Company Marketing Strategy - Vans

COMPANY MARKETING STRATEGY: VANS 1

Company Marketing Strategy: Vans

Christopher Parks

Southern New Hampshire University

6 November 2015

FINAL PROJECT: Vans 2

Company Overview

Vans began operations in 1966 under the name The Van Doren Rubber Company.

Originally owned by brothers Paul and James Van Doren, Gordon Lee and Serge D’Elia, they

manufactured custom shoes for the skate and surf community in Southern California. The shoes,

simply known as Vans, became popular among the outdoor athletes in the region and sold for

$2.49 to $4.99 in three different styles. After experiencing immediate initial success, the

company was opening a new retail location nearly every week. Due to the stickiness of the soles

on the bottoms of the shoes, it became a quick favorite of skateboarders because of the ability to

perform more sophisticated tricks with a better gripping shoe. There had been some complaints

early on that the soles cracked too easily, but the company was determined to prove its

dedication to serving its customer and developed a new “waffle sole” to cater to their target

customer base (Funding Universe). The skating community proved to be just as loyal to the Vans

company as the company was to them and they have both enjoyed a partnership that has lasted

for decades.

In 1979 the slip-on shoe was introduced and became a major hit. What became a huge

milestone for the company came from the inclusion of the slip-on in a popular 1982 movie

entitled, “Fast Times at Ridgemont High.” One character in particular named Jeff Spicoli,

portrayed by up and coming actor Sean Penn, wore a black and white checkered version of the

slip-on and along with the success of the movie came the skyrocketing success of the shoe. Vans

quickly transformed from being a local California company with roughly 70 retail stores, to a

nationally licensed brand that was expanding into major retail stores around the country. They

added approximately 1,000 employees and opened up a new giant manufacturing facility in


Orange, CA. The Vans craze went strong until 1984, when the company was forced to sell their

shoes under manufacturing costs due to a number of Vans imitators. The company soon filed for

Chapter 11 bankruptcy after building a debt of $12 million dollars, which they eventually

crawled out of in 1986. By 1987, Vans had completely turned around their company and were in

the black with $50 million in sales thanks to huge international demand. In 1988, the original

founder Paul Van Doren, sold the company to a banking firm for $74.4 million because he was

tired of controlling the company’s day to day operations. The company went public in 1991, and

Paul Van Doren was majority stakeholder, but stepped down from the board. The company soon

felt the recession of the early nineties and saw a major drop in their stock, from $14 per share to

$7. The company was also fined $400,000 for employing illegal immigrants and had 300

employees deported. The future looked bleak until new CEO Walter Schoenfeld took ahold of

the company.

Once Schoenfeld joined Vans, he hired a new marketing team, new shoes designers,

upgraded retail locations, and expanded the product line overseas which accounted for 75% of

sales (Funding Universe). Domestic production became a problematic source for Vans because

their sales had declined so much that their stock bottomed out at $3 per share and they eventually

laid off 1,000 employees and closed their Orange, CA plant. They began manufacturing

operations in South Korea in order to compete in the shoe market with a cheaper product line.

Sales steadily bounced back and their shares were worth $11 in 1996. The company was now

“focused on producing what would sell, rather than selling what it produced” (Funding

Universe).


In 2004, the V.F. Corporation bought Vans for $400 million. Vans has been a huge

success for the V.F. Corporation especially in overseas markets like China and Mexico where the

shoes brand is growing in popularity. In 2011, sales for Vans rose 20% compared to the previous

year and V.F. Corporations is now believed to be a $2 billion company in 2015 (David, 2015).

Target Customers

Vans products have always been intended for a younger demographic. Since they are

widely known as an outdoor, extreme sports brand, their main customers are young men who

enjoy skating, surfing, and biking. Vans has introduced other product lines to include babies and

toddlers as well as women’s shoes, which have become especially popular with the surge of

women’s action sports. Typically, a person that would buy Vans shoes are athletic, leaning

towards more extreme sports like the ones mentioned previously, but they have expanded into

snowboard boots as well which proved to be hugely successful overseas and in Europe. These

customers are also very loyal and brand conscious. They understand the utility of a well-crafted

shoe for athletic sports and cling to a brand that can offer them good value with comparable

aesthetics. Young people also enjoy the idea of creating something unique. Vans allows them the

opportunity to create custom sneakers that will help them stand out from the crowd. The shoes

can be viewed as a talking point among friends who view the person wearing the shoes as unique

and creative as the shoe itself.

People in the extreme skate culture have a reputation for being loud and ostentatious.

Vans shoes has been a sponsor of the touring music festival known as Warped Tour for over 15

years. This festival is home to hardcore, punk, and metal bands and their fans are generally

young and enjoy loud, hard, and fast music. Vans partnered with the Warped Tour because they


understood that their demographic was young, hard, fast, and loud as well. The skate and surf

culture is very stylish and the people that wear Vans like to appear as though they are a part of

the community as a whole.

Secondary and tertiary customers would be young parents who are interested in having

their children wear unique shoes and clothing similar to their own tastes and women who are

involved in action sports. These two groups are smaller than the primary target demographic, but

are growing tremendously especially due to their increased recognition in overseas markets.

Doug Palladini, Vice President of Marketing for Vans recognizes that it is also about remaining

authentic. Noticing that young kids and adult want to appear cool and hip, he offers this

acknowledgement, “It is that Southern California culture of music, art, action sports, street

culture all wrapped together around this basic-looking shoe. That is really what it is…You know,

at the end of the day, what you're doing is you're capturing cool” (Ryssdal, 2009).

Overall Marketing Strategy

Vans uses a wide array of marketing strategies to publicize their brand. The main

objective for a brand like Vans is to remain consumer focused and listen to the needs of loyal

customers. For that reason, they have tapped into social media (Facebook, Twitter, Instagram)

where they know their target market spends a lot of time. Within these online social venues,

they can indirectly campaign to different markets by separating them into social, gender, and age

clusters. Vans also does a fair share of direct marketing like magazine ads, billboards, and TV

commercials, but they have a good footing in the social media arena. They understand that teens

congregate on social media and use it to their advantage by offering deals to followers. If a


young person likes Vans’ posts on Facebook, it is likely that that will influence others who are

friends with that person.

Vans also sponsors athletes similar to other major brands like Nike and Adidas except

with more extreme skate, surf, and BMX athletes. They have former professional skateboarders

like Steve Caballero and Tony Alva as well as new professionals like Dakota Roche and Daniel

Sandoval. These professionals have a wide reach among their peers and have a lot of influence

over what their fans wear. Therefore, it is beneficial for Vans to sponsor icons in the extreme

sports community as well as up and coming talent. Vans also sponsors events like the music

festival known as Warped Tour (which reaches tens of thousands of kids every summer), the

U.S. Open of Surfing, Shop Riot, BMX AM Contest, and Concrete Carnival. These events pull

in a large group of the target demographic which gives them the ability to influence the

influencers in their market. With sponsorships, Vans is also able to push traffic to their website

to sell more products, encourage people to share their message, and showcase their corporate

responsibility. Vans is very active with Truth, the company to stop underage smoking and

Americans for the Arts, which they have helped to raise nearly $500,000. Corporate

responsibility is important to Vans because their image in the past has not been the most honest.

They have employed illegal immigrants, been fined by the government, and have been

chastised for moving manufacturing overseas while not providing livable wages. So with all of

that bad PR, it is necessary for Vans to retain an image of loyalty and responsibility to the youth

movement.

In 1999, while Vans shoes were becoming more popular and extreme sports was in its

infancy, the company attempted to break into the clothing apparel market. They teamed up with


Pacific Sunwear, a major clothing retailer, and formed VanPac. “The marriage of the Vans name

and Pacific Sunwear's extensive retail network proved to be a fortuitous one for both companies,

and the new venture was soon able to compete for market share with such established brands as

Rusty and Quiksilver” (Funding Universe).

Strategic product placement is a huge part of Vans overall strategy. They understand that

they can sell a limited edition high end shoe to sell in an upscale boutique for $200, but also sell

a low end version for $40 in Kohl’s department store. According to Palladini, “We make things

that are sold at the very top of the chain – stores like Undefeated, Supreme, Fred Segal – which

are very aspirational, all the way to the big box stores such as Kohl's and JC Penney…Not many

brands succeed at different sales channels and product segmentation…The person shopping at

Supreme and Fred Segal is not the same customer looking at (shoe store) Journeys” (Liddane,

2013). Exclusives are a big money maker for Vans, too. For example, during the 2013 Major

League baseball series, the company sold MLB exclusive shoes with the team’s logo and had a

limited supply of 12 in each store. They sold out immediately and became a big hit. Some shoes

would later end up on eBay because the demand was so high. Vans have become experts at

understanding their target demographic and how to properly place their products to appeal to

each group.

Psychographic Criteria

First, a typical customer of Vans fits into one of two VAL categories: Striver or

Experiencer. A Striver customer is motivated by achievements, but has less access to resources.

In essence, they strive to be what their heroes are and what they have accomplished, but do not

have access to certain things because of their lower financial income. Due to their high interest in


emulating their heroes, style is of utmost importance and they attempt to look like them at any

cost. An Experiencer customer is the youngest VAL group with a median age of 25. They are

motivated by self-expression and are very active in sports. They spend a lot of money on clothes,

shoes, food, and activities and are usually the first group to buy new products.

The target consumer is clearly young, ambitious and full of energy. Using a Rokeach

Survey, their terminal values may include self-respect, happiness, equality, freedom, pleasure,

social recognition, and an exciting life. Their instrumental values may include ambition,

imagination, independence, and intellect. Using these values, Vans can close in on their target

demographic to decide what is important to their customers. Rokeach gives insight to what

values their customers hold highest and would be useful to implement when creating campaigns.

Since most of the customers are young adults, a creative imagination may be important to them

while obedience would be last on their list. These consumers see themselves as rebellious and

forward thinking and would scoff at the idea of being conformists who give in easily to

authority. It is important for Vans to maintain their “Off the Wall” image to appeal to a youthful,

imaginative group.

Generally speaking, Vans customers are opinionated, highly motivated and outspoken.

They share traits that are common among the skate culture, loud and in your face. When people

usually think about extreme sports, they don not picture timid kids in pleated slacks and polo

shirts. Instead, they see youthful exuberance with a flair for the extreme. In the late 1990’s and

early 2000’s, skate culture was typified by the hit MTV show, “Jackass.” The skaters in that

show were loud, funny, imaginative, daring and willing to do anything for a laugh. Many young

people were fans of the show and tried to emulate their new found heroes. This show gave way


to another show, “Nitro Circus,” which was an extreme sports show that popularized BMX,

skating and other extreme sports. The stars of these shows are archetypes of the typical Vans

consumer: wild, outrageous, fun, and creative. They are usually not very political and are open

minded, but are very outspoken about their views. Vans customers are interested in celebrity

culture, music, art and anything related to street culture. They are typically of a lower income

status because they are athletes or artists and prefer a more bohemian lifestyle. They are not

concerned about making a lot of money, but would much prefer becoming popular from their

artistic or athletic ventures. Previous to the 1980’s you would generally find these consumers in

affluent suburbs, but now customers can be found in the most diverse markets around the world

due to Vans continued push to get their products to everyone from low income status to high.

Consumer’s Influence on the Vans Brand

Although the Vans brand name has been around for decades, it does not necessarily mean

that the older the brand becomes, the older the clientele does too. In fact, Vans has positioned

themselves as a brand for the youthful and eccentric. Rarely will you ever see anyone over 40

years old wearing Vans shoes and it is not for a lack of comfort. Vans has an image that has been

very carefully crafted so that the teen and young adult market remain their loyal, target

demographic. While the image of youth plays a large role in their advertising campaigns, the real

influencers come in the form of their peers. Other skater, bikers, snowboarders, whom are both

professional and amateur status, generate a lot of buzz around a brand that they endorse because

of their celebrity stature. Professional skaters like Steve Caballero and Chima Ferguson carry a

lot of weight in their industry and their shoes are as noticeable as the skaters themselves. With


multiple celebrity endorsements behind them, Vans has cornered the market on extreme athletic

footwear.

The skate culture is known for being a poor, working class sport that crosses ethnic and

racial barriers. There is little to no room for wealthy imitators. Vans maintains an image of being

for the loners, the misunderstood, and the poor to middle class. Their shoes now retail for an

average of $50, but as far as athletic shoes are concerned, that is a fairly modest price. Kids can

actually afford to buy their own pair of Vans whereas someone might have to take out a loan for

a new pair of Jordan basketball shoes.

A feeling of closeness and familiarity have always pervaded Vans brand image and they

continue to foster that sentiment today. Although the skate culture is perceived to be rough

around the edges, they are a very close knit community. It is important for them to spread ideas

and information including social and fashion trends. They often get their fashion cues from

major influencers like professional skaters, but peers can also be a source of great influence. If a

peer is a big advocate of Vans, it is likely that their friend’s will become fans of the product too.

The Consumer Decision Model

Vans consumers would typically be classified as emotional buyers. They are young,

somewhat fashion conscious, and are driven by impulse. That is not to say that Vans consumers

are not rational people, but they do not adhere to the 5 step purchase process as strictly as an

economic consumer.

It is safe to assume that a young person is driven by influence. When they see something

they like, they buy it based on want, not need. This can be applied to many of Vans customers.

These customers are typically loyal to their favorite brands, too. It is likely that once a consumer


buys a pair of Vans, they have already been inundated with advertisements and marketing efforts

made by the company. The tone has been set and the image has been placed in the mind of the

consumer. Buyers see that their favorite skateboarder is wearing a pair of slip-on Vans and now

they must have them! They are listening to their favorite band that they just discovered from the

Vans Warped music tour and are driving straight to their nearest Vans retailer in hopes of

looking like their idol. They will probably ask themselves, does these make me look cool? Will

my friends like these colors? Will these help me fit in socially? All these questions and more will

be asked before making a purchase.


10 Question Consumer Survey

1. How often do you buy a new pair of shoes?

Every 1-4 months Everyone 4-7 months Every 7-10 months Every 10-12 months

2. Are you up on the latest fashion trends?

Absolutely! Somewhat Don’t care I am an anti-fashionista

3. If I like a pair of shoes, I am likely to refer them to my friends.

Absolutely! Maybe Don’t care at all

4. It is important that a company I buy shoes from gives back to the community.

Absolutely! Maybe Don’t care at all

5. My style is more influenced by professional athletes than peers.

Absolutely! Somewhat Just the opposite Don’t care at all

6. I consider myself outspoken and opinionated.

Absolutely! Somewhat Just the opposite

7. How much is your annual income?

0-$10k $11-30k $31-60k $60k+

8. What is your highest education level?

High School Diploma GED Bachelor’s or Associate’s Degree Master’s Degree

9. When I am not spending time with friends, I am usually _________________.

with my family by myself in my bedroom at church at school

10. I would consider myself a ____________ person.

happy angry sad confused even-tempered


Works Cited

David, J. E. (2015, March 14). Vans chief: We don't need celebrities to sell our product.

Retrieved Oct 24, 2015, from CNBC: http://www.cnbc.com/2015/03/14/vans-how-to-

make-2-billion-without-celebrities.html

Funding Universe. (n.d.). Vans, Inc. History. Retrieved Oct. 24, 2015, from Funding Universe:

http://www.fundinguniverse.com/company-histories/vans-inc-history/

Liddane, L. (2013, May 30). Vans gets specific in supplying various retailers. Retrieved October

24, 2015, from The Orange County Register: http://www.ocregister.com/articles/vans-

510543-stores-store.html

Ryssdal, K. (2009, June 15). How Vans got off on the right foot. Retrieved October 24, 2015,

from Marketplace: http://www.marketplace.org/topics/business/big-book/how-vans-got-

right-foot

Documents

Company Marketing Strategy - Vans