Swot Analysis Of Halo Effect

Halo effect:

Halo effect is basically a positive feeling of consumers towards a product.

Halo effect, which is related closely to confirmation bias, is cognitive bias whereby a person assumes unconsciously that a measure of success (such as profits or pricing performance) must directly reflect its strategy or top quality management. If an overall impression of a company is favorable then thoughts about the product at all aspect are seen as consistently positive. Everything changes but the halo effect will remain as long as we live.

As example, “Louis Vuitton doesn’t sell handbags-it sells dreams”. It puts a effect on customer’s mind. Customer relates this with emotional sense. And develop a positive feeling towards the product thus the loyalty

1. Hermés-

Hermés, French manufacturer of quality goods and is one of the two key competitors of Louis Vuitton, specializes on leather, lifestyle accessories, perfume, wearing etc. Overall brand value is up 8 percent to $8.46 billion.

Unique selling point:

Hermés delivers high quality fashion products to the rich and premium luxury segment. It is also renowned for customizing unique products for it’s consumers. It promotes to its consumers “to faites nous rêver” (Make us dream).

SWOT analysis:

Strengths:

1. Brand name and presence in global

2. Number of exclusive stores of Hermés is more than 300 throughout the world.

3. Production units of Hermés spread gloabally.

Weaknesses:

1. Lack of presence digitally in e-commerce.

2. Waiting list for customized product is huge and substantial.

Opportunities:

1. By including “masstige” ( Combination of “Masses” and “Prestige”) brands Hermés can expand its market

2. Hermès can expand its presence in developing countries such as South America, China, India.

Threats:

1. Intense competition with Louis Vuitton and Gucci.

2. Financial crisis caused by economic crisis of the countries of Eurozone.

2.

Louis Vuitton provides new items synchronized globally for the fashion status and the rich in the luxury customers group and makes sure the products which is exclusive for them shall meet the consumption of customer’s status. But these customers aren’t ideal customers of Louis Vuitton time because they need to save their wage for half a year then they can buy a Louis Vuitton product. Louis Vuitton is very thoughtful for this group because these customers who buy little goods will buy other but more valuable goods next time.

To be strictly speaking, only 1% top people, rich people, celebrities are the target customers defined as a luxury market. But the definition of luxury market became very extensive and the middle class people of society purchasing the luxury products are increasing.

(http://www.sk-gaming.com/content/54908-)

(http://sanliebetong.blogspot.com/2009/08/louis-vuitton-s-target-groups.html)

The Italian brand is also known by its quality, heritage and premium positioning. All Gucci’s products are made in Italy and this iconic Made in Italy style has become a symbol of elegance, sophistication and desirability which has enabled Gucci to become one of the world’s most desirable luxury fashion