Converse Case Study
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The document provides an overview of the history and marketing strategies of the Converse brand. It discusses how Converse was founded in 1908 and introduced the Chuck Taylor shoe in 1917. It then summarizes Converse's expansion into other footwear categories and its acquisition by Nike in 2003. The document also includes a SWOT analysis of Converse, identifying strengths like its strong brand name and affiliation with the NBA, as well as weaknesses such as focusing on a particular segment. It discusses both the benefits and risks of Converse outsourcing production to India and Nike's dual fashion and performance strategies for the brand.
Converse Case Study
- 1. 070060023 ÖZGE DUMAN 070060162 GÖZDE UTAR 070070029 MUSTAFA HATIPOĞLU CONVERSE: WE LOVE YOU CHUCKS
- 2. HISTORY Founded 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
- 3. 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
- 4. Some of Converse Celebrities “They are everywhere”
- 5. 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”
- 6. 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.
- 7. SWOT ANALYSIS OPPORTUNITIES Nostalgia, retro, punk rock trends Street kids wearing on the streets Reflecting antiglobalization perspective. Secondary firm of Nike
- 8. 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
- 9. QUESTION 1: What are the core,actual and augmented product benefits of the Converse Chuck?
- 10. THE TREE LEVELS OF A PRODUCT
- 11. 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.
- 12. 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.
- 13. 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 work Packaging: basically not applicable just shoe boxes Brand Name:”Converse All Stars” known as “Chucks” Quality: Basic shoes and also qualified by NBA
- 14. 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.
- 15. 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?
- 16. BENEFITS OF ACTION 1.Cost Reduction 2.The possibility of utilizing cheaper labor cost 3.Possibility of getting into new markets easily 4.Less promotional effort for Indian markets 5.Increase productivity by restructuring itself
- 17. RISKS 1.The loss of “Made in USA label leads to an uncomfortable situation in the organization 2.Possibility of emerging new competitors “imitators” 3.Uncertainties about new manufacturing place 4.Change of organizational structure “resistance” 5.New product line All stars 2000 can be a “venture”
- 18. 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
- 19. QUESTION 3: What are the sources of brand equity for both Converse and Chuck Taylor All Stars?
- 20. 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
- 21. 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?
- 22. 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.
- 23. 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
- 24. 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.
- 25. Risk: Old fans of Converse dissatisfied with the new image .There is a possibility of losing Chuck Taylor customer base.
- 26. 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
- 27. Converse In Turkey 1987: Conteks has the selling license of Converse 4th in Europe (After France, Italy, Germany) Target Market: Teenagers 15.000 sales in 2001 1.300.000 sales in 2007