Coach Case Study Essay

2063 Words Nov 3rd, 2012 9 Pages
Assignment Questions Case #6 COACH Inc.

1. What are the defining characteristics of the luxury goods industry in 2012? What is the industry all about today?

Today there are key defining characteristics of luxury goods industry such as pricing, quality, style, and brand reputation. The pricing of goods is based on economics, demand increases as income increases. Pricing is also determined by exclusivity, quantity availability, quality and location of the product. The quality of a product can help determine the price, but not always. Luxury goods have higher quality, which results in higher price from the workmanship, material, and labor to product good. Many luxury goods have a particular style that is unique to each brand.
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In the luxury goods industry, brands always want to be trendsetters. The brand has to be “up to date” with the latest trends and always setting trends for the next season. This is a factor to why consumers are loyal to the brand. No consumer wants to have last year’s merchandise, so they are loyal to brands that are setting the trends.
The pace of rivalry is becoming more intense because of the economy. Since the economy is slowly recovering, people do not have as much disposable income. Instead of visiting their favorite store once every two months, they might visit every four months. Instead of purchasing every seven months, they might purchase every ten months. Customers will continue using a handbag for a few more months than they normally would. Trends are also lasting longer now instead of constantly changing every season. Since the demand has slowed down over the past few years, prices have increased.

3. How is the market for luxury handbags and leather accessories changing over the last several years? What are the underlying drivers of change and how might those driving forces change the industry?

The market for luxury handbags and leather accessories are constantly changing. Generations are becoming older so they become a new market. Different generations spend their money on different industries depending on which market they belong to. Also the economy is not doing well so people do not spend money on luxury but on the more

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