ILSC Business College

MARKETING PLAN



Project

Business Report: Coach Inc.


July 2014

Prepared for: Coach Inc.

Prepared by:


ILSC Business College
213 Adelaide St 4000
BRISBANE
QLD
Australia

Contact: Dott.ssa Caterina De Filippo






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TABLE OF CONTENT


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Executive Summary

1. Introduction

Coach Inc. is an American luxury leather goods company that got its start
manufacturing small leather goods. Coach is known for ladies' handbags as
well as items such as luggage, briefcases, wallets, and other accessories.

"Classic American style for 60 years, these words have dened the
character and spirit of the Coach brand. Today more than ever, Coach
embodies "classic American style, now across a broad and modern product
offering of lifestyle accessories in a number of distinctive categories, styles
and fabrications. As the brand has grown and evolved, so has the company:
from manufacturing to marketing driven; and from a small family business
based in a New York loft to a publicly traded company with worldwide sales of
$600 million in scal 2001. At Coach, the brand is at the core of the
company's vision and strategy. The values of the brand, customer
satisfaction, integrity, innovation and collaboration are the reasons Coach's
people come to work each morning. The strength of the Coach brand is,
ultimately, what makes Coach the company it is today.

Coach, Inc. is a designer, producer, and marketer of a prestige line of
handbags, briefcases, luggage, and accessories. The company made its
reputation selling sturdy leather purses in unchanging, traditional, classic
styles, and it remains one of the best-known leather brands in the United
States and has a growing reputation overseas. In addition to its main product
line, the company offers Coach brand watches, footwear, and home and
ofce furniture through agreements with licensing partners. Nearly two-thirds
of company sales are derived from direct-to-consumer channels. These
include about 190 Coach stores in the United States--of these, approximately
120 are retail stores and the remainder are factory outlets--direct mail
catalogs, and an online store. There are also 175 Coach locations outside
the United States, in 18 countries. The company's indirect channels include
the wholesaling of Coach brand products to approximately 1,400 department
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and specialty store locations in the United States. Formed in 1941, Coach
was family owned and operated until 1985, when Sara Lee Corporation
purchased the rm. Coach remained a subsidiary of Sara Lee until 2001,
when the rm regained its independence via a spinoff.

1.1 The business

Business name: Coach Inc.
Business structure: mono brand store
Date established: 1941
Business Owner: Sara Lee
Products/Services: luxury bags and accessories

1.2 The Future

Company Vision and Mission Statement

There are a several number of reasons why Coach has become such a
successful company. They stayed true to their american self.

When a woman purchase a Coach bag she knows she is not just buying the
name of it, she is buying a luxury product that is going to set up a standard
when people see her. She is not just buying an accessory, she is buying how
the possession of it make her feel.

Coach stands behind this vision: making a woman feel special.

Goals and Objectives

The main objective of the company is to maintain the current quality of the
product and the exclusiveness of it. But the most important goal is to
introduce the brand to the european market especially in a country such as
Italy were the most valuable brand were born.


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1.3 The Product

Coach is known for producing high quality bags, wallets, belts and
accessories.

The majority of Coachs product are made of Legacy leather which is
a very thick and gorgeous type of leather. It is also very heavy and doesnt
scratches easily. It has almost a 'waxy' quality to it.

Garcia leather is also used. It is thinner and has a glossy sheen to it.
It is a much lighter weight and was used in the 2008 Legacy bags.

A few pieces have been made with the Madison leather, which is lightweight
and has a sheen but also has been known to have a somewhat rough texture
to it as well as a slight sparkle quality to it. That is what the Sabrinas and
Juliannes are made out of.

Finally, there is the Vachetta leather is what I refer to as 'nekkid' leather.
It is usually a esh tone colour and is very smooth.
Coach does not make a large number of bags using this leather, but recently
it has been used on the handles of the patent Leah totes.












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2. Market summary

2.1 Market Needs

From a high luxury brand like Coach the customers aspects the best in every
single part of the purchase.

Coach select high skilled staff in order to provide the best customers service
because when a woman enters in a Coach store it does not matter if she is
buying a key chain or a suitcase, she has to feel like a million bucks .

Another important aspect about Coach is that it doesnt matter where you buy
the item USA, Australia, online the customer will always nd the same
price.

2.2 Market trends

Nowadays the biggest competitor for the fashion industry is China.
It has enjoyed a dominant position in shoes, apparel and household textiles
manufacturing for several years, makers of these items located in developed
nations such as the U.S. and Canada have suffered a long period of
decline.#For example, over 98% of the shoes sold in America each year are
imports, and the majority of these imports come from Asia.#To consumers in
Europe and North America, this growing reliance on Asia as a low-cost
producer has meant very low retail prices for goods of reasonable quality.
However, recent increases in the cost of doing business in China, including
rapidly rising labor costs, have put Chinese manufacturers in a much less
favourable position.#

In the modern time even in high fashion industry there is a high competition
from manufacturing based in very low-cost nations in Africa as well as
Vietnam, Sri Lanka, Mauritius, Malaysia, Cambodia, Bangladesh, Pakistan,
the Philippines But Coach rmly produces all its items in the USA.

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The current global situation is that# Chinas textile exports soared from $7.2
billion in 1990 to $95.4 billion in 2012, according to the World Trade
Organisations International Trade Statistics 2013.#India is a distant second in
this category, at $15.3 billion in 2012 (up from $2.1 billion in 1990).#Europe as
a whole (the EU27) also had strong exports.
In terms of apparel, China enjoyed a 37.8% market share of global exports in
2012, at $160 billion, up from a mere $8.9 billion in 1990.# The rest of Asia,
not including China, had a 20.4% market share in 2012.#The EU27 enjoyed a
30% market share.

Looking at lower brands Spain has become a dangerous competitor. The
most notable company in this category is Spains Inditex.#The rm is famous
for its lean inventory and fast-fashion strategy.# It can get a new item of
clothing from its 300-person design team, through its manufacturing plants
and into its more than 6,340 stores in as little as two weeks.# The company
has been opening large numbers of new retail stores under the Zara, Pull &
Bear, Massimo Dutti and Oyosho brands.#In 2014 alone, Inditex planned 450
new stores around the world.
It is important for high fashion brands like Coach to also look at the lower
brands because in modern times people mix this two kind of fashion.

One of the more interesting recent developments in apparel manufacturing
has been a certain amount of reassuring, which is the return of some of the
business to plants based in the country where most sales are made.# Some
designers and retailers nd that their orders are not of sufcient size to
interest major offshore plants, or their need for fast delivery makes it
impossible to use overseas manufacturers.#
The need for extremely high quality is keeping some manufacturing of luxury
apparel and accessories at home by Italian designers.#As wages continue to
rise in emerging nations, and shipping costs continue to be subject to spikes
due to high fuel prices, some portion of clothing manufacturing will continue
to reassure.# Growing productivity from better manufacturing technology will
add to this trend, and this reassurance will not lead to high levels of new
jobs.# Instead, modest numbers of workers will be hired to run advanced
factory computers and robots, as well as sewing machines.
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Apparel and accessory stores had generally been enjoying growth in sales
around the world for much of the past 20 years.#Leading American, Japanese
and European brands opened large numbers of new stores in developing
markets in Asia and elsewhere.# However, as of 2013-2014, Chinas growth
was slowing, and the entire nation was going through a new focus on
reducing corruption among public ofcials (ofcials who were often the
recipients of lavish gifts) as well as conspicuous consumption in general.#This
has been hard on the luxury goods market.

Globally, the World Trade Organisation (WTO) reports that apparel and textile
exports were $708.4 billion in 2012, up slightly from about $706 billion the
year before.# For the decade ending in 2010, compound annual growth
averaged 5.5% worldwide.# Among the fastest growing exporters in that
period were Vietnam, China, Bangladesh, Turkey and India.
Over the past several years, manufacturers of basic synthetic textiles, such
as polyester fabrics, have been dealing with a global manufacturing
glut.#Synthetic textile manufacturing had traditionally been dominated by the
largest global chemicals rms, but many of them have exited the business by
selling their holdings.


2.3 Market Growth

No matter the crisis the fashion industry is always growing. The gathered
data show that it is going in a different direction. Based on our analysis,
South Africa, the UAE, Singapore, India, Russia, and Brazil are new and
unique emerging global fashion markets.
South Africa, the UAE, and India are the top emerging fashion markets on the
basis of the increase in the number of large fashion events between 2004
2013 (across 46 countries). Also the fashion industry in Singapore, Russia,
and Brazil has displayed unique growth patterns in the last few years.



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South Africa

The South African fashion industry is supported by the government as part

of the economic development program. In 2006, the Johannesburg
Economic Development Unit announced its goal to develop the city into an
an internationally recognised creative city.

Before becoming a democracy in1994, the design sector in South Africa

was dominated by the American youth culture. However, the last few
years have seen the emergence of several domestic brands.

Fashion enterprises in the country have a diversied range of designers,

including established, emerging, as well as designers of different races and
cultures.

Major design houses as well as individual designers contribute to

Johannesburgs recognition as an emerging fashion market.

UAE

All of the nine large events held in the country in 2013 were hosted by
event management or fashion focused companies, including:

Event management companies: the Middle East hosts two of the Middle
Easts largest bridal fashion shows in Dubai and Abu Dhabi.

Fashion consultancies: Maven Corporate Ltd hosts the bi-annual Abu

Dhabi Fashion Week

International rms have also supported the industry in the UAE:

CRYSTALLIZED Abaya Design Awards, launched in 2007, is sponsored by
Swarovski to feature talented UAE designers.

The government also supports the fashion industry by organising fashion

events to promote tourism. Large events, such as DSS Dubai Fashion
Fiesta, DSS Kids Fashion Week were part of the government supported
large tourist programs.





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Singapore

The government has hosted/supported several fashion events in the last

few years.

The Singapore Tourism Board started the Singapore Fashion Festival with
the objective of promoting Singapore as the tourist and shopping hub of the
Southeast Asian region.

International Enterprise (IE) Singapore, an agency under the Ministry of

Trade and Industry, co-hosts Singapore Fashion Week.

The government also offers funding to fashion initiatives to promote the

fashion industry.

Fashion and apparel manufacturers are making focused efforts to

generate/strengthen brand awareness internationally.

Singapores apparel industry has been evolving from OEM-oriented to self-

branded production, and is shifting focus to market its local brands to
international buyers.

The Textile and Fashion Federation (TAFf) of Singapore provides a platform

for budding designers to display and sell their designs.

TAFfs training arm, the Textile and Fashion Design Centre (TaF.dc)
provides training courses to improve productivity and efciency, and
enhance the skills of Singapores designers.

Russia

Russia has witnessed a 14.8% CAGR in consumer expenditure on fashion

products from 2002 through 2013.

Italian luxury fashion brands are eyeing emerging economies such as

Russia; several international brands are also expanding their presence
beyond Moscow and St Petersburg, to smaller Russian cities, for growth
opportunities.

Russian brands such as Chapurin, Alena Akhmadullina, and Denis

Simachev have displayed their work at the Paris Fashion Week.



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India

India is considered an attractive market for luxury brands; about 50

premium and luxury brands, including Jimmy Choo, Gucci, Christian Dior,
and Chanel, have opened stores in India in recent years. Apparel
manufacturers are now shifting production to low cost Asian countries such
as India.

Consumer spending on fashion products has grown at 7.1% annually from

2002 through 2013.

Indian domestic designers, such as Rina Dhaka, Anamika Khanna, and

Manish Arora are gaining international recognition.

Brazil

The Brazilian luxury market is expected to grow 35% over the next 5 years,
the highest rate for any country in the world.

For the second year in a row, AT Kearney has ranked Brazil the most
attractive emerging market for apparel retailers.

The countrys fashion exports have been growing at an annual average of

5% since 2002.















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2.4 Comparison

The purpose of the research is to understand if the brand Couch can be
successfully exported in Europe. Although there has always been a demand
for high fashion which is very expensive in Europe in the past, but because
recent economic conditions in Europe, a high fashion product from USA
which is much more affordable could have signicant success in this market.
In particular the research focuses in the following 3 countries:


Based on the facts that the gathered data showed similarity between the
chosen countries it has been decided to continue to undertake research
based on Italian market because it is considered the country were fashion
was born and not having a Coach store there could send the wrong message
about the brand.











TOPICS ITALY FRANCE SPAIN
Area
301,340 sq km 551,500 sq km 505,370 sq km
Population
61,482,297 65,951,611 47,370,542
GDP per capita
( PPP)
$30,600 $36,100 $31,100
Unemployment
10.6% 10.3% 25.1%
Female Population
( 25-54 years old)
0.98 male(s)/female 1.01 male(s)/female 1.04 male(s)/female
Taxes
48.3% of GDP 51.9% of GDP 36.3% of GDP
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2.5 Segment Descriptors

Demographic


From the gathered data it is understandable that the segment we are looking
for the product is women from the upper class mostly with no children.
The marital status is considered irrelevant because if their are single they
want to state their status buying the items themselves and if they are married
they would would them as a gift from their partner.
It is understandable that women with no children can spend more on
luxurious items because they do no have anybody else to worry about.

Geographic

Italy does not have a lot of rural areas most of the country is industrial.
Even thought the focus is on the big cities and island which are the following
location:

Milan

Rome

Bologna

Venice

Naples

Palermo

Capri

The intent is to look at just few location in other to establish how unique is the
product.
Age 25-55
Gender Female
Income Medium/High
Marital Status Single or Married
Children Yes/No
Occupation Medium/Highly rewarded
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Usage/Behavioural

As the product is new to the country the full attention is to the rst time
customers. The focus is to provide a memorable experience in every details
in order to increase the possibilities that they would become regular.


Psychographic

As previously mentioned, the personality and the lifestyle of the potential
customer is one the most important factor. The target was narrow to the
folioing characteristics:

stylish

fashion

social

upper class

sosticate


3. Market situation Analysis

In order to be able to expand Coachs market to Italy, it is essential to be in
the italian market and see how the business could be effective in that area.

Product Situation

From the gather research it is understandable that the product meet all the
potential clients qualities such as style and uniqueness.

Competitive Situation

Beaning Italy the house of the best brands in the world the market will be
very competitive. The focus is to use this as an advantage based on the
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potential customers prospective: if Coach has a store next to Gucci and
Louis Vuitton must be at the same level.
The most dangerous competitor are Guess and Gucci given the similarity of
the logo. Other competitor are the following:

Chanel

Prada

Dior

Alexander Mc Queen

Marc Jacobs

Louis Vuitton

Fendi

Burberry


Distribution Situation

The plan for the distribution is to build a Coach mono brand store in the high
fashion roads of Italys bigger city such as Via Condotti in Rome or
Piazza Plebiscito in Naples.


3.1 PEST Analysis


POLITICAL Italians law for import are very favourable in
nowadays because the country need cash
ow. This is a very important incentive even
thought the taxation is very high.
ECONOMIC From 2008 Italy is consider under a major
economic crisis, it is one of the most
attacked nation. Even thought this is the
current situation the bad economic did not
effect much the high fashion industry.
TECHNOLOGICAL The online shopping website are growing a
lot in the past year but research show that in
high fashion women still prefer to shop in
person preferably in a mono brand store.
SOCIAL Italy is known for the fashion industry. It is
consider the mother of high fashion and
luxury brands.
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3.2 SWOT Analysis



4.Target Market

4.1 Segmentation criteria

Geographic: it has to be seen next to the italian high fashion brands.

Demographic: sophisticated women who earn a medium to high income,

who are between 25 and 55, both single and married.

Behavioural: the potential customer must enjoy shopping in order to state a

status.

Life style: people who declare themselves upper class.

Customers feel the uniqueness of the products and they know having them
would make them feel the same way.

Product can be personalised with the potential owner initials.

Strenghts

famous

unique

luxurios

good quality

high fashion
Weakness

high price

not very known in Europe

Opportunity

stand out with other high brands

new market

new culture
Threats

very competitive market

similarity with the logo of 2 famous italian

brands Guess and Gucci.
SWOT Recommendations

work on image

embrace the european culture

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5.0 Competitors

The high fashion market especially in Italy is very competitive.
Coach will have 2 major competitors which are Gucci and Guess, both
italian brands because they all share a similar logo, the letter G and the
letter C that in the canvas products look very much alike.
Other competitors are:

Chanel

Prada

Dior

Alexander Mc Queen

Marc Jacobs

Louis Vuitton

Fendi

Burberry

All these brands have at least 3 mono brand store in the country.



6. Marketing Strategy

The marketing strategy decided for Coach is concentrated.
A concentrated marketing strategy is specic to just one target market which
in this case are women who feel upper class and sophisticated.


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6.1 The positioning
high quality




low price




low quality

The Coach product would have a very competitive position in the Italian
market because are american high fashion which is a new trend for the
market but there are more affordable than the usual Prada and Gucci.

6.2 The 4 Ps

In order to have a better understand of the marketing strategy the marketing
mix has been applied to the situation, and the following was discovered:

Promotion: the main promotion would happen during events such as the
Milano Fashion Week and the opening of Coachs mono brand store but
also media such as fashion magazines, internet and TV commercials will
be used.

Price: high price, affordable just for a few people.

Packaging: the products will include the originality code, a Coach dust bag
and a paper bag.

Place: mono brand store in the centre of Italys big cities.

People: part of the purchasing will be the experience of the excellent

customer service provided. The staff will be trained in order to make feel
the woman who comes in the store unique, giving her treats such as small
pastries and champagne and the undivided attention.

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high price
Coach
Gucci
Prada
Louis Vuitton
Burberry
Fendi
Guess
7. Code of Conduct

Coach like all companies has the obligation to follow stated rules. For this
reason it needs to comprehend the Commonwealth State and local
governments laws which are states to regulate the business practices.
Regulations are rules based on and meant to carry out a specic piece of
legislation.
These laws may apply in the following areas:
location controls like government restrictions
buildings and premises
businesses processes and practices
workplace heath and safety
taxation, insurance and employment

The law states that in the private sector, employers and their employees must
be aware of the following aspects:

Occupational Health and Safety Obligations Insurance Obligations$

Taxation Obligations

One of the most important legislation is the Equal employment opportunity

& anti-discrimination.

In Italy, the laws cover equal employment opportunity and anti-discrimination
in the workplace. The employers are required by these laws to create a
workplace free from discrimination and harassment. It is important that the
employers understand the rights and responsibilities under human rights and
anti-discrimination law.







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9. Recommendations

In order to be successful in Italy the following recommendations are
suggested:

be always careful about the trends because italian people always care
about fashion trends and something that today is in tomorrow could be out.

hire famous people for the advertisement because people follow them.

invest in adds on high fashion magazines like Vogue, Cosmopolitan and

Glamour which are the most read in the country.

price consistency

carefully choose the location of the store

italian people are always very precise with their purchasing so it would be
ideal to have an excellent post purchase customer service in case of
damaging.



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