Analyzing Marketing Cases: Coach, Inc.

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- Threat of new entrants

Although, Coach distributes its company by many channels include direct-to-customer and indirect channels, such as full price or factory store in the US., Internet sales, catalog sales, wholesale, and store in other countries, it might fell in the market. Because the luxury goods retail industry is experiencing continually changing market trends and consumer preferences. It is relatively easy for new companies to enter into the luxury apparel industry, however most companies lack staying power because they are undercapitalized. New Entrants generally lack marketing muscle to give their products the exposure required to build brand loyalty among consumers. Thus, brand names have become increasingly important to consumers (Midgley, 2016).

- Threat of substitute products

There are two types of substitute products that could pose a threat to the company: alternative brands and counterfeits. Brand name/image and product quality are what drives sales in the Apparel/Accessories industry which is why currently Coach and other firms within the industry spends so much on advertising and maintaining high quality standards. Coach works cooperatively with its competitors to minimize the amount of counterfeit products in the market place by prosecuting companies (Midgley, 2016). There are 9 percent of counterfeits in the luxury market. Coach is one of luxury companies, which suffer with it. Normally, the counterfeits are poor quality and are manufactured which violates decent labor standards as if lower standard wage, or child labor. Second substitutes of Coach could be any kind of bag that people can use to carry their stuff instead of luxury handbags. Nowadays, some countries such as Thailand, they are a lot of campaigns that establish to encourage people to support a folk wisdom. Not just people are able to own high bag value in cheaper price, but they are also able to help the economy of the country. Therefore, substitutes of Coach handbags could be backpacks or a craft or handmade bag.

3. Organization

- Summary

Coach stands for authenticity, innovation, and relevance, (Coach, Inc., 2015). The brand is the first American company in handbag category that brings international relevance to American leather goods. Coach creates accessible luxury for the generation. It provides goods women's and men's bags, women’s and men’s small leather goods, business cases, footwear, outerwear, watches, weekend and travel accessories, scarves, sunglasses, fragrance, jewelry, travel bags and other lifestyle products to middle or two-household income families who want to taste luxury brands in 50 percent lower price. Now, Coach is available on five continents in over 1,000 stores worldwide and the brand is also distributed in wholesale and distributor partners.

- Philosophy

Although Coach has over 1,000 stores worldwide, the firm continually expands its business into the under penetrated markets of Asia and Europe, as well as South and Central America. It expected to grow to about $100 million in fiscal 2015 by adding ten new retail stores and 100 wholesale locations in Europe. Besides, too many discounts and promotions tend to lower brand value. Therefore, the company attempts to shift toward higher price. Coach plans to lower the number of deal of the day or flash sales at store, which is about three flash sales per week to be less than one or two sales per month (Market Realist, Inc., 2015).

- Objectives

The objective of Coach is to become the company that defines global modern luxury. The firm would like to make luxury more meaningful, liberating, inviting, and approachable for those who desire more than status. Moreover, in term of employer, to be a good employer and a responsibility and social sensitive corporate citizen in the locations that they operate in is another objective of its business, (Coach, Inc., 2015).

- SWOT

Strengths

- Strong Brand Image of "Affordable Luxury" Product Portfolio

- Multi-channel retail distribution such as full price stores, factory stores, U.S. Wholesale, website, and catalogs.

- Beating competitors price by 50 percent or more, (Paul & Donnelly, 2013, page 283).

- High levels of customer service provided by its employees contributed to its competitive advantage.

- The company does not provide just handbag to the market. But also another alternative such as watches, footwear, and outerwear (Coach, Inc., 2015).

Weaknesses

- Because one of its channels is a factory store, which has 10 to 50 percent discount products after the season, customers do not pay attention to a new collection in the full price store. In the other way, Factory outlet stores outperforming full priced store.

- Too many segments that Coach has spread leading to low inventory turnover.

- Lower brand value because of too many discounts.

Opportunities

- Wholesale in other countries that they are operated in. Because of the busy lives of people, they are preferred to go to the one place that gathers everything they want to have.

- Create campaign or promotion to increase online sales both inside and outside the U.S.

- Expanding presence in China, India and Brazil: The Chinese luxury market has been growing at annual rates ranging from 25 – 30%. China will soon become the world`s largest purchaser of consumer luxury products. Emerging economies like China, India, and Brazil with their developing middle class provide opportunities for long term growth to counterbalance a smaller growth rate in America and Europe.

Threats

- Large amount of competitors in the luxury market.

- Counterfeiting had become so prevalent. It shows that 9 percent of all goods sold worldwide were not genuine, (Paul & Donnelly, 2013, page 290).

- In some countries, people tend to be conservative by campaign against brand-new. For example, Thailand campaigns citizen to use products which product in Thailand and own by Thai people.

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