Coach in China
- Submitted by: pretsh
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- Category: Other
- Date Submitted: 05/22/2010 07:14 PM
- Pages: 3
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Will Coach be able to replicate its Japan success story in China? Why was the firm successful in Japan?
Despite Coach’s success in Japan, it is very unlikely that Coach can replicate its success in the China market with the same strategy or Coach’s (then) current targeting strategy. Although both countries are in Asia, however, Coach neglected to realize there are huge cultural and economical differences in both countries. We are looking at two (or more) sets of different customers here. There are also difference in thinking, adapting, spending power, spending habit, life style…etc., and so on.
The income distribution is more even in Japan, while in China, income distribution is very uneven; there are people in the higher end and lots of people in the lower end, and less people in the middle ground. Emerging from a communist society, people with higher income in China would tend to choose more luxurious, more expensive brands to show their status, while people in the lower end don’t have enough for basic needs and will not spend the money on luxury handbags. Coach, being in the middle price range, is not easily affordable by the working class, and is not desirable by the middle or upper classes.
As most college graduated working class earns an average of about US$500 a month, although the living standard in China in not as high as in the US or Japan, but buying a Coach bag will still be an high expense for them. While the wealthy business people (and their families) are very powerful in spending power, and can easily afford luxury brands such as Louis Vuitton, Gucci, Burberry, Christian Dior, Prada…etc., they see carrying these brands as giving them a higher status, Coach would seem undesirable to them.
Japanese customers are more aware of the western culture and western brands. Coach, has already has its name established in Japan, with brand awareness among consumers there. It was easier for Coach to break into the Japanese market, and at the same...
Despite Coach’s success in Japan, it is very unlikely that Coach can replicate its success in the China market with the same strategy or Coach’s (then) current targeting strategy. Although both countries are in Asia, however, Coach neglected to realize there are huge cultural and economical differences in both countries. We are looking at two (or more) sets of different customers here. There are also difference in thinking, adapting, spending power, spending habit, life style…etc., and so on.
The income distribution is more even in Japan, while in China, income distribution is very uneven; there are people in the higher end and lots of people in the lower end, and less people in the middle ground. Emerging from a communist society, people with higher income in China would tend to choose more luxurious, more expensive brands to show their status, while people in the lower end don’t have enough for basic needs and will not spend the money on luxury handbags. Coach, being in the middle price range, is not easily affordable by the working class, and is not desirable by the middle or upper classes.
As most college graduated working class earns an average of about US$500 a month, although the living standard in China in not as high as in the US or Japan, but buying a Coach bag will still be an high expense for them. While the wealthy business people (and their families) are very powerful in spending power, and can easily afford luxury brands such as Louis Vuitton, Gucci, Burberry, Christian Dior, Prada…etc., they see carrying these brands as giving them a higher status, Coach would seem undesirable to them.
Japanese customers are more aware of the western culture and western brands. Coach, has already has its name established in Japan, with brand awareness among consumers there. It was easier for Coach to break into the Japanese market, and at the same...