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French luxury companies

Challenge to do E-Commerce without affecting their brand image

Written by Paul Lassalle, Clément Lemaire

Paper category

Bachelor Thesis

Subject

Business Administration>Marketing & Sales

Year

2010

Abstract

Thesis: E-commerce, an important opportunity With the development of technology and the empowerment of customers becoming a global opportunity, e-commerce has become more and more important in global commerce (Usine Nouvelle, 02 fevrier 2010). E-commerce includes online business activities for a wide range of products and services. It also applies to "any form of commercial transaction in which parties interact electronically rather than through physical exchange or direct physical contact (Andam, 2000). The first online shopping began in the 1990s, but around 2000 (LeMonde.fr, 22/12/1999), when many companies, mainly from the United States and Europe, decided to use the Internet. Now, with a single click, customers can easily collect information about features and prices and compare shopping (Korper & Ellis, 1999). According to the latest research published by Eurostat on January 19, 2010, in the 27 EU countries, 93% of companies employing 10 or more people can access the Internet, and 82% of companies have broadband Internet connection. Among other purposes, Internet access enables companies to buy and sell products electronically: 12% of the turnover of companies in the EU27 came from e-commerce in 2008. This EU study became the official statistical office of the EU in 2009 and represents us The most reliable data currently available. It shows the importance of e-commerce and proves that it is an important way for companies to make profits. 1.2 E-commerce, the key to the luxury goods market One of the amazing growth of e-commerce is the luxury goods market Penetration. According to a DirectPanel study in May 2008, it has doubled from 5% and 3% in 2007 to 10% and 8% in 2008. Indeed, luxury goods companies are very reluctant to use the Internet, and it is considered pirated Regions and channels do not fit the image of luxury goods (Okonkwo, 2010). The luxury goods market seems to be an example of a market where this opportunity may become a risk, especially in terms of brands. Starting in 2008, they seem to be unable to evade reality, they may Have to adapt to changes in consumer habits. They decided to go through this market and develop their own website so that consumers can buy luxury goods (L'Expansion.com, 02/06/2008). Because luxury goods may need to be carried out in some way Marketing, so companies must be cautious in the way they promote products on the Internet. Because they are slow to enter e-commerce, one of the problems they may face is how to sell their products online without affecting their brand image. 1.3 What are the opportunities of e-commerce for French luxury goods companies? In order to explain how to protect their brand image, we decided to focus this paper on French luxury goods companies. Three French companies entered the top 10, and two ranked among the top three among the most famous and best performing luxury goods companies: L'Oréal and LVMH (World Wide Fund for Nature, 2007). French brands are also very famous, such as Louis Vuitton, Chanel, Hermes or Dior. According to the world ranking of luxury brands, Louis Vuitton, Chanel and Hermes are included in the top 5 luxury brands by turnover (Usine nouvelle, 2008). French luxury goods companies may be reluctant to use the Internet, but knowing that it can be an important source of income, they decide to adapt to this new market. According to the new version on e-commerce released by Eurostat in 2010, 92% of French companies had broadband connections in 2009 (Eurostat, 2010), which is higher than the European average. It is also the only European country where 100% of companies have Internet access. Companies have at least 10 employees. This is the case for luxury goods companies (Eurostat, 2010). E-commerce is an important source of income for this French company, as this survey shows that 13% of its turnover comes from e-commerce (Eurostat, 2010). The importance of brand and reputation to French luxury goods companies allows us to dramatize our problems with e-commerce as a potentially relevant Internet tool. The main purpose of the study is to describe how French luxury goods companies use e-commerce in the context of changing needs without affecting their brand image. 1.5 Paper structure Our paper consists of six chapters. First is the introduction, we explain what the problem is and what the purpose is. In the second chapter, we described our theoretical framework, in which we chose theories related to our purpose. This part is divided into two parts: e-commerce and marketing tools, e-commerce and brand promotion. In Chapter 3: Methods, we explained the methods we used to collect data and conduct research. In Chapter 4, we use our method to observe and collect data to answer the purpose. In Chapter 5, we analyzed the results we observed according to our theoretical framework. Finally, in Chapter 6, we give the answer to the purpose based on our analysis. 2.1.1 Definition The Internet was originally created for the military and soon for universities. But since the early 1990s and the Internet was opened to the public, it has become an electronic distribution place for companies and customers to conduct business. Read Less