gives many females the feeling of "I want that!!" . Most women who knows bags also knows that Jessica Simpson uses LV bags, Paris Hilton with Gucci, Nicole Richie has Balenciagas, etc.

For me, I dont think that ads in magazines really do it for me. Ex. Uma Thurman's LV ads were pretty boring, and I dont really even remember the ads for Gucci. If I had to pick between them though, I would pick Gucci since too many people carry LV's.

 

[bagqueen]

The one thing that has really turned me off to LV is all the fakes all over. I know the Company can not control that, but maybe if they did not do 3 price increases a year people would buy the real thing and not the fakes. I sold all my LV bags on Ebay because I was so turned off with the fakes. Every other person I see is carrying a fake and I did not feel good carrying an LV bag like I use to years ago. My vote is for Gucci. They do not do as much advertising, but I feel they are pretty unique and you do not see as many fakes of them. I was in New York last week and walked down canal street and there is still lots of the fake LV bags and I did not see any Gucci. I am sure they are there, but I did not see them.

 

[Kimkhuu]

First of all, LV uses a lot of celeb endorsement, like doing all celebs campaigns and they can sometime get a celeb to open their show.... ...and it's never surprising to see celebs sitting on the front row during their shows.... Not that they have Marc Jacobs, a very important face in the designing industry to design for them.... As opposed to Gucci who is still battling to get a decent designer after they lost Tom Ford.

Both companies depend on accessories sells, and both of them are known to create a lot of fuss surrounding all the replicas that are made of their bags....

Marc jacobs for lv tends to make important themed bags season after season, that often become it bags (the murakami line.... etc....)... I believe his bags are much more popular than the gucci bags.......

no matter how awful lv bags, the brand is not only popular in the mainstream, the brand is also trying to get the attention of the hipster crowd, thanks to marc being close to kirsten dunst, selma blair, sophia coppola..... and he also tries to appeal to the hip hop r&b whatever crowd by liaisons with Pharell williams, eve, lil Kim..... and it looks like it's working......

his ad campaigns are more focused on handbags than clothes, and he always make sure the logos are 100000% visible on them......

As opposed to Gucci who rarely ever makes any celeb endorsements, they don't seem to really depend on that, they seem to prefer models.... though theyhave a focus on bags, that's what drives their company, i feel as though they also focus a lot on eyewear (what lv don't do as much), shoes and watches.... When they lost Tom Ford, the company sort of drowned and now it is at an all time low.... Though LV is still the shining star thanks to Marc Jacobs.

Not that one company has italian roots while the other is american "Based" (well marc, that is)..... And LV tries to bring up some wannabe "avant gardist" collections now and then to gain some credibility (like their fw 05 collections)..... that feature a bit less logos and a bit more drama.... as opposed to Gucci who are now just plain awful.....

I don't think Lv has anything to ameliorate, although I hate what mj does..... , Gucci needs to hire some big name to do their designs, getting back tom ford would be a good idea......

 

[stoshiro]

Thank you everyone for your great responses.

Please keep em coming, I got 19 pages to write!

Also have to do a presentation. I was thinking of putting together a video collage of various ads with some songs mentioning louis vuitton or gucci.

Here's the list of songs I have so far ( keep in mind I'm from the US, so I have a limited variety of music I listen to )

Ludacris – Stand Up - LV

Ludacris – Splash waterfalls – Gucci

G unit – Wnna get to know you – Gucci

Janet Jackson – My Baby – LV
Mariah Carey - Shake you off - LV

 

[fashionista-ta]

Neither of these brands is a favorite of mine, but clearly of the two, when it comes to accessories LV is waaay on top, and perhaps always has been. Of late LV's stock has risen, because not only do they have the enduring classics like their luggage and the Speedy (introduced in the 30s?), but they are known for Marc's innovative collaborations--the graffiti bag and the Murakami collaborations. They also have quite interesting high-end bags. Recently they've been using fur, crochet, beading, semi-precious stones, and exotic skins like shagreen in interesting ways. They also do limited editions. For SS06 Marc seems to be aggressively pursuing the Lil Kim market. I notice Judith Leiber is perhaps even more aggressive in her advertising to this market, with Nelly and Nia in her ads.

Gucci has gotten significant good publicity and I believe also results with their accessories recently, and for fall introduced new embossed leathers ... believe they are offering some of the same designs in canvas. Their designer has had some good success going back to the archives (for example, the pattern introduced last spring (?) that was taken from a scarf I believe that Gucci made for Grace Kelly back in the day. (I even liked it!)

In my mind anyway, the Gucci red/green trim and Gs canvas is reeeeally tired and oh so 80s. Whereas the LV classic monogram, while perhaps boring, has been so continually reinvented with new shapes, colors, etc. that it remains relevant.

I have to admit viewing both brands as ideally suited to those lacking imagination

Oh, as far as advertising, in Tom Ford days, Gucci's advertising was very very aggressively sexy. Frida has changed that. Unfortunately the current ad campaign is awfully bland. I'm sure you'll also find an awful lot written about the new Gucci CEO or whatever his title is, who came from Unilever & wants to implement traditional business methodologies at Gucci. A bit of this would undoubtedly be good, but his ignorance of the industry does seem to be driving Gucci into the ground (see their SS06 show for all the evidence anyone should need). An article about this has been posted here, a search should turn it up ...

As to what they could do to improve ...

I would like to see LV offer more reasonable price points on their interesting bags. Any bag of theirs I'd actually want to carry usually starts at $2500 and then goes from there. Perhaps they simply can't make the margin they want by offering good value at reasonable price points. But I'd like to see more than the basic monogram vinyl/canvas at price points less than $1000. (Dream on ...) I would also like to see another about-face where this new Versace-like direction is abandoned ... I'd like to see the French side of LV once again.

As for Gucci ... Frida seemed to be doing fine with accessories ... the direction the new guy wants to take is even more branding. I would like to see them go the other way. I like the Grace Kelly print ... I'd like to see more of that kind of work ... different from anything else out there, and not shoving the brand in our faces. The horsebit hardware is quite sufficient, thank you.

I was offended by some of the old Gucci ads, so I welcome subtler campaigns, but they shouldn't be boring.

A few random thoughts for you ...

 

[Velvetini]

Fashion houses are hypocritical in my view. While selling expensive bags which make the user a walking advertisement(and on which they probably make a BIG profit), they bleat about the counterfeits - having generated that Must Have mindset themselves. I think LV is particularly guilty of this.

There are so many LV fakes about that I wouldn't want one if someone GAVE me one.. and actually I suspect that these celebs get their bags free, because houses know that they will be photographed with them !!

I feel quite strongly that fashion houses really contribute to the counterfeit market with logoed stuff and celeb endorsement (tacit or otherwise). People who have little and live on Government hand-outs end up going without food, to afford this stuff. www.chavscum.co.uk

Another example of hypocrisy is that if lines don't sell, they get quietly shipped to other markets by the containerload. This is called Parallel Trading.

www.parliament.the-stationery-office.co.uk/pa/cm199899/cmselect/cmtrdind/380/9051808.htm

^^ This is a link to minutes of a Select Committee within the UK Parliament's House of Commons (lower house). The whole thing makes interesting reading about the practices of the major fashion houses and even sportswear manufacturers.

I found it interesting that a fashion house will sell a licence for a market and may end up without any control over what is made under it's name !

At one time, Prada and LMVH were thinking of buying Fendi between them. I confess that I don't know whether this happened, but there is a lot of stuff if you Google eg

http://europa.eu.int/comm/competition/mergers/cases/decisions/m1780_en.pdf
European Union merger decision

http://www.iht.com/articles/2000/02/26/rind.t.php
International Herald Tribune

Also found a useful looking background piece ' Luxury Wars: The LVMH and Gucci Merger' http://www.uri.edu/hss/tmd/tmd402G/sem.sum/lvhy.htm

Anyway hope that helps a bit !

 

[mellowdrama]

Noblesse oblige?

LV vs. Gucci. The French company seems to avoid murdering kin. From Guardian UK: http://www.guardian.co.uk/elsewhere/journalist/story/0,7792,1227060,00.html

[font=arial,helvetica,sans-serif]John Hooper reports[/font]

[font=Geneva,Arial,sans-serif][Friday May 28, 2004

[/font][font=Geneva,Arial,sans-serif]The first thing Patrizia Reggiani did on hearing that she had been given a 29-year sentence for murder was turn to her defence lawyer.


"Truth is the daughter of time," he quoted the former society beauty as saying. "So I shall take time."

Now, it seems, time has finally switched to Reggiani's side. One of the most sensational trials to take place in Italy during recent years - for the murder of her husband, the heir to the Gucci fashion fortune - is to be reheard. </IMG>The issue of whether medical treatment can turn a patient into a killer will be at stake in the new hearing.


On July 9, at Mestre, the modern city across the lagoon from Venice, an appeal court is to begin retrying the woman dubbed the "dark lady" by the Italian press. For the past six years, Reggiani has been languishing in jail, convicted of orchestrating the murder of Maurizio Gucci.

In 1995, the grandson of the founder of his family's global fashion empire was gunned down in a gangland-style shooting as he arrived for work at his Milan office.

The murder trial overflowed with bizarre revelations about the links between the former Mrs Gucci and her low-life accomplices. These included her confidante - a former boutique owner and fortune teller from Naples - the night porter of a down-at-heel Milan hotel, who was convicted of assembling the hit squad; a compulsive gambler, who confessed to driving the getaway car, and a young Sicilian, who was found guilty of pulling the trigger.

None will be affected by the retrial, which is to concentrate solely on medical evidence.

The prosecution at Reggiani's trial portrayed her as a gold-digger on an epic scale, who felt that she had been robbed of her rightful fortune by her husband's decision to leave her for another woman.

The court heard evidence of the way she pursued Gucci in an attempt to get more than the £400,000 a year assigned to her as alimony. It heard of her open talk about having him killed, and the damning, one-word entry in her diary on the day of his murder: "Paradise". However, the court also heard that, three years before the shooting, Reggiani had undergone an operation to remove a brain tumour. The defence claimed it had altered her powers of judgment to the point at which she could no longer distinguish right from wrong.][/font]