Maryam Ejaz

Sec-A

Marketing Assignment (chp #15)

Pepsi: Promoting Nothing

Q1) what markets should Pepsi target for Aquafina?

A1)

Q2) what advertising objectives should Pepsi set for Aquafina?

A2) The overall effects of entering into a licensing agreement were:

One major benefit was that the brand gained official recognition due to the
licensing. Secondly, the certification of the brand resulted in increased
customer reliability and higher satisfaction.

Despite these benefits, one major negative factor attached to it was that
the brand was now booked and so could not be used by any other brand.

As for the company, getting the brand licensed not only increased the recall
rate but also resulted in high consumer preference and loyalty. Since India is
a low waged country, Converse was able to lower its costs. Moreover, the
profitability and stability also had an overall positive impact due to
outsourcing in India and it also was beneficial since the company had already
lost some competitive edge after closing down the U.S. plants.

On the contrary, the licensing might have had a major impact on the
company due to increased regulations and also resulted in the firm incurring
expenses to get the brand licensed. Then, the company would even loose
some control after closure of the U.S. plants. Alongside, Converse might also

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have to reduce the product quality due to shortage of funds and might loose
its potential customers.

As far as the brand itself is concerned, the licensing is prone to have a

positive effect on the long term aims of the business. This indicates that if, in
future, the company wishes to launch any product under this brand name, it
will be able to do so easily since it will already be authentic and authorized.
But we can say that it turned out to be a positive indicator overall.

Q3) Converse and Chucks are great brands—known around the

globe. What do these brands stand for today? What are the
sources of their brand equity?

A3) Chucks, when introduced in the market, were a bang on. They were “the
shoes to have”. The product line of Converse had a wide variety including
athletic, running and basketball shoes. Not only this, Converse was once the
only sporting goods company sponsoring the Olympics. But later in 1992,
due to rise in its costs, Converse faced a dip in its success path and had to
close down its U.S. plants thus loosing some competitive edge. At that stage
it tried to launch new types of shoes, some of which failed, and it even tried
to follow the changing customer demand patterns, but still couldn’t make up.
By the end of 2001, it picked up sales and improved its brand preference and
brand equity but still wasn’t able to take it to the original level. Things didn’t
change a lot even after Nike’s takeover.

Moving towards the sources of brand equity of Converse, one of the major
factors supporting it was the affordability; it was available for $35 in the
market. Converse aimed to position itself with respect to beliefs and values
and tried to tap the emotions of the target customers by using personalized
marketing activities i.e. the ads and the tag lines saying “The First School”.

The name selection was also a pretty good fit with the requirements
including the name being differentiable, extendable, capable of registration
and remember able and pronounceable.

Then the brand sponsorship was done by “licensing” which helped Converse
gain an official recognition globally. To some extent it also contributed to the
rise in the brand preference and brand loyalty of Converse.

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Finally, Converse also tried to lengthen the brand by increasing the product
range. Starting with running, athletic and basketball shoes, it also started
producing EZ Chucks for the customers looking for ‘retro’ and ‘Magic Line’
for children.

Q4 What should Nike do? Should it go second tier with

Converse, position it as a fashion statement, develop it as a
performance brand, or something else? Defend your position.

A4) Nike has to consider many options while trying to consider what it
should do with Converse. If it opts for the second tier option, although it will
benefit from the higher market share and customer equity but in joining two
brand names, the original meaning of Converse might be lost. Then, trying to
position Converse as a performance brand is a trial process and may result in
failure which may even affect the original brands badly. According to me,
positioning it as a fashion statement would a better option since it not only
fits with the current fashion but also brings along tremendous opportunities
of line as well as brand extension. As for the issue of changing fashion, Nike
could refresh the line and expand the 4 P’s by improving the color and style,
by increasing the sales outlets or simply by investing some funds in
advertising the new range.

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