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070060023 ÖZGE DUMAN 070060162 GÖZDE UTAR 070070029 MUSTAFA HATIPOĞLU CONVERSE: WE LOVE YOU CHUCKS
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Converse Case Study

Oct 21, 2014

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Marketing Class Converse Case Study with related topic of Products, Services and Brands
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Page 1: Converse Case Study

070060023 ÖZGE DUMAN070060162 GÖZDE UTAR070070029 MUSTAFA HATIPOĞLU

CONVERSE: WE LOVE YOU

CHUCKS

Page 2: Converse Case Study

HISTORYFounded in 1908 in North Reading, Massachusetts by Marquis

Introduced in 1917 “Converse All Star “

Renamed in 1923 the “Chuck Taylor ( known as Chucks)”

Introduced in 1923 the first Chucks

Wore extremely in 30s, 40s,50s and 60s

Page 3: Converse Case Study

HISTORY Started to product by the early of 1980s tennis and running shoes Was official shoe of NBA early 90s

Had changed its strategy by 1993 Cancelled in 1992 “Made in USA.” label Nike bought it in 2003 Signed with Dwyane Wade an agreement in 2005 for 7 years

Page 4: Converse Case Study

Some of Converse Celebrities

“They are everywhere”

Page 5: Converse Case Study

SWOT ANALYSISSTRENGTHS

Strong Brand Name Affordable Endorsed by famous stars Official shoe of NBA Wide variety of colors and shoes Very creative and different fashion styles Created eloborately in the laborataries by designers, engineers and biomechanics experts Has talented designers Manufacturing men’s and Woman’s clothing, “product development”

Page 6: Converse Case Study

SWOT ANALYSISWEAKNESSES

Focusing on a particular segment of people

Basic shoes

Deforms easily

Antiestablishment image like skateboarders from public

Using wrong stars for advertisements such as Dr. J.

Page 7: Converse Case Study

SWOT ANALYSISOPPORTUNITIES

Nostalgia, retro, punk rock trends

Street kids wearing on the streets

Reflecting antiglobalization perspective.

Secondary firm of Nike

Page 8: Converse Case Study

SWOT ANALYSISTHREATS

Strong competitors in the market like Nike (26%) and Reebok (23%)

Secondary firm of Nike

Losing treasured “ Made in USA” label

Unpleasured old guard of Converse

Page 9: Converse Case Study

QUESTION 1:

What are the core,actual and augmented product benefits of the Converse Chuck?

Page 10: Converse Case Study

THE TREE LEVELS OF A PRODUCT

Page 11: Converse Case Study

CORE BENEFITS

Core benefits indicate the fundamental level of what a product

really provides to its customers. It can also be named as core problem

solving benefits answer the question of ‘’what is the buyer really buying?’’

When we examine the converse chuck they are basic shoes usually with

canvas lace ups and rubber covered toes. In the perspective of customers converse chucks are not shoes they

get freedom to walk on outside by the difference of wearing converse.

Page 12: Converse Case Study

ACTUAL PRODUCT BENEFITS

Actual product benefits

include features, design, packaging, brand name and

quality level. All together these benefits support the

core benefits to satisfy customer. Actual product benefits carry product far

more than just being a problem solving.

Page 13: Converse Case Study

Features: At the birth of converse they are basic shoes after the takeover of the Nike Converse has become focused on fashionable styles.Design: Generally black, white and red rubber toes, a blue label on the back “Made in USA” after Nike 12-people design team workPackaging: basically not applicable just shoe boxesBrand Name:”Converse All Stars” known as “Chucks”Quality: Basic shoes and also qualified by NBA

Page 14: Converse Case Study

AUGMENTED PRODUCT BENEFITS

Augmented product benefits involve that installation, warranty, delivery and credit after sale service. Converse offers additional customer services to satisfy its consumers. It allows customers to design their own converse.

Page 15: Converse Case Study

QUESTION 2:

When Converse outsourced production of its shoes to India,it entered into a licensing arrengement. What are the benefits and risks of that action? Do you think it has helped or hurt the company? The brand?

Page 16: Converse Case Study

BENEFITS OF ACTION

1.Cost Reduction2.The possibility of utilizing cheaper labor cost3.Possibility of getting into new markets easily4.Less promotional effort for Indian markets5.Increase productivity by restructuring itself

Page 17: Converse Case Study

RISKS 1.The loss of “Made in USA label leads to an uncomfortable situation in the organization2.Possibility of emerging new competitors “imitators”3.Uncertainties about new manufacturing place4.Change of organizational structure “resistance”5.New product line All stars 2000 can be a “venture”

Page 18: Converse Case Study

COMMENT ON ACTION

Although sending manufacturing to India

poses considerable risks All Stars 2000 collection

has become successful. It has helped company to recover a little bit. The

brand also renewed by the All Star 2000 collection

Page 19: Converse Case Study

QUESTION 3:

What are the sources of brand equity for both Converse and Chuck Taylor All Stars?

Page 20: Converse Case Study

Official shoe of NBA

Kurt Cobain and famous stars wear it

Accepted by all social classes

Have loyal costumers who don’t wear any sneakers except for Converse

Make the foot relax

Before 1990: “Made in USA”

A lovemark

Sponsoring Olympics

Retro trend and punk rock movement

Affordable

Page 21: Converse Case Study

QUESTON 4:

Analyze the Nike-era direction of Converse. (a) Assess the benefits and risks of the fashion and performance strategies individually, and of the combined two-tiered approach. (b) What targeting and positioning would you recommend for the Converse brand in the future?

Page 22: Converse Case Study

Before Nike to rescue, company had 180 employees and the sales of 185

millon dollars. ‘Dying brand’Nike observers believed that Converse

should become a second tier brand.

Nike raises promotional expenses from $4 million to $17 million in 2005

However, Exeter Brand Group filled that gap which is selling cheaper shoes

Wal-Mart and Target.

Page 23: Converse Case Study

The popularity of Converse in basketball areas was falling down until Nike signed agreement with Dwayne Wade under the “Wade” collection

and then gained its popularity again with promising sales.

Wade bundled with a special edition of the classic Converse Pro Leather. This

idea comes from “Dr. J” Erving

Page 24: Converse Case Study

Benefits:

Market share increased

Wide range of Converse types enable costumers to choose comfortably

12 person design team improves quality and enlarges the models

Entering into clothing fields can be benefical because of reaching much

more costumers.

Page 25: Converse Case Study

Risk:

Old fans of Converse dissatisfied with the new image .There is a possibility of losing Chuck Taylor customer base.

Page 26: Converse Case Study

Comments&Recommendations

After Nike takeover of Converse Converse brand has gone under substantial change

and became more fashionable therefore possible targets for Converse should be

Upper class society who responses more pricey models correctly

Tennis players and athlets :Main focus just basketball players

Page 27: Converse Case Study

Converse In Turkey

1987: Conteks has the selling license of Converse

4th in Europe (After France, Italy, Germany)

Target Market: Teenagers15.000 sales in 20011.300.000 sales in 2007

Page 28: Converse Case Study

THANKS FOR LISTENING