CONVERSE: We Love You, Chucks!

Case Summary

In 1908, Marquis M Converse founded the Converse Rubber Shoe Company in Malden, Massachusetts. In 1917, about ten years after its inception, an addition was made to the converse shoe line that would become one of the most famous shoe lines of all time: the

Converse Canvas All Star basketball shoe.

Charles “Chuck” H. Taylor, played for the Akron Firestones, and chose the Converse All Star as his athletic shoe. Taylor began working for Converse as a salesman and became the

“ambassador to basketball” as he traveled around the US promoting basketball and the Converse All Star shoe to high school and college basketball teams. I

In 1923, Chuck Taylor’s signature was added to the famous All Star ankle patch. The All Star shoe was soon to become known as “Chuck Taylors” a.k.a. “Chucks.” Chucks originated as a

basketball shoe, and if you look at a basketball court from the 1920’s, every player was wearing a pair. Leather shoes, however, were soon to replace canvas on the basketball court, but the shoe found a new life in the fashion world. Today, over 800 million pairs of Chucks have been

sold.

Converse is a leading global designer, manufacturer and marketer of high quality athletic footwear for men, women and children. The company is also a global licensor of sports apparel, accessories and selected footwear. The company’s products are distributed in over 90 countries to stores which include fashion, specialty athletic, sporting goods, department and shoe stores.

Since the birth of Chucks, Converse has produced tennis, cleats and running shoes as well as a full line of basketball footwear. Converse also had a line of skateboard shoes, as it entered the

skate market. Today Converse enjoys worldwide recognition and is highly regarded as a manufacturer of superior athletic footwear. Converse is strongly involved in street-fashion and

music markets as it associates its heritage and originality with innovative ideas.

Chuck Taylor – The All Star

June 24, 1901 – June 23, 1969

http://sneakers.pair.com/chucks.htm

CONVERSE TIMELINE

1908 – The Converse Rubber Shoe Company opens for business

1915 – Converse Rubber Shoe Company branches out into making sneakers

1917 – The first version of the sneaker, now known as Chuck Taylor All Star, enters production

1921 – Basketball star Charles “Chuck” H. Taylor joins the Converse sales team, and is the first ever player endorsement

1935 – The Jack Purcell sneaker is introduced by B. F. Goodrich, and later becomes a product of Converse 1966 – Converse adds color choices to the basic black and white Chuck Taylor All Star basketball shoe 1970 – The suede One Star sneakers come out

1984 – After paying over $1 million, Converse boxes proclaim “Official Sponsor of the 1984 Olympic Games”

1994 – The company jumps the millennium six years early with the All Star 2000

1998 – Converse achieves production of over 560 million pairs of the Chuck Taylor All Star

2003 –Nike announces purchase of Converse for $305 million

QUESTION 1: What are the core, actual, and augmented product benefits of the Converse Chuck?

QUESTION 2: When Converse outsourced production of its shoes to India, it entered into a licensing arrangement. What are the benefits and risks

of that action? Do you think it has helped or hurt the company? The brand?

In your opinion, what benefits/risks were involved with entering into a licensing arrangement?

How do you think outsourcing has helped the company?

Would removing the “Made In U.S.A. label influence your

decision to purchase Converse?

QUESTION 3: What are the sources of brand equity (reputation) for both Converse and Chuck Taylor All Stars?

QUESTION 4: Analyze the Nike-era direction of Converse.

http://www.youtube.com/watch?v=P0kpgpxeqB4

(a) Assess the benefits and risks of the fashion and performance strategies individually, and of the combined two-tiered approach.

FASHION STRATEGY BENEFITS• Age range – appealing retro-fashion for people in their teens and in their 30s • Extensive lines of clothing for men and woman – varying in price range and target markets:• Planning more variations for the Chucks line – creating endless possibilities. • Sales in 2005 hit $400 million – more than double the revenue from 4 years prior.•Sales continue in an upward trend.

FASHION STRATEGY RISKS•Contrast of well known antiestablishment image•Negative image from customers for going “mainstream” and trendy,.• All extensions rest on the image of one specific brand. If the brand fails, the extensions fail.

PERFORMANCE STRATEGY BENEFITS• Product sales increase; benefits similar to big name brands.• Performance features and technology such as air bag heel (similar to Nike Airwalk) attracts athletic customers.• Potential to attract younger generation• Affiliated with performance (basketball), helping to attain reputation.

PERFORMANCE STRATEGY RISKS• Performance strategies are similar to big name brands, and may damage the brand• Takes away from original “Chucks” image.

TWO-TIERED APPROACHBenefit: Combining fashion with functionality; reach out to a greater number of people with full line for casual, sports, etc…Risk: Cost to reach all target markets

(b) What targeting and positioning would you recommend for the Converse brand in the future?

FASHION POSITIONING: Positioning Converse as a fashion brand, and adding more extensions and product lines to the brand.

PERFORMANCE POSITIONING: Positioning Converse as a performance brand, by focusing on comfort and features.

FASHION POSITIONING: Positioning Converse as a fashion brand, and adding more extensions and product lines to the brand.

PERFORMANCE POSITIONING: Positioning Converse as a performance brand, by focusing on comfort and features.

FASHION TARGETING: Market products to tweens through people in their fifties (nostalgia). With different lines available, market to those with high income, as well as those with average income.

PERFORMANCE TARGETING: Target elementary – college age people, especially those in sports.

FASHION TARGETING: Market products to tweens through people in their fifties (nostalgia). With different lines available, market to those with high income, as well as those with average income.

PERFORMANCE TARGETING: Target elementary – college age people, especially those in sports.

What targeting and positioning strategies do you think would be most effective?

100 YEARS OF CONVERSE

Music is a huge theme of Converse’s 100th Anniversary

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Black Sabbath

Kurt Cobain

100 YEARS OF CONVERSE

Would YOU Spend $1800 on a Pair of Shoes?“Converse celebrates 100 years and invites three designers (Thom Browne, Libertine and

Mastermind) who offer them version of the mythical clothe tennis, a small bonus: the box are customized too. Spring/summer collection 2009, 50 specimen in exclusivity for colette

(boutique in France).”

100 YEARS OF CONVERSE

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