Corporate News: Louis Vuitton Sports a Richer Price Tag

Louis Vuitton is trying to restore the way society views its brand. They want to bring back the exclusive, upper class mentality when people purchase their products. For this reason they have boosted prices of their products by roughly 13% in recent months. They hope by raising their prices it will restore Vuitton’s world-wide exclusivity. In addition to bumping up price tags, they have halted new-store openings and are promoting their more expensive leather products over their entry-level canvas bags. They stopped promoting their cheaper products to avoid “overexposure of the brand.”

Louis Vuitton’s methods can be extremely dangerous as it alienates lower market consumers in hopes of attracting higher-end consumers. The whole luxury industry faces the question of pricing and exclusivity. People purchase their products to be different, however if the brand is successful many people won’t see it as exclusive.

Vuitton’s rise in prices can also have an effect on the whole luxury-good market as it has strong pricing power. Their rise in price tags can give other competitors like Prada and Gucci reason to charge more also.

URL: http://online.wsj.com/article/SB10001424127887324345804578426902194074008.html

-Jonathan Chan

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