Which Stage, Coach?

What a brilliant ride Coach is having.

According to Reuters, Coach Inc. reported better-than-expected quarterly earnings on Tuesday, helped by higher full-priced sales of its handbags during the holiday season, and raised its full-year earnings and sales outlook.

Coach, which sells its signature leather handbags, accessories, shoes and jewelry in department stores and its own stores, said net income for the fiscal second quarter, ended Dec. 30, rose 30.6 percent to $227.5 million, or 61 cents per share, from $174.2 million, or 45 cents per share, in the year-ago period. Analysts, on average, had been expecting 58 cents per share, according to Reuters Estimates.

Lew Frankfort, Coach's chairman and chief executive officer, said the latest results were helped by better conversion, meaning that more of its store's visitors bought merchandise. Together with more customer traffic and higher average transaction prices, quarterly sales jumped 29 percent to $836.4 million. Analysts were expecting sales of $800.1 million.

Check out that wonderful statement on better conversation: more store visitors bought merchandise. Why? Let's break down the components because this Coach is riding with a team of great horses:

- Range of price points

- Excellent design

- Line extensions using different, less costly materials combined with great design supporting that range of price points

- Expanded distribution through new retail stores.

Just think of that -- less costly materials, wider range of price points, more items, and still Coach maintained the integrity of its name.

Contrast that with Tiffany's, which has seen a deterioration in its financial situation because it has been pulling back on its cheaper silver jewelry (you know those bracelets and necklaces that every 14-year-old fashionista had to have) to protect its name and to better serve that truly upmarket customer.

Coach has truly steered itself down the right path. Kudos to management.

But this is the same ride, the same reins, that everyone uses. Why did Coach do it better?

Because they weren't afraid when it came to design. They didn't fear pay-for-lower price materials. They smartly managed line extensions, discontinuing skus when they reached their sell-by date. And they made leaps in their innovations.

That's a road that really successful marketers travel down.

The Snake Knew His Target Audience

Out to create a little trouble? Out to sell a product? Want to distribute product information? Decided that sampling is the better way to gain trial and purchase?

Yes, I bet that was what the snake was thinking in the Garden of Eve when he saw Eve coming his way. He got his target market right. He got the first sale. And Mankind lost the Garden of Eden and it has been the world of commerce ever since.

So why is taking marketers so long to wake up and the smell the primroses?

According to Martha Barletta, author of Marketing To Women, women control or influence 80% of all purchases of both consumer and business goods and services. They have joint or sole ownership of 87% of homes and buy 61% of major home-improvement products. They account for 66% of all home computer purchases and 80% of all health care services. They carry 76 million credit cards, and they start 70% of all new businesses.

Now I hate to be a snake in the grass, but I don't think I would waste a lot of my time talking to men if I was trying to figure out how to move major product purchases.

Particularly in healthcare. Not only do women consume a significant amount of health-related goods and services, they are also the gatekeeping purchasers for their male "wards" and for the seniors above them and the children below them.

When I was recently looking at the 50+ market, it hit me like a pan in the face. Forget about men. For anything, spend a lot of time with women, understand their frustrations, their hopes, their needs, their dreams. Isn't that how good relationships grow?

Tailor your products to those desires. And get them talking about it.

If you don't understand the woman consumer first, nothing else matters. It's not sociological. It's not anthropological. It's biblical.

Now That Other Guy Blinked

Some people may remember when Coca-Cola changed its flavor profile to match Pepsi and embarked on the disastrous launch of New Coke. That was when Pepsi took out full page ads that damningly said, The Other Guy Blinked.

Well, I guess it's Pepsi's turn now to be rescued from its glaucoma.

Changing the design of its cans for a new look every three to four weeks?
To attract teens who are always looking for something new?

You've got to be kidding me. What happened to CPG Marketing 101 about the sanctity of packaging design? Did those marketing geniuses at Pepsi get brain freeze at the Dairy Queen?

When I was brand manager of Wisk laundry detergent for Unilever, we agonized over changing the red on the label. Look at the Tide bulls-eye, still there. Same for Dove.

Fast Moving Consumer Goods (FMCG) move through the minds of teenagers at nano speed. They will forget that Pepsi can faster than their next sip of Mountain Dew.

Brands are supposed to gain value over time (look what J&J paid for 120-year-old Listerine) and their packages are what helps them stand the test of time. Otherwise, how do you really know what's inside?

Those teens will be adults some day. Do you think they will still remember that cool Pepsi can from 20 years ago. The best antidote for Mild Cognitive Impairment (MCI) isn't Aricept. It's branding.

Guess which brand tops the BusinessWeek/Interbrand survey: Coca-Cola.
Guess which brand isn't in the top 20: Pepsi.
Hmmmnnnn.

The issue isn't the package. The issue is the type and quality of product you deliver consistently over time to meet consumer needs. The package is the signpost, the flag, kind of like those flags the samurai warriors follow in the Akira Kurosawa movies.

The risk for Pepsi is that, next month and for the next decades to come, they have those teens mindlessly running all over the place, occasionally bumping into Pepsi, occasionally bumping into other things. That's what teens do anyway -- until they grow up. And then they buy the brands they know and trust. The brands that have always consistently been there.

Okay, Coke, now YOU can say the other guy blinked.

Match Points: A Real Work/Life Balance

Many of colleagues from Pfizer are currently looking for new positions due to J&J's recent acquisition of Pfizer Consumer Healthcare. While I will reserve comments about the sale and the value of acquiring brand assets and getting healthy ROIs through synergistic cost cuts, I do want to put one note out there about the recruiting and searching process.

I was re-reading George Bradt's The New Leader's 100-Day Action Plan, and I was struck by his opening comments about looking for a job. I want to replay them for my friends who I know are reading this blog.

Bradt writes that there are only three real interview questions:

1. Can you do the job?
2. Will you love the job?
3. Can I stand working for you?

Or, alternatively,

1. Strengths
2. Motivation
3. Fit

That's what it comes down to. My Pfizer friends are looking for new jobs in marketing and sales, but they are also looking at consulting, teaching, social work and nursing. Go for it. As I wrote in my last post, don't enervate. Leap.

For recruiters, their clients deserve the best they can hire. For my friends, they deserve to be the best they can be: using their skills, waking every morning loving what they do and enjoying who they are working with.

In a way, it can be a lot simpler than life or work ever is.

And yes, this may be another way we talk about work/life balance.

Enough for now. The next post is back to Marketing and Management.