Academic journal article International Journal of Sports Marketing & Sponsorship

The Brand Management Efforts of a Niche Specialist: New Balance in the Athletic Footwear Industry

Academic journal article International Journal of Sports Marketing & Sponsorship

The Brand Management Efforts of a Niche Specialist: New Balance in the Athletic Footwear Industry

Article excerpt


One per cent per year--the overall US market share growth goal recently stated by New Balance CEO Jim Davis (Steven David, Product Marketing Manager, New Balance, personal interview, August 18, 1998). Such a goal would be quite modest for one of its larger publicly owned competitors. But for New Balance Athletic Shoe, Inc, a privately-owned manufacturer in the highly-competitive athletic footwear industry, this represents a significant brand management challenge. No longer can the company be content to serve its loyal base of "baby boomers" (40- to 55-year-olds), it now must court "Generation X" (25- to 35-year-olds).

This study illustrates the brand management efforts of a niche specialist, New Balance Athletic Shoe, Inc. Based in Boston, Massachusetts, USA, New Balance is a privately-held corporation whose 1998 estimated revenues of $550 million amounted to less than industry leader Nike spent on advertising in that year. While particular interest is paid to the branding efforts of New Balance, its efforts are analyzed in comparison to those of the three market leaders, publicly-owned corporations Nike, Reebok, and Adidas.

This case study is comprised of five sections. The first section provides a brief overview of brand theory. The second section highlights the current status and trends of the athletic footwear industry in the United States. Using brand theory, the third section presents a summary of the brand management practices of Nike, Reebok, and Adidas. Based on this analysis, the fourth section provides a detailed account of how New Balance manages its brand to differentiate itself from its competitors. The case study concludes by offering conclusions about the brand management efforts of a niche specialist in a fiercely competitive industry. While derived from the athletic footwear industry, these conclusions are also salient for the broader sporting goods industry.

An Overview of Brand Management

The effort to create and manage brands is a practice widely studied by marketers throughout the world. Keller (1998) defines a "brand" as a name or symbol attached to a product that allows for differentiation from similar product offerings. For example, both the Nike name and the ubiquitous swoosh logo are components of the overall Nike brand. The goal of brand management is to continually build on the strength associated with a brand, thus developing brand strength, or equity. The set of assets (both positive and negative) that consumers attach to a particular brand constitute "brand equity" (Aaker, 1991).

Many researchers have undertaken efforts to dissect brand equity into different components and dimensions. Perhaps the most widely-accepted model for understanding brand equity was presented by Aaker (1991), who suggested brand equity is comprised of five components:

1) Brand awareness

2) Perceived quality

3) Brand loyalty

4) Brand associations

5) Other proprietary brand assets

The remainder of this section will focus on describing these five components as a basis for analysis of brand management practices in the athletic footwear industry.

Brand Awareness

Brand awareness is the starting point in the development of brand equity. It represents the consumer's ability to recall a brand name when given a product category (Aaker, 1991). For example, when a person is asked to name a brand of basketball shoes, they are more likely to mention Nike, Reebok, Converse or Adidas than they are to name LA Gear or Spalding.

According to Keller (1998), brand awareness is important to brand strategy for three reasons. First, awareness of the brand ensures the brand enters the consumer's consideration set when looking to make a purchase. Second, brand awareness can affect choices within the consideration set. If one brand has a larger presence through advertising, it may be considered more favorably. …

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