Ch. 7 - Business Marketing

Macy's Department Store is home to thousands of products and brands - Coach included. Coach has it's very own department within the Macy Stores. That makes Macy's a "Reseller" of Coach products. In researching Coach I realized that Coach  doesn't authorize many businesses to sell their products; just a few stores outside of the Coach Stores, Factory Outlets and Coach's Internet Website. But the relationship between Coach and Macy's is still a Business to Business relationship - A Macy's buyer places an order for Coach products from Coach then turns around and offers those products to a Macy's customer.

Another Business to Business relationship Coach has is with it's suppliers - the companies that supply Coach with the raw materials they need to make products like Coach handbags, wallets, belts and other accessories. Those relationships are probably the most important business relationships Coach has, aside from the relationship they have with their customers. It's important for Coach to have good business relationships with their vendors who supply the raw material needed to make their products, without that raw material they can't make their products.

It's also important for Coach to have good relationships with the vendors who supply or maintain the equipment used to make Coach products. Major Equipment like the machines and computer systems used in the production process have to be maintained by professionals who know how to fix them when they go down. The type of equipment used for the production of Coach products are also known as Business Products - all of the equipment used to make products and also the equipment that's used on a daily basis by employees such as computers, fax machines, telephones, supplies, etc.

As I read over this chapter and thought about my company (Coach) I realized that running a business, big or small, really requires you to be good at maintaining good, professional business relationships. The overall goal would be to have a great relationship with your vendors who supply your raw materials but be firm enough with them to make sure your not paying too much for those materials. You want to make sure that you have a great relationship with the vendor who supplies and maintains your office equipment so that when you need something asap you get it and when you need something fixed it's done quickly too - but you want to make sure at the same time your not paying too much for those services either. And on top of that you have to make sure that your making a product that's pleasing and appealing to current and future consumers.

To sum-up this semester with this last blog post I feel like with all of the time I've spent researching my company -Coach- I really did learn allot about not only this retail business but about business in general. I was especially surprised to learn about how Coach moved their factories outside of the US and into other countries to lower their production cost. It was surprising to see the conditions of these factories and to read some of the complaints that workers had - it was disappointing as a buyer of Coach products to learn about how Coach got their start right here in NYC, made tons of money and then decided to move production to China. At the same time I understand that from a business perspective it's a smart move. I also learned a lot about some of the other companies my classmates researched. I found it interesting to learn about McDonald's plan to revamp employee production in an effort to keep customers coming back and I even started using some Burt's Bee products after my curiosity about the company caused me to try some of their stuff - it's great btw. And as for the marketing aspect of this class...well I'm definitely more aware of advertising's that I see everyday and sometimes ask myself...what are they really doing here? Are they genuine and is their ad effective?

As a Business major I feel like I've learned a lot and I enjoyed this class so thank you.

Ch. 8 - Segmenting and Targeting Markets

A Market Segmentation is, in short, a group of people who have a similar need for a product. Marketers need to know who their market segment or target market is before they can successfully market a product. With my company, Coach, I feel like they have 2 separate market segments - they have one that targets women and one that targets men. Whether they are using the geographic segmentation, demographic, psychographic, or geodemographic segmentation I think the group of people they are marketing to is the same in terms of age, income, where they live or what their lifestyles are like. With Coach, marketers are making sure that the young, professional woman know about their handbags and other accessories. Same goes for their men's line - marketers are marketing their men's bags, belts, wallets and accessories to the young, professional man. These are the type of people who are going to buy their products.

Earlier this year I took a trip to Puerto Rico and while there I visited the Coach store in San Juan. This location is always super great to go to because its the biggest Coach store I've ever been to. The store has several rooms that showcase Coach bags, wallets, shoes, cloths and other accessories for both women and men and it's very busy. I'm sure that Coach marketers put a lot of thought into deciding whether or not they would be able to sell Coach products in this area. The area of San Juan is mostly a tourist area. On a daily basis cruise ships come into the San Juan bay and spend a day or two docked their. Passengers are always roaming the streets of San Juan...and one of the busiest stores is the Coach store. I say this because I think that a big part of marketing is also knowing where to place your product in order to have it sell. Coach is defiantly marketing their products to young professionals but they are also marketing their product when they decide to open a store in a particular neighborhood. This neighborhood in San Juan is a great location and a smart move for Coach because I'm sure the store is selling and making money. But I'm sure that Coach would not open a store in a low-income area because marketers know that their product wouldn't sell in that type of area.

Overall, I believe that Coach has already established their market segment and I don't think that will change unless they decide to offer different kinds of products. For example, if they decided to create a baby-bag that would change their market segment. Now they would be marketing to moms. If they decided to offer a coach bag designed for a little girl or a book bag designed for a little boy...now marketers would need to change their market segment to make sure that they are reaching out to parents who have small children. But it seems to me like Coach moves in a very slow pace when it comes to offering new products to its customers. For years they've had the same types of bags reinvented in new colors or changed slightly to sell for a new seasons.

I know that Coach is working on a women's clothing line but I don't believe they will have to change their target market too much - the women that buy their bags will most likely but their cloths too.

Ch. 11 - Developing and Managing Products

Seems like Coach has teamed up with Saint James to offer it's customers a new nautical look for the Summer 2013 collection. These products are not New Products but it's a new collection. Coach doesn't really introduce "new products" like Toys R Us would introduce a new toy for kids or Martha Steward introducing a new crafty kitchen utensil never before seen but designed to make life easier in the kitchen.

Instead, Coach introduces new collections by season and sometimes in-between seasons. Their bags, wallets, scarves, belts and even their shoes are usually a modification of an earlier version. I've noticed that one year they'll introduce a new large tote; the following year the tote will turn into a new Hobo bag; the following year the Hobo bag will turn into a new smaller Cross-body bag.

 Like their tassels

 Blinged Out for a new season

I think Coach is still in its growth stage because it's constantly coming out with new designs and collections. They also add other products to their collections like this nautical inspired shirt. And it's not typical for Coach to add clothing to their line of collections, in fact, I always wondered why Coach didn't include clothing in their collection sooner. But earlier this year Coach hired Sandra Hill to head a design team to begin designing a women's clothing line. But for now consumers will have to settle for the tee-shirts, jackets and small accessories that Coach is most known for. I've also noticed in recent years Coach has been adding more and more shoes to their collections. In the late 1990's Coach came out with a small, weird looking sneaker and since then they've added beautiful boots, ballet shoes and new high-heals and wedges to their collections; and their sneakers have been modified too, their more comfortable and more fashion forward today. I don't think that Coach has experienced a maturity stage yet; even with the discontinuation of some of their bags and wallets - even when they discontinue one item they come out with another to replace it. And although Coach has been the company that flip-flops in sales from year to year they continue to push forward new collections, by joint ventures with other companies and now the new venture into a women's clothing line.

Ch. 16 - Promotional Planning for Competitive Advantage

Coach is just one of thousands of companies these days who use Social Media to reach out to their customers. Facebook is one social media outlet currently being used to market Coach products and to advertise promotions and sales. And when it comes to Marketing Communication it seems to me like advertising and trying to promote your business via Facebook (or any other social media outlet) is a great idea. The potential for mass communication is undeniable - for example - On MY Facebook account, because I am friends with The Coach Store I get all kinds of advertising's posted to my facebook wall. These advertising's include information about new products, new product lines, special Coach events and in store and online sales - all of my facebook friends see this, so the message isn't just getting out to me...it's getting out to all of my friends as well.

Using this form of marketing is effective for informing and reminding consumers but it's not an effective way to persuade the consumer to buy your product. If Coach uses this forum to compare their products to their competitors products and shows the  benefits of buying a Coach bag instead of a Louis Vuitton bag, then it would be more effective in persuading the consumer. Still - the communication process is happening and Coach is able to send their message to the consumer and see if the consumer responds.

Another aspect of the promotional mix that I think has been effective for Coach is  advertising in magazines as a way to inform and persuade consumers to buy their products. Coach has been featured in dozens of magazines such as Lucky, Elle, Glamour and Allure and showing celebrities wearing Coach bags and other products is definitely influential to consumers. But I think it's more important to consider the fact that most young women who buy these magazines are looking for the latest trends and styles to follow so having Coach advertise in these magazines is a smart way to get the word out on your products - because these are the people who are going to go out and buy them.

Ch. 10 - Product Concepts

Leather handbags have always been Coachs' main product - and it's known for being a "Specialty Product".  For the consumer who loves and truly appreciates Coach handbags, substitutions of any kind simply won't do. Coach's "Product Line" is it's handbags and the different styles and versions that have come out over the past 70 years. Over the years Coach has modified several of it's bags to go from big totes to smaller, cross body bags. They did this in an effort to make their bags more functional and appealing to consumers. They've also had style modifications to several bags to keep up with new trends and to reach a new, younger target market.


 

 Coach customers know that when they buy a Coach product the packaging will almost be as pretty as their item...whether it's a new handbag, shoe, watch or perfume, the packaging that's used is always beautiful. The packaging does keep the items in place but I think the style of the packaging is used more as a marketing tool. You don't get just any old box and bag - you get a beautiful branded box with a hand tied bow and a bag that was specially designed for your purchase. It certainly isn't necessary to put these items in such fancy packaging but by doing so they make their products more appealing; they also make their consumers feel like their purchasing a quality product - I think this marketing tool is especially important during the holidays and when a customer is purchasing for a special event.

Coach also offers it's customer a lifetime warranty. As stated on their website - if your product requires repair you can send the item to Coach and they will fix it for you. I, personally have had a Coach bag sent for repair of the zipper which had become warn - I shipped the bag to Coach and within a few weeks I got it back with a new zipper...it also looked like they took some time to clean it as well. I was very happy with this warranty and found it to be a nice perk to purchasing their bag.

Ch. 18 - Sales Promotion and Personal Selling

Now that I've been investigating my company, Coach USA for about 2 and a half months now I've realized that they DO often put some of their items on sale. In an earlier post I mentioned how the only sale I've seen from Coach is during the winter holiday when they offer 20% off coupons. Right now, for example if you go to Coach Outlet Online Sale you will find a Coach sales promotion offering customers 50% off all handbags for the next 17 hours (Please note today's date April 8, 2013). Coach has no history of ever having used rebates, contest and sweepstakes or sampling as a way to attract new customers or get the attention of existing customers.

Coach USA sells directly from their store locations and from their websites to consumer so some of the "Steps in the Selling Process" don't apply - but within those store locations there are "sales people". The theory behind these salespeople is that they are their for your convenience to help you find what you need.

Yeah right, who are they trying to fool?

These sales people are placed in the stores to try to get you to buy more then you need, they want you to spend as much as you can and they all have sneaky ways of getting you to do just that. In visiting the Coach stores I've learned that every sales person has a different approach but we can use the industry standard described in the textbook.

Step 1: Generating Leads - This is when a sales person notices a customer walking into the store.

Step 2: Qualifying Leads - this would be when a sales person takes the time to examine the customer to see what they're looking for and to determine how they can make a sale.

Step 3: Approaching the Customer and Probing Needs: This is probably the most important step for the sales person because this is where they would either succeed or fail. Depending on how they approach the customer will determine whether the customer will be receptive to receiving their help.

Step 4: Developing and Proposing Solution: This is the point where the sales person tells you how a bigger, more expensive bag would look better on you, it'll fit more of your makeup (like if I wear any).

Step 5: Handling Objections: This is where we attempt to negotiate which doesn't really happen with Coach because you can't negotiate the pricing with the sales person. The prices are what they are and the sales person can not change that at Coach.

Step 6: Closing the Sale: At this point you have decided whether or not you are buying that new bag and the sales person is finding out how good they do their job. If they can get you to buy that bag then they've been successful.

Step 7: Following Up: This is another step that I don't think Coach uses. Coach is the kind of company where customers either buy or don't buy and following up with the customer is not usually needed. Coach can assume that customers follow up with the company by coming back to buy more.

Ch. 17 - Advertising and Public Relations

Coach USA typically advertises to get the attention of women between the ages of 19 - 45 - women who have jobs and can pay to buy their product. The "Execution Style for Advertising" is "lifestyle". Their advertisements try to show how well their bags or other products will work for you and fit into your daily life. Their advertisements imply that by buying their products you will be happy, satisfied and feel better about yourself. Of course this is hardly ever true but as a fan of their bags I will say that after purchasing some of their products I do tend to feel happier :)

I suppose that means that Coach is doing their job when it comes to how they market and advertise their products. Most of their advertising can be found in a number of magazines like Lucky and Glamour but you may also find some advertising outdoors on billboards and posters. The Internet is another forum used to advertise their products, you may notice that if you do a search of a Coach product on your computer you will find that product and others in other areas of your computer - like on the side of your email or face book accounts.

I spoke to a family member recently about advertising and she reminded me of a time when companies would do mass mailings directly to consumers homes in order to let them know about their products or sales. Back in the day companies had to advertise in weekly newspapers and circulars. It's funny to see how things have changed and to see how marketing and advertising has evolved.