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New Balance Athletic Shoe Inc - Case Study Example

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In the paper “New Balance Athletic Shoe Inc” the author provides analysis, which was conducted via an evaluation of the renowned publications on the footwear industry and New Balance and competitors’ websites information. New Balance Inc. possesses several wholly-owned auxiliary firms…
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New Balance Athletic Shoe Inc
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Download file to see previous pages Even though the company lags behinds its major competitors Nike, Reebok, and Adidas, it has discounted relocating its manufacturing plants abroad unlike her rivals. This adversely impacts on the company’s production expenditure and overall revenue. The company is nevertheless more focussed on manufacturing as opposed to marketing, unlike the rival firms that far outspend New Balance in brand advertising while maintaining scaled down production expenditure (See Exhibit 2 - Appendix). The proportion of marketing expenditure in terms of net revenue is therefore considerably lower than those of competing rival firms. According to Herb Spivak, New Balance vice president operations, the company is unique in that it does not endorse athletes but rather, “aim to make every one of our shoes a performance product as opposed to just a fashion product…fit is a critical performance characteristic” (Bowen et al, 2008, p.4).
Although most of the company major rivals spend millions in endorsement deals with major athletes and heavy advertising, New Balance has conversely concentrated on research, design, and domestic manufacturing. This was accentuated by its 1992 campaign of ‘Endorsed by No One’ though it only enjoyed a three percent U.S. market niche then (Pereira, 2005). Another campaign dubbed ‘For Love or Money’ was launched in 2005. New Balance global marketing vice president Paul Heffernan reiterated that “It’s all about everyday athletes playing for the love of the game” (Aoki, 2005). This is contrasted with another advert by rival Reebok within the same month that featured NBA superstar Yao Ming, Olympic gold medallist Kelly Holmes, actress Lucy Liu, and tennis player Andy Roddick with a tagline ‘I Am What I Am’ (Aoki, 2005).
In product design, New Balance has maintained a width sizing and fitting for comfort arrangement rather than developing fashionable styles. The company has therefore directed most of its products to the older generation of consumers within the 25 – 49 age group range. New Balance is highly focused on design and development, but the company is nevertheless very conservative. ...Download file to see next pagesRead More
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