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STRATEGIC PLANNING PROPOSAL | CHRISTINE SPITLER December18h, 2013

OUTLINE

Brand Positioning | The Opportunity

Consumer Insights

Trends Revisited

Current Trends

The Proposal

The Asics Brand

Appendices & Resources

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3-5

6-7

8-11

12-15

16-17

18-22

23-26

THE ASICS BRAND The ASICS Mission | The Details

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The ASICS MISSION

• ASICS, an acronym derived from the Latin phrase, Anima Sana In

Corpore Sano - a sound mind in a sound body. Staying true to the philosophy by which it was founded, every ASICS innovation, every concept, every idea is intended to create the best product. Our mission is to become the number one brand for the sports enthusiast. To accomplish this, we pledge to continue to make the best product; striving to build upon our technological advances and pushing the limits on what we can learn from the body and its needs in athletic gear. We pledge to bring harmony to the body and soul.

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THE DETAILS

INCOME BREAKDOWN

• 66% sport shoes

• 24% sportswear

• 10% sports equipment

GLOBAL SALES

• 49% Japan

• 28% North America

• 19% Europe

“In recent years their running shoes have often

been ranked among the top performance

footwear in the market.”

THE RESEARCH INSTITUTE OF SPORTS SCIENCE

• Located in Kobe, Japan

• 45,000+ sq. feet of research facilities

• Overall Goal: To enable professional and

recreational athletes to perform better, to

reach a higher level, and to enjoy

themselves.

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Low Price

High Price

Performance Footwear

Casual Footwear

*This chart is an estimate designed by me using brand research and consumer

opinion. 6

Low Price

High Price

Performance Footwear

Casual Footwear

*This chart is an estimate designed by me using brand research and consumer

opinion.

A mid-price

range shoe

that is

performance-

driven with a

casual design:

fun AND

functional.

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CURRENT TRENDS Neon Colors | Minimalism | “Design Your Own”

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NEO

N C

OLO

RS

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THE

MIN

IMA

LIST

SH

OE

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“DESIGN YOUR OWN” SHOES

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CONSUMER INSIGHT The Multi-Purpose Sneaker | Aspirational Athlete | Innovative Customization

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The Multi-Purpose Sneaker Over the past few decades, sneakers or trainers -- once made only for athletes -- have become must-have accessories for style-conscious people both in Japan and overseas, because they are versatile enough to mix with casual, sporty or even formal clothing.

-Eriko Arita in Japan Times

Athletic and non-athletic footwear are witnessing category-blurring trends. For instance, sports footwear is incorporating more fashion elements, such as colors

and seasonality, and is also extending its ability to be worn as street wear post-workout. Versatility and

multi-functionality remained important to budget-minded consumers, and they preferred products which

could be worn on multiple occasions. - “Footwear in the US: Trends” Euromonitor

“We're seeing sports products invading the fashion

world more and more. The two aren't separable, the way they used to be; you see guys wearing suits and

sneakers, and if you do it right you can pull it off. I think that'll continue to grow in 2014.”

- James Carnes, shoe designer, in Men’s Fitness Magazine- Sept. 2013

Most consumers aren’t shopping for specialized shoes, they want a

versatile sneaker to wear on multiple occasions.

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The Aspirational Athlete

“The footwear industry has been in an athletic cycle for a little more than two years now. It doesn't hurt that it's an Olympic year*, [which] usually has an impact on people thinking about being more active.”

-Rick Ausick, Famous Footwear President "The people going to brick-and-mortar tend to be the people at the last third of the race, the beginning athlete who needs a lot of guidance. They might have heard about this FiveFingers thing and they might buy a pair. And maybe they'll do as recommended and start off walking around or hiking in them, and go, 'Wow, this is a lot of work and kind of painful, versus my [ASICS] Nimbus, which are really comfortable and plush and they look good and I can go out afterward in them.' There's always going to be a place for traditional shoes that are soft and comfortable and look good.“

-Joe Rubio, a partner in the online running store RunningWarehouse.com

*Article printed in 2012

Many sneaker consumers are not highly active people. Their

sneaker purchase is either a realized or idealized desire to

become more active.

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Innovative Customization

The issue lies in systematizing [customized shoes] in a way that can lead to mass production in Asian factories and helpful guidance in American stores, all at prices runners are accustomed to. And, notes Steve Magness (formerly an assistant coach with the Nike Oregon Project and holder of a master's degree in exercise sciences), even if this X-factor could be isolated, it will be hard to keep its value in perspective. "There's going to be this shift of, well, maybe we can measure this other new thing really well, so let's make everything entirely based on that.

"The reality is, what people need in a running shoe is probably from some crazy combination of foot mechanics and pronation and muscle activity and structure," Magness says. "It's hard to tease out all these things and say, 'All right, here's the perfect combination.'“

It's difficult to see how the great running insight "We're all an experiment of one" can be matched with modern industry's penchant for flowcharts and categorization.

Excerpted from The Runner's World Complete Guide to Minimalism and Barefoot Running.

Athletic shoes are all about finding “the perfect fit”—which can’t be determined by one standalone measurement. Companies

need to explore innovative ways to measure and test shoe compatibility.

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TRENDS REVISITED Which Trends are Worth Adopting?

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Trends Revisited

+ NEON COLORS: Bright/ Neon Colors are a long-term trend worth adopting. “The brightly colored shoes are some of [Famous Footwear’s] bestselling products. I've been in the athletic shoe business for about 25 years now, and there's more color than there's ever been. You'll see it on 6-year-olds, and you'll see it on 60-year-olds.”

- Jason Short, Famous Footwear's VP of Merchandising

- THE MINIMALIST SHOE: The minimalist shoe is a dying niche market. "I think we may have reached the end of people's infatuation with them," says Peter Larson, author of the popular minimalist shoe blog Runblogger.com, about the FiveFingers. "The fit is so hard to get right. The toe pockets, you either love those or hate those when you run in them. I think a lot of them are sitting in people's closets.“ • About 70 percent of sales within the minimalist category go to one shoe, the Nike Free, most of which aren't

worn for running. Minimalist shoes account for about 11 percent of the U.S. running-shoe market. Remove the Nike Free from consideration, and sales of the remaining minimalist models constitute about 4 percent of the U.S. market.

• See Appendices A & B for more supporting research

+/- DESIGN YOUR OWN SHOES: The average consumer is only qualified to choose colors.

Consumers desire customization but lack the expertise needed to make category choices other than shoe color. Online consumers are typically more informed on what they are looking for, but the bricks-and-motor shopper needs more personal attention and direction on selecting a customized shoe.

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THE PROPOSAL Recommended Strategies & Ideas

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The Proposal

DON’T develop a niche minimalist shoe that seeks to match an unprofitable fad.

DON’T focus production on “street style” apparel in the US.

> Sportswear only accounts for 24% of ASICS income.

> Branded athletic “street style” in the US is only desirable by well-known

apparel brands.

Stay true to your overall goal of “enabling professional and recreational athletes to

perform better, to reach a higher level, and to enjoy themselves,” while capitalizing on the

casual athlete who needs guidance in athletic shoe shopping.

Expose your innovative testing methods used at the Kobe Research Institute in the retail

stores.

Develop new ways to fit customers to their ideal multi-purpose athletic shoe.

Then allow customers to experience the product—to put it to the test at a miniature testing

facility located within the bricks-and-mortar store, with the help of a “Perfect Fit

Specialist”.

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These flow-charts, diagrams,

and infographics are all

designed to help you find

the perfect running shoe.

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I shouldn’t need a flow-chart to

pick the perfect athletic shoe…

because I have the help of an

ASICS Perfect Fit Associate.

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I shouldn’t need a flow-chart to

pick the perfect athletic shoe…

because I have the help of an

ASICS Perfect Fit Associate.

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And I’m being fitted for shoes

using science technologies

developed at the Kobe

Research Institute.

APPENDICES & RESOURCES Additional Data and Resource Information

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Published by runningshoes.com

APPENDIX A A chart visualizing

the infiltration of the barefoot/minimalist

shoe market.

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“Is the barefoot/minimalist movement a long-term trend or short-term fad?”

Short-Term Fad • While there are benefits to barefoot/minimal products in

training, I still see it as a supplement to the everyday training shoe. More people are running for fun and for the social aspect of training with the goal of living a healthier lifestyle. The reality is that most of these people don't run every day. As an industry, I see the minimal category starting to swing back toward a shoe with more substance, but having implemented characteristics from some of the minimal shoes. – TED KUSHION, MERCHANDISE MANAGER,

FOOTWEAR, GAZELLE SPORTS • Innovation and natural motion are surely part of a longer-

term trend, while minimalism will undoubtedly soften at some point as the consumer confronts the performance and versatility limits of these products… From a performance perspective, elite outdoor athletes are not winning the big races in minimalist shoes (while they are in oversize shoes) and any shoe that requires both an instruction manual and a training regimen has some obvious versatility limits. – TOM BERRY, VP SALES, MARKETING &

MERCHANDISING, TECNICA SPA • I can say that there is a place for minimalist footwear in many

runners' "bag of training tools." But -and it's a big but -- for many runners, there are limits to how much it should be used without, in fact, increasing the risk of injury. – CHARLIE HOOVER, SHOE TECH CONSULTANT &

FORMER PHIDIPPIDES ENCINO OWNER • I don't think it will be a long-term trend. Many vendors will

dabble in this but in the end few will stick it out. There will also be people who want these types of shoes but most will try it and go back to a more supportive, cushioned shoe – JERICKSOBIE, BOARD CERTIFIED PEDORTHIST, FOOT

SOLUTIONS

Long-Term Trend • Many dedicated runners have embraced the concept quickly,

and certainly the broader marketplace for running shoes has made lightweight running their top choice for casual athletic footwear this year. Does that mean it is here to stay? I believe so, in a significant way. As a consumer, it is difficult to go back to restrictive, heavy, clunky athletic shoes after experiencing lightweight, minimal shoes. For me, it's like déjà vu all over again. I remember being in high school and buying my first pair of "real" running shoes. Since then running shoes have been my overwhelming choice to wear casually (as well as when I run) and even when I play other sports. – FRAN ALLEN, SVP GLOBAL SALES, SAUCONY

• I think it is long-term. It's partially based on looks but people are also into the benefits to the physical body from the shoes themselves. Once in a while the market comes up with something innovative that will stay around for a while. These shoes are one of them. – BRIGITTE LIEDKE, BUYER, SUMMIT SPORTS

• I wouldn't call this a trend or a fad; it's an expansion of the current lineup of footwear options available to runners. Minimalist running is something that works for some, but not all; just like stability shoes make sense for some but not all. The addition of minimalist options to existing product lines is helping to create a world where more consumers can find the running shoe that best fits and works for them. – COLIN TRUE, NATIONAL sales manager sports &

OUTDOOR, PRO BAR

"Is The Barefoot / Minimalist Movement A Long-Term Trend Or Short-Term Fad?." Sgb 44.3 (2011): 8-

12. Business Source Complete. Web. 17 Dec. 2013.

APPENDIX B

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Resources

• Arita, Eriko. "Get your kicks in Japan." Japan Times 18 Sept. 2011: Newspaper Source. Web. 17 Dec. 2013.

• Douglas, Scott. "Sales of Minimalist Shoes Plummet." Runner's World & Running Times. Rodale, 13 May 2013. Web. 17 Dec. 2013.

• Douglas, Scott. The Runner's World Complete Guide to Minimalism and Barefoot Running: How to Make the Healthy Transition to Lightweight Shoes and Injury-free Running. New York, NY: Rodale, 2013. Print.

• "Fast Forward." Men's Fitness 29.8 (2013): 48. Consumer Health Complete - EBSCOhost. Web. 17 Dec. 2013.

• "Footwear in the US." Euromonitor International Passport. N.p., 14 Aug. 2013. Web. 17 Dec. 2013. <http://www.portal.euromonitor.com.proxy.lib.muohio.edu/Portal/Pages/Search/SearchResultsList.aspx>.

• Kumar, Kavita. "Famous Footwear emphasizes athletic brands for back to school." St. Louis Post-Dispatch (MO) 13 Aug. 2012: Newspaper Source. Web. 17 Dec. 2013.

• Megroz, Gordy. "The Clown Shoe That's Changing Minimalist Running." Outside Online. N.p., 03 Dec. 2013. Web. 17 Dec. 2013.

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