Coach Case Study Analysis
Coach case study analysis
Miho Morishita
Summary
Coach was found in 1941. It is manufacture of high quality leather product and accessories. The U.S. based luxury handbag and accessories manufacturer has been able to achieve extraordinary growth rate, which its sales has grown annual rate 20% between 2000 and 2011, and net income has increased from $16.7 million to $880 million. A luxury goods industry where market characteristic tends to be highly sensitive to economic upturns and downturns, the ability to establish and maintain brand loyalty through various strategies is one of the most vital factors. Coach’s huge success has been largely attributable to its focus on quality and stylish products which respond to consumers’ needs based on its extensive marketing research. Its “affordable luxury goods” price strategy also helps drive growth by appealing to a wide range of consumer, while at the same time, correspond with changes in middle-income consumer behavior. In 2012, Coach operated 345 full-price retail stores and 143 factory outlets in North America, and 169 stores in Japan and 66 stores in China. . The products are sold through direct mail catalogs, on-line store, e-commerce websites as well.
Strategies
By the mid-1990s, the company’s performance began to decline as consumers developed a stronger performance for stylish French and Italian designer brands such as Gucci, Prada, Louis Vuitton etc. By 1995, annual sales growth in Coach’s best performing store fell from 40% to 5% as the company’s traditional leather bags fell out of favor with consumers. The company started changing by hiring Reed Krakoff. Under Krakoff, extensive consumer survey were conducted. The company’s research found out that consumers were looking for edgier stylish, softer leathers, and leather-trimmed fabric handbags. The prototypes had been developed and then tested selected Coach stores. The design process developed by Krakoff made Coach introduce new collections every month
Miho Morishita
Summary
Coach was found in 1941. It is manufacture of high quality leather product and accessories. The U.S. based luxury handbag and accessories manufacturer has been able to achieve extraordinary growth rate, which its sales has grown annual rate 20% between 2000 and 2011, and net income has increased from $16.7 million to $880 million. A luxury goods industry where market characteristic tends to be highly sensitive to economic upturns and downturns, the ability to establish and maintain brand loyalty through various strategies is one of the most vital factors. Coach’s huge success has been largely attributable to its focus on quality and stylish products which respond to consumers’ needs based on its extensive marketing research. Its “affordable luxury goods” price strategy also helps drive growth by appealing to a wide range of consumer, while at the same time, correspond with changes in middle-income consumer behavior. In 2012, Coach operated 345 full-price retail stores and 143 factory outlets in North America, and 169 stores in Japan and 66 stores in China. . The products are sold through direct mail catalogs, on-line store, e-commerce websites as well.
Strategies
By the mid-1990s, the company’s performance began to decline as consumers developed a stronger performance for stylish French and Italian designer brands such as Gucci, Prada, Louis Vuitton etc. By 1995, annual sales growth in Coach’s best performing store fell from 40% to 5% as the company’s traditional leather bags fell out of favor with consumers. The company started changing by hiring Reed Krakoff. Under Krakoff, extensive consumer survey were conducted. The company’s research found out that consumers were looking for edgier stylish, softer leathers, and leather-trimmed fabric handbags. The prototypes had been developed and then tested selected Coach stores. The design process developed by Krakoff made Coach introduce new collections every month