New Balance: Strategic Management

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1. Company Profile:
Ranked 3rd in the US Athletic shoe industry, New Balance Arch Company as it was known in 1906 begun manufacturing arch support, orthopaedic shoes supports and prescription footwear for people with problem feet. In 1954, the company changed its name to New Balance Athletic Shoe Inc. with a focus on running shoes, but gradually entered the other segments such as walking, cross training, basketball, tennis and adventure sports. (Bhat, 2005) New Balance started with a niche in developing accommodative foot orthotics and insoles to accommodate all kinds of foot issue and therefore when New Balance went into shoe manufacturing, they decided to take advantage of their expertise and cater to all foot-types by providing five different shoe widths in an industry where three was the standard. New Balance’s expertise was in manufacturing custom-made footwear for sportsmen and that soon became the primary business of the company, they were also known for their innovative designs with multiple widths selection providing both men and women more comfortably fitted shoes. New Balance’s humanitarian stance toward labour has won favour among shoe consumers especially following boycotts of Nike and Adidas when these two brands came under fire for paying workers in third world countries sub-minimal wages, encouraging child labour, and its sweatshop working conditions. New Balance aims to adhere to minimum living wage guidelines and retains the manufacturing of several shoes within the US, such that several products bore a ”Made in USA” label, versus “Made in China”. A favourite amongst consumers aged 30 and above, whose preference were performance and functionality over fashion appeal and celebrity endorsements. However, due to its focus on the middle-aged group, New Balance has neglected the consumers below 30 years of age. (Bhat, 2005)

2. LOVE/hate- This is the New Balance.
March 27, 2008 saw New Balance debut its new global brand campaign. This new campaign highlights running as a fundamental benefit to all sports and captures the runner’s complex love/hate relationship with running. Believing that their new campaign will strike an emotional chord with athletes, the company was committed to reducing the hate for running and increase the love through innovations in footwear, apparel and equipment. (New Balance Official Website) Tripling the company’s budget on marketing, New Balance has expanded beyond its loyal customer base of serious runners over the age of 30 and have started to re-launch ads aiming at a younger demographic, between the ages of 18 to 29 by creating an emotional connection through the personification of running. In a local context, New Balance had commuters in Singapore ‘seeing red’ when their ‘Love/hate’ ads were displayed at the Orchard Mass Rapid Transit (MRT) platform. Aside from the very prominent location, the campaign was also displayed on selected buses, bus shelters, various publications, online newsletters and television commercials. (, 2008) Deriving its market approach on the emotional element of people, their ads and videos which depict real people in real situations reflect an almost subconscious understanding of how the human mind behaves, being sensitive to the complex dilemmas that plague the human psyche. Previous ad campaigns themes included “For love or money?”, “N is for fit...N is for performance” and “Achieve New Balance”, the company emphasizes a philosophy of ‘Endorsed by no one’ not taking the conventional route of featuring high-profile athletes in their advertising instead allowing the product to speak for itself. (The Boston Globe, 2008)

New Balance’s long term goal is that of doubling its athletic shoe and apparel sales to $3 billion by the year 2012, from $1.63 billion in 2007. In light of the company’s new...
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