Introduction

Puma was originally founded in Germany in 1924 by two brothers Rudolf and Adolf

Dossier. In 1948, the two brothers split their business with Adolph started Adidas.

Rudolph initially named his business called Ruda , however after that he changed to

puma. By 1950, Puma started to get recognition for their football shoes In 1960 , it

becomes the first shoe manufacturer to use Vulcanization production technique to

improve the performance of the player. In 1986, it issued IPO in the Frankfurt stock

exchange.

By 1998, it merges sports and fashion by partnering with Jill Sander. By 2007,French

Luxury goods company such as Gucci acquire 60 percent of the companies share.

Recently, Rihanna has been named as Pumas brand ambassador for women’s training.

Until 2003, Puma had a poor brand image that causes a decline in its market share and

forced Puma to change its strategic decision to improve its brand image which was led by

The CEO of the company so that Puma can compete favourably in the market place.

After couple of years, The puma’s brand image was changed into one of the most sought

after brand being worn by top performing athletes and celebrities.

Micro analysis Of puma

1. One of the micro factor of Puma is the media. For a company, the media coverage

sometimes helps them or create barriers . For Puma, their media coverage is good as

they often involves sports people and highly acclaimed athletes to help promoting

the brand. At the moment, Puma’s main sponsored athlete is USAIN bolt which

allows the company to get good publicity and as a result has created good image in

the minds of the consumers. Also The fact that Rihanna has been made the

ambassador for women’s clothing, that has really increased PUMA’S Brand image

2. Another factor is the customers. Puma ‘s customers are very loyal as they seem to

continue using Puma’s products again and again .However, these customers

sometimes has the habit of buying similar type of products from Nike and Adidas

also, henceforth, It has become quite crucial for Puma to create Unique and

differentiated products

3.Another micro factor is the employees. Starting from CEO of the company to the

Saturday Girl that works in stores, everyone needs to set a good impression for Puma.

Puma’s focus should be to provide continuous training to allow every employee to get

relevant skills and make Puma to become as successful that it can become. Also

customers really like good behaviours , attitude , friendliness and transparency when

they are buying products from Puma. They will come back to buy the product again and

again If they feel that they have been treated well.

4. The other factor are the competitors. The competitors such as Nike, Adidas and so on

are continuously bringing new products in the market that actually pushes Puma to come

out with better and Unique products

Puma target segments:

Puma targets segments who are unique, exclusive, imaginative, sporty and likes

originality. Their main target customers ranges from 15 to 30 years of age as they

believe that this is the age when everyone is sporty and active. They target both male and

female customers with products ranging from male and female clothing , sportswear and

even a perfume line.

Positioning: puma position itself as the leader in sports life style. Initially it placed

more emphasis on functional characteristics specially on soccer shoes and other high

performing sports equipment . Now due to high competition from Nike, Adidas ,

they are repositioning itself towards products that focuses on lifestyle choices.

Sources of Brand equity: When we develop a new product, branding is an important

decision. “The brand can add significant value when it is well recognized and has positive

associations in the mind of the consumer”(Keller ,2000). This concept is referred to as

brand equity.

There are various sources of brand equity such as Financial, Brand extension and Customer

based. In this report, I will analyse Puma with the customer based Brand equity Model.

Salience: Right from its start, puma has one of the best elegant logos among sports and

lifestyles goods. It further supported its logo using vibrant colors’ starting from packaging to

advertisement. People can easily identify its logo without any confusion. This identity

additionally brings unique characteristics and usefulness of the brand to the minds of

consumers. Also it used its logo to make larger than life in all its products.

Performance/imagery: Puma has always almost tried to fulfill the requirements of an

authentic sports lifestyle brand. It offers specially designed products for a lot of sports and

also it created such Innovation in its products that It can be further expanded to everyday

casual life. People always consider Puma a young and energetic brand that almost always

fulfils the requirements of Young people. It always puts emphasis on innovation and design

models and hence positioned itself as a high end fashion brand with its high pricing.

Feeling/Judgement: The performance of Puma has made consumers reach from functional to

aspirational not only because it fulfils not only the basic needs, but also because of its

innovativeness and quality. It created trust and loyalty among its consumers. Consumers feel

a sense of pride using Puma products. Also the Young people recognized its various

offerings and use these in various occasions rather than using in specific occasions.

Resonance: Though Puma has made a huge improvement in India(I am taking India has the

base), but still it has not reached to the level of Nike, Reebok or even Adidas. In India, people

still consider Nike or Adidas as better in functionality, class and superior quality. Puma is

trying to reach this level by creating awareness by showcasing as being a sports lifestyle

brand.

Brand Extension: Puma has made various brand extension down the years. Initially they

were mainly recognized as the maker of sports shoe, However, they have extended to puma

sports shirt, Bag, Pants and recently they are on their way to launch puma Mobile smart

Phone.

Brand personality

(Differentiation and strength): Puma has categorised itself as fun loving, youthful, sporty,

dynamic, energetic, metropolitan and so on. It has become equivalent to sports, fashion

style. It communicate each category in a unique way , but the tone and theme remains aligned

with its actual brand value its personality. It’s main differentiation is its using co-developed

celebrity lines such as Nuala, turlington, Unique trend setting styles, cobranded partnership

with Ferrari , mass customization where it engages its customers with Mongolian BBQ

concept that allows customers to build their footwear from the scratch . Additionally It

provides promotional events that aligns with the themes of “active lifestyle” such as dining,

entertainment, fashion , music and also they provide “fit Your lifestyle” value proposition.

SWOT analysis of Puma:

Strengths Weakness

Financial growth is awesome

1. Wide range of shoe wear

2. More diversified from its

competitor

3. Has made many strategy

acquisition with good reputed

companies

4. Brands focuses on quality,

technology and prestige.

5. Top management is highly

marketing focussed and most of

the key people has come from

marketing background. Hence it

is more market driven than

product driven

6. Globally recognized brand

7. Believe in constant Innovation

and latest customer trends

8. Tie up with companies such as

Ferrari

Less promotion and not enough advertisement

Diverse range of sports products but the income

heavily dependent on shoe wear

Retail sector tends to be price conscious. On the

other hand most of its income comes from selling

to the retailers

Tough competition from Nike, Adidas.

Outsourcing and hence decentralization

Lower financial resource than big competitors

Slower production due to outsourcing

9. Company structure in virtualised

10. Outsourcing and hence cheaper

production

Opportunity Threats

Could open more stores.

Bring more product development

Participate in global events such as

Cricket world cup, soccer world cup

and other top events

Can expand in markets having more

disposable income

Need special sportswear.

Huge competition in the market. Hence in order to

stay in the market, they need to put a lot of efforts

that will incur costs and will also put pressure on

the research and development team.

Weakening of markets can cause a serious threat

Being exposed to International Trade, hence

fluctuation in currency can affect costs and profit

margins

Market leaders has nearly 30 percent of total

sales

Regional Companies can be sometimes strong and

profitable

Imitation of the brand is on the rise

Competitive analysis

Competitive rivalry: The global market for athletic footwear, apparel and equipment has

been affected by intense competition, with presence of a large players such as Nike ,

Adidas And so on.

Nike: They are the major sports brand sports brand . They are the world leader

supplier of sportswear. They have Many sub brand with lots of high quality and

top performing athletes

Adidas:

Second best major sports brand after Nike. They generated 567 million pound

income in the year 2010. Now let’s make a comparison of puma and Adidas.

Puma Adidas

Reason for

being

Mixing sports, fashion, lifestyle

Improve athletes performance through

innovating

Reason to

believe

Trend setting style, retail

experience is branded,

Cobranding partnership with

Ferrari

Style is classic, they co-developed

celebrity lines, technology

innovation in footwear

value

Fits with the active style

Performance at the highest level

personality

Elegant, energetic, exuberant

Sophisticated, classic, Hi tech

association

Fashion brands such as Gucci,

Armani. Movie artist and Movie

stars

Elite football players, Hip hop

artist

The global athletic product industry has been suffering from frequent changes in the

consumer preference and taste, technology , hence if Puma is unable to adapt to these

changes quickly, it could suffer losses in its market share. Strong Competition from Global

brands such as Nike and Adidas which are trying to bring diverse products in the market

along with various product line. Having said , puma has repositioned itself from focusing

just on sports equipment towards lifestyle choices and are bringing new innovative products

and are trying to differentiate their products in the form of new brand image, better

positioning and better distribution system

Bargaining power of suppliers: Puma’s 2009 supplier list included mostly from Asia

including with majority was China followed by Vietnam. The fact the in this industry,

the suppliers are fragmented . Additionally Puma has large department stores and

retailers can choose products from many suppliers, hence supplier has less power.

Infarct in many countries such as Australia, retailers are gaining more power.

Bargaining power of customers:

The fact that price of the products can vary greatly starting from department store to a

discount store, the customers have the advantage to choose additional products to

select from due to dissimilarity , thus the switching cost of buyer is low.Hence the

customers have high bargaining power is high.

Substitutes:

Since puma has large range of department stores with variety of products, it may happen that

individual retailers can substitute for customers. Also the fact that discount department

stores or even high quality electronic stores can provide good quality substitutes if not better

than puma products with a cheaper price. Hence people who do not mind forfeiting quality

for price, they can buy from those stores. Also the fact that each and every company has

almost the similar type of products and services offer.

Threat of New Entrants: The fact that Puma has already in its mature stage and has great

financial resources and are well positioned now and has great brand loyalty , threat of new

entrants is low. Also for any company to come and get settled , it takes a huge amount of

time to get used to government regulation, business practices and also the fact that puma is a

large company, it will be hard for any company to come and take its place. Now a days Puma

has relaunched with its new strategy, it will be harder for new company to wipe it out from

the marker

Threats from Consumers: Change in customers tastes and preferences and the availability

of cheaper products in local and regional stores can reduce the sales of puma in some

countries. With high quality of products from Nike and Adidas, customers may switch to

their Competitors if puma does not develop unique and differentiated products

Opportunities:. According To Puma’s research, Many of the online customers are

multichannel shoppers. As a result, “Mobile is becoming an increasingly large player in

the shopping process” as told my Remi Carlos, The head of digital marketing. As a result,

it is great opportunity for Puma to engage customers in social media and engage them in

real world conversation where they can talk with the Puma employee about the feedback

of the products. Also puma has already launched new platform where the shoppers can

customize their items according to their own liking, is actually a great move on the part

of Puma. They should keep empowering customers in the shopping process thus

improving brand loyalty and customer retention.

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