Converse
Identify and explain the core, actual, and augmented product benefits of the Converse Chuck.
“Chucks” are very basic shoes: high-top canvas; laced up; rubber-covered toes; in black, white and red; “Made in USA” blue label – and very affordable. Seemingly establishing a generic status, it easily evolved itself to aligned and corollary sports products and fashion. It became part of pop culture.
Identify 2 risks and 2 benefits of the licensing arrangement that Converse has with a producer in India.
Benefits:
Converse could avail of better manufacturing facilities; expose to comprehensive outlets for distribution; avail of better knowledge of the local market and can gain better access; avail of and the management expertise of the licensee.
Risk:
It is possible that the licensee can be an eventual competitor of Converse, as it can “cannibalize sales” that Converse may lose some royalties. There might be additional expenses for Converse with regards to further technical assistance; additional technical data; personnel training. Then Converse can become fully dependent on the licensee for the source of revenue. (World Trade Organization)
Has the licensing arrangement helped or hurt the Converse brand. Support your answer with an explanation and a source from online research.
To cut on production costs, the licensing of the production of Converse to a manufacturing in India was helpful. India is a very big consumers market and such domestic market alone is already an advantage for Converse to capture wider market and a faster pace. Even the neighboring viable markets around India would be accessible to penetrate – like Singapore and Malaysia. This would then be easier to conceptualize and coordinate between the licensed manufacturing company in India and Converse U.S.A. any new trends on the product line of Converse – i.e., the sports shoes. (World Trade Organization)
Identify 5 sources of brand equity for Converse and Chuck Taylor All Stars?
The brand equity of Converse and Chuck Taylor Stars start with them being the official shoes of the National Basketball Association for a good length of time. NBA allows its logo to be used by Converse. The brand and the shoes was the original basketball shoe product. Converse has very basic simple designs. Converse and Chuck All Stars are very affordable. Converse evolved itself to fashion statement and became part of the hip culture.
Research the current position of Converse in the market place. Has it changed strategy since the case was written? If so, how? If not, why do you think they haven’t? Support your answer with an explanation and a source from online research.
From the time Converse was acquired by Nike in 2001, it sustained its brands in its Chuck Taylors; All Star shoes; Jack Purcell Shoes; One Star Shoes; The Loaded Weapon (a reissue of The Weapon of 1986); the special editions of The Rams and Sailor Jerry; The Wade; All Star Revolution. On top of Converse offers a diverse portfolio of lifestyle footwear and apparel for men and women. All Converse products are globally sold in 160 countries. It is likewise sold in 25 retail outlets in the United States that are company owned. It licenses production in 100 countries. (Nike Company Overview, 2009)
From a 1983 sales of US$209 million; to a 2001 sales of US$185 million after the Nike takeover; to a 2005 sales of US$400 million – it is recorded that the fiscal year ending May 2007 showed a Converse sales performance of US$55.60 million. (Yahoo Finance, 2009)
Converse seemingly, under the umbrella of Nike, keeps on being in a seesaw situation. The performance track of its revenues is not impressive. And with all the efforts and renewed strategy since 2001, Converse is not showing signs of recovery to claim back the prestige and honor it holds as the one who invented basketball shoes.
References:
“Secrets of Intellectual Property: A Guide for Small and Medium-Sized Exporters”
International Trade Centre UNCTAD/WTO
World Trade Organization
World Intellectual Property Organization.
“Nike’s Brand Portfolio: Converse Inc”
Company Overview. 2009
http://www.nikebiz.com/company_overview/subsidiaries/converse.html
Converse Inc. Company Profile
Yahoo Finance. 27 April 2009
http://biz.yahoo.com/ic/42/42350.html
