Taiwan Consumer Loyalty Survey:
COACH
廖珮君 95933005 Debbie Liao
林宜縉 94933018 Misha Lin
謝光哲 94933011 Daniel Hsieh
鍾添坤 94933010 David Chung
2006.12.30
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Presentation Outline
• COACH Overview
• Literature Review
• Research Hypothesis
• Methodology
• Finding and Analysis
• Conclusion
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Looking at the share price!
Source:
www.bigcharts.marketwatch.com
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Why we’re interested in Coach?
• The story of the revival of second-line brands into
best-selling brands
• Six years ago, Coach was a company in crisis,
experiencing quick decline in both sales and profit
• Six years from then, Coach has become a legend in
America’s Wall Street, share prices rising from USD
$2 in 2000 to nearly USD $45, growing more than 20
times.
• Coach in Japan as an example, sales rose 722%
from 2001 through 2006, reaching USD $420 million
(approx TWD 13.8 bn). In the same period, sales in
•Source:
Taiwan grew 25 times. • Business Weekly 982 edition
• Business Week Nov. 2005
• www.bigcharts.marketwatch.com
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Research Project Gantt Chart
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An American Heritage
• Since Year 1941
• Founded more than half a
century ago in America, IPO at
Oct 2000
• Maker of handcrafted, high
quality leather goods for men
and women for all occasions
• Inspired by a baseball glove
• Refined, softened and
strengthened leather and made
leather handbags based on
refined technology using skills
employed by artisans passed
down from generation to
generation HQ, 516 West 34th Street in
midtown Manhattan, NYC, USA
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The Design Philosophy
• Before 2001:
– Only dark, brown hand bags
available. There‟s no link with
fashion and trend.
• After 2001:
– A perfect balance between
aesthetics and functionality
– Size, shape, inner lining and
pockets are carefully designed
to provide maximum
functionality, ease of use
– Only top ten percent of leathers
used
– Special tanning process used to
soften leather
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The Collection
• Handbags
– Totes
– Duffles
– Signature stripes
– Special occasion bags
– Baby bags
– Hampton Handbags
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Current Collection
• Business Collection –
encompasses a wide range of
bags for laptops, organizers,
briefcases, notepads, cell phone
cases.
• Travel Collection – durable and
highly durable to meet needs of
business and weekend travelers
• Other leather goods and small
leather accessories
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Brand Positioning & Marketing Strategy
• Positioning
– Affordable luxury for chic and young people
• Marketing Strategy
– Transfer product line to China for Asia Pacific
Region to lower cost of goods sold
– Play in Peoria: constantly introducing new bags
into the merchandise mix to stimulate the
purchase behavior
– Unlike other brands, it puts flagships in some of
the world‟s most expensive retail real states but
most of stores are still in modest locations.
» Example in Japan: Always open stores next to LV
to upgrade brand image and switch consumers
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Product Mix by Category - Global
Outerwear, 2% Weekend and Travel,
1%
Men's accessories, 2% Business cases, 1%
Footwear & others, 4%
Womens'
accessories, Hand
23%
bags,
67%
Source: Coach annual report
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Sales by Geography
~ 1,200 stores worldwide
Japan + International 20%
/118 (JP alone) + 180
US 75%
/900
East Asia 5%
Geography Sales % / stores no. (department stores, retail stores and DFS)
Where to buy COACH products - (1) Coach stores, (2) Coach factory stores,
(3) Coach catalogs, (4) authorized department stores, (5) authorized
specialty stores and catalogs, (6) limited duty free locations, and (7) coach.com.
Source: Coach annual report
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Literature Review for Taiwan Market…
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Taiwan Price Index Comparison
Entry level hand bag
2200
2027
1700
1200
700
NT$14,800 NT$20,800 NT$31,200 NT$300,000+
211
200 141
100
Coach Gucci LV Hermes
Source: Store survey; PCHome online store
-300 14
Taiwan Brand Stores Distribution
Area
N C S Total
Brand
50% COACH 8 2 2 12
LV 4 2 2 8
Gucci 7 1 2 10
Hermes 1 1 2 4
Area North 22 Central 6 South 8
SKM SKM Bree Taka Asia Bouti Bouti Taina KS Bouti
SKM SKM Taipe Rege SOG SOG Chun Iseta
Brand TTL A4 A9
Tian- Nanji ze
i 101 nt O
shim Worl gue/F SKM
O gyo
gue/F n Hans
nn
gue/F
mu ng Cent aya d lagshi lagshi SKM hin lagshi
Coach 12 1 1 1 1 1 1 1 1 1 1 1 1
LV 8 1 3 1 1 1 1
Gucci 10 1 1 1 1 1 1 1 1 1 1
Hermes 4 1 1 1 1
Department stores
Source: Websites; Brand Magazine
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Branding activities in Taiwan
• Friendly approach for brand image
– Store design in a white and bright tone to shorten the distance
from consumers
• PR events mostly, just like other luxury brand
– Anniversary party for talents, artists…at Regent
– Celebrity endorsement
• Young, American style to differentiate from LV…
Chung Shan Flagship A9 Store
Mandy Moore
Pop Singer in USA
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Brand User Survey
• Secondary data: BRAND magazine
– “Who‟s buying designer brand” survey
– Survey period: 2005.10-2005.12
– Sample size: 4,732
Others,
Male, 9% 8%
5th , 12%
MG Reply, 7th, 34%
Source 43% Age
Internet, Gender
(Graded)
57%
Female, 6th , 49%
91%
26-35yr (born between
17 MingGuo 60-69 year)
Brand User Survey
Other, 1%
Others, 1% Eastern, 2%
Breeze Center,
Clothes, 13%
14%
Outside
South, Taipei, 28%
Taipei
Watch, 7%
24% 101,
Jewery, 4% Purchase Living Purchase 13%
Type Area North, Area
Shoe, 8%
Central, 59%
Bag, 67% Others, 14% A9,17%
14%
A4,
SOGO, 9% 5%
Narrow down the target groups;
Develop Hypotheses and Q’naire
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Methodology: Research Flow Diagram
1 2 3 4
From an idea to Formulate Select qualitative
Literature search
Select “Coach” Find the secondary hypotheses research as
(They seem to run “Coach” bag research method
data through a
the business well customers – (In-depth interview)
local magazine
with new shops) who are they ?
“Brand”
Collect data Design
Report the results Coding of data,
through personal questionnaires for
and present the then transfer of screening and
data in the Excel interview at Hsin -
case selecting the target
spreadsheet. Yi area, via customers (Female,
Data analysis to telephone and e- 25-35 years old,
answer the mail interview metropolitan Taipei
questions area)
8 7 6 5
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Hypothesis
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Questions to Ask
• For COACH owners, what other brand bags have
they also purchased before?
• What is COACH owners’ willingness to repeat
their purchase? What are the factors to motivate
them to do so?
• What are the Brand images of COACH in the eyes
of COACH owners?
• Is there any relationship between COACH owners’
income and their purchase budget?
From Questions to Questionnaires – Study Instrumental Tool
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Hypothesis Drama
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Questionnaire Design
Target Group: COACH owners
• Mostly residing in the metropolitan Taipei area
– Marital status and education level
• 25~35 years old ladies
– Income level
– Brand bag purchase budget
– What make them want to buy brand bags?
– “Bag collision” psychology, counterfeit bag use experience?
• Fashion shoppers or OLs (network users)
– Field study, Mitsukoshi Department Store chain near Taipei 101
– Questionnaires emailed to friends (and their friends) or
conducted via phone interview
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To Ask the Right Questions –
Relevance and Feasibility Check
Owner Profile Demography
COACH®
Repeat
Buy by self? A gift?
Purchase
Brand Image (10) VOC
Preference Brand Bag
Owners
Other
Brands Income and
Brand Image (20)
Budget
Shared owners of Preferred
COACH Brand Bag
VOC: Voice of Customer
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Questionnaire at a glance
Will you continue to purchase COACH ?
Yes ____ No ____ Why? A) Price B)
Style C) Preferrence for the brand D) Peer
Pressure E) Others:_________________
Name three adjectives to describe
COACH. __________________________
__________________________________
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Field Survey Truman Show
@ Hsin - Yi Area
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Findings and Analysis
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A few Descriptions of COACH Bags from the
Bag Owners
• Younger, handy and durable
• “Souvenirs of US trip (美國之行的紀念品).”
• Fashion, young and reasonable price
• Romantic, cute and energetic
• Young, inexpensive, and “Entry level
version of brand bags (入門版的名牌包)!”
• Classical, magnificent and durable
• Affordable, fashionable and elegant
• …….
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COACH Owners – they also have…
LV 60.0%
Gucci 45.0%
Burberry 17.5%
Dior 15.0%
Hermes 14.3%
Celine 10.1%
Chanel 7.5%
Others 25.0%
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Willingness to Repeat Purchase COACH
COACH Bag Comes from….
Repeat Purchase? Self buys 70%
No Friend 23%
27%
Yes
73%
Family 13%
Others 3%
0% 20% 40% 60% 80%
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What do you feel about COACH Bags?
Differentiation
Young
5
Handy
4
Design 3 Price
Fair Price
2
Good Quality 1
0
Younger Quality
Noble
Classical
Fashion Handy
Stylish
0% 10% 20% 30% 40% 50%
COACH
LV, Hermes, Chanel…
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Monthly Income Curve and
Purchasing Budget per Year for Brand Bags
60%
49%
40%
32%
20%
14%
3% 3%
0%
20-30 30-40 40-50 50-100 100-500 NTD, „000
* X axis presents for 1. Monthly Salary 2. Annual Budget
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Conclusion
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Map Existing Brand Culture – COACH
Brand culture Customers/ Current Brand
Influencers
Brand Story Prospects Strategy
•Young, working ladies •Price •Affordable brand bag
Reputation looking for entry level •Style and design •Only top 10% quality
Value brand bags •Quality leather used
•Interior design of Coach • Word of mouth •A bag for all occasions
Relationship stores •Majority of stores
Value •Attitude of sales located in northern
personnel Taiwan
•Warranty •Repair and after sales • Worldwide, uniform
•Popularity acceptable service service
Experiential
by majority of •Comfortable leather •Friendly atmosphere of
Value consumers touch outlets
•Classic Coach “C” logo •Good craftsmanship • Quickly update the
•Easy to access •Durable, stylish product line with fashion
Symbolic look
Value •Celebrities
• Reinforce Legacy line
to enhance quality image
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Conclusion
• Affordable luxury items do generate brand loyalty.
• The affordable price of Coach bags make it attractive
for consumers to purchase the same brand
• In the eyes of Coach owners, the lower price
(compared to other brands) does NOT impact the
value of the brand in a negative manner
• Income and spending on luxury items are directly
proportional
• The key to the success of Coach lies in its thorough
implementation of the fast turnover of its wide range
of product lines ties in with the current trend of fast
fashion and affordable luxury
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Conclusion
A remarkable marketing strategy revitalize COACH …
Sense Sensibility
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Keep fashionable, sensational, emotional
and comes with quality….
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Thank you!
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