Case StudyROLLERBLADE: ON TOP OF THE MARKET
What's the hottest sports/leisure activity in the United States? Basketball? Soccer? Running? Dancing? None of these: It's
. Since 1995, when in-line skating jumped from third to first place, more Americans haveput on their skates and taken to the asphalt than have joined any other participation sport. And as all those Americanshit the asphalt, companies such as Rollerblade have produced a flood of new in-line skate models and types.Knowing that idols such as Madonna and J.F.K., Jr., like to in-line skate enhances the popularity of the sport evenmore.The number of new models and skates attests to the wide ranging motivations Americans have for skating. For some,it's just fun—afternoon exercise in the park and a chance to get some fresh air and sunshine. For others, in-lineskating is serious exercise ideal for maintaining fitness. Still others race or compete on skates or participate in sportsassociated with in-line skates, such as hockey.To keep up with the market, manufacturers of in-line skates carefully study market statistics, looking for changes.For example, an examination of data on the Rollerblade Website (www.rollerblade.com) indicates rapid growth in thetotal number of in-line skating participants, even if growth is slowing a bit. Between 1994 and 1995, in-line skatingparticipation grew 20 percent (compared to growth rates higher than 30 percent in the preceding five years.) Growthreached 22 percent between 1995 and 1996.What do changes in the popularity of in-line skating mean for a company like Rollerblade? Rollerblade pioneered in-line skating in the United States when Brennan and Scott Olson decided to sell in-line skates to hockey players duringthe off-season in the early 1980s. Throughout most of the 1980s, Rollerblade had market shares of around 80 to 100percent. But as in-line skates sales grew, so did the competition. Firms such as K2 entered the market and thecompetitive pressures forced all firms to create distinctive differences between their brands. With its early jump onthe competition and aggressive marketing, Rollerblade has maintained a market share greater than 40 percent, butdoing so requires paying close attention to the market. Recent declines in the growth rate call for examining marketdata even more closely.To understand the market, you must first answer the question, “Who skates”? Thirty-five percent of all skaters arechildren under 12, and 29 percent are teens. But the greatest growth in number of skates in 1996 versus 1995occurred among adults aged 35 to 54 years (a 61 percent increase). When you couple that with the fact that babyboomers—yes, those same 35- to 54-year-olds—are the largest age group in the United States, it doesn't take a rocketscientist to figure out where the potential market growth is. Nor does it take much science to realize that the kids,teens, and adults skate for different reasons.Kids and teens may be in the sport for fun, transport, or sport. Adults are more likely to skate for fitness. Aging babyboomers are attracted to in-line skating because a 30-minute workout on skates burns the same number of calories asa 30-minute run. But it has less impact shock on joints, stronger cardiovascular benefit than stair-stepping machines,and higher activity for muscles of the hips, thighs, and shins than running or cycling. Furthermore, because they findin-line skating to be more fun, participants tend to skate longer than they run or cycle.Besides understanding customer motivations for skating, Rollerblade needs other information, such as where skaterslive, how frequently they skate, their skill levels, and other facts. An examination of statistics on the RollerbladeWebsite indicates that big states like California, Texas, and New York have the largest
of skaters; smallerstates such as Utah, New Mexico, and North and South Dakota have a greater
of skaters. Thus, the bigstates are attractive markets because of their size, but in smaller states, in-line skating is actually more popular andsales may be easier to obtain.