Branding is, in fact, in the spot these days. They are everywhere. Brands decide where economy or fashion goes. Brands gives names to new actions, make the world even more global and are synonym of power. Knowing how to create a reputation of the company with accurate strategies and acknowledging the risks of it, can bring fame and success. It is part of a company’s capital and because of that it needs smart and strategic management so it can generate profits. Converse has an interesting example of strategic brand management.
Converse started small, as a shoe company in 1908, USA. With more than 100 years of existence, Converse went from a rubber manufacturer (they even produced tires in the beginning) to an icon of self-expression, originality and independency. The brand grew this image reaching the right public in the right time. Starting with the Chuck Taylor All Star and aiming on the basketball, Converse passed to a manufacturer of military products during the war. Later, with the born of Rock and Roll, it became the symbol that holds until the present days.
Converse knew how to fight the competitors, to get out of bankrupts and to sustain it name with a strong design and adaptable performance to it public. Moreover, all of that was made with little effort, in a way that the brand achieved the level of awareness that dispensed advertising. Converse registered in 2011 more than 8 million of fans on Facebook (more than Nike and Adidas, main competitors) and when Geoff Cottrill, Converse’s chief marketing officer, was asked what the brand did, he replied: “Nothing! ” THE COMPANY History of Converse The history of Converse dated from more than 100 years.
In 1908, in Malden, Massachusetts, Marquis M. Converse started a rubber shoe company, based on the premise that he will do business directly with the retail store, with no intermediate. The idea worked, and in 10 years the company grew fast. In 1917, Converse continued to increase: they started producing rubber shoes for basketball and when Chuck Taylor, famous player, got involved, the brand became known within the United States. Chuck Taylor was fundamental to the power of the brand (his name was added on the shoe later) and was trough him that the shoe got its first association: Converse was basketball shoes.
Later to that, Converse had a period of management changes with ups and downs within the market. In 1933, “after providing protective footwear, special-purpose boots, parkas, and other equipment for the American Armed Services during World War II, the company concentrated on rapid growth in a civilian market. ” Going forward 50 years, the shoe company faced the first problems of competition. Still being a strong brand for basketball shoes, Converse relied on a supposed deal with the popular player Michael Jordan, hoping that will launch the brand to an untouchable place in the market.
However, Jordan seal the deal with Nike and on the late 1980’s Nike popularity soared around the USA and the world. Converse fell behind Nike and other sports brands. Kirk Wakefield, professor of Sports, Sponsorship and Sales at Baylor University said: “Converse lost its way when it did not shift as quickly as the industry. It's probably because they were originally more of a manufacturing company. They had that approach. ” On the 1990’s, Converse struggled to stay strong in the market, appealing to the ‘retro’ style of the brand. The company injected large amount of money in advertising.
The marketer planned to spend more than $50 million in 1995. The target was teenagers and the approach was the “hipster” idea of the shoes. Since they had practically lost the sports market, the approach of Chuck Taylor and Jack Purcell shoes as a casual style was a brawl to sustain, since the trend not necessarily saw them as a fashion solution for that time. The brand had a bankruptcy in 2001, resulting in its sale by Nike in 2003. Nike maintained the brand, without changing the aspect of the shoe. Converse was the first athletic shoe marketed by Nike without bearing the Nike name.
In my opinion, the purchase was a great deal for Converse. Since both companies were competitors but at the same time had a different core products (Nike was focused on the hard sports image and Converse in the retro-look style; Converse was known for its low prices, Nike’s could go to double of the price), the buying was the opportunity to Converse rebuild itself and gained the market it owns today. The chief executive of Converse at that time, Jack Boys, referred to the company's troubles and changes. "Over the past two years, we have rebuilt and reinvigorated the Converse brand," Mr.
Boys said. "But our job is not done. " Under Nike ownership, Mr. Boys said, Converse hoped to expand further internationally. It’s estimated that more than 60% of Americans own or has owned a pair of Chuck Taylor All Stars during their lifetime according to Hal Peterson. Because of the heritage and respect that Converse had built over the years, the brand maintains in the market till the present date. Different generations became fan of the shoes when they discover it. With more than 100 years in the market, that is very impressive.
Converse knows how to adapt itself to the generation and to the demand of the new fans. As an example, in 2010, in attempt to draw the attention of young shoppers, even teens, Target, the U. S. discount department store, launched a social media campaign to announce its partnership with Converse. Videos of a young New York singer/songwriter set the attitude for the Converse One Star brand, which asserts, “Everyone is a star. ” While the brand rebuilds its image to achieve new fans, the old fans never stop using it. BRAND MANAGEMENT About brand equity
To analyse the aspects of the brand management of Converse we need first get to know some basics concepts concerning the universe of brand. But, how do we define "brand"? Some marketers and the common sense will say something such as "a brand is the company image". But a brand is more than just your company image. It also includes your customers' experience and the expectation you set when doing business with your company. In short, it is promise, it is value. Brand was, maybe 500 years ago, the way of farmers to identify it cattle avoiding problems such as stealing of animals.
Was a matter of rights, ownership. In other words, according to Cheverton, was a way to say: “this is mine, keep your hands of! ” The analogy made by the author is interesting since today’s idea of brand is “get your hands on! ” As said before, brand is related not only to the image of the company, but the experience and reaction of the consumer on that image. This value that the brand acquires through awareness, quality, associations, and loyalty is what we call brand equity. Here is the challenge: a good management of these assets is the core tool of a strong brand.
When we meet this area of marketing management, when we discuss brand equity it becomes hard to measure it. Logo, sign, symbols represent a company and a brand, but how do we list the relationship or the psychological response from the costumers? Brand equity is no more than that, the response emotional or psychological of the brand by the consumers. As an example, we have the iconic bitten apple, representing the homonymous technological company. The icon in fact represents the company, but the suggestion of trust and hi-tech products is what strength and give value to the brand.
Converse grew its brand in an interesting way: the brand was always recognized by the star insignia that was created on the first All Star launched on early 1930’s. However, more than having the logo, the chevron and even the signature of Chuck Taylor on it, Converse used the post-war atmosphere of patriotism on USA to create the distinct American image with the Converse Yearbook. The yearbook brought the high school and athletes in daily situations using the iconic rubber shoes. With this idea, Converse developed into the symbol of fashion and “cool” image that reflected until the present day.
Another key point of Converse brand equity, is loyalty. According to Cheverton: True loyalty results from the quality of the relationship built between the supplier and the customer. If this involves direct human contact then there are significant opportunities to build loyalty through personal behaviour, but in the absence of that, the brand is the main and most effective representation of the relationship. (Cheverton, 2006) Converse built its loyalty throughout more than 100 year in the market. Within ups and downs, the unique design and the promises of quality shoes, the American image always remained present in the brand.
Converse continuously used of a strategic management of the brand, reinventing itself to new generations, but the brand achieved the point of equity that does not make the old generations behind. Brand Positioning Brand Positioning is “. . . the act of designing the company’s offer and image so that it occupies a distinct and valued place in the target customer’s minds. ” (Philip Kotler). This statement generalizes the concept of brand positioning, but it’s not that simple. A lot of brands can come with a great idea and delivery the promise made it, but if the message of the brand does not stick on the costumer mind, it does not last.
As said before, brand helps the costumer to choose, it reduces time and risk. So if the brand is not bind enough, it loses the power of choice. To know how to position a brand, it is necessary understand the market: the target consumers, the main competitors, what is the similarities and differences between them. It’s what we call Points-of-Parity and Points-of-Difference. Points-of-difference (PODs) are attributes or benefits that consumers strongly associate with a brand, positively evaluate, and believe that they could not find to the same extent with a competitive brand.
Points-of-parity associations (POPs), on the other hand, are not necessarily unique to the brand but may in fact be shared with other brands. Converse starts having competitors in the 1980s. Nike and Reebok were the greater competitors that time, creating shoes for basketball teams and running shoes. Converse stressed advertising and promotional campaigns to compete with those brands. However, even losing space to others brands, Converse always had associations with it public, maintaining itself as a retro-fashion, comfortable, simple shoe. At the same time, being a shoe company the parity with other brands is simple: it is footwear.
Converse were not (and is still not) the only company who offer comfort in its shoes, and we could say more, especially for running shoes were Converse did not stayed strong, others brands were better on that. Converse had to establish (and indeed had it) the Points of Difference to outstand in the market. Another asset of brand positioning is targeting. As pointed by Chverton: Good segmentation will give you a deep understanding of your customer’s needs, attitudes and behaviours. Matching these with your own capabilities will help you select the specific benefits that make up your offer.
This will be your specific positioning – the value given to the customer, the representation of your leading capabilities, and your basis for competitive advantage. To some degree the number of benefits identified will depend on the number of segments that the brand is targeting. In general, the greater the number of benefits argued, the more diffused the brand definition becomes. While this might allow the brand to work across many segments, it will also tend to leave it open to competition that might take a more single-minded approach.
(Cheverton, 2006) Understanding the consumers mind is essential to the success of the brand. Converse knew in its first years what the consumer’s needs were: a shoe to play basketball. Of course the time changes, so as the consumers and the target, but Converse is still well positioned as a top shoes brand. That is because Converse knew how to position itself over the years, during which changes that occurred in history and how those impact the target. Today Converse is main focused in maintain the status of retro-fashion and at the same time bringing this concept to the youth generation.
Is worth to mention that Converse also knew how to use of famous athletes and music stars such as Kurt Cobain to reinforce the quality of the brand. That brought the brand to a remarkable level of recognition. Corporate Brand Management A strong brand has a product or service to back up its value. A product or service will have a company to sustain and deliver the quality and the compromise that is promised. Although, to reach that point there is an important step on the brand management: the corporate branding. As Roll affirms:
A strong corporate branding strategy can add significant value in terms of helping the entire corporation and the management team to implement the long-term vision, create unique positions in the market place of the company and its brands, and not the least to unlock the leadership potential within the organization. Hence a corporate branding strategy can enable the corporation to further leverage on its tangible and non-tangible assets leading to branding excellence throughout the corporation. (Roll, 2004) Converse, as said before, had a brilliant strategic management throughout the years.
We can talk about the Converse Corporate Branding with the help of the seven points that a corporate brand will have, according to Okuneye: 1. A rich heritage. Converse was founded in 1908 and still persists to this day. With changes in management while maintaining principles of quality and design, is still a strong brand in the area of ?? footwear. 2. Assets and Capabilities. When Converse launched the All Stars, the combination of rubber sole and canvas won the attention of consumers. With time, Converse also did leather and other material shoes, but the canvas always was the bread and butter of the company.
3. People. It is hard to not mention Chuck Taylor in Converse’s history. Chuck Taylor was in the 1920s to Converse what Steve Jobs is today to Apple. Was actually Taylor who drove most of the Converse fame and success. 4. Values and priorities. Converse main strength was the Chuck Taylor design. Although the company changed the management many times, the competitors took part of the market from Converse and so many other problems the company faced, the design of the shoes sustained and is an icon today, like the Coca Cola bottle. 5. Local or Global frame reference.
Converse became global specially when got to be the sponsorship of Olympic Games in 1984. Being a symbol of fashion and self-expression, it was well displayed by famous athletes and musicians making fans around the world follow they idol trends. 6. Citizenship programs. Nike has, together with Converse, a program of recycling old shoes. The program already collected more than 25 million of shoes. 7. A performance Record. Convers produces more than 85 million of shoes every year and delivery the same promise of quality. The company also has a plus which is being always basic and always affordable.
Regarding Corporate branding, we cannot forget a big fact in Converse history. In 2003 Nike purchased the company for U$ 305 million. Under new management, Converse increases in performance and fashion. Nike implemented its business strategy and allowed to not use the famous "swoosh" brand. Nike also injected money into advertising, since was over than 10 years that Converse did not advertise anything. The acquisition of Converse by Nike was a situation of "everybody wins". The two competed strongly in the section of casual shoes.
With the purchase, Nike wins the market again and especially to maintain Converse as the brand that America love it, enables new solution for the rebirth of Converse. Brand stretching Converse nowadays is not only a rubber shoe company. They produce accessories such as watches, sunglasses, bags and also all kind of clothing. It is understandable that they did not stop on the footwear when the brand won the reputation. If their shoes gave the message of self-expression and “being cool”, so the clothes and other accessories. That is what we call brand stretching.
Converse is famous because of its shoes, the Chuck Taylor. Nevertheless, in 1994, the company acquired the then popular tennis shoes, Jack Purcell. By doing that, Converse expand the brand to a new public, maintained the Purcell’s design. The company also kept the brand Jack Purcell on its shoes, so it would not be a difference product to the consumers of Jack Purcell. Stretching the brand is a way to continue the brand equity. Converse applied it brand equity (quality, fashion) on Jack Purcell and the other accessories and clothes that carry the star insignia.
There is always a risk Brand stretching, since the public can reject the new product. But with converse that did not happen, mostly because of the heritage that the company transmits. CONCLUSION AND RECOMMENDATIONS It is unavoidable saying that Converse is a great brand. The brand achieved, within the more than 100 years of existence, awareness and global recognition. Converse has today more than 24 million fans on Facebook, which is more than the parent brand Nike and more than competitor, Adidas. Converse goes for the emotive reaction that the brand evokes, the rebel-rock’n’roll that the brand grew after the basketball era.
By doing that, the company achieves the right position in the mind of the consumer: even if they do not use a Converse every day, they do have one or two pairs of Chucks in the closet. As a recommendation of this work is Converse could position itself as a fashion brand. The brand has the strong appeal of the sports, but I believe the main sell point today is the appearance. The brand could expand the brand extensions and product lines. A risk would be a negative image from costumers that sees the brand as a sport brand or a “rock style”. Having the fashion appeal could take away the brand image of “Chucks”
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