The essay compares two logistical distribution systems presented by two leading independent world brands: Coach and Michael Kors Inc. This work displays that two different luxury brands utilize similar approaches and methods to provide their products on the world market. These brands distribute their goods and products in the USA and far abroad. Both of them located their plants and factories abroad in order to save funds and deal with cheap raw materials and labor force. The essay will observe similarities and differences of marketing methods these incorporations use in their business strategies.
Michael Kors is popular American fashion brand. It was named after the designer who established it. Michael Kors designed clothing for many celebrities. It was he who designed the dress for Michelle Obama, the first lady, for her official outing. The designer was born on Long Island, New York City. In 1970, following his dream, he went to NY City in order to enter the Fashion Institute of Technology. However, after two semesters he dropped out. In 1978, he went to work at Lothar’s, famous French boutique in NY. In the result, he created his first fashion collection there. His fashion collection attracted so much attention that Kors received an opportunity to start his own fashion line. Michel Kors created his first women’s collection in 1981. This collection was sold in the most expensive New York department stores. Consequently, he was invited to become a judge on TV for Project Runway in 2004. This project put the light of fame on the designer (MKHANDBAGSALE, 2012).
However, Michael Kors’s designing skills first appeared when he was a child. He was five, when his mother was getting married second time, after terrible accident with Michael’s father, so the boy had designed mother’s wedding dress. It was the start of Kors’s fashion addiction. As the designer quipped later, marriage did not last long, but the photos are timeless.
Kors’s success depends on a winning combination he had created. The combination includes simple, elegantly tailored clothing compared with persuasive sales techniques. Earlier, Michael Kors traveled across the USA, visiting small private fashion shows. Attending such ‘trunk shows’, he met Anna Wintour (presently, she is an editor-in-chief of American Vogue) and asked her to view his collection. Admittedly, those times were too far from glitzy Madison Avenue showroom he would later have. However, Kors represented his first collection in his apartment. These humble beginnings soon picked his up to celebrity fans and earned him awards for designing (MKHANDBAGSALE, 2012).
In 1990, the company went bankrupt. Soon, the designer got back in business. He launched a lower-priced line named KORS Michael Kors. In 1997, he became a creative director of French fashion house. In 2003, he expanded his own brand with accessories, perfume lines, and menswear. The same year, world-known designer, Michael Kors, won the most prestigious award in American fashion industry – the Council of Fashion Designers of America. Moreover, many celebrities wear Kors’s garments, while Kors’s fashion empire continues to grow (Singer, 2013).
Coach Inc. is American luxury leather goods designer, producer and marketer. It was launched in 1941 as a family-run business. Nowadays, it is a huge manufacturer of briefcases, handbags, suitcases, and accessories. Company became popular due to selling leather wallets. The reputation of Coach Inc. is growing overseas. Coach Inc. as a leading USA company, which cooperates with different partners and provides a variety of additional products to its clients, such as footwear, brand watches, office and home furniture (Cirelli).
In the beginning, Coach Inc. was a little company in NY City, on the edge of Manhattan district. The business was started with six workers who made different small leather goods by hand. In 1946, Miles Cahn started to work at the company. In 1950, he already owned the company. In 1960s, key event happened. Cahn reminded the distinctive property of leather being used to manufacture basketball gloves. Evidently, the leather of gloves becomes supple and soft (Fundinguniverse, 2002). Doing his best Cahn created flexible, strong, soft, and deep-toned gloves. The same type of leather was used in manufacturing women’s handbags and purses. This innovation marked the company’s entrance into the worldwide market of luxury leather goods.
In 1979, the chair of vice-president of the company took Lewis Frankfort, whose goal was to develop the business. In 1980’s, the company has doubled its workforce in order to keep up with constantly growing demand. Moreover, Coach Inc. leased additional space for the manufacture (Cirelli). Despite serious changes, the Coach Inc. was sold to Sara Lee Company in 1985. In 1996, under Frankfort’s leadership, the company hired Reed Krakoff. The incorporation is credited for its success to Krakoff. He turned a relatively small company into the world-known brand that Coach Inc. is today.
The superior craftsmanship and classic style help the company to hold one of the leading businesses in the modern world. Coach Inc. continues to create and innovate each season. It turns out new styles, colors, and designs. The history of the company displays that the company has survived in the fashion world due to its innovation, modern design, and marketing strategies.
Michael Kors is the modern American designer who is looking for expanding the company’s success all the time. Despite some paths in the past, brand Michael Kors is known for its stability nowadays. The company’s research and analysis developed some strategies and actions to perform the set goals (Singer, 2013). The company tries to develop its market share to 13 percent in five years, to increase its annual revenue to 31 percent in 2014, and introduce new goods via men’s accessory, children and sport lines.
The other goal of the company is to keep prices stable and increase the profit. There are several major marketing strategies that must be implemented in order to get these goals: discounts should not be used. The prices must remain the same or increase a little. New channels and products should be developed. The innovation and goods differentiation is the most significant element that sets Michael Kors’s brand apart from its competitors. It is evident that strategic alliances can help the company grow into avenues, which were not previously experimented.
The company utilizes limitation availability to increase demand. Admittedly, the brand integrity allows Michael Kors to continue to the path of success. These steps for brand development facilitate the company’s growth. The company should implement these steps in the timely manner. Moreover, the company should continue to create the innovation within the industry. Additionally, it is significant reevaluating actions and strategies to observe what changes should be involved to advance the brand.
Michael Kors possesses the group of brands, which stores are located in the most expensive areas and cities, such as Tokyo, Hong Kong, London, New York, Beverly Hills, Manhattan, Milan, Paris, Istanbul, Dubai, Munich, and Seoul. The company originally made its goods in USA, but in 2008 the manufacture of handbags moved to China, in order to save money (Singer, 2013). The company distributes its goods to customers through the stores and online.
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There are two major segments in which Coach Company operates: North American Segment and International Segment. The company distributes its goods to consumers through its stores, including the internet and wholesale clients. Moreover, Coach Inc. cooperates with international distributors, which operate sales to international consumers through the companies operating in Japan and China. However, the total number of partner companies accounts more than 25 countries all over the world, such as Hong Kong, Taiwan, Macau, Korea, and Singapore.
The North American Segment of product distribution includes indirect and direct-to-consumer channels. Moreover, this segment deals with client sales through company-operating stores, internet and wholesalers or distributors. The Coach stores are located in metropolitan areas and regional shopping centers in the USA and Canada. The company widely uses the e-commerce to promote its goods. It treats the website as a key element of stuff promotion. The International Segment deals with market’s department stores, shop-in-shop locations, retail and factory stores, e-commerce websites, and freestanding flagship.
The majority of Coach’s goods are manufactured by independent manufacturers. The maintaining sourcing and goods developing offices are located in China, Hong Kong, India, and South Korea. This approach has got a name of broad-based global manufacturing strategy. It was involved in order to optimize the cost, construction capabilities, and lead times.
The main approach to the products sale that Michael Kors Inc. utilizes is the creation of products, which are able to sell themselves. It means that none of all practices to attract the client and make him buy something does work anymore. The hard-sell practices are not able to prompt a customer to buy the good he\she does not need.
All the goods branded by Coach Inc. are produced by independent manufacturers. However, the Incorporation obtains control to supply the chain of design throughout the manufacture. It is possible due to qualifying all raw material suppliers. Coach’s cooperation with independent manufacturers provided the seasonal influx of fashion-oriented products that allow the company to meet consumers’ preferences. All the collections are seasonal and oriented to the style and fashion. They are sold in stores in a short duration. Therefore, the quantities of manufacture are limited, which decreases an exposure to excess and absolute of inventory.
Coach provides its products in retail stores and via internet. E-commerce has a great impact on the business development and company’s profit. The Coach stores are located in huge shopping centers and as separate units. However, the company accepts its website as the major communicational unit to promote traffic in the retail stores. The website presents an environment in showcases, where buyers can observe the current offerings. The Coach e-commerce includes a variety of flash sites. The wholesaler system of the company turns out to be a channel of its overall customer research. The Coach Inc. possesses more than 320 retail stores and 190 factories in the USA, 6 factories and 35 retail stores in Canada, more than 190 shops and factories in Japan, and about 360 manufactories and shops in Hong Kong. However, the corporation deals with both e-commerce and storage trading (COH, 2009). The main points of goods selling are shops and retail stores, but the website makes the brand represented broader.
The same situation is with Michael Kors Inc. The Incorporation deals with storage trade and e-commerce as well. The website founded in 1981 and leaded by Michael Kors attracts attention of millions of consumers. However, the designer concentrates his attention on personal pleasing of his consumers (Plopan, 2013). The staff of shops is well-trained to find definite things for each client. Michael Kors Inc. gives particularly pleasant treatment to each consumer. The stores serve to be the joining element between the designer, his brand and fashion culture and consumer. The websites are used for making collections available and observed all over the world.
Consumer ownership related to the goods and services differs in each company. Michael Kors was recently involved in an accident when the designer refused guarantee or repair service for a client who has bought the jacket in discount. However, it was widely discussed that Michael Kors refuses repairs or refunds for those clients who pay full retail price. It seems to be a politics of the company.
Coach Inc. obtains luxury leather goods segment in the world market. It deals with high quality materials, so the company presents high quality products. However, the company provides low-priced goods to meet demands of the middle-class customers. The Coach Inc. does not provide services or repairs for its products. It mainly depends on the fact that the company cooperates with independent partners from all over the world. Therefore, it is hard to satisfy repair needs of a consumer if the product was manufactured far abroad.
As it was already mentioned, all goods produced by Coach Inc. are manufactured by independent manufacturers. The authority of the company controls the chain of design through the manufacture. It is made by maintaining sourcing and development of the product. The great attention is devoted to qualifying raw materials as well. The use of such broad-based manufacturing approach was designed to enhance control over independent manufacturers and increase the speed of introducing new products to the market.
Such a broad-based method of manufacturing and distribution supports the mixed products type. Coach has a limited number of partners, who represent the best brands. They have bounded commitments that demonstrate quality, integrity, and reliable delivery of products. The independent manufacturers are located in different countries in order to evaluate new geographies and deliver high quality products at the low prices to consumers. Before starting cooperating process, Coach evaluates each manufacturer’s facility by conducting the quality and business audit (COH, 2009). Admittedly, none of Coach’s vendors does currently provide more than 15 percent of company’s total units. The strict control of existing vendors allows the company to be one of leading leather producing brands. The random basis is provided for earlier approved, existing facilities is periodically conducted. In the result, all the independent partners are in compliance with high Coach’s quality standards.
Michael Kors Inc. operates its business in three major segments. They are wholesale, retail stores, and licensing partners. The goods are available for buyers in retail stores, specialty stores, leading department stores, and by selected licensing partners (Plopan, 2013). The trading strategy of Michael Kors Inc. is client-focused. A designer, Michel Kors, always tries to outfit the modern women and men’s needs. It is proved by the way the consumers are treated in the retail stores. The company is focused on personal pleasing of clients and finding the exact product for the exact consumer. The high level of respect for Michael Kors Inc. is seen when looking at the employee satisfaction. People working in the company say that the designer himself trains each employee to convey the correct image and know the brand. The employees are trained to be brand ambassadors. The market position defines Michael Kors Inc. as one of the leading luxury brands. The place of the company at the market is quite respectful for such particular industry. Admittedly, that Michael Kors’s business method prefers personal treatment and selling approaches to e-commerce.
The essay observed marketing approaches provided by Coach Inc. and Michael Kors Inc. to improve their business. However, despite some particularities related to their business, the companies deal with the same methods and approaches to develop their business strategies. Both companies use several trading segments, a variety of shops and trial stores, abroad plants and factories, and independent partners. The selling strategy is the main difference between these two incorporations. Michael Kors’s client concentration approach is the main descriptive feature of this brand, while Coach Inc. concentrates its forces on the e-commerce.