Vans: Skating on Air

[pic 1]

Vans: Skating on Air

Team 17

Joseph Sayegh

Eugene Salazar

Irving Salazar Aviles

Bobby Salinas

Executive Summary

        Vans started with very humble beginnings in 1966 by under the name The Van Doran Rubber Company.  They manufactured shoes and sold directly to the public for $2.49 to $4.99 a pair.  Vans primary target market were individuals active in the surfing and skateboarding.  Vans developed a marketing edge by providing shoes that would withstand the rigorous wear and tear of the skateboarding sport and it was the only company providing a customizable shoe product.  

During the 80’s Vans saw some success from marketing in the movie industry, but soon found themselves in bankruptcy after investments in the athletic show market.  In 1995, Gary Schoenfeld was named CEO.  He shifted manufacturing to Asia due the high manufacturing costs in the U.S. and to introduce a greater range of styles.  By lowering costs, Vans would be able to increase margins and be exposed to new distribution channels.  

Vans man’s product line brought in $182 MM, but women and children’s, combined, offered greater than $100 MM revenue.  By maintaining their grass roots beginning, Vans can increase their presence in the men’s, women’s and kids product lines.  

Humble Beginnings

Vans is an American manufacturer of shoes founded in 1966 by Paul Van Doren with his brother James and two other partners. They broke the mold with their brick and mortar stores that only sold sneakers. Their customers included the Southern California surf set of the 1960’s and the skateboarding rebels of the 1970’s.  Both of these groups included a younger segment of consumers from twelve years old through early twenties, including high-school students and the younger skater generation. Vans attracted the skateboard groups, even though the public perception of the skateboarding movement was aligned with the anti-establishment, anti-Vietnam, anti-war sentiment. This reached its climax in the mid-1970s as the skater generation was synonymous with the “Z-boys,” a group of self-identified misfits from the Dogtown area of Santa Monica, CA. The Z-Boys won the first national skate competition in California, their innovated moves overwhelmed judges and skaters around the country. In 1975 the sport spread throughout the states, but it didn’t last long. By the end of 1980, skateparks closed due to skyrocketing cost of liability insurance and Vans  suffered tremendous losses.  

In the first two decades of the company, Vans customer base was characterized as by grassroots acquisition, youthfulness, and desire for customization. Not only surfers and skateboarders were the primary target, but every Southern California kid between the ages of 12 and 18.

Figure 1 Vans first factory and store in 1966.

[pic 2]

Vans Market Edge

Not only did Vans appeal to and attract a clear market segment, they also held a competitive advantage through a clear value proposition. One of the clear advantages to the skate boarding segment was the Vans shoes unique design was perfect for maintaining a solid grip on a skateboard and the double stitched canvas was great for withstanding the wear and tear of the sport. In this 10 year period in the 1970’s Vans became the shoe of choice for a generation of skateboarders due to the non-slip bottom being more conducive for a better grip. Additionally, the level of customizations that Vans offered was unique in the market.  It was the only company that was able to customize their products to match any color on their shoes by request because manufacturing was done in-house and customers were able to choose from an assortment of over 50 fabrics and colors. Vans were easy to wash and they were also able to attract the hard-to-fit customers with non-standard widths and lengths.  Furthermore, this customization made them very popular with students and schools, since the shoes could be customized with school colors and preferences.  Finally, in the initial years of the company, the shoes sold between $2.50 and $7 dollars, making the price very attractive to their target customers. The design and durability of Vans shoes, the ability of customization, and price presented a strong value proposition to their customer base, figure 2.  To reach their target market Vans marketing advertisements,  figure 3, depict their shoes being used on the beach, BMX, and skateboarding.