Converses

Amity International Business School 2012-2015

BY : Sunil Kr. AhirwarBBA-IB, IV Semester +91-9871836819

Converse Shoes All Star *

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

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

Some of Converse Celebrities

“They are everywhere”

SWOT ANALYSIS

STRENGTHS

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”

SWOT ANALYSIS

WEAKNESSES

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.

SWOT ANALYSIS

OPPORTUNITIES

Nostalgia, retro, punk rock trends

Street kids wearing on the streets

Reflecting antiglobalization perspective.

Secondary firm of Nike

SWOT ANALYSIS

THREATS

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

QUESTION 1:

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

THE TREE LEVELS OF A PRODUCT

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.

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.

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

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.

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?

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

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”

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

QUESTION 3:

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

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

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?

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.

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

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.

Risk:

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

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

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

THANKS FOR LISTENING