Coach Inc
1) 1. What are the defining characteristics of the luxury goods industry? What is the industry like?
A luxury brand may have profound influence on an overall product strategy since its position may determine how the company is going to make its next step. A luxury brand like Coach epitomizes elegance and combines classic beauty with modern design. According to John E. Gamble, not only has Coach become one of the most respected and known brand names in the ladies’ handbags and leather accessories luxury brand industry, it is also one of the most best-selling luxury brand companies in the world, with net sales reaching 2.1 billion in 2006 (Gamble). When a company like Coach decides to set up a product strategy for the next season, the manager will need to take the brand’s established style into account, since their incoming products must fit with the existing brand. When a manager, such as Lew Frankfort, chairman and CEO of Coach, Inc., aims to build a luxury brand like Coach, he invests millions of dollars in setting up a series of business strategies, including advertising on television, organizing fashion shows, and gaining the approval of fashion designers. These actions are decided based on how a luxury brand is built; essentially, the brand will guide the future steps of the company to a certain degree. Coach, Inc. is different from other more expensive luxury brands, such as Hermes, Prada, Fendi, and Louis Vuitton in the sense that Coach focuses more on middle-income consumers who want to purchase their hand bags from a price range of $200 to $500. Coach is the alternative to these competing companies, matching their key luxury products on quality and styling, while beating them on price by 50% or more (Gamble).
2) 2. What is competition like in the luxury goods industry? What competitive forces seem to have the greatest effect on industry attractiveness?
The Luxury branding decision will influence an organization’s pricing decisions because its
A luxury brand may have profound influence on an overall product strategy since its position may determine how the company is going to make its next step. A luxury brand like Coach epitomizes elegance and combines classic beauty with modern design. According to John E. Gamble, not only has Coach become one of the most respected and known brand names in the ladies’ handbags and leather accessories luxury brand industry, it is also one of the most best-selling luxury brand companies in the world, with net sales reaching 2.1 billion in 2006 (Gamble). When a company like Coach decides to set up a product strategy for the next season, the manager will need to take the brand’s established style into account, since their incoming products must fit with the existing brand. When a manager, such as Lew Frankfort, chairman and CEO of Coach, Inc., aims to build a luxury brand like Coach, he invests millions of dollars in setting up a series of business strategies, including advertising on television, organizing fashion shows, and gaining the approval of fashion designers. These actions are decided based on how a luxury brand is built; essentially, the brand will guide the future steps of the company to a certain degree. Coach, Inc. is different from other more expensive luxury brands, such as Hermes, Prada, Fendi, and Louis Vuitton in the sense that Coach focuses more on middle-income consumers who want to purchase their hand bags from a price range of $200 to $500. Coach is the alternative to these competing companies, matching their key luxury products on quality and styling, while beating them on price by 50% or more (Gamble).
2) 2. What is competition like in the luxury goods industry? What competitive forces seem to have the greatest effect on industry attractiveness?
The Luxury branding decision will influence an organization’s pricing decisions because its
References: 1) Case 5. John E. Gamble. Page 238-97 2) Marketing Management (J. Paul Peter/James H. Donnelly, JR.) 3)http://www.americanessays.com/study-aids/free-essays/education/the-coca-cola-enterprises.php