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LVMH Watches & Jewelry Consulting Report Prepared for: Monique LIN, CFO of LVMH Watches and Jewelry...
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Transcript of LVMH Watches & Jewelry Consulting Report Prepared for: Monique LIN, CFO of LVMH Watches and Jewelry...
LVMH Watches & JewelryLVMH Watches & JewelryConsulting Report Consulting Report
Prepared for: Prepared for: Monique LIN, CFO of LVMH Watches and Jewelry for Greater Monique LIN, CFO of LVMH Watches and Jewelry for Greater ChinaChina
Prepared by: HKUST Consulting GroupPrepared by: HKUST Consulting Group
Date: Oct 31, 2009Date: Oct 31, 2009
Author:Author:Jennifer CHENG (08938148)Jennifer CHENG (08938148)Olivia NG (08933875)Olivia NG (08933875)Peter KWAN (09806196)Peter KWAN (09806196)Tommy NG (96027571)Tommy NG (96027571)Victor LU (08933928)Victor LU (08933928)
HKUST Consulting All Rights Reserved
All Rights Reserved
Storyline 1/2Storyline 1/2SituationSituation TAG HeuerTAG Heuer, a brand from the Watches and Jewelry division of LVMH,, a brand from the Watches and Jewelry division of LVMH, is a is a Swiss Swiss watchmaker watchmaker
known for its sportsknown for its sports watches watches and and chronographs chronographs. . The brand has presence in many countries and The brand has presence in many countries and China has been recognized as a crucial market for TAG Heuer to develop since year 2000.China has been recognized as a crucial market for TAG Heuer to develop since year 2000.
ComplicationComplication In 2007, TAG Heuer secured less than 1% of the market share within China even after having In 2007, TAG Heuer secured less than 1% of the market share within China even after having
spent 30%-40% of sales towards its media budget. The situation worsened during the economic spent 30%-40% of sales towards its media budget. The situation worsened during the economic downturn in 2008, when the company’s revenue dramatically dropped by 35% after a downturn in 2008, when the company’s revenue dramatically dropped by 35% after a management decision was made to reduce media spending to 15% of sales.management decision was made to reduce media spending to 15% of sales.
QuestionQuestion How can TAG Heuer allocate its spend and implement such marketing initiatives as to increase How can TAG Heuer allocate its spend and implement such marketing initiatives as to increase
revenue growth by 30% in 2010?revenue growth by 30% in 2010?
AnswerAnswer1. Select new local ambassadors for the China market based on media metrics, image, and other 1. Select new local ambassadors for the China market based on media metrics, image, and other
soft factors that can help TAG Heuer tosoft factors that can help TAG Heuer to achieve 10% lift in brand awareness.achieve 10% lift in brand awareness.2. Allocate A&P budget that focus on consolidated end-consumer surveys to gain consumer insight 2. Allocate A&P budget that focus on consolidated end-consumer surveys to gain consumer insight
and to better target marketing efforts.and to better target marketing efforts.3. Develop and enhance online image and presence to improve the media mix. This can be 3. Develop and enhance online image and presence to improve the media mix. This can be
achieved through interactive micro-sites that can engage the customer and elicit valuable achieved through interactive micro-sites that can engage the customer and elicit valuable information on their buying habits and preferences. Refresh and improve existing websites to information on their buying habits and preferences. Refresh and improve existing websites to better direct customers to storesbetter direct customers to stores
Storyline 2/2Storyline 2/2
RationalesRationales
1a. Previous TAG Heuer ambassadors, like Yao Ming and Zhang Ziyi, did not help boost TAG sales b. There are different success stories in China for luxury products boosting sales after the adoption of
new local ambassadors.
c. New local ambassadors who are inline with TAG’s image would help the build the brand in China 2a. Shopping experience of end consumers might not be fully captured by store manager feedbacks. b. TAG Heuer can more efficiently market its brand in China if it understands end consumers’ mentality. 3a. e-Marketing is a new media to reach the target income group in China. 3b. There has been a strong correlation between the level of customer interaction on the website and
actual sales
3c. Mobile and mobile-tailored sites with downloads such as LVMH wallpapers, interactive widgets, will capitalize on the heavy mobile usage and behavior of Chinese consumers.
Who’s the next face that can give Who’s the next face that can give TAG Heuer a lift?TAG Heuer a lift?
Ambassadors from other brands have proven success…
Which Chinese Celebrities are Which Chinese Celebrities are making it to the popularity list?making it to the popularity list?
RankRank Year 2008Year 2008 Year 2009Year 2009
11 Yao MingYao Ming Yao MingYao Ming
22 Liu XiangLiu Xiang Zhang ZiyiZhang Ziyi
33 Jet LiJet Li Yi JianlianYi Jianlian
44 Yi JianlianYi Jianlian Guo JingjingGuo Jingjing
55 Zhang ZiyiZhang Ziyi Liu XiangLiu Xiang
66 Fang BingbingFang Bingbing Jet LiJet Li
77 Zhao WeiZhao Wei Zhao WeiZhao Wei
88 Zhou XunZhou Xun Fang BingbingFang Bingbing
99 Li BLi Biingbingngbing Zhou XunZhou Xun
1010 Zhao BenshanZhao Benshan Li BingbingLi Bingbing
Source: Forbes Magazine
What are the Customers Saying?What are the Customers Saying?
Consumer Survey FindingsConsumer Survey Findings
What the Customers Really Want?
Which Sites are Being Surfed?
Interactive Sites Generate SalesInteractive Sites Generate Sales
The Power of New Media