Rollerblade 1 (1521.0K)

Rollerblade 2 (968.0K)

VIDEO CASE 1-1 RollerbladeÒ: Rediscovering Growth

In the fiercely competitive in-line skate marketplace, what does the future hold for RollerbladeÒ?

As David Samuels, senior director for Sports Innovation at Rollerblade explains, innovative technology-in the form of new and better skates-will continue to be key for Rollerblade to stay ahead of the competition. Rollerblade must also find ways to expand the market for in-line skates. "Our challenge is to provide new venues, new reasons for people to skate. There's a lot of growth for us to catch up on in terms of household penetration," says Samuels.

THE SITUATION TODAY

When Rollerblade was founded, it was the only manufacturer of in-line skates in the world. Today the industry has more than 30 competitors, many that sell lower-priced skates than Rollerblade through mass-merchandising chains. Some of the large sporting goods manufacturers, like Nike, that have not traditionally sold in-line skates are now looking for ways to grow and are exploring the in-line skate market.

In addition, both Rollerblade and other in-line skate manufacturers are facing increased competition from other wheeled sports. This includes everything from scooters and skateboards to on-road and off-road rides for mountain bikes. Even the Segway HT (see Internet Exercise) is a competitor in some situations. Further, as shown earlier in Figure1-1, Samuels is concerned that the exploding growth of the in-line skate market seen in the early 1990s has turned to decline.

THE MARKETING PROGRAM

Expanding the market and continuing to be the leader in product innovation gives Rollerblade a strategic advantage in the marketplace. Yet it is a solid and creative marketing mix that will enable Rollerblade to pass these advantages along to the customer.

The product is the most important "P" in Rollerblade's marketing mix. This involves both innovative technologies and new skate designs. In terms of technologies, Rollerblade has pioneered the ABT and ABT Lite braking systems, more breathable fabrics, and vibration-absorbing cushioning systems. New skate designs include expandable skates for kids, the five-wheeled Lightning^TM for speed skaters, the three-wheeled Coyote™ for off-road skaters, and specially-designed skates to fit women's feet.

Rollerblade's promotional strategy continues to set it apart from the competitors, too. Its catalogs feature both its new technologies and new skate designs. The Rollerblade website (www.rollerblade.com) is one of the most popular promotional tools with Rollerblade's loyal customers.

Since Rollerblade does not have the resources of an industry giant like Nike, it finds ways to communicate with customers that do not entail huge cash outlays. For example, Rollerblade provides information or product samples to media that, in turn, do in-line-skating features for articles or broadcast programs. It also develops promotional partnerships through sponsoring events and creating sweepstakes with other companies. Recently Rollerblade teamed up with Taco Bell, Curad, Wise Snacks, and Honeywell for joint advertising that benefits the partners but is less expensive for Rollerblade than purchasing nationwide television or radio ads by itself.

Finally, Rollerblade sponsors a competitive team of aggressive skaters and racers that competes around the world and regularly wins such events as ESPN's X-Games. It is creative and unorthodox approaches such as these that Samuels believes will keep Rollerblade ahead of the competition in the 21st century.

Rollerblade practices an across-the-board strategy when it comes to distribution and price. Samuels says, "Our distribution channels run the gamut. We are everywhere from the large mass market stores to specialty in-line dealers. Additionally, Rollerblade has chosen to hit every single price point possible. We have skates that are at the very high end, as well as skates as low as $79 under the Rollerblade brand. We also take a different brand name called Blade Runner and bring those products to the large mass markets of the world." Giving the lower-priced skates an alternate brand name allows Rollerblade to uphold its high-quality image in the marketplace while still providing an opportunity for beginners to test out the sport.

ISSUES FOR THE FUTURE

Some of the pressing issues in the future are global expansion, creating new segments of skaters, and expanding the product line. As Samuels explains, "Currently, the U.S. makes up over 50 percent of the marketplace worldwide. But Europe has been significant also. Germany is definitely one of the strongest countries for in-line skating." Other areas of growth include Australia and New Zealand, Japan, Mexico, and Korea. Rollerblade hopes to widen its global reach as the company continues to grow.

The youth segment should prove to be one of the most important segments in the future. "One of the biggest changes that's happened to us, and to the world really, is the power of youth. Kids who are anywhere from 10 to 12 years old on up into their twenties have been able to make a significant impact with so little money," explains Samuels. Rollerblade expects young people to continue to shape the recreational sports markets well into the future. Finally, Rollerblade has begun to offer products that are not in-line skates, such as accessories like helmets; wrist, elbow, and knee pads; skate bags; and skate tools. Rollerblade will continue to introduce products that respond to consumer needs and desires-constantly working to improve skate comfort, durability, and technologies.

1		What trends in the environmental forces (social, economic, technological, competitive, and regulatory) identified in Figure 1-3 in the chapter (a) work for and (b) work against Rollerblade's potential growth in the 21st century?
2		What are the differences in marketing goals for Rollerblade (a) in 1986 when Rollerblade was launched and (b) today?
3		What are the (a) advantages and (b) disadvantages of having Rollerblade become part of the Benetton sport group? Refer to the text as well as the video case.
4		In searching for global markets to enter, (a) what are some criteria that Rollerblade should use to select countries to enter and (b) what three or four countries meet these criteria best and are the most likely candidates?