WENATCHEE VALLEY COLLEGE

Converse
Plan

Marketing

Group Two
Over the past few years Converses product line of Chuck Taylors has reach a market maturity
phase
its mostChandler
frequent buyer
crowed.
As a Villegas-Perez,
result we are going Marcelo
back through
the
Kyli within
Erickson,
Engel,
Kevin
Giles,
AutumnProcess
Ferguson,
Payton
Marketing
to create
a new Garcia
Marketing Plan that targets the same group of individuals
3/11/2014
but
with a different strategy. This time around we intend to market Chuck Taylors as an
accessory. Our new slogan could be A pair for every occasion. Converse shoes need to be
seen as being a necessity of every wardrobe and our strategies will make this happen. But we
didnt just want to focus on that aspect, we also wanted to include a few promotions and offers
that would incense any buyer to purchase through Converse and so we included ways to fix the
arch support and different types of sales. So that even when our consumers are buying their
accessories they are getting affordable and comfortable shoes as well.

Defining the Problem

Converse Chuck Taylor shoes are in the Market Maturity phase but we have already released our
Spring Collection and dont have any more money to spend on changing the shoe. We need to
revamp our marketing strategy in order to improve sales among our 18-24 year old target market.

Situation Analysis (The following information is based primarily on the U.S. market only)
In 1908 Marquis Mills Converse opened Converse Rubber Shoe Company, a company designed
to provide winterized footwear for men, women, and children. In 1915 Converses role in the
athletic shoe industry began. Tennis was their introductory sport. This lead to Converses much
larger role in basketball. In 1921 the legendary Charles Chuck Taylor gave Converse Rubber
Shoe Company their big break by sponsoring the All-Star shoe. At first Chuck Taylor merely
traveled around the country and, while teaching basketball camps for high schools, sold the
Converse All-Star as it was. However, with Chucks innovative ideas for the design and
marketing of Converse All-Stars it wasnt long before he was thoroughly associated with AllStars and the quintessential Chuck Taylor All-Star shoe was born. In 1932 Converse added
Chucks autograph to the All-Star patch, sealing the deal on the now well-known Chuck Taylor
Converse.
For over 100 years Converse has managed to remain an iconic part of American history; but not
without many roadblocks and setbacks. Converse, now known as Converse Inc., has been a
subsidiary of Nike since their 2003 buyout of 305 million dollars. While being treated as its own
separate company, Converse Inc. nonetheless ultimately answers to Nike. Since Nike took over
for Converse in 2003, profits and sales have increased. In 2012 Converse accounted for 9.5% of

Nikes revenue and 14% of Nikes earnings before taxes. Converse itself accrued 1.32 billion
dollars in revenue for the year 2012. That is more than four times the amount Nike bought the
company for in 2003. Over the last several years Converse, under the guiding hand of Nike Inc.,
has managed to yet again turn its company around for the better.
Although we cannot get all of the financial data we might need to create a very accurate
determination of where Converse Inc. is heading, there are a few things we can ascertain. We do
know that between FY10 to FY11 the Other Business net revenue saw a 9% increase; between
FY11 and FY12 there was an 11% increase; from FY12 to FY13 the Other Business saw a 13%
increase; and in FY13 there was another 9% increase in net revenues. Nikes Other Business,
including Converse Inc., is leveling out. They have hit their market maturity phase, just as Nike
has hit a market maturity phase by showing only the smallest changes in profit over the last few
years. With Nike, though, we expect to see small changes in profits and revenues because the
company is so massive that they already see huge profit margins. The Other Business are of a
much smaller size and thus we expect larger profit margins because the company has a lot of
room to grow.
These small changes could be due to any number of issues, the first being the external
environment. Our economy is currently facing large numbers of unemployed individuals, higher
inflation rates, and an increasing deficit. Fortunately for businesses, there is also more available
credit for individuals facing monetary problems and socially we have become a more
materialistic society so the possibility of someone buying a shopping product versus convenience
is very likely. Society has also become very focused on individuality/originality, which again
increases the chance that consumers will want to buy a shoe based on its ability to fulfill these
worldly desires. Fortunately for Nike and Converse, e-selling has become very popular in the last

few years. The availability to shop online not only appeals to people because of the convenience
but also because of the availability for customization, and Converse has done very well at taking
advantage of that.
The second issue that is likely to affect the sales of Converse shoes is the consumers in the target
market. Converse uses a multiple target approach but the largest target market is the 18 to 24
year old, male and female crowd, which consists of a little over 25 million individuals in the
United States alone. This group is highly individualistic and Converse does an excellent job in
targeting them with their versatile styles and design your own options. Converse sells itself on
being idiosyncratic; it doesnt matter if youre a rock star, a rapper, a basketball player, or a
fashionista; Converse has a shoe to fit all styles. They pride themselves on being the shoe for
individuals, saying that, If youre wearing Converse, you know who you are. Unfortunately, as
of late, Converses consumer reviews have not looked very optimistic. Most consumers these
days think Converse is overpriced for the quality they are getting. There have been several
different reviews that state that the shoe falls apart before you can wear it out. As well, many
consumers do not like that most Converse Chuck Taylors are made out of canvas because they
cannot be worn in inclement weather.
Another issue that will effect Converses market growth is the fact that there are no longer any
pro basketball players promoting the Chuck Taylors. With the fall of the basketball sponsorship
Converse loses the athletic edge they have held onto for so long. Converse isnt letting that stop
them though. They have branched out and begun partnering with many celebrities over the years,
from Kurt Cobain to Wiz Khalifa. Converse has also participated in different campaigns to help
raise awareness for social issues (i.e. the RED campaign and the CONS project), which in turn
reinforces brand awareness around the United States.

One of the detrimental causes behind Converses lack of growth is competition. Nike Inc.
acquired Converse in 2003, which means that we left Nike out of their competitors because they
both fall under the Nike Corporation (which ranks number one in market shares with 16.4%).
This leaves Converse with a few main competitors: Adidas, Puma, Vans, and Toms. For this
paper, we are going to go in depth with each competitor listed.
Adidas:
Adidas is the second largest sporting goods company in the world (after Nike) with market
shares at 13.8%. The lifestyle section of Adidas is labeled Adidas Originals. To go along with
Adidas Originals, Adidas owns Reebok, which also has lifestyle shoes. From a marketing
standpoint, they are a dangerous company to compete with because they have many celebrity
endorsements, including Kanye West, Justin Bieber, Katy Perry, Nicki Minaj, Jeremy Scott, Big
Sean, 2 Chainz, B.O.B, and Selena Gomez.
Puma:
Puma is a company that was born in 1948 with a split from Adidas. Puma is fourth largest
athletics apparel company in the world with 6% market share. Puma currently has 9,500
employees and distributes its products in more than 120 countries. Now, Puma is one of the
largest competitors in the lifestyle department. Marshal Colen, Chief industry analyst at NPD
group stated, For Puma its become more about style.
Vans:
Vans is a definite competitor with Converse. As of August 2013, the brand is active in the actions
sports industry and sponsors skateboard, surf, snow, BMX, and Moto X teams. However, most of
their profits come from their appeal as a casual lifestyle shoe company. Their shoes are mostly

similar with Converse. Both Converse and Vans typically consist of a durable canvas upper and a
rubber outsole. When it comes to rock-and-roll band endorsements, Vans is very closely matched
with Converse. Converse has sponsored Black Sabbath, AC/DC, Blondie, and Green Day. Vans
has sponsored The Beatles, Pearl Jam, The Sex Pistols, and Iron Maiden. One area where Vans
beats out Converse comes in their Warped Tour. The Vans Warped Tour is a touring
music festival. The tour is held in venues such as parking lots or fields upon which the stages and
other structures are erected. Vans has sponsored the tour every year since 1995. This tour helps to
make Vans popular amongst the youth and fans their.
Toms:
Toms is one of the newer competitors for Converse. They were established in 2006, but have
rapidly risen in the rank of shoe companies. Their shoes are typically slip-ons and made of
canvas. By 2011, Toms were being retailed at over 500 locations. If their trajectory over their
first eight years stays the same, they will be one of the largest shoe companies in no time at all.

Target Markets
The existing target market for Converse at this point in time appears to be the youth or people
with a rebellious edge. We agree with this current target market. Converse has lost its athletic
advantage that it used to have, and now Converse is more of a fashion statement than anything
else. We believe that they should stick to the ideal target market with relatively few changes. We
designated the new Target Market as the age range between 16 and 24. We are marketing our

product under the idea of Converse being a younger, more hip shoe. Since we are aiming for
anyone with a job, we aim for the sixteen year olds on the lower end of our scale, with the age of
24 being the older edge of the plan. The individuals we are looking for are highly materialistic
and socially conscious. To this target market it is very important to fit in, while at the same time
standing out. Converse shoes are perfect for this, they are shaped the same but with the different
colors, styles, and designs.

SWOT Analysis
Strengths:
- Strong Brand Identity
- Owned by Nike
- Consumer loyalty
- Iconic/ Historical Reputation
- Cost of shoe compared with other brands
- Uni-sex/Versatile
- Lots of retailers
- Partnerships (Red, Black Sabbath, etc.)
- Limited customization

Weaknesses:
- Not much advertising
- Cost of shoe compared with imitators
- Tough competitors in a smaller market, meaning a limited share
- Widespread Uncomfortable opinion
- Limited customization

Opportunities:
- Well-known brand
- Being owned by Nike may mean an increase in company advertising
- Promotions with other companies
- Sponsorships
- New Partnerships
Threats:
-The industry is very price and fashion sensitive
-Imitating products from various generic companies
- Brand delusion
- Bad reputation

Research Questions, Findings, and Analysis

To get a good understanding of what it is our consumers want out of Converse shoes, we asked a
total of 35 people to answer a few short questions. We really wanted to see where our target
market was going to be so in our surveys we included a couple of questions about age, sex, and
whether you do or dont wear converse. Our findings told us that 23% of our survey takers who
answered yes to wearing converse were between the ages of 18-24. Out of that age range 63%
who answered yes were male and 38% were female. The 18-24 year olds were our largest group
of Converse wearers so we decided to stick with that age range for our target market. Over all
37% of our participants between the ages of 16-51+ answered yes to wearing Converse. 54% of
those survey takers were male and 46% were female. Totaled, 54% of our participants were
between the ages of 18-24, 23% were between the ages of 25-35 and the other 24% were evenly
distributed between the remaining age ranges. Out of those groups, 57% were male and 43%
were female. We also wanted to know whether individuals shopped more frequently online or in
stores. Our surveys told us that approximately 74% of people prefer to shop in stores than online
(23%). The most common stores were Target (which already sells Converse Cons) and JCPenney
(which already sells Chuck Taylors). When we asked between Converse and its three main
competitors, which would people prefer to wear, 39% of the participants said Adidas and 36% of
participants said Vans. Converse ended up the least preferred shoe at 12% with Puma barely
making it above them at 14%. We also gave a couple of options to physically alter the shoe and
asked people what, if anything would make them want to wear Converse shoes. 43% of
participants said better arch support might influence their decision. Durability and Graphic
Designs tied at 21% each and Wider Shoes brought up the rear at 10%. We also received 10% of

other answers that were either hard to read or unusable. One of our questions asked the
participants if they believed Converse were being sold at a reasonable price. We did receive 11%
of I dont know answers but 51% of individuals said that they believe converse were reasonably
priced and 37% thought they were too expensive. This data was a determining factor in where we
would set our price during our marketing strategy. Finally, we asked if Converse were made
more easily accessible would more people be inclined to buy them and our results were not what
we expected. 54% said yes they would buy them and 43% said no. This showed us that even if
we did increase the number and variety of retailers it would be unlikely that Converse would see
a large increase in sales. We would assume what little increase they saw would not cover the cost
of increasing their retail locations.

Recommended Strategy with Outlined Goals

We desire to make our product a specialty product for customers as opposed to a convenience
product. We dont want to remove the convenience of shopping entirely but we do want to focus
on the idea of Converse being an accessory. We are looking for businesses to buy custom-made
Converse shoes as a way of marketing by placing their logo on their employees shoes. Right
now, our product seems to have gone through the product life cycle a few times. Converse had
their highlight of popularity in the 1950s and 1960s, but then rose on a surge of popularity
when grunge music became more popular in the early 1990s and then with west-coast rappers
around 2000. However, Converse became unpopular for a time in the early 2000s before being
purchased by the Nike Incorporation in 2003.
The new product development requirements would be increasing the number of employees we
have in order to reach out to businesses who might want to buy Converse as a company shoe.

Primarily we are targeting businesses such as Starbucks or Dennys who already require a
uniform to be present during business hours. These businesses would have the ability to have
their logo incorporated on the shoe along with the Chuck Taylor insignia. This would require
new money to pay salaries for the employees time, as well as the time it would take for finding a
niche for your employees in their field and the time it would take to market this idea to
businesses.
There shouldnt be a need for product liability, safety, or social concerns regarding Converse
Chuck Taylors. The only standout might be the fact that our shoes are primarily manufactured in
South East Asia in sweatshops and thus the manufacturing could potentially be lower than U.S.
standards. Under our marketing plan Converse will continue to produce shoes overseas due to
the extensive costs (i.e. higher wages, shorter work hours, safety regulations, etc.) and minimal
cost benefits of producing in the U.S. However, this is not a situation which is uniquely attached
to our specific product. Our specific good is a set of shoes (Chuck Taylors), which can be
customized for the customers needs. The product itself consists of a rubber outsole, a removable
cushioned midsole, and an upper which varies by style of the Chuck Taylor. The upper might be
a variety of materials ranging from different types of canvas to knitted fabric (depending on the
model and the custom preferences from the customer). The supportive services provided would
just need to be a customer service line or phone bank. Here we will have a set of employees
dedicated to help out the troubled customers. Our warranty policy takes care of all manufacturing
defects within a one-year timeframe. Converse as a company will replace the shoes if the
problem is a defect in the shoe manufacturing process (IE: incorrect stitching leading to a quick
disintegration). All claims and/or complaints will be handled on a case by case basis. In order to
receive a reimbursement from Converse the customer will need to mail in the defective product

for examination. If Converse deems that the product was faulty, Converse will send a
replacement pair or a refund check per request.
As Converse has been around for over a hundred years, so they carry a certain level of brand
recognition primarily with those customers who have been longtime purchasers of Converse.
However, in recent years Converse has lost some brand recognition with the younger generation
due to brand dilution. Since Converse is not incredibly difficult to manufacturer, the company
has drawn a lot of imitators. These imitators create Converse-esque shoes that make it harder
for current consumers to differentiate between brands.
Our revised marketing plan for Chuck Taylors doesnt move them to any other specific product
line. Other than the possible partnering with companies, we will not be changing anything
physical about the product.
Recommended Distribution System
In order to meet our marketing criteria we have decided to try selling our shoes at higher end
stores. Converse already distributes through JC Penny, Fred Myers, and Costco but these stores
dont necessarily meet the target market we are trying to acquire We want to take Chuck Taylors
out of Costco and start selling them to more fashion conscious stores such as Buckle, Macys,
Tillys, Forever 21, etc. We want our target market to think of Chuck Taylors in a fashion sense,
so we need to send the shoes to stores that would reach our target market. Along with the new
outlets we would like to have excellent shelf placing so that when customers enter these stores
they are more likely to see the Converse shoe which will also increase the promotion of our
product.
Along with our new retailers we will include distribution promotions such as free shipping on
orders one hundred dollars or more. Along with that we will offer free shipping during certain

seasonal times like right before summer and during the fall back to school shopping. We know
that there will be a lot of consumers looking to buy shoes during this time and with a new
marketing plan this could boost up our promotions and gain some sales.
As for the packaging itself, before mailing we would be packaging in just about the same manner
as the original packaging of Chuck Taylors. However, along with the customers order we would
include a draw string bag with the Converse logo and motto printed on it. We will keep the
regular flat rate shipping of $5.95.
Recommended Pricing
As far as pricing goes, one of the most common complaints with Converse is their lack of a
cushion. In our survey, 34% of people surveyed said they would like more arch support. We
think that Converse should offer better quality insoles for only $1.99 more. This deal would
certainly increase a selling point of the shoe, because many customers take issue with the lack of
arch support currently offered in Converse. We also think that Converse should create more
competition between companies by slightly dropping the price of their shoes, without changing
the quality. Finding this equilibrium would be golden for Converse, considering the fact that they
have so many imitators. We think Converse should sell their childrens shoes starting at $29.99,
with an added $10.00 for customization. For teens/adults, Converse should start selling at
$39.99, plus an added $20.00 for customization. For Back to School or the holiday season we
would suggest that Converse offer a Buy one, get 50% off discount. We will also offer a yearround Buy two, get the third pair 50% off discount in order to increase our sales and push our
marketing strategy. We also propose that retailers or wholesalers should be able to trade in their
slower selling inventory for a small fee. In this ordeal, Converse will cover any damages during
transport.

Recommended Promotional Effort

The promotion goal of Converse is to maximize sales. The best way to go about this is to
increase the level of advertising. To do this, we propose that Converse uses an aggressive
marketing strategy. Converse should have a marketing blitz, where they pay for a lot of
advertisements over a short period of time. In order to accomplish this goal, Converse should use
multiple ways of advertising: radio, billboards, television commercials, and celebrity
endorsement. We think that perhaps the best way to use celebrity endorsement would be to
follow in the footsteps of a marketing system that works. The example that we are looking to
replicate would be the use of Air Jordan shoes in the popular nineties sitcom, The Fresh Prince of
Bel-Air. During the show, Will Smith almost exclusively wore Air Jordans. This marketing
strategy worked well, as the celebrity advertising was very successful in selling shoes. An
example of a television show we were thinking of might be The Walking Dead or Archer.
Similarly, you could use celebrity endorsements on the big screen. A good example of this was in
the movie I, Robot were Will Smiths character says a few short lines about his character wearing
Converse even when the movie is set in a fictional 20. In any case, the more publicity received
by celebrities wearing Converse would have a positive impact on profit. As well we are trying to
market Converse as being an accessory. Thus we would have television commercials or billboard
ads that show A-list celebrities wearing a different pair of Converse for every outfit. We want
consumers to know that Converse isnt just a staple, its a fashion necessity.

References

http://www.converse.com/about/about-us.html
http://www.vault.com/company-profiles/general-consumer-products/converseinc/company-overview.aspx
http://www.hoovers.com/company-information/cs/companyprofile.Converse_Inc.ec6db8689a75a503.html
http://en.wikipedia.org/wiki/Converse_(shoe_company)
http://sneakernews.com/tag/converse-chuck-taylor-all-star/
http://www.kicksonfire.com/tag/converse-chuck-taylor/#page-11
http://chucksconnection.com/history1.html
http://www.ldfootcare.com/converse-running-shoes.html
http://investors.nikeinc.com/files/doc_financials/AnnualReports/2012/docs/nik
e-2012-form-10K.pdf
http://investors.nikeinc.com/files/doc_financials/AnnualReports/2013/docs/nik
e-2013-form-10K.pdf