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Coach's Legacy Pushes the Brand Toward New Levels of Luxury

Question is whether American shoppers are ready to pay upwards of $1,000 for a Coach Bag?

Stevens, PA February 8, 2007 - Coach just announced the opening of two new Coach Legacy boutiques that will take their brand to a more sophisticated customer base who are described as "style innovators and trendsetters." The question on many people's mind is whether the American shopper who has grown accustomed to paying around $300 for the latest Coach handbag are willing to spend more than twice that for new Legacy offerings, such as the Mandy Leather Courier bag, priced at $798.

Pam Danziger, president of Unity Marketing and author of Shopping: Why We Love It and How Retailers Can Create the Ultimate Customer Experience, predicts "Coach has a good chance of success at the higher end with more limited edition products that give the luxury consumer a unique way to express her personal style. With the Legacy launch Coach is playing off affordability to see how far the luxury consumer's budget can stretch to give her an emotional thrill when making a purchase."

Why people are likely to buy Coach Legacy

Danziger explains consumers' propensity to buy is a function of four key factors expressed as an equation in her new book Shopping:

P = (N + F + A) � E²

That is, Propensity to buy is defined by:

N= Need or some perceived consumer need

F= Features of the product that make the item more desirable

A=Affordability or whether the price is worth it or not

E=Emotion is dominant in the overall shopping equation

Called the quantum theory of shopping, the equation explains how emotion magnifies each of the tangible factors when shopping, i.e. the need, features and affordability, to encourage shoppers to buy.

She explains, "In terms of the shopping equation Coach Legacy has very little to do with need, since few affluent women really 'need' a new handbag. Legacy touches the customer's desire with added-value features that make the bags more desirable, like metal detailing, showy front pockets, limited editions and soft leather. But the key factor in the equation that Legacy plays off is affordability. The luxury consumer has a budget that can stretch to pay the price for a Coach Legacy bag if it touches the shopper's emotional hot buttons."

Danziger explains that when it comes to retail pricing there is 'absolute affordability' and 'relative affordability.' Absolute affordability defines a shoppers' budget limit where they simply can't afford to make the purchase. Wal-Mart and other discounters play off this factor most often. But in the realm of the affluent, luxury shoppers, they are far more constrained by relative affordability which is how far they are willing to stretch their budget for something they really desire.

"The brilliance of Coach's pricing strategy is to offer up a family of products that extend the range of shoppers' affordability," Danziger says. "Take the popular Carly bag: at its most affordable they have a Signature version priced at $178; in the mid-range they offer a leather demi bag at $238 and a full-sized leather version for $398; at the top they present a large leather version for $498 and a suede version for $598. At these price points, the luxury shopper has the flexibility to choose the bag that is right for her at a price she feels comfortable paying. The key to getting her to stretch her budget is to enhance the product features of the premium bag while offering them up in a shopping setting that delights the customer. By building emotional appeal Coach gives the shopper a justification to spend more."

She concludes "High emotion is what drives the shopper to buy and successful companies like Coach play to emotion in the entire retail and product experience."

Pam Danziger has prepared a corporate profile about Coach which is available at http://www.unitymarketingonline.com/cms_luxury/

An excerpt from her new book, Shopping: Why We Love It and How Retailers Can Create the Ultimate Shopping Experience, can be downloaded at http://www.unitymarketingonline.com/cms/

About Pam Danziger and Unity Marketing
Pamela N. Danziger is a nationally recognized expert specializing in consumer insights, especially for marketers and retailers that sell luxury goods and experiences to the masses or the �classes.' She is president of Unity Marketing, a marketing consulting firm she founded in 1992.

Advising such clients as Cartier, PPR, Remy Amerique, Stearns & Foster, Waterford/Wedgwood, Prudential Fine Homes, Baccarat, The World Gold Council, The Conference Board and American Express, Danziger taps consumer psychology to help clients navigate and master the changing luxury consumer marketplace.

Her latest book is Shopping: Why We Love It and How Retailers Can Create the Ultimate Customer Experience, published by Kaplan Publishing in October 2006. Her other books include Let Them Eat Cake: Marketing Luxury to the Masses-as well as the Classes, (Dearborn Trade Publishing, $27, hardcover) and Why People Buy Things They Don't Need: Understanding and Predicting Consumer Behavior (Chicago: Dearborn Trade Publishing, 2004).

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