Vans Skating on Air Case Solution

1. What were some of the key characteristics of Van’s earliest customers in the 1960s and 1970s? What was the public perception of skateboarding in this era?

Some of the earliest customers of Van, in late 1960s, were kids and young adults who were looking for customized shoes, in addition to the surfers. The company used to make customized shoes from its assortment of more than 50 fabrics and colors. The company also had the capability to accommodate customers with different foot sizes for just an extra dollar. In 1970s, a new wave with anti-establishment sentiments ushered in the American Youth who were crazy in exploring the limits of skateboarding. One such group was Z-Boys. The members of these groups were looking for rough and tough shoes, which can withstand the wear and tear of this reckless sport. Moreover, since the majority of the customers were in their teens or early twenties, they were price conscious and a pair of shoes in a range of four to seven dollars was ideal for them.

In 1960s, skateboarding was just another ordinary sport with not much charm in it, but with the introduction of Z-Boys and their new techniques, people from across the country started taking interest in skateboarding. In addition to the skate parks, new magazines were also launched related to this sport.

2. What was Van’s competitive advantage during its early days (in the 1960s and 70s)? What was its value proposition to customers?

The main factor that provided a competitive advantage to Van was its in-house production facility. During that time, no one in the industry had its own factory which gave an edge to Van. The company started customizing shoes, which attracted many kids from around the city. Plus, Van was also able to avoid the inventory problems that had severely affected other manufacturers. Moreover, its concise production cycle of less than three weeks also provided a great advantage to the company over its competitors.

The main value proposition of Van’s shoes was its affordability and durability. The company was making a rubber soled shoe, reinforced with clay, making it twice as thick as of the competitor. In addition to this, company also double stitched the upper canvas and made it completely washable. Above all, the price range of $3 - $5 for a customized Van’s shoes made it an affordable and attractive deal for the young and trendy customers.

3. How has the company’s competitive position and value proposition changed over time?

In late 1980s and early 1990s, a variety of economic and social factors affected the profitability and growth of the company. America was hit by a deep recession in 1991, whereas, in 1992, the Gulf war started causing oil shortages, which resulted in increased rubber prices. This situation was further worsened by change in customer preferences as a result, profit margins were severely affected and companies moved towards Asian countries for cheap manufacturing and labor cost. At this point, Van had lost its long term competitive advantage of having two in-house production facilities and concise manufacturing cycle because the production cost had gone high, and it was not feasible any more to continue the local production. Because the brand was strong and people used to associate it with skateboarding, surfing, beaches etc., the company decided to focus on its rich heritage and making Vans a life style brand. Since then, besides making shoes and apparels for nearly half a dozen sports, company is not only sponsoring skateboarding competitions, for both professionals and amateurs, but also operating 11 skate parks across the country. In addition to this, it is sponsoring movies and also plans to launch a new record label. In short, the company is in-line with its aim of becoming a life style brand by stepping in every ship, which has sports and youth involved. Now after so many year, the durability factor of Van’s shoes is still there, but customer takes pride in wearing its shoes because of its connection to the sport and rich history.

4. In recent years Van’s has expanded in number of directions. The company has

a. increased the number of sports it is affiliated with

b. diversified its product portfolio

c. expanded its distribution and

d. broadened its promotional mix.

Analyze each of these decisions in terms of their impact on Van’s customer base, its brand image and overall sports category.

Over the years, Van’s affiliation with the number of sports has increased considerably. Now, people don’t consider it as just a skate and surf brand, rather they recognize its presence in various sports. Van’s is now manufacturing shoes for not only the professional and amateur athletes, but its current target market also include non-technical and general consumers, who are interested in just the ‘skate-look’ at a reasonable price. In addition, to attract more customers and further build brand credibility, Vans also endorses around six hundred athletes across all of its core sports. Lastly, Vans has also carefully designed its distribution channels. Not all product categories are available at all places; rather product specification, pricing and target market is kept in mind before deciding its distribution channel. All of these steps have provided Vans an opportunity to capture a wide customer market. Maybe it is not possible to easily identify a common factor in Vans entire customer base, except that of age and interest in sports, but this has allowed the company to diversify its risk by not investing in only a couple of sports. Moreover, because of the diversified product portfolio, Vans has evolved into a comprehensive sporting brand, rather than a shoe maker. This has allowed the Vans to keep its customers involved at all times, across various platforms. Furthermore, this diversification and expansion of Van’s products and distribution with increasing interest from kids and teenagers has caused overall sports category to expand considerably, making it a more lucrative industry than ever before.