Question

Question: Think about the elements of marketing environment. What are the changes occuring in the macro and micro environment of Coach Co.? How is the market for luxury handbags and leather accessories changing? What key factors determine the success of makers of fine ladies handbags and leather accessories including Coach?

Answer 1

Elements of Marketing Environment are:-

Micro Environment Factors
Suppliers: Suppliers are capable of managing market performance as authority remains in their hands. They hold power when the sole or largest supplier of their goods is theirs.
Resellers: If the product manufactured by the organization is placed on the market by third party resellers or market intermediaries such as retailers, wholesalers, etc., then the marketing success of those third-party resellers will be affected.
Consumers: Who are the consumers (B2B or B2C, local or multinational, etc.) and whether they purchase the product plays a big role in how you handle your goods and services marketing.

Macro Environment Factors
Demographic forces: specific demographic factors, like population, usually impact various consumer segments; age; ethnicity; level of education; household lifestyle; cultural characteristics and movements.
Economic factors: The economic climate will influence the performance of the enterprise, as well as the decision-making process of the customer.
Natural physical forces: consideration must be given to the renewal of Earth's natural resources such as forests, agricultural products, marine products, etc. There are also natural non-renewable resources such as oil, gas, minerals and so on, which can also impact the output of the company.

Changes occurring in the macro and micro environment of coach co. are as follows:-

Laws & Regulations:
The government has a range of laws and regulations which have consumer and industry impact. Companies work under those rules. The rules regulate issues such as taxes, imports, exports, subsidies and other business regulations. Coach is aware of these rules and will function within these systems. The company must act in a responsible way and adhere to laws and regulations. Laws and rules, too, can protect businesses from unfair trade. However, as businesses grow internationally, regulations and legislation are complicated, and they need to take care and be up-to - date about the laws and guidelines of the countries of which they exchange or establish subsidiaries.

Population & demographics:
For every form of company, customers and customers distributing affect the company' sales and earnings. The more men, the more buyers; the more customers, the more income and the greater profits are comparable. Citizens in the United States, Europe and Asia (Japan) are extremely trendy and have plenty of discretionary income to spend on expensive goods.
The US has many potential customers, and even if they don't all have the money, they 're still striving for the bags and making a plan to purchase one or more of them. Long-term growth rate: based on market research, it is clear that the demand for luxury goods is not one that would disappear; in fact, it is rising at a phenomenal rate: Coach share 2006= 25 percent in the US and 8 percent in Japan. Competition ongoing is great for the market. Coach began in 1941, and is still in operation, a sign that there will still be competition for handbags.

Globalization:
Contenders in luxury goods markets in all global centers such as the United States, Germany, and Asia- central Australia, Korea , Hong Kong, and China. Coach has expanded and is doing well here too. This is attributed to more customers with more discretionary resources, such as handbags, which they spend on products.

Product innovation & technological transformation:
Coach's share fell in the 1990s owing to sales lag- they were no longer that competitive. Their competitors, including Gucci, Prada and others, were serving consumers more and bigger. Coach dropped from 40% to 5% in 1995. In 1996, Lew Frankfort moved in and began with creativity and technical changes: the production of new products, prototypes and models. Coach polled customers and got to know what they needed after new product creation, built new stores and updated old ones. Through this they reclaimed market share, and profits rose.

Changes in the market for luxury handbags and leather accessories:-

The highly competitive market for the luxury handbags and leather accessories. Coach Inc. has recently became the industry leader in the US industry. But for many reasons, the market for luxury handbags and leather accessories is now shifting rapidly. Firstly, the middle class is expanding and becoming younger, and they are earning disposable income to spend on luxury goods on agendas that are different from previous generations. Second, they do have diverse opinions on development , financial smarts, and a very good fashion opinion and style. Industry participants ought to take into account the similarities between the two, precisely how those differences impact their patterns of purchasing luxury products. The change has been taking place in generations, finally. The shift from Generation X to Generation Y customers has arrived and they are earning disposable income to spend on luxury goods with different agendas than previous generations. Coach was founded in 1941 and started producing women's handbags that are simple and extremely resilient to wear and tear, but over the next 40 years Coach was able to grow steadily by setting prices around 50 percent lower. Reed Krakoff a former Tommy Hilfiger designer as the current artistic director of a Coach claimed that new designs would be focused on market analysis rather than on the instincts of designers on what will sell, and every month the design process began new collections to please buyers. In 2000, the improvements in the approach and operations of Coach built the company into a major lead in the leather handbags and accessories industry's "simple luxury" market and made it a strong player in the business portfolio of Sara Lee. The demand for premium handbags and leather accessories has also evolved over time from the past to the present, and the transition has always relied on both consumer interest and differentiation from current handbags to be exclusive ladies Coach's handbags and new innovative monthly releases.

There are several key influences that decide the success of fine ladies' handbags and leather accessories suppliers:-

Coach, Inc. has continually tailored its product line to coexist with the current trends and seasons. In an attempt to keep up with Coach's growing competition, Inc. plans to open up to nine new stores in the U.S. along with two more in Japan. The recent innovative accessories, such as the PDA leather holder, have helped Coach Inc. sales. The diverse product range consists of handbags for ladies, key fobs, ties, accessories for phones, beauty cases, caps, hats , scarves, watches, shoes, and sunglasses. This helps the company to diversify and distinguish, while providing a broad product range. Similarly, Coach also launches new items that are representative of a commitment to diversify its product lines.

Clear advertising is a well-known and respected mark name. Wealthy customers agreed that with the use of black and white imagery and lack of other distractions, Coach's message was "bold and to the point" and "very eye catching" When it comes to brand image coach is very strong. To sum up, in order to assess the profitability of premium handbags and leather accessories producers, coaches need to be able to deliver high-quality products while growing margins by exporting manufacturing to lower cost markets, strong brand awareness, strong global sales capacities, varied product lines and strong creative technologies.