Puma marketing2.doc

8/20/2019 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.

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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


inancial result

EBT


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

&ampras, "ndre "gassi and (ichael Gordan are of a very high Ouality, they


49/90

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


50/90

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


51/90

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


52/90

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,


53/90

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$


54/90

• 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


55/90

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.

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58/90

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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.


59/90

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


60/90

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


64/90

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


65/90

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.


66/90

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+


67/90

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


68/90

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@?


69/90

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


70/90

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

Documents

Puma marketing2.doc