Chapter 7 · Business Marketing

Coach, Inc.

516 West 34th Street 

New York , NY , 10001 

Website: www.coach.com

Phone: 212-594-1850

Industry: Retail - Apparel and Accessories

NAICS: Clothing Accessories Stores (44815)

Although Coach began as a manufacturer of small leather goods, the company now has independent manufacturers that it maintains control over "from design to manufacture." Since the company has product development offices in China, South Korea, and India that oversee the mentioned manufactures and raw material suppliers, Coach is able to implement a global manufacturing strategy that allows them to maintain control over materials used in products. 

According to Coach's COH 10-K, the company has manufacturers in China, Italy, the U.S., India, Thailand, Vietnam, Turkey, the Philippines, Ecuador, Malaysia, Mauritius, Peru, Spain and Taiwan.

Independent manufacturers and partners have to comply to Coach's high quality standards, so only the best can be used for Coach products. Coach has random inspections of their facilities to make sure that their partners, like those providing the finest leather, are complying with Coach's policies. 

Additionally, the fact that there are certain department stores that are authorized to sell Coach products is an example of business marketing. When Coach does business with, for example, Macy's or Bloomingdale's, those stores aren't interested in keeping the handbags or shoes for themselves but are more interested in selling them from their store. 

Department stores authorized to sell Coach products:

• Macy's
• Bloomingdale's
• Dillard's
• Lord and Taylor
• Nordstrom

Coach has always been a strong believer in business ethics and great customer service. The Chapter 3 blog post on Ethics and Social Responsibility describes the company's business ethics and describes Coach's Global Business Integrity Program more in depth, but in short, the company "seeks to be a good employer and a responsible and socially sensitive corporate citizen in the locations in which the corporation conducts business."

The company values honesty and integrity, and feels that it is responsible for delivering the best service to ensure that the needs of a customer are always met. While the company is intent on attracting new consumers, Coach continues keeping current customers satisfied.

Sources: Manufacturing, Company Profile

Chapter 8 · Segmenting and Targeting Markets

The words "target market" have been mentioned in various posts, and while Coach has continued to target men and [mostly] women between the ages of 16-54, the company has remained focused on expanding within Asia. Coach has directly operated locations throughout Asia, located in Japan, China, Korea, Taiwan, Malaysia, and Singapore. There are also locations within Europe: in the UK, Spain, Ireland, Portugal, Germany, and France.

As Coach continues striving towards establishing themselves as a lifestyle brand, they have been in a "transformational period" for about a year. When the period ends, around December 2013, the company can bet on becoming a force to be reckoned with. By transforming the company into a global lifestyle brand, Coach increased direct competition among lifestyle brands such as Michael Kors and Tory Burch, two fast growing companies, "both of which have nibbled away at Coach's still-dominant share of the North American handbag market."

In terms of Coach's geographical sales mix, 70% of sales are represented by North American customers. This includes sales through company-operated stores, online purchases, and wholesale distributors. International sales account for 30% of sales, through company-operated stores throughout Asia and from online sales.

Coach has been targeting consumers based on personality for years. When the Poppy Collection was introduced in 2009 to help sales during the recession, it focused on capturing the youthful spirit of the Coach woman. The line succeeded, and as the company grew, so did Poppy. The latest line is described as having a "downtown edge" and

 

East/West Satchel from the latest
Poppy Collection

"sophisticated new silhouettes with slender straps give the latest Poppy Collection a ladylike sense of refinement. They combine the luxury of Coach leathers with delicate yet iconic hardware and a fashion-forward palette."

When purchasing Coach products through their website, shoppers have the option to "connect with Coach". By signing up for Coach emails, customers are notified of new products that are available to purchase. Additionally, Coach sends out pamphlets to customers that offer 25% off for them and a friend, including two promo codes that can be entered at checkout online or scanned in store.

Shopping in store proves to be a different experience than shopping online, especially at Coach. The stores tend to be big, and can have more than one floor. Their flagship store is the most distinguished in terms of its design. The store was redesigned from a 2,600 square foot store to one more than double the size, and now stands proudly on the northeast corner of East 57th Street and Madison Avenue on 6,000 square feet of land. It has three stories, and offers more variety to choose from. Handbags,shoes, clothing, perfume, watches and other accessories grace each floor of the beautifully designed store that not only provides the latest designs of superb quality, but also has impeccable service. As of the company's 2013 fiscal year, Coach has 351 retail stores in North America, with total square footage of 952,422.

Coach has long been considered as an affordable luxury, appealing to middle class consumers. The company's simple, understated, and sophisticated design continues to attract new customers and those who have established brand loyalty have the pleasure of waiting for Coach's next design to wow them.


Sources: Coach's New Strategy: A Lifestyle Approach, Sale Stats, Coach Expansion

Chapter 11 · Developing and Managing Products

For over 60 years, the words "classic american style" have defined the character and the spirit of Coach, Inc.

In the early 1990's, Coach's popularity grew with the belief that their "underestimated style, lacking in logos or obvious status symbols, was beginning to supplant the vogue for flashy designer goods." The company would then continue expanding their product lines, all the while keeping the qualities that made the brand prestigious.

To help the company grow as a brand rather than just a leather company, Coach hired a designer to create new products and lead a product development team. Since, Coach offered timeless staples in high quality, it meant that customers would rarely need to replace a product. To increase necessity for Coach products, the company focused on adding more color to their collections. 

Coach magazine ad showing a handbag
in a brighter color

Coach began to mail out brochures/mail order catalogs in 1992 in order to test market their leather outwear. By sending out brochures to former customers and their target market, the company showcased their ability to provide more than just handbags.While broadening their products, Coach also expanded their handbags, going from dark colors to those of a brighter hue. The demand caused the company to expand manufacturing to Puerto Rico, and in 1997, Coach entered a licensing agreement with Movado Group so that the Coach name could be used on a line of watches.The company later began to target younger consumers and remodeled major retail stores to better display new products.

Coach, Inc. developed new products and new product categories rapidly, and remodeled stores to give off a modern vibe. Outsourcing provided an improvement in margins, since the company was now seeking production in low cost markets. Coach began expanding their channels of distribution, eventually developing a multi-channel distribution strategy. There are over "500 Coach stores in North America, over 400 directly-operated stores in Asia, and 20 in Europe", boutiques are located in department stores and specialty retailer locations in North America, and there are "distributor-operated shops throughout the world." The company has websites in the U.S., Canada, Japan, and China.

Sources: Company Profile

Chapter 18 · Social Media and Marketing

 Social media plays a big role in the 21st century; it  has changed the way we get and share information, the way we communicate and the way we get our opinions heard.

 With the hundreds of millions of users on Facebook, the site can be the third largest in the world and the  hundreds of millions of active users on twitter post an average of a billion tweets. This "exponentially  leverages word of mouth" and it is important for marketers to take advantage of social media to advertise products.

Coach has seized the opportunity to communicate with customers through social media, and the company has active accounts on twitter, instagram, and facebook. From there, Coach posts updates on the latest collections and shares images with followers. Additionally, Coach allows consumers to subscribe to email updates and their website can be accessed from a smartphone. Since virtually anything can be viewed on a smartphone, Coach has also utilized YouTube to showcase short videos featuring the latest products. The company's channel has over 55 thousand subscribers. 

Left: Coach's twitter account.
Middle: Coach's instagram.
Right: Coach's facebook account, with 4.3 million likes.

Coach engages with customers over twitter, and those with any questions regarding a product can tweet the company using the handle: @Coach. The account is monitored, and a representative will reply to customers needing assistance regarding a product, whether it needs repair or tips on cleaning. Although customers get a reply, the replies are often received a day later, and some up to five days later. If Coach plans on using social media as a way of connecting with customers, they need to establish a better way of helping customers because most replies sound generic and insincere. This may give off the impression that the customer is not valued, and those who don't have a strong sense of brand loyalty will go elsewhere.

Chapter 10 · Product Concepts

Coach advertisement in the '60's.

Founded in 1941 in Manhattan, Coach has been providing products of "distinctive design, quality, function and durability" for over 70 years. True to their origins, Coach's products continue to be handcrafted from the finest textiles but rather than handcrafting products from a Manhattan loft, Coach now has manufacturing facilities in 16 countries. 

The company has come a long way since then, and they were helped greatly by Bonnie Cashin. Hired in 1961, Cashin worked to "revolutionize the product's design." The features of Coach bags such as the signature Coach toggle were Cashin's idea, as were the turn-key fobs. She often sketched the women she was designing for, calling her a "reader and a listener and a traveler." Bonnie Cashin did do what she intended, and revolutionized not only the company's handbags by including bright colors, but the industry itself. Bonnie Cashin is credited for giving Coach its iconic look. In 1968, Bonnie Cashin was awarded the 

American Handbag Designer Award by Leather Industries of America.

In addition to revolutionizing the industry, Cashin also designed the Coach logo; the classic horse and carriage symbolizes "luxury, elegance, social status, and royal dignity." Also, the "C" seen on Coach signature bags creates brand recognition.

Bonnie's sketches.

Since it's conception in 1941, Coach has created the following collections:

1. The Borough

2. The Urbane

3. Madison

4. Legacy

5. Poppy

6. City Tote

7. Coach Classics

Left: Legacy Collection
Right: Madison Collection

The number of bags within the collections vary. For example, the Legacy Collection, which is inspired by the iconic designs from the Coach archives, features 125 handbags in timeliness shapes, modern color, and classic hardware. The Madison Collection on the other hand (named after the elegant, boutique-lined avenue in New York City), has 148 handbags in sophisticated silhouettes, striking hardware, and modern luxury of textured Italian leather.

Evidently, the company offers many products for customers to choose  from. If you're looking for playful, energetic, and youthful, the Poppy Collection is where to shop. Modern luxury can be found in Madison, iconic in Legacy, and versatility in the Borough Collection. Most of Coach's collections feature "sophisticated" styles.

In terms of packaging, Coach products are neatly placed in a red box. The box features a white outline, the logo is printed in silver in the middle of the box and a long, white ribbon is tied around it. Inside the box, handbags are stuffed with paper to keep their shape, and so are shoes. The product is covered by white tissue paper that has light silver lines printed over it.

The company's customer/product guarantee is as follows: 

"Coach does its best to make sure you'll be satisfied with every purchase. However, should any item fall short of your expectations, by all means return it to us unused upon receipt. Just enclose the form included with your order and we will send you a prompt refund or replacement, whichever you prefer. 
Coach products are made to ensure satisfaction and service for the natural life of the product. If, during its lifetime, your item should require repair, we offer a repair service for many of our products. There is a shipping and handling charge of $20 (plus tax, where applicable) for each item submitted for repair."

Sources: COACH Company Profile

Chapter 17 · Personal Selling and Sales Management

As Coach enters the market as a lifestyle brand, the company needs to maintain its base of loyal customers more than ever before. With the latest advertising campaign being the first to feature all Coach products, the company needs to continue to entice consumers with their products. The way that Coach hopes to accomplish this is  through various promotional methods as well as by strengthening their relationship with existing customers and building one with potential ones.

In order to keep costumes coming back for more, Coach not only continues to offer affordable luxury goods, but they also offer free shipping for to those who spend $150 dollars or more when shopping on their website. As mentioned in a post for chapter 2, the company offers discounts of up to 25% off to "Preferred Customers" and even provide a discount code for a friend in an elegant envelope they send to your address. Also mentioned in the post is that Coach surveys how well a product will do within it's target market before making it available for sale. This increases the company's image in the sense that they care about what products they are putting out there and want to provide customers with products that will satisfy both needs and wants.

At Coach, Global Corporate Merchants need to "have a deep understanding of our customers, past product sales, current market trends and Coach's classic, modern American style. They use this knowledge to work collaboratively with Design, Operations and Coach's different business units to help build fashionable product lines that appeal to our customers."

Coach focuses on the needs of their customers, and employees participate in a development program that allows them to better:

• Commit to internal and external customer service
• Understand customer priorities
• Build customer relationships through trust and respect
• Lead others to exceed customer expectations

The third bullet point relates to relationship selling, which stresses the importance of establishing a bond with consumers in order to form brand loyalty.

Thought and effort is clearly put into what Coach, Inc. does, and this allows them to make sure that their target market sees them in a positive light. From their social policies to discounts and their dedication to making sure a customer is pleased with their shopping experience, (be it in stores or online), the company is eager to please and to establish a connection with customers that many other brands only dream of creating.

Sources: COACH

Chapter 16 · Advertising, Public Relations and Sales Promotion

Coach has used methods such as magazines, their website, and social media to promote their products and famous famous such as Gwyneth Paltrow and Kate Bosworth. This season, Coach, Inc. is promoting their Fall 2013 Collection through #CoachNewYorkStories, an advertising campaign featuring three "influencers", Karlie Kloss, Liu Wen, and Will Chalker, who all have a New York story.

Karlie Kloss, Liu Wen, Will Chalker

Karlie lives in the West Village. She believes less is more, and her style is simple, timeless, and genuine.

Liu Wen knows New York is constantly changing, and she appreciates the beauty of the city: Uptown and Downtown, the West Side and the East, the city life and the beach. Liu Wen represents the feminine yet tomboy style.

Will believes that there is always something new to discover in New York. When he's not discovering new parts of the city, he's on a farm in the middle of England. He describes the two places as "night and day", but thinks the contrast is what keeps New York interesting. The city itself represents his style, and he knows that NY is where he is supposed to be.

These three faces all wear the latest trends that the company has introduced, from the "Borough Bag", a simple, chic, and sophisticated handbag that represents the "elegant ease" of the city, to the fur trimmed coat.
This campaign is the first time that all the products featured in the ad are from Coach, because as Coach transitions into a lifestyle brand, they need different tactics to be able to compete globally. #CoachNewYorkStories is the company's way of making people see that they are not just a bag brand. This seems as though Coach is using institutional advertising to promote the company, because as the company focuses on becoming a lifestyle brand, they need consumers to maintain a favorable attitude towards the brand.

Coach's revenue continues to grow by 21% every year, but analysts are worried that Coach changing it's direction after 72 years could affect the company's future growth. If this transition year is successful, Coach will then have established higher brand loyalty.

Sources: COACH, COACH Brand Issues, COH: Undervalued Luxury Brand