Sunday, September 29, 2013

Ch. 4 - The Marketing Environment


 

"Classic American style"--for 60 years, these words have defined the character and spirit of the Coach brand. Today more than ever, Coach embodies "classic American style"--now across a broad and modern product offering of lifestyle accessories in a number of distinctive categories, styles and fabrications. Coach is a very sophisticated brand who seems to mainly target women ages 16-54. That age bracket is definitely a broad range, however, Coach putting forth numerous product lines with distinct differences has allowed them to target such a large range of people. As the brand has grown and evolved, so has the company: from manufacturing to marketing driven; and from a small family business based in a New York loft to a publicly traded company with worldwide sales of $600 million in fiscal 2001. At Coach, the brand is at the core of the company's vision and strategy. The values of the brand--customer satisfaction, integrity, innovation and collaboration--are the reasons Coach's people come to work each morning. The strength of the Coach brand is, ultimately, what makes Coach the company it is today.

Since 2000 Coach Inc. has expanded its distribution to countries around the world such as France, Italy, Hong Kong, Japan, and South Korea as well as holding a strong lead in the luxury handbag industry within the United States. Coach Inc. (NYSE: COH) is a leading retailer of premium handbags and accessories, located primarily in North America and has recently expanded into Asian markets. Basing its image on "affordable luxury," Coach seeks to establish a premium brand that caters to affluent consumers but also provides lower-priced goods to appeal to the demand of middle-class customers. Due to its effective merchandising and brand-building, Coach has boasted high operating margins and increasing popularity within the U.S. and Japan for years, even in the suffering American economy. COH also intends to take advantage of increasing luxury consumption in China by taking more control of its retail operations there and building its own stores instead of relying on third-party retailers. As COH continues to develop its ultra-luxury collections, it will share in the recent increase in spending in luxury good markets as the affluent release pent-up spending power from the last year.




Coach Inc has zero tolerance policy for counterfit products.
Coach vigorously pursues counterfeiters and the shops, websites, vendors, and flea markets that sell counterfeit Coach merchandise. Coach work with local, state, and federal law enforcement as well as U.S and foreign customs officials to try to stop the sale of counterfeit goods at every point in the supply chain. Coach DOES NOT authenticate merchandise or determine whether serial numbers match actual Coach items. If you purchase an item from an authorized Coach retailer, you are guaranteed the item is authentic.



Coach’s plans for geographic expansion during this recessionary environment are cause for a bit of concern. The company’s 1.6% increase in sales from ’08-’09 were driven purely by expansion while same-store sales declined 6.8%, gross margins dropped 4%, net margins dropped 5% and earnings dropped 20%. Aggressive expansion as the comparable earnings of the company decline is a very risky strategy. Coach management appears to have a rosy outlook regarding its positioning in the economy beyond this current recession. Despite its expansionary plans there are not many markets for Coach to expand in outside of the North America, Japan and China. The luxurious and niche nature of its product don’t necessarily attract consumers in lower income economies. This geographic concentration may limit Coach’s growth opportunities in the long term and potentially prohibit upward movements in its stock.



sources http://en.wikipedia.org/wiki/Coach_Inc

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