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 Taylors 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 1920s, 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 companys 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?
CORE BENEFITS
Classic kicks that fit
any look
Perceived look of
self-expression,
free-spirit and
creativity
Easy to care for
ACTUAL
BENEFITS
Quality
Comfort
Brand name
recognition
Packaged in color-
themed shoe boxes
Thousands of
choices; create your
own


AUGMENTED
BENEFITS
Create your own
option
Limited edition and
web exclusive offers
Easy returns within
30 days
If purchased at high-
end retailer,
satisfaction
guarantee

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?

BENEFITS
Minimize production costs
Global brand recognition
Increase of international sales

RISKS
Removal of Made in the U.S.A. label
Perception of poor product quality
Job cuts

THE COMPANY
HELPED Choosing to outsource has helped make Converse the success it is
today. Outsourcing helped the company to cut costs; thus decreasing expenses
and increasing revenue.
THE BRAND
NEITHER HELPED NOR HURT Converse brand recognition was established in
the U.S., so I dont believe outsourcing affected the brand. It is the oldest brand
of athletic shoes turned 100 in 2008.
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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?
CONVERSE
Brand Awareness/Recognition
Logo
Brand Loyalty/Insistence
100 years old in 2008
Consistent, Strategic Marketing
Cost Always Basic, Still Affordable
Effects Unique to Brand
Rubber Toe and Sole
Canvas
Brand Associations
Retro-fashion
Rockers
Artists/Actors
Skaters
Surfers



CHUCK TAYLOR ALL STARS
Brand Awareness
Chucks
Brand Loyalty
Chucks and other variations of the All Star
Strategic Global Targeted Marketing
Perceived Quality
Every Day kicks
Comfortable
Effects Unique to Brand
Design Your Own
Refusal/lack of alternatives
Brand Associations
Basketball
Famous Athletes/Player Endorsements
Unisex



QUESTION 4: Analyze the Nike-era direction of Converse.
NIKE-ERA DIRECTION OF CONVERSE
2003: Nike purchased Converse for $305 million
After the buyout, Nike left Converse management to implement its own business strategies; also allowed
Converse products to go without the Swoosh logo.
Nike invested in Converse advertising: 2004 more than $4 million ; 2005 over $17 million.
Marketing investment allowed for first Converse television commercial in over 10 years : The first school.
Nike moved Converse in two directions: Fashion and Performance
Nike gives access of labs, designers, biomechanics experts and engineers to 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 APPROACH
Benefit: 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 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?
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100 YEARS OF CONVERSE
Music is a huge theme of Converses 100th Anniversary

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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
CONVERSE WEAPON COMMERCIAL
SUBMIT YOUR OWN 30 SECOND COMMERCIAL ADVERTISEMENT
WWW.CONVERSE.COM