This report will show the analysis about PUMA marketing strategy which the 4th footwear producer in the world and also giving advice and objective to develop marketing strategy.
PUMA and its Situational Analysis
To satisfy customer demand, First, PUMA must understand its internal and external situation, including the macro-factor, micro-factor, and its own capabilities. In order to understand the situation, PUMA must do SWOT analysis and PEST analysis.
PUMA can apply SWOT analysis to both the business unit level, the corporate level and frequently appears in marketing strategy.
First, it is about PUMA brand and its power:
* Its image stands for the quality, the neo-technology and the prestige. * It is very competitive brand in athletic footwear, accessory and appeal market. * It is an international company.
* It got acquisition of reputable companies.
Second, it is about PUMA financial power and its product:
* Its financial power is very strong and the financial growth rapidly. * Its product is very diversity and it is successful on creating brand recognition. * It has long time experience in produce athletic footwear, accessory and appeal. Third, its management is marketing oriented, this is PUMA’s advantage in this business, since this is market driven.
First, PUMA is not done much of Promotional Campaigns or advertisement. Second, PUMA’s profit dependent on footwear market heavily although it already have wide range of sports products which can cause profit loss when its market share erodes. Third, almost of PUMA’s profit come from selling into its retailers. But retail sector is price sensitive that offers a very similar experience to the consumer as well as they tend to pass the low price competitive pressure to PUMA.
First, PUMA’s products are for both fashion and unfashion customer, playing sport or not, especial the young, so it make its own opportunities, since it give customer changes to replace their products. Second, PUMA success on build-up a strong brand recognition which is cover all over the world that give it change to penetrate to disposable market  for high value sports products like World Cup, The Olympics… Threats
First, PUMA’s short-life-cycles product competitive penetration plan can cost it a lot of money and give its marketing and its research and its development a heavily pressure. In addition, the serious threat may come from weakening markets. Second, buying and selling in different country with different currencies can be threat, because margins and costs are not stable for long periods. Not only PUMA but every international company must face those issues. Third, price sensitivity is a threat to PUMA, especially when the retail sector becomes competition of price. For example, there are many stores with same goods. The consumer is walking around for bester price in the same product.
PUMA can apply PEST analysis to analyze the external macro-environment which it is affected. Political Factors There are various political factors that are affect to developing process of PUMA, especially to build strong financial to make more profit, environmental issues is one of those issues. So PUMA should focus on various issues which related to the environment. In order to keep up the developing process, PUMA should consider the international laws and local laws when being outsourcing from foreign countries that include quota and tariffs which is the most critical political factors. Like another international company, PUMA is outsourcing its production in Asia due to lower labor-cost and taxes. PUMA is selling its products in various parts of the world. So the political stability is very important because if one of those issues is happen for PUMA’s local partner that can affect overall performance of PUMA.
In terms of stock exchange, monetary issues and so on, the economic factors, somehow, can be related to the various political factors which could affect the developing process of PUMA. Especially, the economic policies issues in Germany which is play an important role as well as the economic policies issues of the local partner. Thus, political factors have a great affect to the psychology of the customers. Due to different cultures and regulations and human resource aspect, the various employment laws in foreign countries should be considered.
There are various social factors that might affect the developing process of PUMA as well as demand or experience of the customers for one service or product. Nowadays, due to higher life-quality, people is love to playing sport a lot, so it is a big opportunities for PUMA to expand its market share. PUMA also should include some of new sports such as skateboarding, diving and extreme bike as importance segments in strategy-making Recently, there are more female-customers participates in sport, especially in US, the number of female-student who playing sports at university has increased three time and there are also more than thirty-three percent of female-students playing sports at high school. For now, female-customers participate in every sport in US. Thus, PUMA should consider the needs of female-customers in fitness shoes.
PUMA should focuses on Research and Development activities by apply latest technologies, in terms of technological factors, especially internet-marketing like, example vital marketing or so on… The maturity of technology is play an important role in terms of development because technology is non-stop develops, so PUMA should consider it. In addition, the global consumer is another important part because PUMA is run its business in various part of the world.
PUMA and its Unique Selling Proposition
The Unique Selling Proposition (USP) states successful advertising campaigns made unique propositions to consumers and this convinced them switch to PUMA brands. PUMA is suggested replacing its traditional business plan with its USP because USP can make a great deal to PUMA business model. USP can define PUMA business and business goals in one sentence. According to Rosser Reeves, there are three part of USP definition. 1. Each of PUMA’s advertisement must say to its consumer: “Buy our goods, and you definitely get this specific advantage”.
Example: “Make Football Everywhere” (PUMA football), By using such advertisement, PUMA try to tell its consumer the benefit of buying and using its football shoes, the benefit is its shoes can be use everywhere to playing football, it can be the street, stadium and backyard… and it is also new marketing strategy of PUMA. 2. PUMA’s offers must be something that other competitor cannot offer. Those offers should be unique. Example: The Puma design ethos/philosophy
“PUMA is mixing fashion and sport-lifestyle in a unique way. PUMA always try to illustration sport in a creative-fashionable way, and when it comes to fashion PUMA’s always try to put its sports heritage into fashion-area…”
Or “To PUMA, sport is a living-active-lifestyle, whether its customers are a traveler, an athletic or event businessman, this is a various kind of illustration of sport in modern time…” (Jochen Zeitz, CEO, Puma AG, discusses Puma’s design ethos)
By doing such campaigns, PUMA is creating their new brand image that it is changing its image from product sport shoes to product mixing sport-lifestyle fitness shoes, and it is also new development strategy of PUMA. 3. PUMA’s offers must be so powerful as well as those offers can return the mass profit.
“PUMA have been renewed contract with Jamaican-athletic Usain Bolt that allowed PUMA brand to keep-up, for the risen of 154 percent in annual net earnings to €202.2 million, year-on-year.” (PUMA’s profit “Bolt”, Jamaica Observer)
By gaining suck successful contracts, PUMA try to connect their products brand to famous athletics, and it is also new brand endorsement strategy of PUMA. In short, by using USP, PUMA gain opportunities to wider its market share and make more profit, especially, by lifestyle fitness shoes.
PUMA and its Segmentation, Targeting and Positioning
To implement marketing strategy, PUMA must define its segmentation, targeting and Positioning.
Segmentation is related to discover what consumer’s kinds exist and various needs exist. In the athletic footwear market, for example, the demand of consumers may include performance, safety and speed while others are concerned about fashionable.
In general, segmentation show the trust which company cannot be every things to everyone and long-time experiences has illustrate that PUMA that focus on the demands of a group of customers more than another for more profitable. Especially, the fitness-shoes market, which can be ‘segment’ by gender and age: Age
Age can affect the tendency of buying of consumer.
1. Kids (6 to 12): they may like colorful small-sized shoes. 2. Teens (13 to 18): they may like something that cool and impressive. 3. Adult (19 to 36): They may like the serious color, black or white color is an example. 4. Middle (37 to 55): They may like the same as adult desire. 5. Old (55+): They may like the comfortable, safe and stable.
The tendency of buying of consumer also can be affected by gender. Different genders have different demand. 1. Men: They like strong style, and also like strong color like black or white. 2. Women: They like cute and fresh style, and then they may like soft-color like pink, purple, light-green… Thus, there are many segments in fitness shoes market which can be consider as ‘Demographic Segmentation’ that PUMA must satisfy the demand of customer about region, population, climate, population growth rate and density. So the lifestyle fitness shoes can be the answer, because this kind of products is wide cover all of that demand.
First, PUMA need to find out how well the other competitor served the exist segments. It should be harder to approach to segments which are served as well by more than one competitor, in fitness-shoes, for example: NIKE, ADIAS, and KAPPA… Second, PUMA need to find out how large the segment is, and how large it grow, in fitness shoes, for example, in US, the number of female-student who playing sports at university and high-schools has rapidly increased. By now, female-customers participate in every sport in US.
Third, in order to archive successful, PUMA should use the ‘Differentiation Strategy’ on all targeted segments, which included: ‘Age’ and ‘Gender’. By using ‘Differentiation Strategy’, PUMA could provide to its consumer the unique features of its goods like lifestyle fitness shoes rather than by lowest price. Because differentiated goods can please the demand of consumers’ unique needs, PUMA can give premium prices for differentiated goods, for example: a pair of lifestyle fitness-shoes can cost more than 1 million VND in Vietnam, that can be consider as luxury goods.
PUMA’s lifestyle fitness-shoes could be positioned following by two main factors: ‘Competitor’ and ‘Consumer’. If the positioning is based on consumer, the marketing campaigns and its messages are targeted to the consumer by branding. That can use logo, symbol which make consumer recognize PUMA and its products. For example: First, the PUMA brand name is popular in the world and people can recognize its name and logo even if no of PUMA’s products is bought by them. Second, the logo is also an important part of branding, itself. The main reason of people that are recognizing PUMA can also recognize its products from this symbol alone. The lifestyle fitness-shoes company PUMA is popular for using a “leaping cat” (animal) symbol on its product lines. This feature allows consumer to identify PUMA’s lifestyle fitness-shoes, even if the PUMA’s brand name is not showing.
Recognition and Loyalty
First, recognition, the main benefit of branding is that customers are remembering PUMA’s business. A powerful brand name and logo keep PUMA’s image in the mind of its potential consumer. Second, loyalty, if consumer is please with PUMA products, its brand will help to build consumer’s loyalty. For example, even in the case of consumer is not aware that PUMA sell a new product, if consumer trusts PUMA’s brand, they will trust PUMA with unfamiliar products.
Image of Size, Quality, Experience and Reliability
First, image of size play an important role when consumer wants to knows that PUMA will still exist in a long time. For example, people often associate the large firms which spend a lot of money on advertising and promotion it’s currently and new products. Second, image of quality, people see that brand can be a part of a product that will help to show its quality and value. If PUMA can process effective branding, then the image of quality in PUMA’s business will raise higher over time. However, branding cannot replace high quality.
For example, Nike Inc. sport-wear brand was one of the biggest in the sport-wear world market. However, constant bad publicity about the low paid of its labor at Asia cause damage the image of the brand. Third, image of experience and reliability, PUMA business is to be seen as experienced in its products for a long time, it will make PUMA to be seen more reliable than the other firms. For example, in the case of a customer is choosing a new pair of shoe, there are a PUMA one and the other, but if customer trust PUMA experience, they will choose PUMA.
PUMA is being strong brand now which allows it to link several various product lines together. PUMA can put its brand name on each product, it make consumer is willing to buy new product of PUMA. For example, PUMA sells sport-wear, appeal, accessories and etc. all under the PUMA brand name.