New Balance ~ A Case Study in Corporate Social Responsibility

New Balance Case StudyBy Ruth Zamoyta
February 2012

My team and I looked into raising market share for New Balance footwear and discovered that the company had a long, strong history of corporate social responsibility (CSR)—a factor we could use to grow brand equity.

Our target audience of responsible shoppers wanted a better world for themselves and their kids, and they felt good when they would take steps to achieve this—even when they shopped.

The brands that tapped into this consumer insight the best were the brands that from the start had CSR built into their business model.

How had other brands successfully and unsuccessfully used CSR to drive profits?

The Pepsi Refresh contest that aired on television during the Super Bowl had nothing to do with cola. Pepsi garnered 80M votes, but lost 5% of its market share. On the other hand, Dawn dish liquid saw a 15% increase in sales after its Dawn Saves Wildlife campaign revival during the Gulf oil spill. And GE’s ecomagination initiative helped GE more than double its revenue growth in early 2011. CSR was more successful when the brand’s core competency embraced the focus of the efforts, in these cases “cleaning” (Dawn) and “energy” (GE).

New Balance was the only athletic shoe manufacturer that still had plants in the U.S., and it was committed to preserving jobs during the recession. In terms of labor conditions in overseas operations, New Balance had the highest grades in the footwear industry.

New Balance had a strong, 100-year-old tradition of bringing fitness, comfort, and excellence to both competitive and everyday athletes. Furthermore, the company gave back to its community through philanthropy, partnering with local and national charitable organizations, and cause-related marketing.

New Balance was an industry leader in environmental ethics, being the first to eliminate PVCs from its footwear, using recycled materials in all its products, building green retail stores, and creating a state-of-the-art factory which streamlined efficiency.

When it came to corporate social responsibility, NB blew Nike, Adidas, Puma, Asics and every other athletic shoe company out of the water. This was New Balance’s competitive advantage in the “responsible shoppers” market, where people put on their Patagonia fleeces, grab their Kleen Kanteens, hop in their hybrids, and drive to Whole Foods to buy Earth’s Best baby food.

But what do any of New Balance’s CSR programs have to do with athletic apparel? The answer is fitness. Fitness not only of the individual, but also of the world and its people. New Balance should see its core competency as fitness for the world.

The problem was lack of awareness of NB’s hearty CSR program. Bragging was not New Balance’s style. The company had a culture of humble, so the way we recommended getting the word out was indirectly, through word of mouth. In order to convince responsible-shopper non-wearers to choose NB the next time they were in the market for athletic footwear, we needed to amplify our their desire to do good for the planet, for themselves, and for others. The positioning statement:

To active, responsible shoppers in Generation X, New Balance is the brand of athletic apparel that offers performance footwear that allows them to feel good not only about their appearance and performance, but also because they’ve shown their commitment to society and the planet.

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