Beijing Business Today" interviewed Professor Zhang Mengxia, the Director of Luxury China ,regarding a 10% price rise in Coach
Coach has raised prices for the first time this year. On October 17, a reporter from Beijing Business Today visited a number of Coach stores in Beijing and found that most of the handbags and clothing except for products of new styles rise by about 10%, and there were almost no products under RMB4,000 in the stores. Coach has also tried to attract young people by various means and strengthen the positioning of light luxury. However, the huge price gap with the country of origin makes the consumption though the Outlets channel of Coach China more powerful, and makes the impression of product charging RMB1,000-2,000 more deeply rooted. Zhang Mengxia, the Director of the Research Center for Luxury Goods and Services of the University of International Business and Economics (UIBE), believes that there is a great risk for brands to enhance positioning by price increases.
"Light luxury products have no clear discriminative quality and are easily replaced", stated by Zhang Mengxia. Therefore, if it is demonstrated by certain big data that the fixed customer base can accept the risk of price increase, this action is operable; but if there is no reliable market data, the price increase will lead to the loss of the customer base.
To enhance the brand value, the key is to create a unique competitive advantage.