Abstract
Two types of customers:
The consumers = products directly sold to the customers
The department stores = buy wholesale products
Two clear consumer targets:
Consumers with high purchase power = Buy the products for their design, style(full-price stores)
Buy various products per year = Middle-income consumers who want a taste of luxury
Buy because accessible price for luxury (factory stores)= Buy fewer than one bag a year
Extract
[...] 1. Sell Coach Inc.'s products only in full price stores 2. Sell Coach Inc.'s products only in factory stores 3. Create a sub brand of Coach Inc. and sell it in the factory stores Criteria : Cost of implementation Risk of failure Delay to obtain funds Augmented value of the operation Weight in decision 1. [...]
[...] I. THE PRESENTATION OF THE COMPANY II. THE INTERNAL ANALYSIS Marketing system ( 4P ) Core & Distinctive competences III. EXTERNAL ANALYSIS : Opportunities & threats IV. IDENTIFICATION OF THE PROBLEMATIC V. [...]
[...] Communicate on two differents ways for the two kind of products and insist strongly on the new one. [...]
[...] SOME PROBLEMS ENCOUNTERED 1941: Founded by Miles Cahn and his family Produced only women handbags in leather Created the accessible luxury category Produced just 2 collections per year 1985 : Acquisition of Coach inc. by Sara Lee 1995 : Annual sales growth fell from 40% to 1998: Received licensing agreement Improve the appearance of the factory stores and outsource production Between 1999 & 2006 the company's annual sales encreased from $500 Million to $ 2,1 Billion 2006: 500 location in US and diversify productions items Decided to focus on Japan & US market different types of shops Best selling brands women of luxury handbags of market share in US) COACH TUROVER Products Handbags Belts Cosmetics Gloves Electronics Hats Luggage accessoires Keep the same qualities as luxury brands Price Cheaper than other luxury brands $200-$500 Strategy for middle income customer Promotion Web site and catalog in Asia Principally in Us and Asia Web site: 40 M visitors 54 M in net sales 7,6 Millions catalogs in retail stores Associated with luxury brands Place 900 Department stores location 218 Full prices Coach stores 86 Coach factory stores Located in Prestigious Place Distribution channels : Strength High quality and styling with low prices High level of customer services Various product High number of marketshare in the world Innovation of new handbags every month Weaknesses Poor website Not a lot of marketshare in Europe Possible confusion with positionning Opportunities Threats Growing luxury goods market in Asia and Eastern Europe Introduction of new markets: fragrance and knitwear Growth of big-box discounters Growth of demand for goods in luxury market Number of famous competitors Competitors are launching “diffusion lines” offering accessible luxury Counterfeiting Economic crisis PORTER ANALYSIS SUBSTITUTE PRODUCTS • Counterfeiting • Cheap fashion stores: Zara, H&M • Medium pressure from counterfeiting • Low competitive pressure from cheap fashion stores SUPPLIERS •Low pressure because many RIVALRY Medium competitive pressure •Low pressure on luxury market as hard to get into •High pressure in miedium luxury market POTENTIAL ENTRY • on luxury market • on accessible luxury market • Middle pressure from DS • Quite high pressure from the consumers BUYERS • Department stores • Consumers Core competencies : - Quality - Design - Price beating the rivals by 50% or more - High level of customer service They constitute distinctive competencies Source of competitive advantage as they offer accessible luxury, which is a winning concept Two types of customers: - The consumers = products directly sold to the customers - The department stores = buy wholesale products Two clear consumer targets: - Consumers with high purchase power = Buy the products for their design, style(full-price stores) Buy various products per year - Middle-income consumers who want a taste of luxury Buy because accessible price for luxury (factory stores) Buy fewer than one bag a year The situation in 2005: $105 billion spent on luxury goods an increase of in 2006 was expected Market share : increase in sales arrival of Big-Box discounters in the market emerging markets become really important problem of counterfeiting: - sectors - about $500 billion worth of counterfeiting goods sold in the world - of all goods sold worldwide not genuine increasing incomes in emerging countries importance of middle-income consumers: - advertising - two-income household - « trade up, trade down » desire of luxury: opportunity for a lot of competitors to entry the market of accessible luxury ex: Wal-Mart or sub-brand of Dolce&Gabbana globalization: - problem and impact of counterfeiting - More and more upper classes - Impoverishment of most people first slowdown in 2008 after 6 years of growth decrease of predicted for 2009 the successful firms will be those with international brand and diversified products KSF's: - quality - uniqueness - design - price - diversification - international covering - Style Coach Inc. [...]
[...] Create a sub brand of Coach Inc. and sell it in the factory stores Total= 1.0 cost risk time market Total score Alternati ve 1 4=1,6 6=1,8 7=0,7 Alternati ve 2 6=2,4 3=0,9 7=0,7 Alternati ve 3 3=1,2 7=2,1 6=0,5 Scale: 1=low; 10=high Market survey to make sure that our strategy is the proper Differentiate both products with external signs Work with designers to define wich materials will be used and how will be defined the products. Define a new logo close to the first one. [...]
