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 ce ck in 1975 a loyal Pa er model ba tt I’ve been d me se le ce el
Pa
er prop th your e Pacesett th came out wi at th y ed to sa fact, I us
.
ass status cl de? to worl shoe anymor find this e I th t t n’ ou ca ab g on ed? Why ne ads goin dWhat happen zi en ga an ma d e an te” l thes
Old Favori old You have al s from Your just want my rd I da t an bu
St
, ls ing de “New nn mo w ru able nifty ne lid, depend so uld less list of a wo s I wa d ck. It tles, an ba is wh te d ri an vo s fa ll s. t all the be nning year shoe withou st of my ru re e th r it fo ub, have worn
Running Cl the Dallas ing th er wi nd y wo rl regula so been al ve ha s
I work out mber been able an a few me thing I’ve ly on e and more th
Th
. tter Plus,
Pacesetter
the Pacese ed ll about the ca ride, g somethin
’s a cushy midsole. It to find is ning io er sh ft cu so a much ow that which has
d. I ke it. I kn ar li bo t er n’ ov do y, I ys went gu u ole yo but frankl wh t d my ght now, bu pillows, an o tw all is “in” ri on me g ve tter ga
I’m runnin
The Pacese feel like
.
st ju ad d to re body has ha ed. I ever need n io sh gh the cu e are enou thing? Ther t od gh go ou a th th never u mess wi ready. We al Why did yo et rk ma on the fad shoes ll out. se d ul you wo
Cal Linden

els, the RaceOne, but less than a week into practice, the toe stitching on half the pairs started to fray. Pacer immediately sent her a new shipment, free of charge, and dispatched a sales rep to make sure