1.

Coach gained huge popularity as a high-end leather brand, with pricing strategies being expensive,
but not exorbitant. Coach is expensive, but many middle-class people can afford to splurge on a
Coach bag once in a while, as well as their outlet stores being a huge source of profits. A challenge
that arose for Coach was that many other brands entered their market of ‘semi-affordable’ but
quality bags. Tory Burch and Kate Spade gained huge popularity with more innovative styling, while
Coach’s sales were decreasing with less demand. A challenge arose that people stopped shopping at
genuine Coach stores as much, and instead turned to the outlets where they sell the previous
season’s goods. The company kept offering more of the same every year, and customers were
getting bored with the product because it was the same thing every year, along with the same
pricing making customers view the company as dull.

2. Pricing in general is not solely the number the customer has to pay; it has to do with the value the
customer perceives will be received when they purchase the product. Coach has very high-quality
products, in the same category as Gucci, Louis Vuitton, etc., but their pricing is very aggressive in the
way that it isn’t exorbitant, but still expensive. Many middle-class women can afford a Coach bag, if
they desire to splurge. It shows status and quality along with the Gucci’s and the Louis’s, but it is
priced down a tier. Where it got complicated was when people stopped seeing Coach as valuable as
before, due to poor innovation and the emergence of similar brands like Tory Burh and Kate Spade.
Sales started to take a hit, because now it wasn’t perceived as having the same value as before. But
Coach rebounded and still maintain their strong reputation. This is a good value priced offering, as
there is a mix of high quality at a reasonable price.

3. At first, the emergence of competitors like Tory Burch and Kate Spade gave the brand a wake-up
call. Coach’s performance was not affected by the recession, and it led to them having innovative
complacency. People stopped shopping at Coach as much, and the competitors market share grew.
As a result, Coach had to introduce new ways to keep their prestige, introducing a men’s line as well
as a bigger international presence. They also had to keep their products stylish to keep up with the
new competition.

4. I believe that the dependence on outlet store sales diminishes the prestige of the Coach name. Also,
in store sales are diminishing as well due to more people buying online. It means the brand clearly
isn’t as strong as it used to be, but on the other hand, Coach is growing worldwide, and those sales
are very good. The new design collection though looks very promising as the new merchandise looks
very innovative and futuristic. Coach still makes elegant products, but I feel like the market share
they once had will be unrecoverable as Michael Kors, Tory Burch and Kate Spade have established
themselves, taking that share from Coach.

5. If I was the CEO of Coach, I would continue on the current track, because they make a very good
product along with great profits from the outlet sales and new markets around the world. Coach
have a head start on the other brands, and are already established around the world, so I wouldn’t
see any problems in being more dependent on international markets. It will be a tough task to reach
the popularity they once had in America, so the company has to adapt to the current market climate
in order to be successful.