The problem with brand management over time is how to deal with change. Customers change; society values change; and competitors change too. Few examples illustrate the challenges of change as well as the case of Salomon, the world winter sports leader with 30 per cent of its sales in Japan, 30 per cent in Europe and 30 per cent in North America.
In 1995, in an executive committee longterm planning meeting, a hypothesis emerged that established a scenario for the future, in which it was probable that the young teenagers who were giving up skiing to take up snowboarding would never go back to skiing and the other traditional winter sports that had established the reputation of not only Salomon but also Rossignol, Kneissl, Dynamic and others.
On the basis of this prediction, it was decided to present a full range of snowboards at the forthcoming professional winter sports world exhibition. However, the stand remained bereft of visitors throughout the exhibition: visitors (who were all retailers) walked past without even stopping.
For a company ruled by technical innovation, (for example, Salomon’s safety bindings are world leaders), it was a major shock. Meanwhile, Salomon’s overall sales shrank from s442 million in 1993/94 to s437 million in 1994/95, s396 million in 1995/96, and then s365 million in 1996/97 – a lower figure than in 1992/93. It should be said that between 1994/95 and 1995/96, world snowboard sales doubled while ski sales fell by 16 per cent.
The diagnosis was a shock, too. Salomon was perceived as an anti-model by new generations of anti-conformist, rebellious ‘snow surfers’ worldwide, who were opposed to the values prevalent in alpine skiing and in the sporting system in general. After all, a brand is always more than just a name.
It is a point of view about a category, a vision, a set of values. As a pillar of the Olympic ideal and the Winter Games, and the first choice of the world’s top ski teams, Salomon was becoming the symbol of a world from which the snowboarding community wanted to distance itself, standing as it did in total opposition to its values.
Indeed, what are the typical values of traditional winter sports in which all participants ski along wide avenues of well-packed snow? What are the Olympic values if not individuality, competition, beating competitors, shaving off hundredths of a second, order and hierarchy? By contrast, snowboarding – which is after all a direct descendant of surfing – is about getting together in groups, going offpiste and enjoying unique snow sensations centred on the values of fun, groups, friendships, anarchy, freedom, pleasure and a disdain of competition.
Breaking with traditional values, snowboarders form tribes with very well-defined dress codes, in sharp contrast to the traditional clothing of the piste skier. Surfboarders generally shun the reds, whites and blues of traditional ski suits in favour of fluorescent colours straight out of the Timothy Leary psychedelic movement. Furthermore, snowboarding is a combination of sport and music: participants always wear their personal stereos on the slopes. This makes it more than just a sport: it is a sect.
Salomon’s very future was at stake. The diagnosis was that there was no question of creating a new, dedicated snowboarding brand: to do so would ultimately be to sign a death warrant for Salomon and entomb it within the practices of yesterday. Surgery was required on the brand itself in order to bring about a profound change in its identity. Winter sports are not a segment or an activity, but instead represent a fundamental shift in western society. Therefore, no winter sports brand can afford not to play a part. A brand identity overhaul was thus set in motion.
The second part of the diagnosis was that Salomon should continue to maintain a presence in the ski and snowboard markets. The former market was the source of its current revenue; the latter would generate the revenue of the future. This left the brand with no choice: a dual marketing approach was needed.
However, there is no room for schizophrenia within a brand. There is room for only one value system to be attached to any given name. When it comes to values, a brand cannot serve two masters. The answer was thus to reduce the values gap between skiing and snowboarding, bringing the former increasingly closer to the values of surfing: fun, sensations and pleasure.
This is where concept and product innovation came in. Salomon invented parabolic skis, freeride skis, X-screams skis and improved mini-ski technology. All of these new products offered new sensations and delivered the snowboarding feel without the snowboard.
By means of these innovations, Salomon achieved an effective reduction of the distance between skiing and snowboarding or snowblading. Salomon thus dragged skiing out of its traditional mould – a case of the category leader changing along with the category as the key to its survival.
But the hardest work was yet to be done. How was the firm to make up its lost ground in the opinion-leading teenage target market to which it remained the anti-model and very epitome of tradition? Of course, it could already count on the democratisation of the snowboard and snowblade.
Assuming that this process continued, reaching increasing numbers of less radical people, the assets of the Salomon brand could offer them reassurance. However, the world of sport is dominated by fashions and by opinion leaders, who saw brands such as Quiksilver as the real stars.
Three radical decisions were taken to bring the brand closer to its reticent (or even hostile) targets: listening to customers, the creation of Salomon Stations, and a strategic extension into rollerskating.
Listening to customers became Salomon’s main method of conducting market research. Young people were sent out to spend time alongside – and learn to understand – surfers and young teenagers on the US West Coast, since they are opinion leaders. Using this ethnographic method of participatory observation, they could feed back continuous information on forthcoming trends, expectations, key words and so on.
Another step was the creation of Salomon Stations, friendly places right at the heart of winter sports towns, offering a listening environment at the bottom of the pistes. The exercise was not about selling products, so as to avoid competing with local retailers, but rather about stimulating dialogue in a relaxed setting, thus furthering the values and practice of the sport. However, considering the significant set-up costs and times, another approach was needed: this took the form of brand stretching into the rollerskate and inline skate market.
This strategic extension was triggered by a simple observation: young people only spend one month a year playing winter sports. If Salomon is to become their brand, they must be approached during the preceding 11 months – and snowboarders are one and the same group as the die-hard rollerskaters found in town and city streets the world over.
Furthermore, with regard to the actual rollerskates, Salomon’s technical expertise could offer a significant advance over the performance of existing roller skates in two key areas: comfort and safety. As a world leader in mountain shoes and safety bindings, Salomon alone had the means to take a significant forward step through innovation. This led to the 1999 launch of a new range of roller skates whose performance characteristics were widely acknowledged.
The third strategic decision was based on an observation: in snowboarding, ‘software’ is just as important as hardware. It was not enough merely to be a manufacturer of products, however technically excellent. What was needed was the introduction of design, colour and hyper-modern codes capable of attracting young people brought up in the culture of tag graffiti and comic books.
Most importantly, a plan was needed for marketing the ‘software’, extremely modern clothing ranges which would reflect the changes within the brand. Hence the purchase of the Bonfire textile brand, which enjoyed a high profile among surfers – and, more importantly, enlisting the help of Adidas in 1997 to assist in these changes.
After all, who better than Adidas to master the balance between aspirational hitech and textiles and sportswear, worn by the young and not-so-young alike, immersing them in the crucible of worship of sport (and thus of the body)? Furthermore, there is great profitability in textiles, which are sports derivatives. Until then a family company which had been founded by Georges Salomon, Salomon discovered in Adidas the financial resources and expertise to assist in the transformation of its identity and business model.
The same strategy continues today: in a nautical twist, Salomon is now entering the surfing market. This is the result of a redefinition of its identity and business: it has moved from a product-based definition (mountain shoes and safety bindings for skis) to an identity based on the activity itself (winter sports) and on values (sensations and pleasure).
It has developed from a cyclical business threatened by the vagaries of the climate (‘Will it snow this year?’) to a permanent business with its grass roots in the tarmac roads of New York and Oslo. Tomorrow, they will also be in the waves of Australia, California and the South of France. This product extension also satisfies the goal of profitability: it will enable the follow-up launch of a complementary textile range. After all, a textile range in this sector needs legitimacy, of the sort that is conferred by the equipment. The extension into surfing has no other aim than to provide this legitimacy.
Lastly, on the communication front, Salomon developed a relational marketing system and created communities. It initiated the Salomon X-Adventure ski trek in Europe, the United States and Japan, created ‘free-ride’ stages and offered a host of ‘challenges’ for inline skaters and snowbladers. It also put an end to superficial sponsoring. Now the champions, and opinion leaders for young teenagers, are more than just a brand vehicle – they are co-creators with Salomon.
What can we learn from this? A brand can only survive change if it is constantly reearning its relevance among target groups of which it may have had little understanding. Paradoxically – as has been shown by Christensen (1997) – in their quest for ‘good’ management, companies often become slavishly devoted to understanding their existing client base.
In the process of satisfying their own customers better and better, brands become these customers’ hostages and neglect the weak signals of social or technological change. Considering that this change generally takes the form of a break with existing habits and products, it is rejected by the brand’s existing customer base. The brand then works harder and harder to please a clientèle that does not represent the future, thus becoming an anti-model for innovators and tomorrow’s customers.
The necessary process of winning customers over again takes time and requires a systematic, coordinated, focused approach which involves all areas of the company. It implies an internal revolution – at the management, organisation and identity levels.
It starts with a redefinition of identity. What parts of the old identity do you keep? What do you change to help in coping with changes in society and the rise of all the new sports that were still unknown 10 years ago? Salomon’s slogan – which defines its business and field of competence – is now ‘freedom action sports’, which applies equally to the mountains, the town – and in future, the sea too. This shows the path followed by the brand over time:In 1950, its identity was based on a product – the ‘binding’ safety fastening, an essential component.In 1980, the brand’s entire identity, skills and value system could be summed up as skiing.In 1990, its identity became focused on mountains, with the introduction of hiking boots and the like.In 2000, the brand expanded its target and field of competence to a particular area, a conceptualised sport: freedom action sports. It became a specialist multi-sport brand, serving this concept and its underpinning values. What are these values? Freedom means unrestricted sensations and ‘my style’; action means energy, gravity and the environment as a playground; and sports suggests gliding, adventure, riding and so on.
To equip itself against competitors and changes among consumers, distribution channels and competition, the brand continues to capitalise on its historic skills: its unique know-how in working with professionals to design pure, simple, unique, innovative products.
It has had to acquire new skills in order to communicate with – and indeed, enter into a genuine relationship with – a new generation of young sports enthusiasts worldwide.
Salomon has thus widened its target to young people and teenagers, tomorrow’s trend leaders. Activating this identity implies a long-term commitment and substantial human and financial resources dedicated to:Product innovation (brand extensions play a strategic role here). For this purpose, Salomon sets aside 7 per cent of its turnover for research and registers 80 patents per year. The company has also reduced its product-to-market timescales to one year for composite products and two years for mechanical products (bindings). In addition, opinion leaders are involved at an early upstream stage in the creative process, and surfers can contact the brand via the internet to influence research into new products.
Furthermore, Salomon’s product range marketing is no longer segmented simply into the old three categories of age, sex and skiing ability: a fourth category has now been added (the type of sensation sought after).The brand’s role as an engine for moving ‘old-fashioned’ but still majority activities (such as skiing) towards something more modern via new sensation-based products, and in so doing narrowing the gap that exists within both the brand and winter sports as a whole. In addition, snowboarding has become an Olympic event, and Salomon has been able to forge a link with Edgar Grospiron, an emblematic figure in winter sports.Offering a complete range of experiences via challenges, competitions, ski treks and so on, and also via sportswear ranges.Communication that has at last become more interactive, guerilla-styled and street-focused.Proximity to the customer; perhaps even a direct relationship in locations devoted to the brand, during events and the like.
The commercial and financial results reflected the radical effort which had gone into adapting to this change: sales rose from s390 million in 1997 to s435 million in 1998, and s500 million in 1999. The company reversed its 1997 deficit to move back into profit in 1998. Bought out for 1.2 billion dollars by Adidas – 40 times its profit in a sector where the average multiple was just 20 – the Salomon group was keeping its promises. However, because global warming makes future snow levels uncertain, Adidas decided to sell Salomon to the Finnish sports group Amer, which already owned Atomic skis and Wilson tennis rackets.