When New Products and Customer Loyalty Collide
When New Products and Customer Loyalty
Collide
by Regina Fazio Maruca and Amy L. Halliday
Harvard Business Review
Reprint 93608
C A S E
S T U D Y
Pacer Shoes expanded its line and entered a new market.
Now the returns are coming in, and they’re not good.
When New Products and Customer Loyalty
Collide
by Regina Fazio Maruca and Amy L. Halliday
Henry Carson, president and CEO of Baltimore-based Pacer Athletic
Shoes, stood at the edge of the track behind company headquarters and watched as the fourth group of runners completed their final lap. They were testing a new line of running shoes, now in the final design stages, which Pacer planned to introduce in 1995. Henry examined the cracks on the surface of the track. He had hoped to put in a new one next spring, but right now he wasn’t so sure that the company would have the resources.
As the runners began a cool-down walk, vice president Sarah Levine joined Henry, looking perturbed.
“Did you read that letter I left on your desk this morning?” she asked.
“I did,” Henry squinted at her in the afternoon sun. “I guess we can’t approach Cal Linden for an endorsement now, can we. And I was really looking forward to wooing Michael
Jordan too.”
Sarah didn’t laugh at his gallows humor. Given Pacer’s tight budget, the company had never paid athletes for endorsements.
“That’s a joke, Sarah.” He tapped her arm.
“I know,” she said. “I just wish we would get some good reviews for a change.”
Henry nodded. The letter, waiting on top of his “In” pile, was the first thing he’d read that morning, and it had started his day on a sour note. Henry took pride in the number of serious runners who praised the technical excellence of his shoes and who had formed the core of Pacer’s customer base from the company’s early years. Criticism from Cal
Linden really stung. Cal was a former Boston Marathon winner and a longtime fan of Pacer’s flagship shoe, the Pacesetter. His support for the company’s new models, intro-
duced in June to
Collide
by Regina Fazio Maruca and Amy L. Halliday
Harvard Business Review
Reprint 93608
C A S E
S T U D Y
Pacer Shoes expanded its line and entered a new market.
Now the returns are coming in, and they’re not good.
When New Products and Customer Loyalty
Collide
by Regina Fazio Maruca and Amy L. Halliday
Henry Carson, president and CEO of Baltimore-based Pacer Athletic
Shoes, stood at the edge of the track behind company headquarters and watched as the fourth group of runners completed their final lap. They were testing a new line of running shoes, now in the final design stages, which Pacer planned to introduce in 1995. Henry examined the cracks on the surface of the track. He had hoped to put in a new one next spring, but right now he wasn’t so sure that the company would have the resources.
As the runners began a cool-down walk, vice president Sarah Levine joined Henry, looking perturbed.
“Did you read that letter I left on your desk this morning?” she asked.
“I did,” Henry squinted at her in the afternoon sun. “I guess we can’t approach Cal Linden for an endorsement now, can we. And I was really looking forward to wooing Michael
Jordan too.”
Sarah didn’t laugh at his gallows humor. Given Pacer’s tight budget, the company had never paid athletes for endorsements.
“That’s a joke, Sarah.” He tapped her arm.
“I know,” she said. “I just wish we would get some good reviews for a change.”
Henry nodded. The letter, waiting on top of his “In” pile, was the first thing he’d read that morning, and it had started his day on a sour note. Henry took pride in the number of serious runners who praised the technical excellence of his shoes and who had formed the core of Pacer’s customer base from the company’s early years. Criticism from Cal
Linden really stung. Cal was a former Boston Marathon winner and a longtime fan of Pacer’s flagship shoe, the Pacesetter. His support for the company’s new models, intro-
duced in June to