Longchamp case study

The leather handbags retailed at between €160 and €870. The company manufactured most of its products in France with over 50% production coming off its French factories to position them as authentic. Where the company manufactured its products outside France, the company communicated that the products were Longchamp to give them authenticity. On the other hand, Le Pliage had turned out to be the company’s flagship product, outselling all other products. Le Pliage, however, was not a high-end product and retailed at €55 - €125 far lower than the typical Longchamp product. Good perception of a product restricts customers to that product at the expense of other products from the company. On the other hand, a good corporate brand drives customers to all products of the company based on the capital of the corporate brand.

In this manner, a product from the company that may not match others in its portfolio will receive good custom where it would not have received any without the excellent corporate brand. Le Pliage had created a brand for itself with little consideration of the Longchamp brand as a company. When the company decided to manufacture the leather version of Le Pliage, it returned good sales despite the huge price difference. The bags Longchamp made were of different sizes to meet the different needs of buyers. Longchamp- renewed its collections to reflect the seasons to meet the needs of the fashionistas (7). Besides the function of carrying other accessories therefore, the bags also reflected the season to meet the fashion need. Le Pliage offered only functionality without the class appeal.

Longchamp’s desire to brand itself as a luxury brand is negated by the presence of Le Pliage in its product portfolio. The choosy high-income earning woman chose Le Pliage for its utility while the ordinary woman chose it for the luxury associated with the French brand (6). The runaway success of Le Pliage with all classes of buyers was the reason for the company’s dilemma in its positioning. The image Le Pliage customers had of a quality utility bag was overpowering the image Longchamp wanted to create for the company as a luxury goods manufacturer. Judgments and Feelings The image that customers developed regarding products or companies led them to develop relevant judgments on the same. According to Veselinova and Samonikov (17), judgments are critical because they heavily influence the consumer’s purchase behavior.

The company was, therefore, struggling to attain the same loyalty with its main line of products – leather accessories. Brand Positioning Target Market “Longchamp products are made for the woman who appreciates class, quality, and functionality of fashionable leather accessories found in the company’s French heritage. ” The above brand positioning statement asserts Longchamp products’ uniqueness while emphasizing their conformity with the traditional luxury fashion product makers. The company’s main competitors are Hermes and Chanel. These two brands are known for their bourgeoisie touch in their products that give them exclusivity and high prices. The company has suppressed the promotion of Le Pliage to focus customer attention on leather products. Distribution remains mainly with the company’s outlets to prevent making the products common.

Le Pliage distribution is limited to less than 20% of all other products. Solution The company’s main product line is doing well although the growth has somehow stagnated. The threat of Le Pliage is real as it continues to sell in both the nylon and leather iterations. Print. Kapferer, Jean-Noël. The New Strategic Brand Management: Creating and Sustaining Brand Equity Long Term. London: Kogan Page, 2009. Print. Le Pliage was, therefore, threatening the positioning of Longchamp as the luxury leather products. The information provided does not specify the sales of any of the other products because Le Pliage sales dwarfed them. Failure to act on the current situation would clearly leave the company’s positioning affected because Le Pliage was the main revenue earner and customers were likely to begin associating the company with le Pliage only.

The decision to manufacture leather iterations of le Paige had little impact on the sales of the original version in other fabrics confirming that the bag clearly had developed a brand of its own. Appendix 2 Item Details Analysis Price • Le Pliage selling at €55 to €125 (6) • Other products selling at €160 to €870 (6) • Le Pliage Heritage selling at €670 to €870 (10) Le Pliage’s price did not reflect the luxury brand that Longchamp sought to maintain. Both versions were major revenue earners but the company brand positioning was in danger due to the low perception of Le Pliage. Appendix 3 Item Details Analysis Promotion • Initially evoked the equestrian image • Upscale • Kate Moss and Alexa Chung gave the products the modern feminine appeal • No discount • Generally, laid-back promotion associated with luxury brands • No runway shows The company had avoided outright promotion of its products to eliminate the “common” tag associated with large scale promotions.