Case Study:
Boston-based New Balance has invaded China. The 103-year-old company got its start manufacturing and selling arch supports to people like police officers and waiters, whose work kept them on their feet all day. During the 1970s, the company switched its focus to designing and marketing athletic shoes for “the everyday athlete,” with proper fit being its key selling point. Over time, New Balance added an apparel line and has become a leading name in the industry. The company’s family of brands also includes Dunham, Aravon, Warrior, Brine, and the classic American sneaker, PF Flyers. The first New Balance retail stores in China, called “Experience Stores,” opened in Beijing and Shanghai in 2010, with hundreds more planned for the near future. The stores’ décor emphasizes the company’s century-long heritage and accomplishments. Walk in the front door and you’ll swear you’ve just entered a shoe store from the 1950s. The space evokes all five of the senses: comfortable, well-worn leather couches; framed archival photographs, advertisements, and other paraphernalia from the company’s early days; an oak scent in the air, reminiscent of the smell of an old-time shoe store; and piped-in sounds from the “be-bop” era, including such artists as the Everly Brothers, Little Richard, Fats Domino, Jerry Lee Lewis, and Bill Haley and the Comets. A “DNA ribbon” in each Experience Store— underscoring the company’s unique Performance DNA concept— traces the company’s history and accomplishments and hints at the future as it extends from the first floor to the second floor. Programmed in-store messaging promotes the Performance DNA concept and draws shoppers to the second floor, where the merchandise is displayed in a decidedly 21st-century setting. (Recent consumer research suggests that up to 40 percent of consumers are influenced by such in-store messaging.) To plan for its entry into China, New Balance engaged leading Asian branding consultants Equal Strategy to create a “total sensory experience.” The Experience Stores exemplify the concept of “sensory branding”: that is, the process of creating a brand experience that calls upon all of the senses in reflecting a company’s brand. Consistent with the company’s Total Fit campaign, the store openings include healthy running tips, pointers on foot care, and inspirational stories from some of China’s most well-known runners. The Beijing launch included an American-style street carnival reminiscent of the 1960s. To further celebrate the openings, New Balance sponsored an international marathon in Hong Kong, featuring 88 Chinese entrants and 6K runs in the cities of Nanjin and Hangzhou. New Balance has 4,000 employees worldwide and recently posted revenues of $1.64 billion
Q1. Do you think opening retail stores in China is a good move for New Balance? Why or why not?
Q2. New Balance calls its new retail stores “Experience Stores.” In your opinion, what does the company mean by “experience,” and how does that experience translate to sales?
Your answer must be typed, double-spaced, Times New Roman font (size 12), one-inch margins on all sides, APA format and also include references.