On October 23rd, 2014, we updated our
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THE CUSTOMERS BRAND NAME :CONVERSE DELIVERY AND CREDITS: AS
OF CONVERSE QUALITY LEVEL : HIGH CHAIN STORES DON’T SALES
GETS PRODUCT ON CREDIT .
COMFORT MORE PACKAGING : NO INFO.
DESIGN : HIGH HOP CANVAS
LACEUPS WITH RUBBER
COVERED TOES IN BLACK,
WHITE, RED WITH A BLUE
LABEL ON THE BACK THAT
2 . When Converse outsourced production of its shoes to India. It entered into licensing arrangement. What are the benefits and risks of that action? Do you think it has helped or hurt the company? The brand?
Localization will hamper the brand image
Lost of one of the brand element will make it weak
Faith in consumer for the product will be diluted
Reduction in legal compliance will make company irresponsible
Cost was reduced
Scope for alternative cost quantity benefit raised
Product was made cheaper on removal of
“ Made in USA” tag.
Legal compliance will be reduced
Helped the company: It helped the company in cutting cost It lets the company to shift the burden of production It gave them space to think on further diversification Cutting cost will reduce price and increase revenue Hurt the company: It made the product brand weak which will reduce the cost at one hand and increase the vulnerability to its revenue on the other Helped the brand: No help Hurt the brand: It had hurt the brand by the loss of one of its element
3. What are the sources of brand equity for both Converse and Chuck Taylor All stars?
Choosing the best brand elements to market the shoes.
Company developed brand elements and new products to increase the brand equity.
Company designed personalized marketing activities.
Company started leveraging its secondary associations to create brand equity.
Q. 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-TIRED APPROACH. (B) WHAT TARGETING AND POSITIONING WOULD YOU RECOMMEND FOR THE CONVERSE BRAND IN THE FUTURE?
NIKE-ERA DIRECTION OF CONVERSE
ACQUIRING A FADING COMPANY WHICH WAS STRUGGLING IN THE MARKET.
AFTER THE ACQUISITION NIKE HAS GIVEN THE COMPLETE FREEDOM TO THE MANAGEMENT OF CONVERSE TO IMPLEEMENT ITS OWN BUSINESS STRATEGIES.
ALLOWING CONVERSE TO CONTINUE WITH THE SAME PRODUCT LINE.
FINANCIAL ASSISTANCE TO MEET THE SAME PRODUCTS ( IN 2004, NIKE INVESTED MORE THAN $4 MILLION IN ADVERTISEMENT FOR CONVERSE )
HIGHER INVESTMENT IN ADVERTISEMENT HELPS CONVERSE TO COME UP WITH TV ADVERTISEMENT IN WHICH IT WAS DECADE-LONG ABSENT .
NIKE OPENED ITS DOORS TO ITS CREATIVE LABS, GIVING THE CONVERSE TEAM ACCESS TO ITS DESIGNER, ENGINEERS, AND BIOMECHANICS.
WIDE RANGE OF PRODUCTS i.e., COMING UP WITH FULL LINE OF MEN’S AND WOMEN’S CLOTHING THAT INCLUDES BLAZERS, MARINO WOOL HOODIES, MILITARY COATS, JEANS AND T-SHIRTS( 1000 TYPES OF CHUCKS ALONE )
WIDE PRICE RANGE WHICH VARIES FROM $45 TO $125 FOR T-SHIRTS AND FROM $295 TO $795 FOR OUTERWEAR AND JACKETS (AFFORDABLE TO HIGH RANGE PRODUCTS)
BOOST THE REVENUES i.e., $400 MILLION WHICH WAS 1.5% OF THE MARKET BUT WAS DOUBLED IN JUST 3 YEARS.
CHANGED THE DOWNWARD TREND OF SALES INTO UPWARD TREND.
OLD LOYAL CUSTOMERS OF CONVERSE WAS NOT PLEASED WITH SUCH TRANSFORMATION FROM CLASSIC TO FASHION CENTRIC STRATEGIES.
CREATES NEGATIVE PERSPECTIVE IN THE MINDS OF THE CUSTOMERS.
PE RFORMANCE STRATEGIES HELPED THE COMPANY IN MAKING THE SALES PROMISING.
THE PRODUCT OF CONVERSE WHICH WAS PERFORMANCE CENTRIC HELRPED THE COMPANY TO GAIN ITS OLD REPUTATION.
PERFORMANCE STRATEGIES HELPED THE COMPANY TO ATTRACT GEN-X .
VARIOUS PERFORMANCE BASED FEATURES LIKE SAFETY, COMFORT, AIR-BAG HEEL FOR WALKING ON AIR FEEL, ETC. HELPS THE COMPANY TO TARGET THE MINDS OF SPORTS LOVERS ( E.G.- C4880)
BARACK OBAMA WAS RECENTLY SEEN WEARING CONVERSE PRODUCT BASED ON PERFORMANCE STRATEGIES.
THE NEW PERFORMANCE DIRECTION MAY DO DAMAGE THE CORE BRAND.
PERFORMANCE IS FICKLE AND THIS POSES THE GREATEST RISK.
FASHION POSITIONING: THE BENEFITS TO POSITIONING CONVERSE AS A FASHION BRAND BRINGS WITH IT THE TREMENDOUS OPPURTUNITY TO PRODUCE LINE AND BRAND EXTENSION.
LINE EXTENSIONS INCLUDE ALL NEW VARIETIES OF “CHUCK TAYLOR ALL STARS” AND THESE LINE EXTENSIONS ALSO HAVE ALLOWED THE BRAND TO BRANCH OUT INTO NEW, UPSCALE OUTLETS.
PERFORMANCE POSITIONING: THE PERFORMANCE BASIS SHOULD BUILD ON CONVERSE TRADITION AS A COMFORTABLE, SUPPORTIVE SHOE FOR EVERY USE AND FOR PLAYING USE WHILE RECOGNIZING THAT IT’S NOT A VERY HIGH PERFORMANCE SHOE.
TARGETING : THE POTENTIAL TARGET WILL BE GEN-Y (ABOUT 70 MILLION IN NUMBERS)
HIGH DISPOSABLE INCOME, HIGH SELF-WORTH, COOL IMAGE MAKES THE GEN-Y MORE FAVOURABLE TARGET.
TARGETING: THIS APPROACH MIGHT WORK BEST WITH ADULTS OVER FOURTY. IT FITS WITH THE CURRENT PROMOTION OF GETTING BACK TO THE BASICS WITH YOUNGER FOLKS AS WELL AS OLDER FOLKS.