Puma marketing2.doc
Transcript of Puma marketing2.doc
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INTRODUCTION
Puma is a highly respected and regard brand across the globe. Indians now
have the chance to become a part of this leading fashion and sporting brand.
It aims first, at analyzing the sports shoe industry India and finding a place in it
for Puma. It then sets out to describe the target audience for the product range
and finally suggests a host of marketing strategies and activities that will help
Puma to achieve its target of becoming the #1 sports shoe brand in India.
Puma is the world's # sportswear manufacturer. It has a longstanding historic
rivalry with the #! manufacturer "didas, not least because the two companies
were founded by brothers udi and "di $assler. "rea of production covers of
ma%imum &ports and end of fashion products. Product of sports of involves
ootball, unning, (otorsport, )olf and &ailing.
P*(" has started true to its four cornerstones+ heritage, sport, technological
innovation and design over the years. he brand is focusing on bringingdistinctive designs and a global outlook to each product range by blending
influences of sport, lifestyle and fashion.
his fusion is known as -&port lifestyle. P*(" views sport as a philosophy on
life / one that emphasizes fitness, wellness and simply living an active life.
&ince &port can be different things to different people, P*(" approaches it in
a greater0lifestyle conte%t, while not compromising performance. his is
e%actly what the brand means when it speaks of -&port lifestyle.
he study then goes on to the customer analysis section. he customer base
is identified and various segments are pointed out. arious criteria and factors
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have been taken into consideration while segmenting the market. 2e have
also tried to ascertain why customers buy these products, how they choose,
and what factors matter most when making their decisions.
3efore moving onto the portions dealing with the strategies and marketing
plan proper, some assumptions are made. he rationale behind these
assumptions, dealing with market potential and sales forecasts is clearly
defined.
ollowing the section on planning assumptions, the report moves on to the
cru% of the matter / the marketing plan to be followed by Puma in India. irstly,
the ob4ectives behind this plan and the core strategy are stated. 5ustomers to
be eventually targeted are described and compared with competitors6
customer targets. "fter starting the ob4ectives and reasoning behind them, the
actual marketing programs are described in detail. his includes aspects such
as pricing, advertising, promotion, sales, channels, and the company website.
&uggestions are made on each and every one of these aspects7
improvements and innovations are recommended.
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RESEARCH OBJECTIVES AND SCOPE
OBJECTIVES OF STUDY
The main objectives of the st!" a#e$
1. o analyze the marketing strategies of Puma in footwear and sports segment
!. o study various sales strategies and know about the current strategies keeping in
mind the cut throat competition.
. o find out the customer satisfaction level.
SCOPE O% THE STUD&
1. It helps to know that which publicity media gives ma%imum retention to the
customers.
!. he study also helps the company to improve their standard of service 8
handle the competition in the near future.
. It also helps in putting in possible improvements, additions, and new
strategies and offers the customers.
9. It also puts a detailed insight into the different aspects of the company,
such as manufacturing, marketing, sales promotion, etc.
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CO'PAN& PRO%I(E
Puma is one of the biggest international shoe brands in the world in the
leagues of :ike, eebok and "didas. Puma India was set up in !;;< and this
was an advantage for it as the )erman brand became one of the first
international shoe brands in the country. 3ut then in the last < years, how
many times have you seen a Puma commercial or huge billboard
advertisement or heard a 4ingle= I am sure you can count on your fingers. 3utthat would surely not be the case with say a eebok or a :ike>
)hat*s the !iffe#ence +ith Pma,
Puma has always gone for a subtle branding and communication strategy to
target its customers in the age groups 1?0!< years / the ones who use their
products the highest
ather than go overboard with , 3illboard or print advertising, Puma has
always concentrated on digital as well as in / store branding and retailing.
Positive word of mouth from satisfied customers is what Puma has always
http://trak.in/Tags/Business/category/trends/advertisement-tv-ads-creative-ads-indian-tv-ads-television-ads/http://www.afaqs.com/news/story.html?sid=29138_Puma+Decoded:+Why+it+keeps+a+safe+distance+from+mass+mediahttp://trak.in/Tags/Business/category/trends/advertisement-tv-ads-creative-ads-indian-tv-ads-television-ads/http://www.afaqs.com/news/story.html?sid=29138_Puma+Decoded:+Why+it+keeps+a+safe+distance+from+mass+media
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tried to achieve as its main communication strategy as this purchase is a high
involvement category.
Puma6s strategy is built on left brained communication as it e%plains the
concept of the brand at a level from which one can form opinions and
conclusions. his gives an option for a person to be 4udgemental @ non /
4udgemental.
Puma desires to be the brand for people who want something to show off as a
status symbol or to satisfy their esteem needs. Aarly adopters would leave a
brand they consider as desirable if it starts appearing anywhere and
everywhere.
ather than specially placing a product by its name in a movie, Puma India
concentrates on building attention or awareness about the brand without
mentioning the name. &ince the brand appeals to fashion as well as sports
conscious individuals, it strongly relies on digital advertising.
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'ISSION
Puma has the long term mission of becoming the most desirable and
sustainable sports lifestyle company.
HISTOR&
Puma ") udolf $assler &port, officially branded as P*(", is a ma4or
)erman multinational company that produces high0end athletic shoes, lifestyle
footwear and other sportswear. ormed in 1B!9 as )ebrCder $assler
&chuhfabrik by "dolf and udolf $assler, relationships between the two
brothers deteriorated until the two agreed to split in 1B9D, forming two
separate entities, "didas and Puma. Puma is currently based in
Eerzogenaurach, )ermany.
he company is known for its football shoes and has sponsored acclaimed
footballers, including PelF, AusFbio, Gohan 5rui4ff, Anzorancescoli, $iego
(aradona, Hothar(atthus, Jenny $alglish, $idier $eschamps and )ianluigi
3uffon. Puma is also the sponsor of the Gamaican track athlete *sain 3olt. In
the *nited &tates, the company is probably best known for the suede
basketball shoe it introduced in 1B?D, which eventually bore the name of :ew
Kork Jnicks basketball star 2alt L5lydeL razier, and for its endorsement
partnership with Goe :amath.
ollowing the split from his brother, udolf $assler originally registered the
new0established company as uda, but later changed to Puma.MN+1 Puma's
earliest logo consisted of a sOuare and beast 4umping through a $, which was
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registered, along with the company's name, in 1B9D. Puma's shoe designs
feature the distinctive LormstripeL,MN+ with clothing and other products
having the logo printed on them.
he company also offers lines shoes and sports clothing, designed by
HamineJouyate, "my )arbers and others. &ince 1BB? Puma has intensified its
activities in the *nited &tates. Puma owns !
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really difficult for the brand to sustain itself and it may force it to go the
conventional above the line advertising route>
A5A: ("JA &I*"IS:
Puma 5ompany recently announced the details of the so0called Lback attackL
pro4ect, which aims to make an annual profit of 9; billion Auros in !;1
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Provincial Public &ecurity 3ureau police received a clue+ :ingbo 5ustoms
found ? e%port items of a company in Wingdao does not match to what its
customs clearance of the actual name of the goods when e%amined their
samples. "fter police arrived at :ingbo they found that the goods were
appro%imate ? items whose value reached1 million, including the H THouis
uitton U, "$I$"&,P*(", :IJA T:ikeU, 5E":AH, H"5S&A, ) 8 " T)eorge V
"rmaniU, there were more than !; international brands of bags, hats and other
merchandise. Eowever, such a large number of high0end lu%ury goods, none
was a real thing, there were counterfeits, civilian police found the related
person, and e%amined the trade mark7 the goods were affirmed the fake
knockoff. 2e can see that Puma takes many strategies to compete with its
competitors. It is struggling to increase its net profit, but some bad guy 4ust
makes use of it. here are so many such things happening around us every
day, so we should have an eye for the goods when you are in the store. In
order to choose the right things, ne%t time I will tell you some ways to identify a
real thing of Puma.
ADVERTISIN- AND 'AR.ETIN- HISTOR&
Puma's restructuring was but one part of its new success story. he other was
its innovative marketing plan. "t its core was the positioning of the Puma
brand as an international performance sports brand for high0Ouality athletic
shoes, sport te%tiles, and accessories. he company also based its innovative
marketing concepts on the latest trend research, earlier ignorance of which
had in part caused Puma's past downturns.
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"s a result, Puma launched the LPuma0Sffensive 'B
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he event campaign was carried out in cooperation with the ma4or )erman
sports magazine &port03ild and was supported by retail sporting goods stores.
Sther prominent )erman companies also 4oined Puma as sponsors.
)ermany's teenagers embraced the idea. In fact, demand far e%ceeded
supply, and thousands of registrations could not be accepted. "bout 1,;;;
youngsters between age 1; and 1? kicked the ball in over ?,;;; teams with
names like L(agic,L L&treet "ttacks,L and Lurkish 3rothers.L Sver !
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'ERCHANDISE IN PU'A
CATE-ORIES
SUB CATE-ORIES
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CATE-OR& RO(ES
he 5ategory ole determines the priority and the importance of various
categories in the overall business.
here are 9 types of category rolesX
aU $estinationbU outinecU Sccasional @ &easonaldU 5onvenience
3ut only are applicable in our brand which areX
aU ootwear forms the Destination cate/o#" asX • It is the primary category provider and help define the retailer as the
store of choice by delivering consistent, superior target consumer value.• It leads in areas of turnover, market share, consumer satisfaction ,
service level and operating e%pense management.bU "pparel forms the Rotine cate/o#" asX • It helps develop the retailer as the store of choice by delivering
consistent, competitive target consumer value.• It plays a primary role in delivering profit, cash and S".cU "ccessories form the Convenience cate/o#" asX • It helps to be a category provider.
• "nd help reinforce the retailer as the store of choice by delivering good
target consumer value.
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(ITERATURE REVIE)
CONSU'ER BU&IN- BEHAVIOR
*nderstanding the buying behavior of the target market is the essential task of
marketing management under marketing concept. he consumer market
consist of all the individuals and households who buy or acOuire good and
services for personal consumptions. he buying behavior tries to find out the
answers for the Ouestions, who buys= Eow do they buy= 2here do they buy=
$o they buy=
0A1 %ACTORS IN%(UENCIN- CONSU'ER BU&IN- BEHAVIOR
here are four ma4or factors that influence the buying behavior such as
cultural factors, social factors, personal factors, and psychological factors.
i. CU(TURA( %ACTORS$ 5ulture is the most fundamental determinant of
a person wants and behavior. alues, perceptions, preferences, and
behavior are the main variable under culture of an individual. Aach
culture contains sub0culture like nationality, religious group,
geographical area, and linguistic divisions etc.
ii. SOCIA( %ACTORS$ " consumer behavior is also influenced by social
factors such as the consumer reference group family and social roles
and status.
iii. PERSONA( %ACTORS$ " buyer decision is also influenced by his or
personal characteristics, notably the buyers age, lifestyle, occupation,
economic circumstances etc.
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PS&CHO(O-ICA( %ACTORS$ a person buying choices are also influence by
four ma4or psychological factors such as motivation, perception, learning belief
and attitudes.
0B1 BU&IN- DECISION PROCESS
It includes buying roles, types of buying and steps in buying process.
I2 BU&IN- RO(E
he buying role could be classified into four parts. hese are initiator,
influencer, decider and buyer.
II2 T&PES O% BU&IN- BEHAVIOR
5onsumer decision taking varies with the type of buying decision. here are
four types buying behavior such as 5omple% buying behavior, Eabitual buying
behavior, ariety seeking buying behavior.
III2 STA-ES IN BU&IN- DECISION PROCESS
Eere are five stages in buying decision process namely problem recognition
search, evaluation of alternatives purchase decision and past purchase
behavior.
NEED RECO-NITION
he buying process starts with the buyers recognition of a problem of need.
he buyer sense a difference between his actual state and desired state.
IN%OR'ATION SEARCH
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here are different sources from where a consumer can gather information like
personal sources commercial sources, e%perimental sources.
EVA(UATION O% A(TERNATIVES
"fter gathering information about different products the customer will be in a
fuss as to choose which product among the mainly alternatives consumer
usually evaluate the alternatives on traditional basis, on the basis of utility
function etc. from the many alternative consumers at last choose the best one
for him.
PURCHASE DECISION
" consumer who decides to e%ecute purchase intention will be making up to
five purchase decisions.
POST PURCHASE BEHAVIOR
"fter purchasing the product and services the consumer will e%perience some
level of satisfaction or dissatisfaction with the product and services that will
influence subseOuent behavior. If consumer is satisfied he may show the
probability of buying the product the ne%t time, satisfied customer will say
good thing about the product, proving the statement that Lsatisfied customer is
the best advertisement. Lhe dissatisfied customer, may take some action
against it. hey may try to reduce the dissonance by abandoning returning the
product.
*nderstanding consumer needs and buying process is the foundation of any
company. 3y understanding how buyers go through problem recognition,
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information search evaluation of alternatives, the purchase decision and post
purchase behavior marketers can pick up many clues as to how to meet
buyers need.
)HO ARE THE CUSTO'ERS,
In India, Puma shoes are targeted towards the higher income group and on
the basis of the different sports played in the country. 5ustomers of sports
shoes can be segmented into various categories. arious criteria can be taken
into consideration and segmentation can be done according to a number of
factors. &ome of the identifiable segments are on the basis of )ender, "ge,
&ports @ ashion, )eographical Hocation, Perceived 3enefits and Income.
-en!e#
Puma shoes are available for both men and women. here are e%clusive
product ranges, made specifically for each gender. Sften the same shoe
comes in a male and a female model, differing in aspects like color and size.
his differentiation is necessary, as these shoes are not simply used for sports
but for fashion as well. Eence specific designs are necessary for the se%es to
complement the clothes worn by each of them. Eowever, a drawback is that in
India there are fewer models available for women than in other countries.
A/e
Puma has also divided its product offering and customer base according to
age. here are separate designs made for children 0 colorful and flashy, and
more sober looking models for older people. In fact there are certain designs
that are available only for children and come in smaller sizes.
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S3o#ts4 %ashion
"s mentioned before, branded sports shoes in India have a dual purpose 0
they are used for sports as well as lifestyle products. "s a result, segmentation
can be done on this basis. or those using these shoes as fashion
accessories, anything that looks good would be adeOuate. 3ut those using
them for a specific purpose need to be divided into further segments based on
the sport, namely unning, ennis, 5ricket, &occer, 3asketball and others.
-eo/#a3hica5 (ocation
Puma has adopted a strategy to market and sell its shoes and other products
mainly in metropolitans and other big cities. he reason for adopting this
strategy was that the pricing of the shoes was such that they could be targeted
only towards the high income and fashion conscious groups. or them the
market is concentrated mainly in these areas. Eence all Puma showrooms,
franchisees are located in the main urban centers of the country.
)HAT DO THE& BU& 0BENE%ITS1,
or the two broad categories of customers, two broad sets of benefits can be
associated with Puma shoes. or those who look upon the product as sporting
gear, comfort and weight would be paramount. hese two factors would
appear on the top of their list of priorities in choosing a sports shoe. hey
would want a comfortable and lightweight pair of shoes that enhances their
performance on the field. 3rand name and looks will be of secondary
importance. eatures such as the "ir &ystem and anti0shock soles will be
value0added features. here would also be a psychological benefit involved.
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"rmed with the knowledge that TsUhe is wearing the same pair of shoes as
his @ her favorite sports person, TsUhe might get motivated enough to perform
better than average.
he other category of customers, i.e. those who buy them for fashion and style
would put good looks and brand image above everything else. he image that
the Puma brand has created for itself has made it one of the most sought after
names in the world. Averyone would love to possess one and get noticed in
one. &uch people would even be ready to compromise a little on comfort and
Ouality to acOuire a pair that looks great and has that powerful brand image. In
this event the sports shoe does not remain a sports shoe7 it becomes a
fashion accessory with a sporty look.
HO) DO THE& CHOOSE,
2hile choosing the right kind of shoe for themselves, consumers have many
aspects to consider. his, of course, depends on the consumer. he purchase
of any sports shoe is dependant on the buying and spending power of the
customer, which directly reflects the purchasing power of the consumers. his
is especially true in case of children. o complete the cycle, we can specify
five different buying roles that are applicable
1. Initiator Tidentifies the need for the productU
!. Influencer Thas informational or preferences input to the decisionU
. $ecider Tmakes the final decision through budget authorizationU
9. Purchaser Tmakes the actual purchaseU
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In the case of Puma shoes, the consumer type that goes through the above
cycle are the children. In this segment one can draw a differentiation line
between the customers and users of the product. he need for the product is
felt by the child and fulfillment of the need is done by their parents. Eere the
buying behavior of the user depends on the purchasingEaving narrowed
things down, the category to be dealt with in this conte%t is the Indian sports
shoe segment. " large fraction of the sports shoe industry, indeed the shoe
industry in the country belongs to the unorganized sector. Sur focus will be on
the organized sector only / i.e. branded sports shoes.
" key point about the sports shoe industry in India is that most of the sports
shoes sold are not used for sporting activities. &uch shoes are mainly looked
upon as fashionable footwear or accessories. his is primarily due to the
attractive and flamboyant appearance and comfort that these shoes provide.
(any users view them as all0purpose and all0weather shoes. "t the same
time, sports shoes are also used for what they are meant for. People serious
about their sports make it a point to possess and use a pair of shoes made for
the particular sport TsUhe is involved in. his makes one thing clear / in selling
sports shoes in India, it will not be adeOuate to target only the sports persons7
the non0sporting segments will also have to be paid attention to.
CATE-OR& ATTRACTIVENESS
A//#e/ate facto#s
Size: he Indian footwear industry is largely in the hands of the unorganized
sector. he size of the industry is s. Q; billion in value terms and ?!; million
pairs in terms of volume. Sf this 1;; million belongs to the organized sector. In
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addition 9; / 9< per cent of the organized sector is composed of canvas and
rubber shoes, mainly sports shoes. Sf this, about < per cent can be
estimated to fall under the category of the premium sports shoe segment. hat
means that the total market size of the premium sports shoe segment in India
is appro%imately < million pairs.
Growth: he footwear industry as a whole is growing at a rate of 1; / 1! per
cent per year. :o clear0cut data regarding the growth of the sports shoe
segment is available, but the growth rate is e%pected to be higher than the rest
of the industry. &ince the phenomenon of international brands like :ike,
eebok, "didas and Puma being available in the Indian market is reasonably
recent, there are still a considerable number of first0time buyers in the country.
his coupled with the growing population and the increasing number of young
people in the country, we can e%pect a growth rate of about 9; per cent in this
segment.
Life Cycle Stage: If one were to place premium Ouality sports shoes in a
product life cycle graph in the Indian conte%t, one would find it in the period of
rapid growth. he rage of possessing a pair of high Ouality and e%pensive
sports shoes has 4ust caught on and more and more international players are
e%pected to enter the market. he market is therefore e%pected to grow even
further and it will be a while before the product reaches the phase of maturity.
Cyclicity: he sports shoe industry in India as well as around the world
displays a direct cyclicity with ma4or sporting events of the world. here is
generally an increase in sales during the Slympics and the &occer and 5ricket
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2orld 5ups. ollowing these upsurges in sales, there are usually periods of
low sales.
Seasonality: "gain, the demand for sports shoes, as a whole is not really
seasonal in nature. Eowever, if we go deeper and look at individual models or
shoe0types within the sports shoe industry, we may notice the slightest
semblance of seasonality. or instance, soccer shoes are likely to en4oy more
sales in the summer and monsoons than in winter owing to the fact that most
soccer in the country is played at these times in a year. "t the same time,
since sports shoes are often used as fashion accessories and footwear, a
buying flurry may take place in the months of Sctober and :ovember, during
the festival of $iwali / the gift0giving period in India.
Marketing Mix: &ports shoes in India are usually distributed through company
showrooms, franchisees and other retail outlets. 5ertain brands have their
own e%clusive company0owned showrooms, while others operate through
franchisees. In addition, many distribute through retail outlets as well. "s far as
pricing is concerned, a sports shoe in India can cost anything between s.
;; and s. ?,
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Cate/o#" %acto#s
Concentration: "s mentioned before, the sports shoe market is about 9; / 9<
per cent of the organized sector. his amounts to about 9< million pairs of
sports shoes every year. his can be further split into the premium and general
segments. In the premium segment, the ma4or players are :ike, eebok,
Puma and Hotto. eebok is the largest player en4oying about
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eebok have hardly any presence in this segment, with only 1 or ! models in
this price category. 3ut then, this is not the segment being targeted by these
companies.
Pressure from &ubstitutes+ &ubstitute products in this case are other forms of
footwear. his is of course, true only in the case of people who use
sports shoes as leisure or fashion wear. "fter all, a sports person cannot
be wearing anything other than sports shoes. o be more detailed,
substitute products are leather shoes and sandals. "gain, since we are
concerned primarily with the premium segment, we can narrow the
substitutes down to e%pensive leather shoes and sandals. Premium
users can be e%pected to switch brands and even the generic product,
but usually do not downgrade to a lower price range.
Aase of Antries and A%its+ or a domestic or new player, the entry barrier
would be very high. 3rands like "didas and eebok are well established in the
country and it would be difficult to displace them. In fact, all the players in the
premium segment are international brands, with worldwide reputation and
recognition. "lthough it would be possible for other well0established
international brands Tlike ila and H" )earU to enter the market, it would be
almost impossible for a local manufacturer to enter the segment under
consideration. "t the same time, following the implementation of 2S
regulations, it has now become easier for multinational players to import shoes
and penetrate the market in a big way. his makes it possible for them to
achieve significant economies of scale, while cutting down on manufacturing
costs.
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PEST ANA(&SIS
echnological !actors: echnology is not much of a factor in the sports shoe
industry. he non0technical nature of the product means that manufacturing
eOuipment and machinery do not usually become obsolete easily. "s far as the
shoe itself is concerned, manufacturers claim that new technology comes into
the picture every year. Eowever, this Ynew technology6 is more innovation than
technological advancement and has little to do with advances in science and
technology. Eence although technology does not play much of a role, product
innovation happens to be a key factor.
Social: 5hanges in outlook, value, lifestyle and demographics are can tell on
the performance and acceptance of a product. In this conte%t, changes in
fashion trends can prove to be a critical factor. ight now, it is in fashion to
wear sports shoes as leisure wear, but if this changes, sport shoe
manufactures will be affected. &imilarly, if the use of child labor in the
manufacturing of these sports shoes Tespecially in case of PumaU becomes an
issue, it might lead to people boycotting the brand or organizing protests and
demonstrations against it.
Political: ollowing liberalization, the political scenario in India has been
conducive to foreign multinationals setting up their businesses in the country.
Eowever, if the government changes its policy and decides that multinationalsare no longer welcome in India, it will spell the end of Indian operations for
Puma as well as its competitors. Eowever, 4udging by the present state of
affairs, this situation is unlikely to arise.
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Regulatory: " problem that has been plaguing Puma for a long time now is
issues related to labor. "ccusations of unethical behavior, whether or not they
are true, only serve to in4ure Puma6s image, and, as a result, product sales.
Sne such e%ample of Ouestionable behavior relates to ietnam and the trade
embargo placed on the communist country as a result of *nited &tates
PS2s@(I"s. In 1BB, *nited &tates President, 3ill 5linton, promised to keep
the embargo in place until the *& received an accurate picture of the situation.
Eowever, two years later President 5linton normalized trade relations to the
dismay of the PS2@(I" families involved, yet to the delight of the corporations
operating in ietnam. 2hite Eouse documents have revealed large donations
to the $emocratic :ational 5ommittee by companies with an interest in seeing
the embargo lifted. he image of profitability being more important than
"merican PS2@(I"s has led to an unfavorable image with armed forces,
families and "mericans as a whole. his, combined with the LsweatshopL
operations in Puma facilities in ietnam and other countries, has negatively
impacted "didas6s image. 2hile the worst is over, Puma is still working on
initiatives to change the current situations throughout factories. 2hether true
or not, the company still suffers from this unethical image and must sway the
minds of the consumer and give them a renewed faith in the responsibility of
Puma.
In this conte%t, if any kind of regulatory measures are taken against Puma,
preventing them from employing labor and production facilities in ietnam and
&outheast "sia, it will definitely affect the company and its performance.
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'AR.ETIN- 'I6 ACTIVIT&
Puma's range of athletic footwear is priced between s. 1,!;; and s. ?,
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meet changing market demands, while remaining anchored to its brand
principles and heritage. Performance0oriented footwear, apparel and hardware
products will always remain the lifeblood of Puma. Eowever, Puma is also
committed to incorporating the growing importance of lifestyle, fashion and
music inspiration into the sports arena and Puma products. his strategy
allows the brand to create a uniOue Puma e%perience and mean more to more
consumers.
PRODUCT 4 BRAND STRATE-&
CUSTO'ER TAR-ETS
" key factor while deciding upon the target audience of Puma is the price of a
pair of Puma shoes. Puma is a high0end sports shoe, an e%pensive product.
aking these factors into consideration, it has been decided that the target
customers for Puma shoes in India would be middle and high income groups.
It is within this category that further segments and target customers will have
to be identified. It would, therefore necessary for Puma to target various parts
of its product range at the right target audience.
he people most likely to buy Puma shoes would be people who are fashion
conscious. o these people shoes like Puma are lifestyle products rather than
sports wear. his customer group would be the largest and critical to the
success of the brand. urthermore, these people are likely to be within the 1? / ; age group. 5hildren can also be included in this category, as they too are
getting more and more fashion conscious these days.
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he second category to be considered is people who indulge in various
sporting activities. hese people need a pair of high0performance and
comfortable sports shoes and it is up to Puma to fulfil that need. his category
can be further sub0divided into more segments according to the sport played.
Puma has a shoe for every sport / 3asketball, ennis, 5ricket, &occer and
more. People playing each of these sports need to be targeted specifically.
In close con4unction with the category are sports fans. hese are people who
do not play any sport seriously, but like to pretend that they are. 3eing sports
fanatics, they would like to dress themselves in the most fashionable sporting
gear available and that includes sports shoes.
he target audience can also be classified according to age. Puma, and other
brands like eebok and Puma appeal to young people / children, teens and
people in their twenties. 3ut at the same time Puma has a range of shoes
made to serve the needs and preferences of the older group of people. here
is no need to believe that only the young can wear Puma, older people can
too. his belief however, has to be cultivated in the minds of the people.
CO'PETITOR TAR-ETS
Puma6s competitors can again be classified into primary and secondary
competitors. "t the primary level are eebok and Puma. 3oth companies
manufacture similar shoes and target them at the same people / young,fashion0conscious and sporty. hey too have shoes for different sports and
target them at amateurs as well as professionals.
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Sn the secondary level, there are other manufacturers of less e%pensive
sports shoes / companies like Power Ta brand owned by 3ataU, Hotto, Hiberty6s
orce 1; and "ction. hese companies are of lesser importance as they cater
to a different target audience / people with less buying power. "t best these
brands will be competing with the lower end of Puma6s product offering.
" third category that can be identified is the gray market. his refers to shoes
that are smuggled into the country. hey are sold in certain areas of cities. he
buyer in this case does not get any warranty, nor does he take home a bill.
his market is flooded with the top brand names from all over the world / :ike,
eebok, "didas, ila, Puma, H" )ear and others. &hoes are sold much
cheaper than their showroom prices. he market also features models that
may not be available in the authorized showrooms and franchisee stores. his
puts :ike in the Oueer situation of having to compete against itself on terms
like price.
PRODUCT %EATURES
"part from delivering a pair of comfortable sports shoes :ike also provides a
number of value0added features with its products. he features that are a part
of every :ike sports shoe are as follows.
"igh Perfor#ance Sports Shoes: :ike has patented the -"ir system and has
made it into a regular feature in most of its models. (any models feature anair pocket in the shoe that reduces the weight of the shoe and reduces
pressure on the heels. 3esides the overall design and compactness of the
shoes have made it a favorite of many professional athletes around the world.
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Co#fort: :ike shoes are renowned all over the world for the comfort they
provide. 2ell padded and cushioned, they provide a tremendous level of
comfort to the wearer and reduce the strain to his feet while playing.
Lightweight: his attribute is in line with the two described above. Hightweight
shoes provide greater mobility and eases the pressure on the feet of the
wearer.
$ura%ility: People purchasing a pair of shoes at such a high price often feel
that they have made an investment. hey would obviously want to see their
shoes last a long time. o prove this point we draw the e%ample of the authors
of this marketing plan. "ll of us own a pair of :ike6s and have been wearing
them for well over two years / a symbol of the durability of :ike shoes.
Style: :ike6s designs are considered to be the most stylish in the industry and
beats all others as far as looks are concerned. "ttractively packaged, it is a
delight to bring a pair home. "dd to this the -&woosh / the most recognizable
symbol in sports and you have a product that would give the user a definite
sense of pride.
:ike shoes also come with a guarantee card that enables the owner to return
it in case of manufacturing defects. Eowever, owing to the fact that the
company implements strict Ouality control measures, coming across a
defective pair in a store is a rarity.
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SPECI%IC PRI'AR& PRODUCT 4 BRAND OBJECTIVE
he specific brand ob4ective of Puma India would be to build up its brand
reputation, image and eOuity. " brand is not simply a collection of products and
benefits, but also a storehouse of value stemming from awareness, loyalty,
association of Ouality and brand personality. " brand is a name, term, sign,
symbol or design or a combination of them intended to identify the goods or
services of one seller or group of sellers and to differentiate from those of
competitors. In essence, a brand identifies the seller or maker. It can convey
up to si% levels of meaning+ "ttributes, 3enefits, alues, 5ulture, Personality
and *ser. If a company treats a brand only as a name it misses the point. he
branding challenge is to develop a deep set of positive associations for the
brand.
"lthough these si% meanings are noticeable in the Puma brand in the west
and other parts of the world, they are yet to be cultivated in India. Puma has to
ensure that their brand is built up on these pillars in India.
SPECI%IC SECONDAR& PRODUCT 4 BRAND OBJECTIVE
he secondary brand ob4ective of Puma India would be to ensure that they
match the market share and sales volumes of its competitors. "fter all, a
company is in business to make profits and stay ahead of its competitors. "
company, product or brand may have a very good reputation and image, but if
it is not profitable, it does serve its purpose. "t the same time sales figures and
data can be misleading. Eence market share has also to be paid attention to.
RATIONA(E
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ecently, a survey was conducted on the popularity of the different leading
brands of shoes in India. People were surveyed in some of the ma4or cities of
the country and it was found that 3ata Tand PowerU was the most popular
brand. Puma was lagging behind as a distant fourth. $etails of the survey can
be seen in the table below.
"nother survey of a similar nature was conducted in some of the ma4or cities
of the country. he findings are shown in the table below.
3":$ 5EA::"I (*(3"I 3":)"HSA $AHEI3ata QQ ?B ?<
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improvement of brand image and reputation as the company6s primary
ob4ective is Ouite clear.
"t the same time, profits and market share must be paid attention to. here is
no point in having a brand that everyone likes but does not buy. hat is e%actly
what is happening / eebok, as we can see in the chart and table is as
popular as Puma, but eebok sells more than Puma and has a greater market
share. his situation has to change considerably.
CORE STRATE-& 4 VA(UE PROPOSITION
Puma6s distinctive competency lies in the area of marketing, particularity in the
area of consumer brand awareness and brand power. Sn the global scale this
key distinctive competency towers over the competitors. "s a result, Puma6s
market share is number0one in the athletic footwear industry in most places
around the world.
wo key attributes of a distinctive competency are its inability to be easily
replicated and the value or benefit it offers to consumers. ew companies
have such a recognizable image and the resources to promote it. his
ultimately translates into added value for consumers. he public benefits from
the strength of Puma6s image at the point of purchase. or decades,
consumers have come to associate the Puma image with Ouality products. 3y
associating star athletes and motivational slogans with marketing campaignsthat emphasize fitness, competition, and sportsmanship, consumers identify
their purchases with the prospect of achieving greatness. Kounger consumers
especially benefit from this positive influence. his image is something that
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competing companies can not easily duplicate by simply enhancing the
physical characteristics of their products.
Puma6s vision is to remain the leader in the industry. he company will
continue to produce the Ouality products that have been provided in the past.
(ost importantly, Puma will continue to meet the ever0changing needs of the
customers, through product dinnovation. In the past, the company has utilized
product differentiation as the main competitive strategy. "s Puma6s reputation
dictates, it will continue to place emphasis in this area. Puma has built its
business on providing products that rise above all others and this has made it
the worldwide success that it is today.
Puma is known for its technologically advanced products and is the leader in
this area. his allows Puma6s products to stand out from the rest. he
company6s focus also allows it to maintain a somewhat narrow niche that
enables it to effectively capture the needs and wants of the consumers. "n
e%ample of Puma6s superior and innovative technology is its new range of
shoes called -"ir Presto. ermed as the first 0shirt for the feet, these shoes
can take the shape and size of the wearer6s feet. *nlike regular shoes it
comes is sizes like ZH, H, (, & and Z&. Aach of these sizes can accommodate
three conventional foot sizes. Puma will continue to produce such path0
breaking products in the future and stay a step ahead of its competitors.
Puma will also focus on making a strong effort in price leadership. Puma6s
products in the past have been concentrated in the higher end of the pricing
category. "n entrance will now be made into lower price categories with these
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Ouality products. his will enable Puma to capture an even greater hold on
market share.
'AR.ETIN- PRO-RA'S
PRICIN-
"s mentioned before, Puma caters to the higher income group and its
products are priced accordingly. he table below shoes the current price range
of Puma6s shoes in India.
Shoe Type Men Women KidsCross Training s. 9,
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classified as e%clusive products. Hater on, however, when the product line
becomes more widespread and grows older, one may consider reducing
prices a little bit.
%INANCIA( OBJECTIVES
Sur financial ob4ectives are as follows+.
• o maintain year0end minimum contribution margins of 9;.
Sa5es
5ost of sales
-#oss 3#ofit
0 in of consolidated sales
oyalty and commission income
Sther operating income and e%penses
Sperational result before special items
&pecial items
EBIT
0 in of consolidated sales
inancial result
EBT
0 in of consolidated sales
a%es on income
0 a% rate
:et earnings
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• o grow direct retail sales by a conservative minimum of 1! per year.
• o achieve sales of [1B;,;;; in year one
%INANCIA(S
• &ales are e%pected to grow from [1B,;;; the first year to [!?!,;;; by
year three.
• A%penses will increase with the rate of inflation TU minus diminishing
cost of goods T1U.
PRICIN-
he amount of money charged for a product or services or the sum of the
values that consumers e%change for the benefit of having or using the product
or service. Price communicates the value positioning of the product and is a
ma4or component of marketing plan which in turn is a part of business plan. It
is a &trategic activity that differentiates the product from competitors.
Price \5ost ] Profit
here are our iews Sf Price
Aconomists view+ Price is set by the forces of supply8 demand.
"ccountants view+ Price should cover costs so that profit can be earned.
5ustomers view+ Price has to represent good value.
(arketers view+ Pricing is an opportunity to gain competitive advantage.T (arketing management, rd edition, a4an &a%enaU.
Ste3s In Settin/ P#ice$
1. &et pricing ob4ectives
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• evenue ma%imisationIt seeks to ma%imise revenue from the sale of products without regard
to profit. his ob4ective can be usefulwhen introducing a new product
into the market with the goals of growing market share and establishing
long term customer base.or a well funded company, or a newly public company, revenues are
considered more important than profits in building investor confidence.
Eigher revenues at a slim profit, or even a loss, show that the company
is building market share and will likely reach profitability.• Wuantity ma%imisation
It seeks to ma%imise the number of items sold. his ob4ective may be
chosen if you have an underlying goal of taking advantage of
economies of scale that may be realised in the production or sales
arenas.here are a couple of possible reasons to choose the ob4ective. It may
be to focus on reducing long term costs by achieving economies of
scale. It may be to ma%imise market penetration0 particularly
appropriate when you e%pect to have a lot repeat customers. he plan
may be to increase profits by reducing costs or to upsell e%isting
customers on higher profit products down the road.• Wuality ma%imisation
It is used to signal product Ouality to the consumer by placing prices on
products that convey their Ouality.
!. &elect pricing method
aU5ost plus@ (ark up pricing
2e suggest this method to be used because in this method the marketer
estimates the total cost of producing and manufacturing a product and then
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adds a mark up or the margin that the firm wants. his is indeed the most
elementary pricing method and many services and products are priced
accordingly. o arrive at the mark up price one can use the following formula.
(ark up price eOuals\^@ T10rU,
where ^\ unit costT fi%ed cost ] variable costU
r \ e%pected return on sales e%pressed as a .
his approach ensures that all costs are recovered and the firm makes a
profit.
"nother ma4or determinant, infact the limit to pricing, is the firm6s cost
structure. It is important to estimate the costs of manufacturing and marketing
the product. Is is thus important to know how costs behave over a period of
time and Ouantities produced.
herefore, the graphs shown below help us understand the relationship
betweenX
bU 5osts and ime THearning costsU
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"s time collapses, costs go down because the firm learns how to manufacture
and market the product efficiently.
aU 5ost and Wuantity Produced
(ore than the Ouantity produced lower is the cost. his brings into play the
importance of large scale production. he rule is that as a firm6s production
level reaches its optimum, it gets the benefits of economies of scale operation
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which the firm can pass in the form of lower costs. he firm may pass this
benefit to the customers in the form of lower price. (any transnationals use
this strategy to compete in the world market.
bU $etermine demand
he Ouestionnaire was taken from !1 correspondents.
rom where we got to know that ma4ority of people, i.e 1? of them feel there is
a need of sports eOuipment in puma.
2here as on !1 feel there is a need gap for introducing kids wear.
"nd ! said there is no need of introducing anything.
_Wuestionnaire survey taken from !1 correspondents2
cU "nalyze competitors price mi%
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he marketing mi% or the 9 Ps of (arketing of of our competitor6s :ike are
Product, Price, Place TdistributionU and Promotion. :ike's 9Ps are the
following+
1.Product
:ike offers a wide range of shoe, apparel and eOuipment products, all of which
are currently its top0selling product categories. :ike started selling sports
apparel, athletic bags and accessory items in 1BQB. heir brand 5ole Eaan
carries a line of dress and casual footwear and accessories for men, women
and children.
hey also market head gear under the brand name &ports &pecialties,
through :ike eam &ports, Inc. hey sell small amounts of plastic products to
other manufacturers through :ike IE(, Inc. 3auer :ike Eockey Inc.
manufactures and distributes ice skates, skate blades, in0roller skates,
protective gear, hockey sticks and hockey 4erseys and accessories
!. Price
:ike6s pricing is designed to be competitive to the other fashion shoe retailers.
he pricing is based on the basis of premium segment as target customers.
:ike as a brand commands high premiums. :ike6s pricing strategy makes use
of vertical integration in pricing wherein they own participants at differing
channel levels or take part in more than one channel level operations. his
can control costs and influence product pricing
. Place
http://www.suite101.com/content/marketing-audit-of-nikes-strategies-a94402http://web.syr.edu/~cshim/Report.htmlhttp://www.suite101.com/content/marketing-audit-of-nikes-strategies-a94402http://web.syr.edu/~cshim/Report.html
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:ike shoes are carried by multi0brand stores and the e%clusive :ike stores
across the globe. :ike sells its product to about !;,;;; retail accounts in the
*.&. and in almost !;; countries around the world. In the international
markets, :ike sells its products through independent distributors, licensees
and subsidiaries. Independent distributors need not adapt to local pressures
because the 9Ps of marketing are managed by distributors
9. Promotion
Promotion is largely dependent on finding accessible store locations. It also
avails of targeted advertising in the newspaper and creating strategic
alliances. :ike has a number of famous athletes that serve as brand
ambassadors such as the 3razilian &occer eam Tespecially onaldino,
enaldo, and oberto 5arlosU, Hebron Games and Germane S6:eal for
basketball, Hance "rmstrong for cycling, and iger 2oods for )olf.
. &elect Pricing strategy
Penetration pricinghis strategy is used to gain entry into a new market. he ob4ective for
employing penetration pricing is to attract and grow market share. Snce
desired levels for these ob4ectives are reached, product prices are typically
increased.Penetration prices do not garner the profit reOuired. herefore it must be used
strategically.his strategy can be used when the pricing ob4ective is either revenue or
Ouantity ma%imisation. he lower price set on products by using penetration
pricing is done to entice the ma%imum number of customers possible to
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purchase the product. Harge numbers of customers purchasing the product
should ma%imise the revenue and the Ouantity of product sold.
o 5ompetitive pricing
his strategy refers when the pricing is based on the prices which thecompetitors have on the same product.his pricing strategy can be useful when differentiating the product from other
products is difficult.
1. &electing the final price
3ased on the above criteria, the final price is selected for the product.
PRODUCT (I%E C&C(E
" product life cycle refers to the time period between the launch of a product
into the market till it is finally withdrawn. In a nut shell, product life cycle or
PH5 is an odyssey from new and innovative to old and outdated> his cycle is
split into four different stages which encompass the product's 4ourney from its
entry to e%it from the market, thus impacting the pricing strategy and the
pricing mi%.
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P#ice In Eve#" Sta/e
Int#o!ction Sta/e$ "fter conducting thorough market research, the company
develops its product. Snce the product is ready, a test market is carried out to
check the viability of the product in the actual market, before it can set foot into
the mass market. esults of the test market are used to make correction if any
and then launched into the market with various promotional strategies. &ince
the product has 4ust been introduced, growth observed is very slight, market
size is small and marketing cost are steep Tpromotional cost, costs of setting
up distribution channelsU. hus, introduction stage is an awareness creating
stage and is not associated with profits> Eowever, strict vigilance is reOuired to
ensure that the product enters the growth stage. Identifying hindering factors
and nipping them off at the bud stage is crucial for the product's future. If corrections cannot be made or are impractical, the marketer withdraws the
product from the market.
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or the Puma fitness products, there may be low penetration pricing to build
market share rapidly, or high skim pricing to recover development costs.
-#o+th Sta/e$ Snce the introductory stage goes as per e%pected, the initial
spark has been set, however, the fire has to be kindled by proper care. he
marketer has managed to gain consumers attention and now works on
increasing their product's market share. "s output increases, economies of
scale are seen and better prices come about, conducing to profits in this
stage. he marketer maintains the Ouality and features of the product Tmay
add additional featuresU and seek brand building. he aim here is to coa%
consumers to prefer and choose this product rather than those sold by
competitors. "s sales increase distribution channels are added and the
product is marketed to a broader audience. hus, rapid sales and profits are
characteristics of this stage.
'at#it" Sta/e$ his stage views the most competition as different companies
struggle to maintain their respective market shares. he clichF 'survival of the
fittest' is applicable here. 5ompanies are busy monitoring product's value by
the consumers and its sales generation. (ost of the profits are made in this
stage and research costs are minimum. "ny research conducted will be
confined to product enhancement and improvement alone. &ince consumers
are aware of the product, promotional and advertising costs will also be lower.
In the midst of stiff competition, companies may even reduce their prices in
response to the tough times. he maturity stage is the stabilizing stage,
wherein sales are high, but their pace is slow, however, brand loyalty develops
imparting profits.
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hus Price may be lower because of the new competition.
Dec5ine Sta/e $ "fter a period of stable growth, the revenue generated from
sales of the product starts dipping due to market saturation, stiff competition
and latest technological developments. he consumer loses interest in this
product and begins to seek other options. his stage is characterized by
shrinking market share, dwindling product popularity and plummeting profits.
his stage is a very delicate stage and needs to be handled wisely. he type
of response contributes to the future of the product. he company needs to
take special efforts to raise the product's popularity in the market once again,
by either reducing cost of the product, tapping new markets or withdrawing the
product
Prices may be lowered to liOuidate inventory of discontinued products. Prices
may be maintained for continued products serving a niche market.
ADVERTISIN-
hus far, Puma6s advertising campaign in India has been rather passive when
compared to their normally aggressive advertising strategies in the rest of the
world. "dvertising is predominantly carried out on magazines and
newspapers. elevision advertising is present, but it is on a much smaller
scale than it could be. In any case Puma spends 4ust [!9; million on its
worldwide airtime advertising campaigns. his figure could be increased andmore attention could be paid on television advertising in India. (oreover, most
of the Puma ads featured on Indian television are the same ones that appear
in the west. 2hile these ads featuring famous sports personalities like Pete
&ras, "ndre "gassi and (ichael Gordan are of a very high Ouality, they
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often do not reach out to most Indians. Puma needs to Indianize its ads to
appeal to the Indian sensibility. hey could take a leaf out of eebok6s or
Puma6s book and rope in some famous Indian sports personalities to appear in
their advertisements.
Progress has been made in this area. ecently Puma signed a contract with
ediffusion to carry out their new Indianized ad campaign in India.
"nother strategy that could be followed by Puma is to allow the franchisee
stores to carry out their own ad campaigns. hey could advertise their stores
in the local cable channels, newspapers and community magazines.
3anner advertising is already being carried out at Ouite a large scale in $elhi.
his could be e%tended to cover other ma4or cities like (umbai, 5hennai,
5alcutta, 3angalore and Eyderabad.
Puma6s Indian operation also needs to have a greater presence on the 2orld
2ide 2eb. 2e suggest an Internet advertising campaign for the Internet,
featuring banner ads and links to their online store for India. he online Puma
store is doing reasonably well, but would generate more traffic if backed up by
online advertising.
PRO'OTION
"lthough, Puma6s advertising campaign in India has been somewhat sluggish,
they have spent a great deal of time and money on promotional activities.
Puma has sponsored numerous events all over India. Aach of their store
openings have been accompanied a grand party and have all been
inaugurated by a celebrity. ecently, Puma opened their biggest Indian
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showroom in 3angalore. )ames were organized during the launch and many
young people participated. )ames included 3asketball, ennis, )olf and
&occer. hese games, while popularizing the respective sports also popularize
the brand.
"nother good idea to promote the brand would be to sponsor various local
sports teams. Puma should target schools and colleges and offer
sponsorships to their 3asketball, &occer and 5ricket teams. his would
achieve significant results. 3y using shoes and other sporting gear made by
Puma, members of these teams have a very high chance of being converted
to Puma. hey would also recommend Puma to their friends and fellow sport
persons. " start has been made in this department / Puma sponsors the
3asketball teams of &t. &tephen6s 5ollege and Eindu 5ollege, two of the best
colleges of $elhi. " move should be made to other cities and other amateur
and professional sports teams should be roped in.
5ollege festivals, so popular in India are always looking for sponsors. his is
another area that Puma could e%ploit in their promotional activities. hese
festivals are usually a meeting point for young people from various colleges.
Eaving a strong Puma presence at these events would go a long way in
promoting brand loyalty and awareness among the youth of the country / the
age group where the bulk of the customers belong.
ecently, Puma collaborated with former ennis player 5.).J. 3hupati to open
the Puma / 3hupati ennis village in 3angalore. his was an e%ercise in
promoting ennis in the country. " similar emphasis should be laid on 5ricket,
the most popular sport in India. Puma could organize coaching camps and
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similar training centers like they have in 3angalore. :ike has also decided to
sponsor the prize money at P)" ournament to be held in $elhi. &uch
sponsorships should be increased in number and should be spread to other
sports as well.
hese various promotional methods should either be incorporated into :ike6s
promotional activity in India, or should be implemented at the earliest. his will
help satisfy the company6s primary product strategy / improve brand
reputation and image in the company.
SA(ES
Snce the company has identified its target market and its desired positioning it
needs to identify the types of intermediaries to carry on its channel work.
"t present Puma has ?< retail stores in the form of franchisees and a few
company owned showrooms. hese outlets have employed around 1;01!
people for its management, sales and for accounting purpose. (oreover for
any promotional activities in an outlet they have taken the strategy of
deploying youngsters for launching any new range of sports shoes. 2e
suggest that Puma use a young sales force in their outlets as this would go
well with the image of the company and appeal to young people coming to buy
their products.
POSITIONIN-
P*(" needs to become a place for women who need to satisfy all the fitness
needs including apparel and accessories. 2ith the inclusion of this category,
Puma 2omen fitness might be able to offer high Ouality sports eOuipment to
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shop for. his might position Puma women fitness as a brand fulfilling value
proposition for the customers by minimizing the need gap.
VA(UE PROPOSITION
alue Proposition\ 3enefit@ 5ost
2here,
3enefits\ functional ] emotional ] self e%pression
5ost\ money ]time ]effort] psychological
alue proposition helps the consumer get to know about his need. o reach
there we made use of Ouestionnaire method
ITE' TO BE INTRODUCED
I:A&& "55A&&SIA& like
72 Neo3#ene Dmbbe55
%eat#es0 -$umbbells are like ready to eat meal in the workout kitchen. Sur
dumbbells apart from providing the usual benefits makes the user feels
special, because of the good feel of the product. he outer side is made of
fiber which makes it softer to the hands of women. "lso, it feels personalised
to some e%tent because it is available in a variety of colours and prints to
choose from.
Si8es Avai5ab5e$ 1kg, !kgs, kgs, 9kgs,
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92 -"m Ba55
%eat#es: hese itness 3alls help you improve balance, coordination and
fle%ibility and is an ideal eOuipment for e%ercising and weight training.
Si8es Avai5ab5e$
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• It might create a stand for itself among the competitors by offering
specialised service for women
CHANNE(S
In addition, they also have an online store catering e%clusively to Indian
customers. "s of now they are not selling their products through other retails
stores that stock other brands.
he company has plans of increasing the number of showrooms and
franchisees all over the country. It hopes to increase the number from ?< to
1;; over the ne%t year. 2hile this is a good idea, it is not enough. Puma
needs to follow eebok6s e%ample and stock their products in other shoe retail
outlets as well. &elling them through well0established sports and fitness stores
would also be a good thing to do. Sften we find people going out to buy a pair
of sport shoes / they have not decided upon the brand. In this event they
might want to visit a store stocking multiple brands rather than a store stocking
products of a single brand. his is where Puma and eebok have the
advantage. hey sell their shoes through retail outlets and sports shoes, in
addition to Ybrand0only showrooms. " prospective buyer visiting these stores
is simply missing out on Puma6s product offering and Puma is missing out on a
number of new customers. *sing this channel would mean new customers. It
would also mean eating into eebok and Puma6s customers and taking market
share away from them.
Puma also participates in trade shows in India and has outlets for factory0
seconds. &econds0outlets always attract a large number of customers,
primarily because of the low prices at which they offer the same products that
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are available at the showrooms. hese seconds0stores need to be increased
in number and their locations must be made known to the people of the cities
they are located in. hese stores represent a golden opportunity for Puma to
woo the lower income groups. here are millions of people in India who would
like to possess a pair of Puma6s but cannot afford one. his will be their
chance to enter the elite segment without having paid such a high price.
CUSTO'ER 'ANA-E'ENT ACTIVITIES
Presently, the only form of customer relationship management activity that
Puma has adopted in India is product warranty. Puma shoes come with a si%0
month warranty. If the shoe is found to be defective or wears out within si%
months due to no fault of the wearer, Puma replaces the product. his is only
the first step and more needs to be dome in this area.
3eing a company that always strives towards e%cellence, Puma needs to
know e%actly what its customers think about their products. " good way of
assessing this would be to have the customer fill in a form at the point of
purchase. he form will ask the customer his @ her opinion on the product as
well as the showroom. &uggestions and comments would be welcome.
Eowever, care must be taken to ensure that these forms are not too
cumbersome and do not take up too much of the customer6s time. &urveys
have indicated that normally people don6t mind filling in forms as long as they
are not too long.
"nother good method would be to introduce a system of customer points.
Avery time a customer makes a purchase, he would earn himself a certain
number of points, depending on the price of the product. "fter he crosses a
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certain point level, he would be entitled to a gift from the company or choose a
product of a certain value from the range. his would be helpful in building
customer loyalty and give them an incentive to make repeat purchases. "
most valued customer database could be created from her e and various
forms of direct marketing could be directed at them. his would help the
company to retain its e%isting customers.
" third way to improve customer relationship would be to issue gift coupons
and vouchers. People would have the facility to buy these vouchers and
present them to their dear ones. his would be a good way to reach out
towards newer customers through e%isting ones.
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CO'PETITOR ANA(&SIS
PRODUCT %EATURE 'ATRI6
he product feature matri% comparing Puma with some of its ma4or
competitors is given below. "n analysis of the matri% shows that Puma6s shoes
are in no way inferior to its competitors. "t the same time eebok6s products
are not lagging behind either.
!&'(R
&
S
BRANDS:ike eebok "didas Puma Power "ction
M
!
e
a
t
u
r
e
"ir
&ystem
$(Z,
Pump
:one :one :one ockers
A%tra
5ushion
"vailable "vailable "vailable "vailable "vailable
in some
models
"vailable
in some
models&oft
Padded
ongue
"vailable "vailable "vailable "vailable
in some
models
"vailable
in some
models
"vailable
in some
modelsAnhance "vailable "vailable "vailable "vailable "vailable :ot
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d oe
&upport
in most
models
in most
models
in most
models
in most
models
in some
models
"vailable
Plastic
&upport
on &oles
"vailable
in most
models
"vailable
in most
models
"vailable
in most
models
"vailable
in some
models
"vailable
in some
models
"vailable
in some
models2eight Hight Hight Hight (edium
/ Hight
(edium Eeavy /
(ediumHaceless
(odels
"vailable "vailable :ot
"vailable
:ot
"vailable
:ot
"vailable
:ot
"vailable(ulti0
purpose
"vailable
T5ross
rainersU
"vailable "vailable
and
Predomin
ant
:ot
"vailable
:ot
"vailable
:ot
"vailable
Sne0size
fits all
"vailable
T"ir
PrestoU
:ot
"vailable
:ot
"vailable
:ot
"vailable
:ot
"vailable
:ot
"vailable
3rand
:ame @
Hogo
&woosh ector &tripes Present Present Present
Price Eigh /
Premium
(edium
/
Premium
(edium
/ Eigh
(edium How /
(edium
How
OBJECTIVES
In order to meaningfully analyze the competitors and understand their
strategies, it is necessary to study and understand their ob4ectives. o begin
with, one needs to know their core businesses and areas of specialization.
$ata on market share and profits are also valuable sources of information.
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he main competitors of Puma in India and indeed, the rest of the world are
eebok and Puma. 3oth would have intentions of acOuiring the highest market
share in the premium sports shoe segment in the country, in the long run.
5urrently eebok has the highest market share and would certainly want to
maintain that, if not increase it. Eaving gained widespread acceptance and
penetration, they might even want to e%plore new markets in India. Puma are
4ust behind Puma in terms of market share and would aim at catching up, and
if possible overtaking their rivals. "t the same time Puma would want to gain
greater penetration into the Indian market. "part from the issue of market
share, the Ouestion of profitability would be on the minds of all the competitors.
STRATE-IES
Puma6s various competitors have strategies that show similarities in certain
respects and differences in others. In other words, a uniform strategy does not
prevail among competitors.
'a#;et se/ments 3#se!
he market segments pursued by Puma6s competitors can be analyzed at
many different levels. "lthough it is not known which company segments
according to what criteria, one can take educated guesses. In this analysis of
Puma6s competitors, the different segmentation criteria that have been
identified are on the basis of income, se%, age and usage.
Ree%ok: eebok6s shoes are primarily targeted at the middle to high income
groups in urban areas. hey have divided their product range into shoes for
men and shoes for women and have the segmented the market according to
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se%. hey have ranges of shoes made especially for children as well as older
people. In terms of usage, like any leading manufacturer of sports shoes they
have different ranges of shoes for different sports Tennis, 3asketball, 5ricket,
&occer etc.U and each of these sports forms a segment by itself.
')i)as: he income group targeted by "didas is slightly lower than that
pursued by eebok. "lthough the same people who buy eebok might also
buy "didas, there are also people who are able to afford a pair of "didas
shoes but not eebok. In addition, "didas have also segmented their product
range according to se% and have shoes for children in their repertoire. he
segmentation on the basis of sports is present in case of "didas but less
pronounced. hey do have shoes made for ennis, 5ricket and &occer, but
they also specialize in all0purpose shoes that can be used for a number of
sports, at least so some e%tent.
Puma: Puma targets an income group lower than "didas and eebok. heirs
is the middle income group, perhaps bordering on high. Eowever, their
products cannot be clearly categorized as made for males or females. :or do
they have separate designs targeted at children. Hike "didas, most of their
designs are all0purpose sports shoes, though some segmentation on the basis
of sports is noticeable.
Power: Power is made with the low and middle0income groups in mind. hey
have designs and prices for entry level as well as mid0range buyers. heir
designs are also well segmented in terms of sports and they have a distinct
ranges meant for women and children. In a nutshell, Power does pretty much
the same things as "didas and eebok, only on a smaller and cheaper scale.
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'ction: "ction is the shoe for the masses and is targeted at the low to medium
income groups, primarily the low. ery basic in nature, they are really shoes
with a sporty look and are not targeted at sports persons. Eence their product
line does not show any differentiation on the basis of sports. here are
however designs for children.
urther data on market share and brand popularity can be found in "nne%ures
8 9.
'a#;etin/ 'i=
he marketing mi% is different for different manufacturers and brands of
shoes. he methods of distribution and strategies for promotion and
advertising vary. hey do overlap in some cases, with two brands adopting
similar tactics, but in no way are the marketing mi%es of two companies
identical. he table below lists the salient features of the marketing mi% of
each of the competitors.
AA3SJ "$I$"& P*(" PS2A "5IS:Price s. D;; /
s. ?,
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he promotional activity carried out by eebok and Puma have been Ouite
aggressive. 3oth brands have made sure that they get noticed in the market.
eebok was the first to enter the Indian market and had a head start over
Puma, but the )erman company has gained significant ground in recent
times. 3oth have been able to get famous and popular Indian sports
personalities to endorse their products. "didas have &achin endulkar, the
famous 5ricket player and the ennis duo of Heander Paes and (ahesh
3hupati. eebok have ahul $ravid, a member of the Indian 5ricket team and
the &occer player 3aichung 3hutia. he presence of these popular
personalities as brand ambassadors has really made a difference to the
brands, and have helped them gain widespread recognition and acceptance in
the market. &achin endulkar also appears in the commercials of "ction
shoes and this has given the brand a better image and has to an e%tent
removed it from the category of being a poor man6s shoe.
"s far as channels of distribution are concerned, that is where eebok holds
the advantage. eebok products are sold in more places than are "didas or
"didas products. hey are beginning to reach the same level of market
penetration as "ction and Power / two of the oldest players in the market.
Hotto, on the other hand is sold primarily through 3ata showrooms and have
therefore not been able to spread itself in the market.
DI%%ERENTIA( ADVANTA-E 4 RESOURCES
Aach of Puma6s competitors holds some kind of advantage over the other. In
some cases, these points of differentiation do not matter much, but in other
cases they have the potential to be decisive.
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Ree%ok: In many ways eebok6s shoes are Ouite similar to Puma6s. 3oth are
stylish and comfortable at the same time. "s far as brand name is concerned,
both are eOually sought after and as prestigious as the other. If Puma have the
"ir system as their ma4or selling point, eebok have patented the $(Z
technology. he two companies price their shoes at the same level cater to the
same target market. 3oth companies entered the Indian market at more or
less the same time, so no one can be said to have en4oyed a first mover
advantage. Ket, eebok en4oys a larger market share.
')i)as: he shoes manufactured by "didas do not have proprietary
technology behind them like "didas and eebok, but they are as stylish and
comfortable. he brand name is eOually well known. he differential
advantage lies in the pricing. "didas shoes are priced lower than both "didas
and eebok. "s a result many look at them as offering as good at a lower
price.
Pu#a:Puma6s brand name is internationally known, but in India it comes
behind "didas, eebok and "didas in terms of prestige. "t the same time their
shoes can be considered inferior in terms of Ouality when compared to the -big
three. Eowever, Hotto remains the cheapest international brand available in
the Indian market.
Power: Power6s greatest advantage is the fact that it has been around in the
market for a very long time / it is the oldest player in the Indian sports shoe
market. "t one stage it was the premium sports shoe in India, with many
famous sports personalities endorsing it. It was even the official shoe of the
Indian 5ricket team in the D;6s. 3ut following the arrival of the multinationals it
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lost its foothold on the premium segment. It is still a -powerful player in the
middle and lower segments and en4oys widespread market penetration and
availability. Its wide price range ensures that there is a pair of Power sports
shoes for everyone.
'ction: Hike Power, "ction too has a very deep penetration in the market. It is
a shoe for the masses and never really looked at the premium segment. Snly
recently has it tried to cultivate a more international image and is trying to
compete at the lower end of the premium sports shoe segment.
Eowever, due to the very generic nature of the product, it is difficult to pinpoint
too many points of advantage while comparing Puma, eebok and "didas. In
the end it comes down o which company creates a better brand image and
which company has a better and more effective marketing strategy.
2e have however, tried to identify some strengths and weaknesses that Puma
might have with respect to its competitors. Its strength, at least on the product
level, lies in their ability to innovate and bring out revolutionary products every
few years. Eowever, their weakness, in the Indian conte%t is that they have not
been able to cash in on the Indian sports icons and have thus missed out on a
ma4or promotional opportunity. he market for children6s shoes presents a new
opportunity. hreats come in the form factors like market saturation, demand
fluctuations, brand shifting problems and changing demographic features. 3ut
these last problems mentioned are applicable to other players as well.
E6PECTED %UTURE STRATE-IES
uture strategies of Puma6s primary competitors, eebok and Puma can be
predicted from their current strategies. 3oth companies have cashed in on the
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5ricket fever that has been sweeping India for the past few years. hey have
managed to get national sports heroes to endorse their products. hey are
likely to continue using this strategy for some time.
eebok is also e%pected to match Puma strength for strength in promotional
activities and advertising. heir promotional efforts are already on Ouite a large
scale and eebok, for one, sponsors Ouite a few sports teams around the
country. he moment Puma gets aggressive in these departments, eebok
and Puma will do the same.
In addition, eebok is also planning to introduce a new range of sports shoes
for children. his is their strategy for dominating the kids6 segment and
cultivate a brand loyalty among them / an investment for the future.
he other competitors, namely "ction and Power are e%pected to continue in
the way they are at present. hey already have the recognition and reputation
in the market and will probably continue to target the middle and lower income
groups.
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RESEARCH 'ETHODO(O-&
RESE$RC' MET'ODO(O)Y
RESEARCH DESI-N
he study conducted to achieve the before said ob4ectives was both
e=35o#ato#" an! !esc#i3tive in nature and involved personal interviews
based on the Ouestionnaire format.
$'' C*LL&C+*, M&"*$: -
Primary source
&econdary source
%rimary sor*es+ ,
he data reOuired for the study would be based on+
Personal interviews based on pre0decided format of structured
undisguised Ouestionnaire, which would be administered to the
respondents.
Personal interview with the 5ompany representatives regarding
the various data.
&hort interviews with the customers.
Secon)ary Sources: -
he secondary data consists of information collected from+
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2ebsites
"nnual eport of the 5ompanies
3usiness magazines
rade guides
Published data on ootwear industry
Sam35in/ P5an
he entire study covered the following two respondent segments+
a. 5ustomer 0 1;;.
otal sample size was
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DATA ANA(&SIS AND INTERPRETATION
Do "o /ene#a55" se,
"ccording to the survey of 1;; respondents most of them agreed that they
prefer eebok more. In India, eebok shoes are targeted towards the higher
income group and on the basis of the different sports played in the country.
Ni;e
9>?
Reebo;
9@?A!!i!as
97?
Action
7?
(otto
7@?
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Ho+ easi5" !i! "o fin! the ne+ Pma sto#e 5ocation to b" a ne+ Pma
3ai#,
(ost of the respondents agreed that location of Puma store. Hocation and
concept are the most important factors and play a key role during initial stages
for the survival of business in the near future. he other constituents which are
necessary for success are+ efficient management, right product 8 Ouality,
value for money and investing in staff training is very important. Snce an
establishment is established, gets a name in the market many other factors
play an important role in its success or survival in the future.
1ery Aasily
9;P
Aasily
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Do "o as; fo# a s3ecific b#an! b" name,
he above graph shows B; of the respondents ask for particular brand of
shoes. or the two broad categories of customers, two broad sets of benefits
can be associated with eebok shoes. or those who look upon the product
as