Next price increase?

[LV-PRADAfanatic]

oh no,.. NOT another increase...

[baglady362]

another one?!? by november?!?!?!

i hope not too soon! it's driving me crazy!!

[kenzo89]

I hope it's not a worldwide one .

[shb]

[villado]

Another price increase?!

[xi_captain]

Wow....

[CindyYZ]

AGAIN???? they just had one!

[baglover1973]

My SA said one more before the end of the year....it's getting a little ridiculous for me...

[heychar]

November!!!!!!...............Does this include England too????

[jchiara]

SA at the Los Angeles LV store confirmed November as well. No actual date, just the month.....

[canipus]

Originally Posted by jchiara

SA at the Los Angeles LV store confirmed November as well. No actual date, just the month.....

It's November in time for the US Thanksgiving holidays with a minimum three increases a year 2009 and on in N. American and EMEA regions in order to get pricing higher than Asia. They want to lower the demand in these regions to balance the surging demand in Asia. The cheap days are over. Look our for prices at least 40% higher than they are today within 24 months.

[cindy05]

CANIPUS,
You seem to be very knowledgeable about LV's reasons for price increases and whatnot. Do you work for LVMH? If not, where are you getting this info?

Originally Posted by canipus

It's November in time for the US Thanksgiving holidays with a minimum three increases a year 2009 and on in N. American and EMEA regions in order to get pricing higher than Asia. They want to lower the demand in these regions to balance the surging demand in Asia. The cheap days are over. Look our for prices at least 40% higher than they are today within 24 months.

[MaRiL09]

Originally Posted by canipus

It's November in time for the US Thanksgiving holidays with a minimum three increases a year 2009 and on in N. American and EMEA regions in order to get pricing higher than Asia. They want to lower the demand in these regions to balance the surging demand in Asia. The cheap days are over. Look our for prices at least 40% higher than they are today within 24 months.

wow, how do you know all this??? doesn't seem fair

[canipus]

Originally Posted by cindy05

CANIPUS, You seem to be very knowledgeable about LV's reasons for price increases and whatnot. Do you work for LVMH? If not, where are you getting this info? As an economics major in college, I can understand that demand drives the prices up and down. If there are 10 buyers for one bag, then why not raise the price until all is phased out until the last buyer remains who can still afford to buy it? If there were 10 bags and one buyer, then the price would have to be lowered to meet that sole buyer's reserve. So it seems that as long as we continue to go nuts for LV, they will continue to have a reason to raise the prices, until it gets to the point where it is close to the price of Chanel or Hermes or some other pricey name brand. IMO, if it gets to that point, I would rather buy the other brands.

No I don't work for LVMH and no I won't disclose sources - sorry.
I am an International strategic marketing consultant (thirty years) for fortune 50 corporations and previously an advisor to the Foreign Trade Committee for tariffs and imports on Asian imports for the European parliament in Brussels.

The LVMH pricing strategy isn't just about profits. It is also a regulator valve to ease pressure on production. With mass produced products you simply ramp production up and down - no problem - bring in more machines - speed up slow down the machines. With LV the products have a high amount of human labour and you can't ramp SKILLED human labour up and down without impacting quality of workmanship. There is a much higher level of inertia. If you raise prices in the EMEA region to slow demand you take pressure of labour intensive resources that are already stretched meeting demands in other regions. If you try and make people work faster quality suffers (heard about the quality problems in other threads - ring a bell?). You have to use price as a manufacturing valve BUT there is no point raising prices on product lines that are already manufactured and form part of your inventory. That WILL increase profits of course, but the game plan is to slow production on items to be manufactured - not on items that have been manufactured. LV have to raise prices to a point where the product is just affordable to a market size that they can handle. The problem is the psychology of Asians who are insane about having to own Louis Vuitton. They will bankrupt themselves and everyone around them in order to own the brand. A more moderate western frame of mind will simply move to other brands, as you correctly point out. Once that happens a degree of equilibrium will return and demand will grow at a slower controlled pace. In short, Asia has created a multitude of problems (not just counterfeit copies). The other strategy is simply not to supply the Asian markets or at least curtail it. That strategy failed as Asian purchasers simply travelled to Europe to purchase the product by the ton in local markets and then carried it back and resold it. Hence the "you can't purchase more than two of any product line" ruling. Raising prices is the only option - unless of course you learnt something in your economics class that LVMH have missed, in which case I strongly advise you contact them. I have it on good authority that they will pay mega bucks to allow you to showcase a solution.

[cindy05]

Thanks for your enlightening response. I don't think any amount of price increase will deter the asian consumers from buying. If anything, it would probably stop everyone else from buying before the asians. I happen to be chinese myself and have never met anyone or heard of anyone becoming bankrupt over buying some designer bags. I believe there is a new thread that talks about LV as merely a money-making company and no longer having the quality or luxury as it used to. I still think they are only doing it for the money. If demand is so high, then why not raise it to the point that only those who can truly afford the high price tags continue to buy...that way, they dont put too much strain on their bag makers and they make a pretty penny.

In the technology industry, such practice is called "skimming." Did you ever realize every time a new piece of technology comes out (think plasma TVs, IPODs, Iphones) it always costs ALOT more than what it would cost a couple of years down the line? Thats because those companies know that there are always people who are willing to pay the big bucks because they can't/won't wait. So they skim profits from those people first. Once demand dies down at those high prices, then the prices drop so that more reasonable people can afford it.

Sorry I went off topic a little. I didnt intend for this to get so much attention. I just wanted to share my frustration at the price increases. It doesnt matter what LV's rationale behind the increases are. If this keeps up, I am soon to buy just Chanels and Hermes. I am not spending more than $2k on LVs....being canvas and all. JMHO

Originally Posted by canipus

No I don't work for LVMH and no I won't disclose sources - sorry. I am an International strategic marketing consultant (thirty years) for fortune 50 corporations and previously an advisor to the Foreign Trade Committee for tariffs and imports on Asian imports for the European parliament in Brussels. The LVMH pricing strategy isn't just about profits. It is also a regulator valve to ease pressure on production. With mass produced products you simply ramp production up and down - no problem - bring in more machines - speed up slow down the machines. With LV the products have a high amount of human labour and you can't ramp SKILLED human labour up and down without impacting quality of workmanship. There is a much higher level of inertia. If you raise prices in the EMEA region to slow demand you take pressure of labour intensive resources that are already stretched meeting demands in other regions. If you try and make people work faster quality suffers (heard about the quality problems in other threads - ring a bell?). You have to use price as a manufacturing valve BUT there is no point raising prices on product lines that are already manufactured and form part of your inventory. That WILL increase profits of course, but the game plan is to slow production on items to be manufactured - not on items that have been manufactured. LV have to raise prices to a point where the product is just affordable to a market size that they can handle. The problem is the psychology of Asians who are insane about having to own Louis Vuitton. They will bankrupt themselves and everyone around them in order to own the brand. A more moderate western frame of mind will simply move to other brands, as you correctly point out. Once that happens a degree of equilibrium will return and demand will grow at a slower controlled pace. In short, Asia has created a multitude of problems (not just counterfeit copies). The other strategy is simply not to supply the Asian markets or at least curtail it. That strategy failed as Asian purchasers simply travelled to Europe to purchase the product by the ton in local markets and then carried it back and resold it. Hence the "you can't purchase more than two of any product line" ruling. Raising prices is the only option - unless of course you learnt something in your economics class that LVMH have missed, in which case I strongly advise you contact them. I have it on good authority that they will pay mega bucks to allow you to showcase a solution.