The Brand Builder's Playbook // Turning Brand Perception into Pricing Power with Sandeep Seth (Tapestry)
Timestamps are as accurate as they can be but may be slightly off. We encourage you to listen to the full context.
Podcast Summary
This episode explores how strong brand building translates into tangible pricing power, featuring insights from Sandeep Seth, Chief Growth Officer at Tapestry (parent company of Coach, Kate Spade, and Stuart Weitzman). (03:33) The discussion reveals that pricing power isn't just for luxury brands—it's about reducing substitutability and making consumers believe no alternative can deliver the same unique value. (04:03)
- Core theme: True pricing power comes from consumer trust and brand love, not spreadsheets—it's an outcome of desirability rather than an input measure.
Speakers
Jim Stengel
Former Chief Marketing Officer at Procter & Gamble and renowned brand building expert. He's the host of The Brand Builder's Playbook and has extensive experience helping organizations develop strong brand positioning and pricing strategies.
Ryan Barker
Co-host of The Brand Builder's Playbook with deep expertise in brand positioning and data-driven marketing insights. He provides analytical perspective on brand performance and consumer behavior across various industries.
Cait Lamberton
Professor of Marketing at Wharton School, bringing academic rigor to the discussion of pricing power and consumer behavior. She specializes in experimental marketing research and consumer psychology, providing educational insights on brand strategy.
Sandeep Seth
Chief Growth Officer at Tapestry, with 23 years of experience at Procter & Gamble in beauty care, including global leadership of SK-II. He brings unique perspective from both mass market and luxury brand building, having successfully repositioned Coach for younger generations.
Key Takeaways
Consumers Set the Price, Not Spreadsheets
As Sandeep Seth emphasized, "the consumer decides the pricing" regardless of what price companies set. (14:15) This fundamental truth reframes pricing discussions from internal financial models to external consumer value perception. Companies must understand what business they're truly in from the consumer's perspective—Coach isn't in the handbag business, they're in the "belonging business," providing social acceptance and affirmation through life moments. This insight requires deep consumer research and understanding of substitutes consumers actually consider, not just direct competitors.
Pricing Power Flows From Brand Positioning Excellence
Strong positioning across four key elements—purpose, emotional connection, functional benefits, and experiential benefits—creates the foundation for premium pricing. (12:43) Ryan Barker's data showed Coach has superior emotional connection even over their strong functional benefits, demonstrating how emotional differentiation can command premiums even without functional superiority. The key is optimizing across all positioning elements to create meaningfulness that reduces substitutability and price sensitivity among target consumers.
Innovation Must Connect to Emotional Needs
Technical innovation alone doesn't justify premium pricing—it must translate into emotional benefits consumers value. Coach's success with Gen Z came from understanding their unique challenges around self-expression in a social media world, leading to their "courage to be real" positioning. (34:03) The brand realized younger consumers face unprecedented pressure balancing multiple online personas while seeking authentic self-expression. Innovation in products, experiences, and communication must address these deeper psychological needs rather than just functional improvements.
Point of Market Entry Strategy Drives Long-term Value
Focusing on consumers' first entry into a category creates the highest lifetime value and strongest brand habits. (30:13) Sandeep explained this as "the first date when you start falling in love"—capturing consumers at pivotal life moments like graduating college or starting a first job. Coach identified 25 million women turning 18 globally each year, representing consistent point-of-entry opportunities. This strategy requires understanding life stage transitions and creating meaningful brand connections during these formative moments.
Discounting Destroys Brand Value Perception
Heavy discounting and promotional strategies create "deselection barriers" where reduced pricing actually drives consumers away by signaling low brand value. (27:16) Sandeep noted that "for every customer we're getting through discounting, we're creating deselection for 10 others." This insight challenges traditional volume-driven approaches and emphasizes building desirability over discount dependency. Brands must resist using price as a primary customer acquisition tool and instead focus on creating genuine consumer demand through differentiated value propositions.
Statistics & Facts
- Coach identifies 25 million women globally who will turn 18 each year for the next ten years, representing a massive point of market entry opportunity. (31:27) This data point demonstrates how demographic analysis can reveal consistent growth opportunities in emotional purchase categories.
- In Coach's target market research, Ryan Barker's data shows the brand has higher uniqueness and meaningfulness scores than awareness levels, indicating significant headroom for growth. (32:20) This counterintuitive finding suggests strong brand equity among those familiar with the brand.
- Chanel has increased prices every year since 2019, with the smallest increase being 11% and a massive 24% increase in 2023 for their iconic bag, demonstrating luxury pricing power even in softening markets. (09:33)
