"The company is founded on values such as customer satisfaction, integrity, innovation, and collaboration and seeks to be the leading brand of quality lifestyle accessories offering classic, modern American styling."
By developing a clear mission statement, Coach, Inc. is able to take the necessary steps to achieve their goal of being the "leading brand of quality lifestyle accessories."
Coach has outlined its strategy and has executed it successfully to help grow the business:
- Raising its brand awareness and market share in the under-penetrated Asian market with China being the top targeted market
- Growing its women's business in the North American and European markets
- Increasing its men's business in North America and Asia
- Maximizing e-commerce sales
SWOT ANALYSIS
STRENGTHS:
- Strong brand presence in luxury market; number one brand of premium handbags and accessories in the U.S. market and ranked number 10 on the 2013 World's Top 10 Luxury Brands list
- Multi-channel distribution; offers products in store fronts, through their website, phone, factory outlets, and airports.
- This wide geographical coverage allows the company to be the leading American marketer of fine accessories and gifts.
- Coach offers products in over 20 countries.
- Coach has high operating margins and increased popularity, even in the struggling U.S. economy.
weaknesses:
Coach has a low inventory turnover rate, which could mean that Coach's target wasn't aware of the product, so there was either a deficiency in advertising, or that the products remained unsold for too long. The latter is costly for any company because the demand might not be as high as predicted, causing products to remain in the warehouse.
opportunities:
Coach has taken advantage of the increased luxury consumption in China and plans to take more control over their retail operations by building their own stores rather than selling their products through third-party retailers.
threats:
Coach, Inc. is constantly pursuing counterfeit retailers. The increase in knockoffs diminishes the company's reputation for high quality leather goods, and Coach educates shoppers on counterfeit items on their website.
marketing mix
product:
At Coach, "customer satisfaction is paramount" and the company wants to make sure customer needs are always met. Before a product is officially available, Coach surveys its target market to see how well it will do. When Coach packages its products such as boots or a handbag, the bag is stuffed with paper to help maintain its shape, and boots have a cardboard like paper placed inside to avoid creasing. A letter from Coach and care instructions can be found inside.
Coach also gives you the option to gift wrap a product.* The gift boxes vary; some are red, with a long white ribbon tied around it. Others are white with a gold ribbon tied around, and some are striped.
*Note: The last time I ordered from Coach, I was able to gift wrap it for no extra cost.
Place:
Coach has a multi-channel distribution strategy, with over 500 stores located throughout the United States and Canada, with more to come. Over 400 stores are directly operated throughout Asia, and 20 in Europe. The company also offers products at department stores such as Macy's and Bloomingdale's.
PROMOTION:
Strategies for promoting Coach's latest collections include YouTube videos, and customers receive a booklet featuring the latest collection. A survey found that Coach utilizes the use of social media and the internet extensively, emailing over 1.2 billion messages to selected customers.
The video is inspired by the poetic phrase for a daydream or reverie, Coach presents an atmospheric film about a day in New York—an otherworldly short starring new fall shoes that evoke the feeling of never touching the ground, and a cast of golden origami birds taking flight.
PRice:
While never really changing its price range, Coach does offer discounts to "Preferred Customers" and during the recession, rather than lowering the value of the products within already available collections, Coach introduced the Poppy line (which represents youth and playfulness) in order to offer consumers a more affordable way to pamper themselves.
"In business, I look for economic castles protected by unbreachable moats." -Warren Buffett
In other words, Coach has competitive advantage in the luxury brand market because it offers high-end products with the same great quality their competition does, but for a lower price. As mentioned previously, Coach has a very strong brand presence in the market and "new competitors in the luxury brand industry would have to spend a large amount of money and resources to build up competitive brand awareness and image. Coach also has consumer loyalty as it has been delivering high-quality products that are simple and reliable, with a perceived value."
Coach has implemented it's strategic plan successfully in the past, evident by the 21% growth rate the company saw this year. In addition, Coach has a high gross margin of 74% and a net margin of 24%, showing Coach's position as a market leader.
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