Question: New Balance has developed a strong reputation as a serious
New Balance has developed a strong reputation as a serious and leading manufacturer of high performance and high-quality athletic footwear. Its use of technology to produce state-of-the art running shoes and cross-trainers has earned the respect of many world-class athletes who rely on New Balance footwear to compete at the highest levels in their respective sports. So, it seemed strange to industry observers when New Balance’s channel design strategy, implemented in the spring of 2009, chose Nine West shoe stores, a division of Jones Apparel Group Inc., to sell New Balance athletic footwear. What raised the eyebrows of the observers? The fit—not of the shoes, but of the two brands. Would Nine West, which is identified as a seller of fashionable women’s shoes, undermine the brand image of New Balance as a maker of hard-core athletic shoes? Although the strategy is being tried on a limited basis in just 50 Nine West stores, if sales are good for the first six months, many additional Nine West stores will be added. What do you see as the strategic rationale for New Balance selecting Nine West as a channel member to sell its high performance athletic footwear? Over the long run, do you think New Balance’s channel member selection strategy will affect its product image?
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