New Balance is a midsized company out of Boston, a privately held player in an intensely competitive market. The company began by producing arch supports in 1906. It evolved into a niche company that produced running shoes for the serious athlete. The low-volume market kept the company focused and lean, with early manufacturing primarily in New England. As its reputation spread, that its shoes were the choice of serious runners, so did the demand for its product. Amateur weekend athletes like Karen started choosing New Balance, and soon an almost cult-like following evolved.
Today, New Balance focuses on running and court shoes with a theme of fit and comfort. They are known for quality. Some of the shoes are made in the United States, separating them from Nikes which not only are made offshore but also have run into social problems after reports that they are made in sweatshops in Asia. After 9/11, New Balance did not suffer the same decline in sales as other manufacturers, partly due to its “made in the USA” policy. Although only about 20 percent of its shoes are still made in the United States, this still stands out as a local commitment in a time where tight margins keep prices low and competitive. Further, the globalization of manufacturing is no longer just an economic consideration. Asian technologies have, in many instances, surpassed U. S. capabilities. So competitors at times go to Asia, not only for cost but also manufacturing quality. Keeping shoes “made in the USA” holds brand equity, which overcomes economic costs.
Customers are loyal to the brand. “Comfort and fit” drives the product and is the New Balance identity. Manufacturing quality is consistently high. New Balance advertises but has no high-profile Michael, Tiger, or Kobe endorsements. It is a privately owned company that does not feel compelled to compete with the approaches used by its competitors. In the markets where word of mouth is a strong alternative to paid advertising, New Balance excels; however, in the markets where names as icons have sway in schoolyards and playing fields, its position is not as competitive. The company has been willing to accept that compromise, and in many ways, this has added to its sense of integrity as the shoe company for serious runners. Interestingly enough, this perceived value has spilled over into the nonrunning shoe market, where, certain high-school students whose gear for everyday life includes backpacks and Nalgene plastic bottles for drinking water have extended that trend and designated New Balance as the casual shoe of choice.
New Balance products nicely balance cutting-edge technology, especially in material use, ergonomics of fit, and appropriate but reserved aesthetic trends. Although New Balance meets the industry standard of new product introduction four or more times a year, it shies away from high-fashion trends and instead improves each product line. Its shoes are named by number, with increasing numeric value generally meaning a higher-performance and higher-priced shoe.
