Coach

Case 7

Coach Inc. in 2012: Its Strategy in the ‘Accessible’ Luxury Goods Market

What are the defining characteristics of the luxury goods industry? What is the industry like?

The luxury goods industry can be characterized as goods that are associated with wealth, status and image. Such goods require wealth and the freedom to spend without financial consequence.

“Luxury brands, in general, relied on creative designs, high quality, and brand reputation to attract customers and build brand loyalty. Price sensitivity for luxury goods was driven by brand exclusivity, customer-centric marketing, and to a large extent some emotional sense of status and value.” (Thompson, C-77)

Brand recognition and the desire to fit in are a driving force with the middle-class to expend their finances, whether this is financially responsible or not, in order to obtain such luxury items. The luxury goods industry is a driving force in reference to the ever growing “status symbol” of today’s society.

How is the market for luxury handbags and leather accessories changing? What are the underlying drivers of change and how might those driving forces change the industry?

The market of luxury goods, specifically handbags and leather accessories, is experiencing changes due to a shift in generational thinking and the increase in men purchasing such goods. With the shift in generational thinking and wants there is a new market to design for, target and supply while allowing the older designs to filter down to lower cost distributors allowing the brand to be more widely available this increasing the name. Several years ago men were rarely seen with what has now been coined as a “murse” or “man bag”, but today Coach is able to capitalize on the fact that more men, especially in metropolitan areas, are delving into the luxury goods industry. Coach is able to view these changes as a thriving audience just waiting for their new designs and products.

These changes are...