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Randall Cunningham
GSBA 516
Louis Vuitton Moet Hennessy
Case Analysis
As the parent company of nearly 50 sub-companies that specialize in luxury goods such as watches, jewelry, and purses, Louis Vuitton Moet Hennesy depends heavily on the perception of their brands as high-end products. One of the greatest threats to the brand image is counterfeiting. In order to off-set the effects of this multi-billion dollar per year industry, LVMH must take steps such as working with governments and international organizations that target counterfeiters. Another, somewhat ironic, threat to the LVMH brands is the increasing demand for their product among the middle-class. In order to maintain its status as a purveyor of fine goods for the wealthy, LVMH must walk a fine line of satisfying some of the increased demand but not diluting the market through its own actions.
One of the most valuable assets of a company like Louis Vuitton is its brand equity. While not directly measurable, some sources have attempted to quantify these values and provided the following measurements as example: Marlboro $33B, Microsoft $9.8B, and so on. Counterfeiters profit on this brand equity by producing goods that range from identical to loose resemblances of the original product. Counterfeiting negatively affects companies by: taking away potential customers, diluting the market, and decreasing the overall perceived quality of the product. The affect of diluting the market is particularly troublesome for brands that seek to be viewed as exclusive.
In the fight against counterfeiting LVMH should continue its practice of limiting ...