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ASSIGNMENT ON: Ups & Downs of Coach Brand.

SUBMITTED BY: Babun Nesa

Date of submission: 6 September 2020

About Coach
An American company started steps from thirteens decades produces luxury
accessories like a handbag. It is the main subsidiary of Tapestry Inc. It was a
family workshop with six leatherworker 34th Street in Manhattan. Owners of a
leather handbag manufacturing business Miles and Lillian Cahn who were
knowledgeable about leatherworks and business joined the company in 1946. From
the decades of forty, the company started to make ordering fold as well as leather
gloves for baseball. The quality of their products was being attractive soon for the
customers, as a result, Coach expands the product line with man accessories as
well as women handbags. Cahn bought the coach and hired Bonnie Cashin, a
sportswear pioneer, to design handbags for Coach in 1961. From 1962 through
1974. working as a creative head for Coach. Coach made a various range of
products like handbags, matching shoes, pens, key fobs, and eyewear, and added
hardware to both her clothes and accessories. Richard Rose joined Coach in 1965,
responsible for making Coach a household name after putting the product in
department stores across the United States and abroad. This time, Coach was
achieving $6 million in sales, and products were being divided through the
domestic wholesale channel, firstly in the northeastern United States. The
company sponsored its first directly generated retail location on Madison
Avenue in Midtown Manhattan in 1981. Cahn sold coach to Sara Lee where Lewis
Frankfort was the director in1985. It brings a new collection of product lines
beside 900 outlets in North America, Asia, and so many places. Coach has created
a new era at the door of human luxury with the price 5 times higher. This company
achieved revenue even in a dangerous situation. At that time Coach wanted to
access a new market with a moderate price and give chance to people who cannot
afford to buy this kind of costly product. With the new customer, Coach arranged
the new collection of men's products so the profit got higher. Coach is the pricing
that didn’t follow discount pricing despite becoming the most popular brand. The
lackings were that the company was afraid of price-reducing was followed by
value-added pricing. Besides they followed market penetration to buy a large part
of market share. But for more competitive market shares started to reduce in the
American market. It was a great risk for Coach. They were not able to pick the
revenue. There were many questions raised for this failure of Coach. Such as,
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1. What challenges does Coach face relative to pricing

its vast product line?

-Coach the company always has been the premium and muscular brand well
known for its satisfying high quality serves a symbol of luxury and smartness. The
company faces hazardous problems relative to pricing. Initially, the company faced
the problem is sticking out of the competition. The company maintained market
penetration pricing on account of taking large numbers of market share beside
reveal the company of the U.S. market as well as the China market. But Coach
didn’t become successful because of the large collection of the competitive group
as a result Coach broken down. On the other hand, they maintained product line
pricing with a vast range of products. They started with wallets as well as billfolds
then they produced baseball gloves besides many male and female accessories. In
contrast to competitors enrich their showroom in a tricky way to face Coach. As a
result, Coach cannot cope with those deals. Moreover, Coach always produces
luxurious goods that are fearable for customers on account of costly price. They
reduced discount pricing which is popular in customer's perception. So only rich
customers interact with the Coach which made it's market-specific. Suddenly when
Coach arranged a product for a lower price in purpose od entering a new market.
But it was a wrong decision that made the customer market confused. The
customers' perception of lowering prices may affect the quality or standardization
of products. So the customers felt less attraction and confused about Coach's
product. At the same time, competitors grabbed the market with various kinds of
discounting strategies. Besides Coach fears at price reducing, the didn’t take the
step against this kind of demands of customers which makes Coach market
challenging with some specific customers. The company products segment reaches
its competitors. Coach's showrooms bear looked over the seasonal collection as a
result customers feel no exception with other competitor markets. The price
doesn’t match the level of exclusiveness combined with pricing. Lastly, the rapid
rise of competitors is most important for Coach’s downgoing

2. Based on principles from the chapter, explain how price affects customer
perceptions of the Coach brand.
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-Coach faces high pricing and must make sure the customer's satisfaction with the
hazardous product line should support the range of price. The perception of
product price is a remarkable feature of how psychology works. Customer's
perception is –the price of the product is depended on what they are finding and
engaged with offers that are emulative. Generally, customers think that the higher
price of a product always provides higher quality. On the other hand, the lower
price gives a lesser quality of products. But this perception is not dependable
always. Moreover, Coach always set their price in a way higher and which is 5
times more than five times a normally standard product. Attaching a higher value
that considers the psychology of added features and services to differentiate
quality, not simply the economics as well as the price is used to say something
about the product. Especially Coach authority considers just the psychology of
pricing as the customers perceive higher prices provide higher quality.

3. How has increased competition at Coach’s price points affected the brand’s
performance?

-Coach is such a renowned company which starts revenue from 1 billion over 5
billion. When Coach wanted to reach the international market like China it faced
great loss on account of reducing demands of products. The company faced
problems like other retailers less traffic in the malls. Besides Coach was not able to
cope with international pricing and segmented pricing farther Coach may have
taken the premium price point too far.

4. Will the plan proposed by current Coach leadership be successful in

-Yes, the plan proposed by current Coach leadership will be in reversing the
brand's slide market share.

According to considering all this the plan of Coach will work. Firstly, as an
example by thinking about middle-market Coach brings lower pricing Poppy Line
that’s a lower quality product at 30 percent off.
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While the company’s other plants have struggled, Coach’s importance to Tapestry
has risen again over the years. The growth is wished to be driven by strong
international growth and increased usage across e-commerce platforms. As Coach
is concerned about the customer value with product quality, the brand’s brick-and-
mortar business is also expected to thrive, particularly in China, to strong product
offerings. Revenues at Coach, the upper-end handbag company, nearly doubled in
the most upcoming time, to $152 million, as part of the company’s aggressive
turnaround efforts.

5. What recommendations would you make to Coach?

-The key part of Coach's success is luxurious products. To catch the success the
Coach must realize customer psychology with quality products. Since when it
wanted to get access to the middle-market caused great loss. The reason was the
customer's awareness of product quality. They think a good price is a change with
quality.

Therefore the Coach should be aware of it. Besides Coach should take an
advanced idea about international trade techniques which is a critical one.

Deal perfectly with retailers and wholesalers is the obedient part that should be
cared for by Coach. Coach should keep learning from its challenging time of loss.
Market segmentation as well as dynamic pricing should be followed perfectly by
Coach.Coach should be more strategic about penetration which may bring the
company to the door of success.

To conclude, Coach was the boss from its dawn in a very critical market condition.
It slipped for some reason issues and today becomes able to overcome. So it’s very
true to say that we are optimistic to see something revolutionary from The boss
brand Coach.