Lew Frankfort Sees Great Potential In China Market, Reflected In Low Brand Recognition And High Repurchase Intent
Coach hopes its aggressive digital brand outreach and extensive market research will continue to pay off in 2010 (Image courtesy GEmag)
Although Coach reported better-than-expected sales figures in its top two markets (North America and Japan) in its latest fiscal statement, the company has made clear that it is strongly committed to building more market share in the increasingly lucrative Chinese market. Over the last year, Coach has invested heavily both in the mainland and Hong Kong markets, announcing last spring that the company intends to add nearly 50 retail outlets to the 37 it currently operates in mainland China, Hong Kong and Macau, appointing luxury veteran Andre Cohen as China Region President, and launching a large-scale Chinese-language online promotional campaign.
Part of the reason that Coach’s China offensive has been so pronounced over the past year is the brand’s relatively low recognition in the Louis Vuitton-mad Chinese market. Coach’s less flashy designs make it less of an immediate status symbol, and as such the brand appears to be positioning itself within the mainland and Hong Kong markets as a more attainable luxury — lower-priced than the most popular luxury brands but still of superior quality — and is using its association with popular American television shows like “Gossip Girl” to its advantage.
As an article today in GEmag (Chinese) points out, Coach’s China strategy does not consist of “dumping” inventory into the market and plastering advertisements arbitrarily around major cities, but rather is the result of intensive market research on everything from the materials preferred by Chinese handbag buyers to the size, style and function (translation by Jing Daily team):
In a conference call today, Coach’s CEO Lew Frankfort mentioned his company’s low “unaided” recognition — which is to say, brand recognition not driven by marketing campaigns — as a cause for optimism. According to Frankfort,
In the year ahead, Coach is planning to further ramp up its China expansion efforts, announcing today that they plan to open 15 new China locations over the course of 2010, including a new flagship store. In addition to these new openings, Coach plans to employ a “multi-channel” strategy that combines discount factory stores as well as in-store boutiques, according to Marketwatch.