MARKETING IN A GLOBAL AGE

MARKETING PLAN FOR LOUIS VUITTON PERFUME BY 4039714

EXECUTIVE SUMMARY
This marketing plan suggests a new product development for Louis Vuitton (LV). This product will stretch the LV brand into perfumes. The perfume line will carry two products, A7 and A7-untitled. After a situational analysis, it was observed that opportunities in the macro environment such as rising wealth in emerging economies can set a platform for the success of this product. LVs internal capabilities its strong financial position- can capitalize on these opportunities to stretch the LV brand upwards. However, external threats such as changing consumer value can potentially affect the success of the product. A7 and A7-untitled will be positioned as a high-end luxury product with a corresponding premium pricing strategy. Geographic, demographic and behavioural variables will be considered in the market segmentation, and the target market will consist of upper class and the super-rich. The 7 Ps will be employed in the marketing mix. Distribution of this product will be through directly operated stores to maintain brand image and control exposure of the distribution channels to counterfeits. Integrated marketing communication (IMC) strategies will utilize different media for the communication of the product. The major media considered are television, outdoor, press, and electronic. The marketing budget is highlighted in Appendix 2, marketing activities will be controlled using measures like Total Quality management (TQM) and reviewed at intervals to ensure the effectiveness of advertising campaigns and product quality. The balance scorecard in Appendix 1 illustrates the objectives, measures, targets, and initiatives of the four perspectives- financial, customer, internal processes and learning and growth. This brief concludes that LV is poised to launch a successful perfume line.

TABLE OF CONTENT
1
1.1 1.2 1.3

INTRODUCTION ............................................................................................... 5
MARKET DEFINITION ......................................................................................................................... 5 ORGANISATION AND PRODUCT ..................................................................................................... 5 HISTORY ................................................................................................................................................... 5

2
2.1 2.2 2.3

SITUATIONAL ANALYSIS:.................................................................................. 6
COMPETITOR ANALYSIS .................................................................................................................... 6 PESTEL ANALYSIS ................................................................................................................................ 7 SWOT.......................................................................................................................................................... 7

3
3.1 3.2 3.3 3.4 3.5 3.6 3.7

CUSTOMER DRIVEN MARKETING STRATEGY .................................................... 9

CUSTOMER SEGMENTATION........................................................................................................... 9 CUSTOMER TARGETING .................................................................................................................... 9 MARKET POSITIONING ................................................................................................................... 10 BRANDING ............................................................................................................................................ 10 CUSTOMER RELATIONSHIP MANAGEMENT (CRM) ........................................................... 10 COMPETITIVE ADVANTAGE.......................................................................................................... 11 OBJECTIVES .......................................................................................................................................... 11

4
4.1 4.2 4.3 4.4 4.5 4.6 4.7

DEPLOYMENT OF MARKETING TACTICS ......................................................... 11

PRODUCT............................................................................................................................................... 11 PRODUCT LIFECYCLE MANAGEMENT .....................................................................................12 PRICING STRUCTURE ....................................................................................................................... 12 DISTRIBUTION .................................................................................................................................... 13 PEOPLE ................................................................................................................................................... 13 PROCESSES ........................................................................................................................................... 14 PHYSICAL EVIDENCE ....................................................................................................................... 14 INTEGRATED MARKETING COMMUNICATIONS .................................................................. 14 KEY MESSAGES....................................................................................................................................14 ADVERTISING ......................................................................................................................................14 DIRECT MARKETING ........................................................................................................................15 PERSONAL SELLING .........................................................................................................................15 4.1.1

4.7.1 4.7.2 4.7.3 4.7.4

5
5.1

IMPLEMENTATION AND CONTROL: ................................................................ 15

RESPONSIBILITIES ............................................................................................................................ 15

6
6.1 6.2

REVIEW AND MEASUREMENT:....................................................................... 15

BALANCED SCORECARD STRUCTURE ...................................................................................... 15 BUDGETS ............................................................................................................................................... 15

7
7.1 7.2 7.3

EVALUATION AND CONTROL ......................................................................... 16

QUALITY CONTROL........................................................................................................................... 16 RISK ANALYSIS ................................................................................................................................... 16 EVALUATION ANALYSIS ................................................................................................................. 16

BIBLIOGRAPHY .............................................................................................. 18

1 INTRODUCTION
1.1 MARKET DEFINITION
The luxury goods industry is characterised by consumer goods positioned in the top-end of the market. For a majority of consumers, luxury brands are usually perceived as being exclusive, represented by high quality, stylish and extravagant. However, a few consumers perceive luxury goods to be lasting and expensive.

1.2 ORGANISATION AND PRODUCT

Louis Vuitton Moet and Hennessey (LVMH) currently produce more than sixty prominent brands in five divisions of activity; BBC (2010) claims that the LVMH group is the worlds biggest luxury goods firm. The LV-A7 perfumes are a new perfume line developed by the LVMH group to better suit consumers with the needs exclusivity. The products (LV-A7 and A7-untitled) are a niche-luxury and connoisseur luxury perfumes produced with superior craftsmanship for a specific group of people, and people who want private worlds where intimate connoisseurship exists (Focus, ND). LVMH will succeed in taking the concept of exclusive-luxury to a new level with the launch of these products. The new products have attractive bottle designs, base notes and scents that are successfully differentiated from existing market options.

1.3 HISTORY
The LVMH group was formed in 1987 in a merger between Moet Hennessey and Louis Vuitton. LVMHs divisions include: wines and spirits, fashion and leather goods, perfumes and cosmetics, watches and jewellery and selective retailing. LVMH supports the growth of individual brands through shared resources whilst recognizing their individuality and innovative positioning. Since its creation the group has had a strong dynamic, expanding retail network to the present 3,040

stores worldwide. LVMHs core values border on creativity, innovation, and product excellence. With more than 80,000 employees and revenue of 23,659million- 3,195million from perfumes and cosmetics- as at yearend 2011 (LVMH, 2012a), the group is poised to launch a new line of LV perfumes. The Louis Vuitton (LV) brand has recorded a steady growth, maintaining a stellar course yearly in the fashion and leather goods division. LVs loyal customers demand the best possible quality, exclusive products and unparalleled level of service (LVMH, 2012a). Therefore, extending the LV brand into luxury perfumes will complement its existing brand value and the groups efforts in its perfumes and cosmetics division.

2 SITUATIONAL ANALYSIS:
2.1 COMPETITOR ANALYSIS
LVMH major direct competitors in the luxury fashion goods sector in terms of sales revenue are PPR group, Neiman Marcus Inc., Richemont and Hermes group. LVMH still maintains a leading position in fashion and leather goods. The PPR group controls brands like Gucci, Sergio Rossi, YSL, Stella McCartney and Alexander McQueen. In 2011 the group made a total sales revenue of 12.2billion (PPR, 2012). Its most profitable brand is Gucci. The group is increasing its presence in the Asian markets. Another major competitor, Richemont controls leading brands like Cartier, Ralph Laurent, Mont Blanc and Chloe. They recorded a total sales revenue of 6.7billion in 2011 (Richemont, 2012). Its main strengths are its wide geographical coverage and vigorous performance supporting revenues and increasing margins. However, major weakness such as its unfunded pensions scheme may compel the group to make cash contributions to account for the gap in pension assets and liabilities. This can limit the groups working capital, capital expenditures and store expansions (Datamonitor, 2012). Hermes group is popularly known for its leather goodssaddlery. In 2010, the group made 2.4billion in sales revenue. IBtimes (2010) reports LVMH owns over 20% equity stake in Hermes.

2.2 PESTEL ANALYSIS

Luxury brands are still thriving regardless of the global economic downturn. This is due to the continuous growth of the extreme net-worth individuals particularly in Asia (Economist, 2011). Counterfeiting may affect brand image. Louis Vuitton caters to a niche market and mass availability of luxury such products may impact on brand loyalty. Government taxation policies can potentially affect business activities. For example, the 2011 VAT increase in UK led to an increase in consumer prices. As the global economy gradually comes out of the 2008 recession, levels of disposable income increase correspondingly. However Mintel (2008) report that luxury brands are less likely to be affected by economic changes, as their affluent customers will generally be able to afford them. Also, strong economic recovery observed in Asia (IMF, 2011) creates a marketing opportunity. Demographic and population changes are major considerations for marketers. For example, By 2025, more than a third of the UKs population will be over 55 (Jeavans, 2005). The advent on the Internet and other IT services have revolutionised marketing communications and activities such as supply -chain management.

2.3 SWOT
Strengths: The on-going success of the LVMH group is as a result of the ingenuity of the groups vision. The primary strength of the group is its heritage, innovation and superior craftsmanship. LV has maintained quality products since the 19th century with its signature LV logo. Another strength of the group is its diverse business portfolio and leading positions in different divisions of activity and its strong financial position. Additionally, a significant strength of the LV brand is its selective retailing. LV markets its products through its own stores enabling the brand protect its distribution channels from counterfeit products. LV also does not have duty-free shops or sales promotion, which helps to preserve its brand

image. Furthermore, LVs advertising strategy is a major strength of the brand. With few words in high-quality print adverts and A-list celebrity endorsement, LV effectively engages its target market. Weaknesses: A significant weakness for LV is a limited customer base. Owing to its pricing structure, selective retailing and absence of sales promotion, LVs customer group is restricted to the affluent. Another weakness could be the brand stretch into an unrelated market wines & spirits. Although there have been market speculations of the sale of the wines and spirits division to Diageo, LVMH chairman denies the divestment of this portfolio (FT, 2009) Opportunities: A major opportunity for LV is the rising wealth in emerging economies (Bain & Company, 2011). Also, socio-cultural changes such as attitudes and values present opportunities for LV. For example, more women in the workforce drive demand for luxury goods. JMRN (2007) claim that working outside the home drives expenditure on self-consumption. Additionally, People are always attracted to luxury. It has a certain allure to it that is hard to describe, (Thomas, H, 2010); consequently, as income increase luxury spending will increase correspondingly. Threats: A major threat could be changing consumer perceptions. Consumers increasingly believe that they can derive more value in terms of functionality and quality from mass-market products. JMRN (2007) claim that many consumers do not need luxury brands to prove themselves as they acquire higher confidence levels. This can trigger poor demand and sales of luxury products. Climate regulation laws such as the Kyoto protocol can also be a source of threat to LV

3 CUSTOMER DRIVEN MARKETING STRATEGY

3.1 CUSTOMER SEGMENTATION
LV will base segmentation strategies on geography; the main geographic areas will be Europe, US, and Asia. Advertising, sales and promotional efforts will be localised to individual regions without compromising on the product quality or offerings. Additionally, consumers will be segmented according to demographics. Socio-economic variables such as income and class will be considered in addition to gender segmentation. Consequently, perfume range will carry women and men lines. The female lines will have milder constituents designed with the womans chemistry, packaging and advertisements will also be tailored to strengthen the female image. Mens lines will be slightly more concentrated and designed to appeal to the male senses. Segmentation will also address convenience hence 30ml, 50ml and 75ml bottles will be introduced and the A7untitled will come in only a 100ml bottle. LV will also segment market according to occasions and gifts sets will be launched prior to special occasions such as, Christmas, Valentines day and Mothers day.

3.2 CUSTOMER TARGETING

LV will use a niche marketing strategy to launch its perfume as a premium product. A7 lines will be targeted at the affluent-the upper middle class. However, a high-end limited edition product (A7 untitled) - targeted at the capitalist class-will be introduced annually and available at selected fashion shows only for a premium price. Regular A7 lines will target individuals with a net annual worth of between $500,000 - $1,000,00 while the limited edition product will target individuals with a net annul worth of over $1,000,000. This will include major CEOs, A-list celebrities, Ivy League education common, heirs, and top politicians.

3.3 MARKET POSITIONING

LVs strong heritage is built on critical foundations of uncompromising quality, superior craftsmanship and the value of LVMH. Our businesses once again showed excellent momentum in 2011. These excellent figures are a direct consequence of our culture of innovation and creativity, as well as our obsessive focus on the quality of our products (Arnault, 2011). A7 will be positioned as a luxury product with a highly perceived value and a corresponding premium price. Availability of the product will be through highly controlled selective retailing signalling its exclusivity. Positioning Statement: A sniff of luxury The A7-untitled will be positioned as a pure status product, limited and restricted to the super-rich. With an accompanying positioning statement of LuxuryUnfair!

3.4 BRANDING
Brands and brand image can be a source of competitive advantage and can serve to improve profit margins for organisations. LVs strong focus will be to maintain a premium image for the A7 lines. The brand elements of the name and logo is linked to LVMH history and heritage. The logic behind the name: is A7 would appear as an inverted form of LV. This product line will extend the brand upwards and add prestige to LVs current products. In addition to the product positioning, the brand will be strengthened by the integrated marketing communication (see below).

3.5 CUSTOMER RELATIONSHIP MANAGEMENT (CRM)

As part of its strategy to manage customer relationships LV will design magazines that decipher a luxury lifestyle and updates about products. These magazines will be sent to customers on the database for a fee. Additionally, LV will create an invite-only social network (LV-ELITEs) that transcends the Internet. Customers can only join this network by invitation from LV after purchase of A7-untitled. The network will be closely monitored and controlled

by LVs customer relationship managers. Members LV-ELITEs can have the privilege of designing a customised scent with private noses available from LV. The customer will patent customised scents. Furthermore, exclusive parties will be organised for LV-ELITEs. Parties will feature auctions and fund-raising for various charities.

3.6 COMPETITIVE ADVANTAGE

LV fragrances last longer than the market alternatives. LV has built a remarkable reputation over the years and also benefits from the reputation of its parent company-LVMH. Another advantage is its retail network. With about 3040 stores in 60 countries, LV can boast of a huge geographical coverage. Additionally, LV benefits from other complementary products of the brand or its conglomerate group.as customers may sometimes prefer to buy different products of the same brand or group.

3.7 OBJECTIVES
FINANCIAL Achieve 15% ROACE Increase earnings per share by 10% annually in the next 10 years Increase sales revenue by 3million in 2013 MARKETING Achieve 90% brand awareness in target market

4 DEPLOYMENT OF MARKETING TACTICS

4.1 PRODUCT
This perfume is a blend of exotic and fruity fragrance with base notes of apricot, sandalwood, amber, peach and musk. The Eau De Toillete fragrance is ideal for all occasions. The Eau De Parfum is slightly more overwhelming therefore most

suitable for daytime use. A7 lines provide the benefit of longer-lasting fragrance and an association with the LV brand. The limited edition perfume arrives in a rare L-shaped frosted glass box containing a V-shaped bottle carved from polishes yellow gold, white gold and platinum. The bottle also features 100 brilliant white diamonds inspired by Chris Aire.

4.1.1 PRODUCT LIFECYCLE MANAGEMENT Owing to consumers voracious craving for novelty and dwindling attention span, fragrances now have a shorter lifetime than they used to. Consumers now own many brands of perfumes and use them to suit moods, occasions and seasons. According to MarketWatch (2006) report, "A few years ago, it used to be that a fragrance would come out, slowly build up sales, and perhaps after three or five years you would start seeing some attrition. Now a fragrance comes out and often by the second year it's either off the shelves or posting double-digit declines in sales." To mitigate this challenge LV will launch new product lines annually in order to maintain a competitive advantage.

4.2 PRICING STRUCTURE

The pricing objective is to create exclusivity, signal extreme quality and also serve to strengthening the brand position. Louis Vuittons pricing power has generated reliable profit margins of around 40-45%- the highest of any luxurygoods brand- (Economist, 2009). LV will pursue a luxury pricing strategy based on the perceived value of the brand. Prices will be justified by the value of the products and other aesthetics such as the packaging, personalised customer service and generous return periods. Geographically segmented pricing strategy will be applied. A7 will be marketed internationally; consequently, slight changes will be observed across regions. Also, both feminine and masculine perfumes will be sold for the same price the only difference will be observed in the volumes. The A7-untitled will be sold in dollars across the globe and there will be no variation in price between regions. There will be no sales promotion or discount pricing at any time so as to preserve the brand value. As suggested by Keller (2009) excessive price movements or volatility could send the wrong signal to the worth of the brand.

The price summary can be found in the table below. Pricing Structure for International Market

REGION Americas Asia UK Rest of Europe

75ml $980 $1250 720 950

50ml $950 $1220 690 920

30ml $930 $1180 560 890

100ml $250,000 $250,000 $250,000 $250,000

4.3 DISTRIBUTION
Almost every aspect of the value-chain will be managed by LV. All material for the production of the perfumes will be sourced centrally. The design will also be by LVs designers, although the bottle design will be done by a design agency. Manufacture, marketing and advertisement of products will be done In-house and LV will spend about 10% of its sales revue on advertising annually. Product distribution will be through 100% LVs directly operated stores (DOS). Additional stores will be opened in Sephora, Harrods, and Bloomingdale and on Saks Fifth Avenue. Whereas electronic media will be used to promote the product, actual sales will be restricted to physical stores. This strategy is employed to increase the quality of LVs products and enhance brand image.

4.4 PEOPLE
In addition to LVMHs over 80,000 employees worldwide, LV will hire additional 800 staff that will be trained on the product benefits and effective customer service.

4.5 PROCESSES
Besides the process undergone to bring a product to market processes that interest customers will be properly managed. Customers will wait a maximum of one minute before getting served. They will be informed about product updates thru LVs magazine and other promotional activities.

4.6 PHYSICAL EVIDENCE

Perfumes will be displayed throughout LVs 3040 chain of stores. Each Louis Vuitton boutique will display the product on counters and sections with different "themes". These counters range from, men's fragrances, womens fragrances. The store will be organised in a way that allows customers easily locate different sections, helping to navigate through what could be very confusing.

4.7 INTEGRATED MARKETING COMMUNICATIONS

Hader (2008) suggests, to win over todays upscale customers, brands must ensure a flawlessly engaging and emotional experience with every interaction. The promotional objectives are: Increase traffic on LVs website, Reinforce purchase decisions and Increase sales. The main media to be used are: television, electronic, outdoor and press. The A7-untittled will be restricted to word-ofmouth advertising.

4.7.1 KEY MESSAGES The main messages will be the positioning statement (A sniff of luxury)

4.7.2 ADVERTISING The adverts will feature celebrity endorsements from Simon Cowell and Angelina Jolie. Simon is a strong British personality and highly influential in the entertainment industry. Television adverts will be placed on CNN.

4.7.3 DIRECT MARKETING LV magazines will be sent to customers on the database quarterly. Also Parties and events will be communicated to the LV-ELITE network through direct marketing.

4.7.4 PERSONAL SELLING Products will be sold by personal selling to encourage consumers establish contact with the brand through the sales force.

5 IMPLEMENTATION AND CONTROL:

5.1 RESPONSIBILITIES
Ogilvy public relations will be contracted to create buzz for the product and manage social media, blogs and other electronic media. The graphic design will be done In-house and photography by Annie Leibovitz. Marc Jacobs- LVMH creative director will direct all these activities.

6 REVIEW AND MEASUREMENT:

6.1 BALANCED SCORECARD STRUCTURE
Refer to Appendix 1 for details of BSC

6.2 BUDGETS
Refer to Appendix 2 for marketing budget

7 EVALUATION AND CONTROL

LV pride themselves on high levels of control and evaluation methods. The company in extensive quality control has depicted these, risk analysis and evaluation.

7.1 QUALITY CONTROL

LV will undertake an on-going quality assurance process to ensure Total Quality Management (TQM) is met. LV will work in accordance with government and industry regulations in order to meet international standards. Such standards will be met through checking every product going to the market for 100% accuracy in design, functions and brand image. all production. Through internal audits, management will document progress in order to continually improve quality of

7.2 RISK ANALYSIS

LV employs a 24hr security system to secure the Louis Vuitton warehouse. LV also theft and breakage insurance with AIG insurance LTD for equipment, vehicles and warehouse facilities. Furthermore, employee safety will be of ultimate importance; consequently, plants will be immediately shut down should a machine malfunction occur. Personnel Protective Equipment (PPE) will be enforced in plants to avoid casualties. LV will keep a record of receipts of deliveries in order to ensure that purchasing is performed correctly.

7.3 EVALUATION ANALYSIS

LV will base evaluations primarily on meeting financial and marketing objectives. Sales analysis will be conducted bi-annually and promotion budget adjusted accordingly. Furthermore, key performance indicators (KPI) will be assessed in all employees through an appraisal method in order to support a

high standard of achievement. Promotional schedule will be reviewed quarterly to ensure compliance with deadlines.

8 BIBLIOGRAPHY
Bain & Company (2011) The great Eight: Trillion-Dollar Growth Trends to 2020. [online] http://www.bain.com/publications/articles/eight-great-trillion-dollargrowth-trends-to-2020.aspx Accessed 27 March 2012

Financial Times (2009) LVMH eyes sale of Moet to Diageo. [online] http://www.ft.com/intl/cms/s/0/f49288f4-2ec4-11de-b7d300144feabdc0.html#axzz1qjkzBoRp Accessed 30 march 2012

Gumbel, P. (2007) The business of luxury: luxury goes mass market. CNN Money http://money.cnn.com/2007/08/30/magazines/fortune/mass_vs_class.fortune/ index.htm Accessed 24 March, 2012.

Hader S. Wooing Luxury Customers. Marketing Management [serial online]. July 2008;17(4):27-31. Available from: Business Source Complete, Ipswich, MA. Accessed March 29, 2012

IBTimes (2010) LVMH holds over 20 percent stake in Hermes, possible takeover. [online] http://www.ibtimes.com/articles/94530/20101222/lvmh-mo-thennessy-louis-vuitton-hermes-international-sca-stake-increase-possibletakeover.htm Accessed 10 March 2012

IMF (2011) World Economic and Financial Surveys: Regional Economic Outlook Asia and Pacific, managing the next phase of growth.

Jeavans, C. (2004). Welcome to the ageing future. BBC news. [Online] http://news.bbc.co.uk/1/hi/uk/4012797.stm Accessed 20th March 2012.

JPRN (2007) Japans changing consumer: drivers of change for luxury brands.

[Online] http://www.jmrn.com/UserFiles/File/DCLB_JMRN.pdf Accessed 27 March 2012.

Keller K. (2009) Managing the growth tradeoff: Challenges and opportunities in luxury branding. Journal Of Brand Management [online]. Vol 16(5/6):290-301. Available from: Business Source Complete, Ipswich, MA. Accessed March 24, 2012.

LVMH

(2012a)

Annual

report

[online]

http://www.lvmh.com/investor-

relations/lvmh-at-a-glance/key-figures Accessed 26 March 2012

MarketWatch (2006). Fleeting fragrance life cycle nothing to sniff at: Cosmetics giants see mounting R&D, promotion costs hitting bottom line. The Wall Street Journal [Online] http://articles.marketwatch.com/2006-1221/news/30808894_1_fragrances-perfume-sales-elizabeth-taylor-s-whitediamonds Accessed 30 march 2012.

Okonkwo U. Sustaining the luxury brand on the Internet. Journal Of Brand Management [serial online]. March 2009;16(5/6):302-310. Available from: Business Source Complete, Ipswich, MA. Accessed March 29, 2012.

PPR

(2012)

2011

Annual

results

[online].

http://www.ppr.com/sites/default/files/fckfile/Presentation2011_161212_%2 0ENGLISH(1).pdf Accessed 28 March 2012

Richemont (2012) Key figures: Consolidated results for the year ended 31 March 2011 [online] http://www.richemont.com/investor-relations/key-figures.html Accessed 28 March 2012

Stankeviciute R, Hoffmann J. (2011) The slippery slope of brand expansion.

marketing management [online]. 20(4):26-31. Available from: Business Source Complete, Ipswich, MA. Accessed March 24, 2012.

The Economist (2009) LVMH in the recession: the substance of style [Online] http://www.economist.com/node/14447276 Accessed 23 March 2012.

The Economist (2011) The fashion industry: the glossy posse catwalks in the West, action in the East. [Online] Accessed 20th March 2012. http://www.economist.com/node/21530989

Thomas, H. (2010) US M&A: Luxury groups adapt to the post-recession world. Financial Times [Online] http://www.ft.com/cms/s/0/54fa455a-74e8-11dfaed7-00144feabdc0.html#axzz1pqzUQbMW Accessed 21 March 2012.

APPENDIX 1 BALANCED SCORECARD FINANCIAL PERSPECTIVE Objectives Maintain a balanced cash flow Increase group revenue Enhance Shareholder longterm value

Measures

Cash flow statement

Sales income

Return on average capital employed (ROACE)

Targets

Surplus cash flow 10% organic statement through growth by 2014 business cycles

11% ROACE by 2014

Initiatives

Improve costefficiency through value chain synergies

Effectively execute campaigns

Use technology to improve supply chain management

CUSTOMER PERSPECTIVE Objectives Expand market share Customer retention Customer satisfaction

Measures

Customer focus groups

Customer lifetime value

Customer satisfaction surveys

Targets

90% awareness 90% retention level among target and market recommendation rates in 2013

100% customer satisfaction in 2012

Initiatives

Initiate referral programs

Justify price in product quality

Use segmentation strategies to better understand consumer behaviour

INTERNAL PROCESSES Objectives Manage growth through Innovation Achieve operational excellence Drive demand

Measures

EFQM model

Incident occurrence levels

Delivery rate

Targets

Launch new products annually

90% reduction in counterfeits in distribution channels

80% demand rate by 2013

Initiatives

Increase R&D budget

Implement quality Effectively management monitory systems inventory

LEARNING AND GROWTH PERSPECTIVE Objectives Develop strategic capabilities Build learning culture Expand capabilities with technology

Measures

Competitive advantage

Skills set ratio

Targets

Gain 20% of the market by 2013

90% skills set ratio among employees

Initiatives

Encourage teams and collaboration among employees

Develop technical Deploy proficiency among information employees systems in supply chain management

APPENDIX 2 MARKETING BUDGET

Marketing Budget for LV for 01.06.2012-31.12.201

Jan-12

Feb-12
0

Mar-12
0

Apr-12
0

Budget Total Personnel

Marketing Budget for LV for 01.01.2013-31.12.201

Jan-13

Feb-13
47

Mar-13
40

Apr-13
42

Budget Total Personnel

48