Puma: business report - Essay Example

?Essay BUSINESS REPORT PUMA Marketing April TABLE OF CONTENTS Executive Summary 3 Overview 4 Market Audit 5 Marketinggoals and objectives 5 Current customers 6 Product or service 6 Strengths 6 Weaknesses 6 Competition 7 Critical Success Factor 8 Recommendation 8 References l0 Executive Summary PUMA is a recognized brand of sportswear in the world. It is known for its running shoes used for football, soccer, motorsports, running, and others. The company operates its own retail stores and products are distributed in 80 countries. Recently, PUMA has branched out into non-athletic products that include perfumes and accessories. Its marketing strategy is to combine lifestyle with sports. After establishing a reputable name as an athletic shoe, it is now slowly losing its market share to competitors. The Audit and review implies that PUMA needs new strategy to bring back the luster of the logo in sports. While it has retained core competency as a running shoe, company did not focus on basketball which is one of the leading sports worldwide. Basketball is a market segment that PUMA did not touch. Sources of information is from published reports of the company and various reliable sources from the internet, Recommendation is to align their shoe design to this segment to penetrate the youth markets who are basketball fanatics. Company may do this thru acquisition or own manufacture as it has the capability to do so. BUSINESS REPORT PUMA Overview PUMA is a sports company based in Germany. It was formed in 1936, but was officially registered in 1948. It was originally founded by brothers Adi and Rudi, but a squabble separated them and their families that prompted them to form their own companies. Adi formed Adidas, while Rudi created PUMA. PUMA designs and manufactures footwear, apparel, and accessories under the brand of Puma, Tretorn and Cobra Golf Labels. Puma’s operation is divided into footwear, apparel, and accessories. Its footwear includes shoes for motor sports, cross training, running, tennis, soccer, and other activities. While it bears the shoe heritage, it has expanded its athletic apparel styles in t-shirts, track jackets, pant, and hooded sweatshirts. Its range of accessories includes utility bags, backpacks, belts, headwear, and socks. PUMA operates its own retail stores and controls product distribution in about 80 countries. It is perceived as a sports brand that defines culture in lifestyles. The icon of cougar depicts strength, power, and durability which an athlete should be. Thus, feeling is translated into wearer, and that alone distinguishes PUMA brand from other brands. Part of its marketing strategy is to be seen in numerous TV and magazine ads. This allows them to reach farthest consumers that have not been reached out yet. Its partnership with World Cup Champions, as in Golf champions highlighting consumers’ lifestyles is an innovative marketing strategy, For the past five years, from 2008 TO 2012, the company saw a continuous rise in revenue, Exhibiting a growth rate of 11%. MSN Report that it is more than the growth of companies of SP 500s. Industry rate is not available. Marketing goals and objectives Long term vision of the company is “to become the most desirable sports like company” in the world. The four keys to success in PUMA vision, is “fair, honest, positive and creative” (About PUMA). Its long-term objectives are: “expansion of product categories; regional expansion; and expansion with non-PUMA brands. Expansion of product categories involve entering new product categories and expansion of existing ones that will cover the entire sports lifestyle from sports to fashion. Puma will expand growth of products with potentials that will distinguish it from competition. PUMA aims at regional expansion both in its retail and wholesale business. PUMA intends to expand its shop-in-shop systems and intensify sales promotions instruments to promote its business relations with existing partners. It also plans to redeem licenses and distribution agreements to consolidate business. Company believes that this strategy would lead to a rapid exploitation of brand potential in their respective markets, and that it will serve as a unique window for the brand, and offers the possibility to react swiftly to new trends. As a result, it has a chance to offer innovative products at an early stage. The vertical strategy is hoped to further strengthened retail sales through consolidated sales. Expansion to non-PUMA brands After its Tretorn acquisition in 2001, Company does not rule out further acquisitions if same will contribute to a sustained value to the company. Current customers Puma started with shoes for baseball and football, now it customers include others who are in football, running, Motorsports, golf and sailing. Product or Service. Purpose, features, benefits of product Puma products are perceived to bring back the joy of mixing lifestyle and sports. In planning design of their products, they have in mind, where is the joy? They think it comes from running fast on the track, having socials at ping-pong, or just by being the best while having fun doing it. Strengths Strong presence: sports/lifestyle fashion market Products meeting demand High innovative and qualitative products Big distribution network Harnessing resources and experiences Ample knowledge in R & D Weaknesses Weakness in market share Lacks product promotions Competition Competition in sports athletics wear is keen. Sammy S. (January 2013) of the Richest Org. listed the 10 most popular athletes shoes in the world. Accordingly, Nike, tops the list, followed by Adidas, Reebok, Puma, Converse, New Balance, Fila, K-Swiss, Asics, and Li-Ning. Graph below show Nike’s world market share as 31%, Adidas, 16% while PUMA retains 7%; others are new players. Source:www. Wikinvest.com available at google images Basic marketing strategy of the companies is to get endorsements or asking legendary names in athletics field to use their brands during competitions or leagues. For instance, Nike got famous basketball players to endorse its brands. Signing of Michael Jordan to use its brand proved to be its biggest success. Adidas uses same strategy of using famous basketball players like Karem Abdul-Jabbar. Reebok which is a subsidiary of Adidas, uses same kind of endorsement, but was introduced to the US market thru international trade shows. PUMA entered fame thru World Cup. Others were known through various arenas of sports (Sammy, S. 2013), Critical success factors PUMA logo is one of its success factors. John Charlie, (2010) an established author of Ezine Articles, stated that a strong logo design is one of the carriers of success of the company. First he perceived a strong logo as simple because to him, a simple visual image is easily processed and remembered. The simplicity of PUMA logo portrays the core essence of the brand. Second, John specified uniformity of elements. PUMA’s logo is uniformly displayed in all its brands. Third, John says a logo is purpose oriented. To me, the purpose of icon of a cougar aptly describes power and strength of the product it carries; and last is the metaphorical design. The use of metaphorical design symbolizes the meaning of the company that stands for the core meaning that products deliver. For instance: “M” of McDonalds means delivery of quality foods, while the Puma logo if is for delivery of running speed. In arriving at my recommendations, the 7PS of marketing mix is considered. The first deliberation is the product. It seems that the current product or service, or mix of products and services, is no longer appropriate and suitable for the market and the customers of today. The company is coming in as 4th place in the competition for sportswear. However, it has maintained its core competency in running sports. The company should assess their business if this is still the right products for customers today. Competition has successfully edged PUMA in market share because of basketball. Others are coming in fast, and a large market share is held by new players. If PUMA will not address this problem, they will soon find out they completely lost its market share to competition. Since company’s strength lies in being innovative and having strong R & D, it should come up with a new design of shoes appropriate for basketball. Prices. In introducing the new product, pricing should be properly considered. It should properly think about the appropriate current prices. This study has not studied pricing at length and is therefore not in a position to recommend pricing. But precisely, pricing should not be very far from competitions. Promotion. Company should experiment on different ways of promotion since, endorsements from famous basketball players is used up strategy, company may look like copy cats. It should develop new strategies and marketing ideas, like or sponsoring regional basketball associations, or even world sports events like Olympics. Regional basketball association’s competition is close to the hearts of fans, so that they could immediately relate. Place. Products can be introduced in different places. Being a multinational, products can be introduced through heavy advertising in the internet, magazines and catalogs, social media network, and television sports. Packaging. Company should be very careful in differentiating its running shoes with basketball shoes because it will create a lasting impression that will create different reactions from customers, Being a global company, it is not yet late for the company to introduce basketball shoes into worldwide fanatics of this game. The company has enough capability in terms of resources to deal with this. Bibliography About PUMA (2012). Our Brand Strategy. [online] Available from: About PUMA.com. [Accessed 18 April 2013 Charlie, J. (January 2010) Building strong logo designs, critical success factors. [online] Available from: Ezine Articles http://ezinearticles.com/?Building-Strong-Logo-Designs---Critical-Success-Factors&id=5044300 [Accessed 18 April, 2013] MSN Money. (2013) PUMS SE Financial Highlights. [online] Available from: MSN .com http://investing.money.msn.com/investments/stock-balance-sheet?symbol=PMMAF[Accessed 18 April 2013] Sammy, S. (2013). Top 10 most popular brands of sports shoes [online January 14, 2013] Available from the Richest.org. [Accessed 18 April 2013] Read More