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New Balance
What’s the core product for New Balance?
We’re an authentic running brand. From 1906, as a brand in Boston that made orthotics for shoes, we were about making elements of footwear that made your shoes fit better so you could go about your day in more comfort.
From a business point of view, it wasn’t until the early ’70s when Jim Davis bought the company, that we started to see real growth. This growth was built on the foundation of one of our core values, widths and half sizes, making shoes that fit. Running has always been the core, with the brand spanning the elite end of the running market to the lifestyle side of things. Other brands like Nike and adidas have running as the core line running through their product range and we’re no different, it’s our mainstay. We have diversified and taken some of the key technologies from running coupled with our unique approach and applied them to other areas like walking, which is a natural extension from running. We have also taken our knowledge from running and applied this to more products for the general fitness consumer as well, whether that be cross training or running. We have something for most people.
You have a commitment to manufacturing in both the US and UK, which is unusual now.
We still manufacture in the UK, having a manufacturing unit in Flimby, in Cumbria. That unit is split in two sides, with a cut-to-box production line, where a hide comes in from a supplier and literally goes through the entire process to becoming a boxed shoe. The other side of it is where some components are manufactured in the Far East and are then put together in the UK.
The brand’s commitment is clear, we want to maintain our roots, we are a manufacturer of footwear. We believe that if you want to understand shoes, to talk to consumers, talk to the trade and talk internally about what you do, you really have to understand shoes and how to make them. It’s an integral part of the business, one we plan to keep for the foreseeable future.
If running is the core of the business, what do you see as the growth areas for the rest of the business?
In the UK and Ireland we have three very clear points of focus for the next three years, Elite, Fitness & Lifestyle. The elite side of the business is our core, and we’ll keep with that. The fitness running side, yes it’s running, but it’s on a fitness level so it’s a different customer. Going forward with the fitness range we have, being able to go to a wider audience, as we are in JJB, which yes, it’s more a volume-driven side of the market but everyone understands that – having the mix of outlets, keeping your grounding in elite and top end of the lifestyle, keeping the innovation, and staying true to the brand’s beliefs, allows us to perhaps go slightly wider in our distribution as well.
A key we have identified for growth for the future, is the lifestyle side of the business, which has running still at its core.
We do also have walking and apparel goods, but these two areas are not going to be the major growth areas for us at the moment; apparel could be but at the moment it’s quite a small part of our overall share. For a focus of the brand apparel could come online as we grow outside the elite market, with a fitness consumer in mind and possibly to the elite consumer as well.
What makes New Balance shoes special?
I think every running brand does a reasonably similar thing; cushioned shoes, supportive shoes, lightweights, spikes et cetera. It’s about understanding what the brand is about and what you get behind the name, as a consumer. I think you can look at, say, Nike and see it’s a big global brand and you want to be a part of that, same for adidas as a multi-discipline brand and also a global player.
New Balance in the UK doesn’t have the same brand awareness; outside of the elite sporting arena our awareness is relatively low. But for the people that know us, their love for the brand is unbelievable. It comes back to the core of the brand, we don’t do endorsements, though we have given kit away sometimes to key runners. It’s not been in a contractual or a paid way though, we just want people to believe in the product that we have. I don’t have any budget for sports marketing outside of sporting events; I don’t support key individuals because we want people to come to an event or be recommended the product in a specialist running store. We can supply all the half sizes and width fittings, whatever people need. Our range allows the customer to have that.
How do you think New Balance measures up to its rivals?
How do you plan to grow the brand in the consciousness of the customer, bearing in mind the strength of the competition?
Our product is comparable to the brands out there, the specialist running brands. We have good technologies across the board right through the shoe, whatever the customer needs. It’s probably the more discerning consumer that’s interested because they don’t want the global hype, they want something that’s a bit more real, and that offers a fantastic fit every time because of the half size and width options.
What I need to work on as a marketing manager is the low brand awareness. Going forward, any good brand has good product as well as good brand awareness whatever market they’re in. You can get that awareness in two clear ways via distribution, so people go in the store and discover the products, or you can get it through quite an overt brand campaign so people go into the store and expect to see the product.
The thing New Balance has done over the years is to make good product, without a doubt, and fairly unique in the halves and width offering we have. But the problem to a degree in the UK and Ireland is that we haven’t worked on the brand awareness, which is something the new Chief Executive, Rob de Martini, is dealing with. We plan to go out in a more proactive way and a consistent way to communicate our values as a brand. It’s no good being too quiet if we want to be around for another 100 years, we have to work for it.
I read New Balance is the fourth biggest maker of sports footwear in the world – that’s impressive.
It’s the US that’s bolstered that position. We’re number two or three over there and have been for a number of years, thanks to distribution, brand awareness and having good product. That’s the home of the brand and what Jim’s worked on over the last few years. We need to transplant that success over to Europe and grow this side of the business now.
Who is the typical New Balance customer, and what does your customer think of New Balance?
If I’m honest, we have an older consumer group, 30+ or possibly slightly older. They’ve grown up with us, they trust our product and like it which is why they’ve stuck with it. It might be said that without endorsements, we don’t penetrate into the consciousness of the younger consumer, but that’s simply not how we work. Part of the plan going forward is to increase brand awareness in that younger consumer group, whether it’s through fitness, running, lifestyle or a combination of all three. We can’t market to them the way we have before, what we have to do is offer some kind of experience through the events we support and utilize the relevant media to target them directly. Specifically we’re lacking a clear digital platform, we need to sort that out. This is being worked on, the plans are in place for that to happen.
In addition we’re embarking on an awareness campaign that will come through two main sources, online and print, specifically targeting the running community. While that’s not directly going for a younger consumer, it’s sort of looking at activity from a ground zero position, realizing we need to simply start to improve brand awareness, starting to talk to consumers on a regular basis, 2008 is about re-awakening the brand.
Our customers like that we haven’t deviated from our core values; that’s something very important to the New Balance ethos. We just want more people to know about these values.
Could it be seen as complacent, the lack of endorsements for New Balance? It’s a very effective way to get a brand out there, especially to the younger market.
It’s a part of everyday life, but our clear non endorsement stance has not been borne out of the last three years, it’s the way the company has worked right from the start. New Balance relies on product innovation and quality product alongside great retailer relationships to make the brand grow. It’s a proven business model, it has enabled us to become a success in the US and it’s actually the opposite of arrogance if anything. We just want runners to wear our products, enjoy them, and come back for another pair when they’ve worn the first pair out. I’d rather have that attitude than simply pay someone considerable sums of money to wear our shoes. From a marketing point of view it’s an obvious area to look at and it’s part of a regular sports brand’s arsenal, but it’s not part of ours, and nor will it be.
What’s the New Balance relationship with the independent retailer?
They are, for any kind of specialist brand, the mainstay and the lifeblood of the business. They’re the guys that, when you have a product like ours, act almost as your brand ambassadors with the customer. We’re going to try to support them even more in the future, especially considering that next year sees the beginning of our largest campaign in the last three or four years. It will raise the awareness of the brand so hopefully, they’ll see more people coming in and asking about our products.
