Case Facts:

Baltimore based Pacer athletic shoes started out as a small company in 1970s and
became $10 million Company by 1990s. 1990s industry statistics analysis report,
mentioned that athletic shoe market was booming and large players were trying to
increase their market share.
The marketing research indicated that Pacer was gathering young customers,
however 10% of the Pacer wearers were lured by flashier shoes industry giants. Due
to this, Henry, CEO of the company decided to expand from serious runners
(target segment of Pacer) to broader market of casual runners and
walkers.
Issues faced:
However the concern of Sarah, the Vice President of the company was that the new
print campaigns run by the company were hampering the current market
positioning.
Also, the bad review by Cal Linden didnt help the companys case either. Next
the incident at the Westford High school also made the leadership team question
about the new shoe: PacerPlus.
Quality issues also started arising as the Pacer increased the number of designs
being produced from past 15 years 5 to current 11.
Next in 1995, however the company was spending huge money on marketing but
there regional share was decreasing and presence in the broader market
was also not impressive.
Problem Statement:
Company was in a dilemma that whether their choice of expansion was right or not?
Can and should the company relaunch the old Pacesetter (which all the loyal
customers are asking for)?
The other question was how to tackle the issues faced and raise Companys
morale?
Case Snapshot:

Case Snapshot
Launch Pace
Setter Plus
Relaunch
Original
Pacesetter
Maintain
original

Volu
me

Market
Share
Growth

Brand
Image
clarity

Value for
customer

Company
morale

Same

Not likely

Low

Not clear

Increase

Not
clear

Not likely

Low

Not clear

Lower

Same

Same

Same

Same

Same

Case Analysis:
As the Industry was expanding, Pacer though took the right decision of extending
the product line however they were not able to communicate the new
positioning to their loyal customers. Because of this loyal customers started
shifting to other brands and newer customers also became difficult to acquire.

Therefore the company should not have phased out its popular and original Pacer
brand.
They should relaunch the original Pacer brand to satisfy the loyal customers and
should focus on popularizing amongst the younger generation since Pacer brand is
already able to acquire them, even for the new product line extension.
Next, as Henry mentioned in the case that the company stands for technical
excellence, therefore, the company should give prime importance to quality. Hence
they need to ensure set quality standards at the two plants in South Korea.