ATOMIC Ski USA Inc.: Brand marketing reaps handsome rewards

From Next magazine issue 4/2002. Text by Jussi-Pekka Aukia

"We started very near the bottom in North America. Now we are somewhere around number two or number three. We are very close to number one," says Jack Baltz, President of Atomic Ski USA Inc.

Atomic Ski USA Inc. is based in Amherst, New Hampshire. The company is responsible for the importing and marketing of Atomic's products in the United States, where Atomic is a growing ski brand in terms of both sales volume and market share.

Sales of Atomic's alpine skis in the USA in 1997 were 32,000 pairs; this winter the company is expecting to sell 135,000 pairs. Over the same period Atomic's market share has risen from 3 to 15 per cent.

Jack Baltz believes that Atomic has succeeded in the US because it chose to differ from the approach taken by its competitors.

"Five years ago we developed a new business strategy based on the marketing of a single brand rather than skis, binders and boots as separate products. All available resources are now aimed at developing the brand because if it is successful, so too are all the products that bear its name."

"The second most important thing is that we really focused on the needs of our dealers. And that meant not just the products they needed, but also good margins, good service, and quick turn-around of product. In our eyes they are just as important as the products themselves. We have good products but if we hadn't given our dealers good service and good margins, I don't think we would have been half as successful."

The third factor is the clear superiority of Atomic's products and the brand loyalty that stems from it.

"There's no doubt that the better the ski equipment, the easier and more enjoyable it makes skiing. And that's why people who try our equipment once come back for more, even though we are the most expensive brand in the United States and we have the highest average selling price in the market."

Growth in a shrinking market

Atomic's growth figures must be regarded as a fantastic achievement given the fact that alpine ski sales have been falling in the United States for the past fifteen years. US ski sales have almost halved from their 1988 level of 1.3 million pairs to about 750,000 pairs this year.

"The market has contracted by about 2-3 per cent annually, and in winters with little snow the decline has been even more pronounced. Actually, the fall-off in ski sales has been offset to some extent by the growing popularity of snowboarding."

The weather conditions in recent winters have not been favourable for skiing. In only two of the last ten winters have there been really good snow conditions, and there have been a number of winters when the snowfall was unusually light.

"Even so, the main reason for the decline of the alpine skiing equipment market is intensified competition for people's leisure time. Today there are many more competing leisure-time opportunities than there were 15-20 years ago."

"Vacation opportunities in warmer climates - such as Florida's Disneyland, Las Vegas and various ocean cruises - are attracting many more winter holidaymakers than they did in the 1980s. The popularity of home computers, the Internet and video games is also apparent on the ski slopes."

"Alpine skiing is a family sport in the United States, and the number of nuclear families - mom, dad and kids - doing things together has fallen from 75 per cent to 50 per cent in the last twenty years. The data proves that if a kid is going to start skiing, it's because his mother or father does. The absence of young skiers on the slopes has raised the average age of alpine skiers, which in itself harms the sport's image and makes it less attractive to young people. It's a vicious cycle."

The average age of alpine skiers has risen over the past five years from 36 to 40 years. "The whole industry is working actively to bring more young people into the sport. Ski resorts are being developed to make them more interesting to young people, and the manufacturers are working together to promote the sport and raise its popularity. Everyone understands the vital importance of bringing new blood into the world of alpine skiing."

"The biggest skiing clubs are - surprisingly perhaps - in Dallas and Miami. Many people move south in later life, but they don't want to give up skiing. The Miami club even has its own aircraft to fly members up to the ski resorts of Colorado and Utah," says Jack Baltz.

Listening to customers

The Atomic alpine skis sold in the United States are manufactured and for the most part also designed in Austria, as there are hardly any differences between the needs of American and European skiers. The product range as far as skis is concerned is almost identical on both sides of the Atlantic.

All the products arriving from Europe go through Atomic Ski USA's Amherst logistics centre.

"The skis, binders and boots imported from Austria are excellent, so we haven't needed to devote much time at all to the development of new products specifically for the US market. That has allowed us to concentrate on marketing and collaboration with our dealers."

Baltz stresses the importance of discussing the needs and desires of customers with key dealers.

"We are a market-oriented company. We find out what the market wants and then develop products accordingly. Many of our competitors take the opposite approach: first they develop a product and then try to get people to want it. Why not sell people the products they really want - it's easier too!"

Atomic snowboards poised for launch

This year the Atomic snowboard brand will be launched properly for the first time in the United States.

"Our snowboards are sold under the Atomic and Oxygen brands. In accordance with our brand strategy, the emphasis in future will be on Atomic snowboards. This year's models were still designed in Austria, but next year's products will be the fruits of all-American design work."

Baltz points out that the United States is easily the world's leading snowboarding country, accounting as it does for 70 per cent of global sales, i.e. about 450,000 units per annum.

"We believe that it is important that the product development and marketing of Atomic snowboards is based here in the United States, which after all is where the customers are. Austria is the global leader in skiing technology, but when it comes to snowboards the best expertise resides in the United States."

Next year Atomic Ski USA will be devoting ten times the resources previously allocated to the design and marketing of snowboards. Atomic's snowboarding competence centre, which is responsible for the design and technology of new snowboards, was relocated to Amherst in June of this year.

Moving the competence centre to the United States was a really important change because in the eyes of snowboarders Atomic now bears the hallmark of a real snowboard company rather than a ski company that also makes snowboards.

"Instead of being driven by engineers, the products will be developed and designed in close collaboration with snowboarders and our snowboard team. Part of the culture of snowboarders is that they are independent and don't want to be told what to do, how to do it, where to do it and when."

Atomic Ski USA's snowboarding and alpine skiing operations will be run as two separate units, even though they are based in the same building.

Teenage snowboarders

Snowboarders in the United States are predominantly teenagers, and they typically want to differentiate themselves from others on the mountainside in every way possible, including their clothing.

"That dissident attitude has diminished recently thanks to the growing popularity of new alpine sports like back country skiing in deep powder. Five years ago only snowboarders did that. Now there is mutual respect between snowboarders and skiers, and they can go out and share the same mountain," explains Baltz.

"The average age of snowboarders has remained at a fairly constant 16 years of age, which means that youngsters are taking up the sport as older kids move on to something else. Snowboarding has taken a lot of young potential entrants to the ranks of alpine skiers. On the other hand, many snowboarders switch over to skis in due course and about 30 per cent engage in both sports at the same time."

Baltz believes that Atomic has an excellent chance of duplicating its success with alpine skis on the US snowboard market.

"We have the best factory in the world, we are financially sounder than just about any of our competitors, and we have the finest R&D group in the world in the snowboard industry. If we can build, market and sell the best ski products, it makes sense to us that we should be able to do the same thing with snowboards. We have the right ingredients to make the cake and now we will mix them the right way."

Consumer's bible

The US consumer buys his or her skis from specialist ski stores.

"The breakdown of alpine categories in the US is much the same as in Europe. In addition to Racing, Atomic has Carving, All Mountain, Women's Collection, Junior and Free Ride. No single category is that much bigger than any other."

More than half of Atomic's skis are sold together with their bindings and perhaps a third with boots as an integrated package.

Five years ago Atomic was predominantly known as a racing brand and 40 per cent of the skis sold were in the racing category. "Today we cover the whole market and we aren't stuck in any corner. We still enjoy an important position as a manufacturer of racing skis, but their commercial significance is small. Competition skiers certainly do enhance the brand image, but the importance of this is not so great as in Europe."

More important than racing victories is success in comparative product tests in the two leading skiing magazines. Product doesn't really start to move off the store shelves until the test results are published in early autumn. Many customers actually walk into the stores with magazine in hand.

"There are two magazines, Skiing and Ski, and every autumn they test all of the brands in about twelve categories, awarding them bronze, silver or gold medals. In the last three years we have won more gold medals than any other brand in the world. We got a gold medal in every single category they tested this year."

The tests are like a bible for consumers. They are absolutely impartial as all the ski manufacturers advertise in these magazines.

"The skis are painted white so that the testers do not know what brand or model they are using. All the skis are tested at the same time. The testing is as fair as it can be, as the magazines cannot afford to be partial towards any of their advertisers."

Cross-marketing

Atomic does not spend a lot of money on advertising, but it does collaborate in advertising with companies outside the skiing business that have customer bases of similar age structures and consumption habits.

"Cross-marketing is extremely important to us, because co-operation with the automobile manufacturer Pontiac and the brewer Samuel Adams gives us a lot more exposure than we would otherwise be able to afford. We use intelligent humour in our own advertisements in order to support the brand rather than just to sell skis and snowboards."

Atomic does a lot of direct marketing to consumers and it has a very good website.

"We target a lot of direct mail shots at specific segments of the market: for example, all of the ski instructors. We also keep the most influential people in the industry up to date with our new products and technologies."

Grass-roots marketing

Supporting retailers is the most important function of Atomic Ski USA's marketing.

"We know quite a lot about the 750,000 people who are going to buy skis this year. They read one of the two magazines and they go to a specialist ski shop to buy their product. That's why we advertise in those magazines and why we focus so much on what we look like inside the store."

Atomic has a so-called shop-in-shop inside about a hundred ski stores.

"Similar solutions have long been used in the marketing of other consumer products, but Atomic was the first to try out the concept in the alpine skiing equipment industry. It means that we can be sure that our products are merchandised in precisely the way we want."

The shop-in-shop is designed to keep potential buyers focused on Atomic's products until such time as a salesperson is free to serve them.

"The customer can walk in, watch a video and examine the products in peace. By the time the salesperson has arrived the customer will already have learned more about the products on sale, making it easier to select the right product in consultation with the store's representative."

Atomic also has seven brand new promotional vehicles, which travel around from dealer to dealer outside the skiing season.

"One such vehicle can visit as many as thirty dealers a week. Their purpose is not to sell product but to support the retailers' business. The people working in the stores get a clinic on our products and technologies so that they are better prepared to provide their customers with informed guidance."

Once the snow comes, these trucks head for the mountain ski resorts, where they are used to demonstrate Atomic's products to customers - again in collaboration with the local ski store.

"Specialist ski stores often invite their best customers to attend special events. On a good day as many as 200 people will try out our skis at such an event. If necessary we will ensure that a promotional vehicle is there."

Baltz says that as many as 50 per cent of the people who buy a new ski try it out first.

"You don't buy a thousand-dollar pair of skis on an impulse. The biggest ski resorts have permanent demonstration points where customers can try out skis, and many retailers have demo skis in their stores as well."