Marketing Analysis of Puma: April 2016

Term Paper

Marketing Analysis of Puma

Prepared For

Professor Dr. Md. Mahmodul Hasan

Faculty EMBA/ MBA Program

North South University

Plot: 15, Block: B, Bashundhara, Dhaka-1229

Prepared By

BUS 620: Marketing Management

Section: 4

Date of submission: April 2, 2

Letter of Transmittal

April 2, 2016

Professor Dr. M. Mahmodul Hasan

Faculty EMBA/ MBA Program, North South University

Plot: 15, Block: B, Bashundhara, Dhaka 1229

Subject: Submission of Term paper on marketing analysis of Puma

Dear Sir,

It is a great pleasure to present the term paper on Marketing analysis of Puma (BUS -620) which had been a great experience for us to work with such a real life issue. Throughout the study we have tried with the best of our capacity to accommodate as much information and relevant issues as possible and tried to follow the instructions as you have suggested. We tried to make and let it look like a professional and informative one. We sincerely believe that it will satisfy your requirements.

We are very grateful to you for your guidance and kind cooperation at every step of our endeavor on this term paper. We will remain deeply grateful if you kindly take some pen to go through the report and evaluate our performance.

Thank You.

Sincerely,

No	Name	ID No.	Signature
1	Shaima Islam Shatu	153 1014 660
2	Redwan Rezvi	153 0709 060
3	Md. Shariotullah Sharif	153 1254 660
4	Md. Rakibul Hussain Shah	153 0577 660

Acknowledgment

At first we would like to thank Almighty Allah and then we want to give special thanks to our honorable course instructor, Professor Dr. M. Mahmodul Hasan, Faculty EMBA/ MBA Program, North South University to give us such an excellent opportunity to prepare this term paper on Marketing analysis of Puma. He gives us the inspiration and guidance to learn marketing management. We strongly believe works like this will surely help us to have a clear concept about this area and to make us better adapted as well as capable to cope with the issues & practical exposures in this field.

We want to thank our every group member. Each and every member tries their best to complete the term paper as per the guideline.

Therefore, there might have some technical mistakes or error due to our limited aptitude, related knowledge and time constraint. In this regard, we do believe to get a kind consideration from you and those who will be exposed to this report.

Executive Summary

PUMA is one of the leading athletic footwear, apparel and accessories company in the world. Their journey started in the year 1924 with Rudolph Dassler the original founder starting a manufacturing company with his brother Adolf. PUMA has more than 600 stores and their products are also featured in Multi Brand stores as well. They have employed over 10,000 employees worldwide who are highly trained to serve their customers. Puma offers performance and sports style products to different customer segments. It focuses more on quality, innovation, design, and performance of their product.

This report is carried out in order provide the marketing insight of PUMA by implementing some marketing theories and provide analysis based on that. This report covers the following topics which were taught in our class by our Honorable Faculty Professor Dr. M. Mahmodul Hasasn. The theories we learned in our class we used that to an analysis of the marketing of PUMA to produce analysis done by us which will show how PUMA can be more effective and be in a competitive advantage by implementing these theories in practice.

After the analysis of the report we will give a recommendation suggesting few steps to be used by PUMA that will help them in gaining a competitive hand over its competitions by better enhancing their marketing strategies. Puma firstly focuses on its product expansion according to their target market’s needs and wants. It develops its existing product and expand new product. It entered into fashion based product with sports products. Puma emphasizes on innovation, performance, quality to design its new products to make it unique from its competitors

From the overall study we will be able to conclude how marketing strategies can be more competitive with the help of our analysis and if implemented properly it will be really beneficial for a company leading to a larger customer base and increased profit.

TABLE OF CONTENT

Contents	Page No.
Letter of Transmittal
Acknowledgment
Executive Summary
1.0 Defining Marketing Management
1.0 1.1 Definition of Marketing Management (Theory 2000 – 2011)	1
2.0 1.2 Definition of Marketing Management (Theory 2012 – 2016 ±)	1
3.0 1.3 Marketing Management of Puma	1
2. Mission – Vision – Business Plan – Corporate Strategy	2-3
3. SWOT Analysis of Puma	3-4
1. 4. PESTEL	5-6
2. 5. Michael Porter’s Five Forces	7
6. Marketing Strategy & Core Marketing Concept	8-10
3. 7. Market Segmentation	11-12
4. 8. Marketing Mix ( 7P) + 4C	13-14
5. 9. Value Chain Model	15-16
10.TQM – Loyalty – Quality & Control	17-18
11. Brand & Branding	18-19
12. Box Analysis of Brand Elements (6 Categories)	20
13. Brand Dynamic Pyramid	21
11. 14. The Five M’s of Advertising	22
15.0 Mass Communication	22-25
15.1 Advertising Budget & Campaign Cost	23
15.2 Sales Promotion & Budget	24
16 15.3 Events & Experiences/Sponsors	24
17 15.4 Public Relation/Government Lobbying	25
15.5 Corporate Social Responsibility	25
15 16. Marketing Budget & Expenditure	26
16 17. Pricing Strategies	27
17 18. Breakeven Analysis with Chart/Graph	28-29
18 19. Recommendation	29
19 20. Conclusion	30
References	31

TABLE OF GRAPHS

Content	Page No.
Graph 6.1 Marketing Strategy of Puma	10
Graph 9.1 Value Chain Model of Puma	15
Graph 10.1 TQM of Puma	17
Graph 15.1 Advertisement Cost of Puma	23
Graph 16.1 Marketing Budget & Expenditure	26
Graph 18.1 Break-even analysis of Puma	29

Definition of Marketing Management

1.1 Definition of Marketing Management (Theory 2000 – 2011)

Marketing management is the art and science of choosing target markets and getting, keeping, and growing customers through creating, delivering, and communicating superior customer value.

1.2 Definition of Marketing Management (Theory 2012 – 2016 ±)

Marketing management depends on the size of the business and the industry in which the business operates. Effective marketing management will use a company's resources to increase its customer base, improve customer opinions of the company's products and services, and increase the company's perceived value.

1.3 Marketing Management of Puma:

As the business and industry size of Puma is very big and competitive, Puma faces a huge competition, complexity and different marketing activities. Puma obviously uses the latest definition of marketing management where they focus on the increased customer base by using their resources. Puma offers performance and sports style products to different customer segments. It focuses more on quality, innovation, design, and performance of their product. It engages in exciting collaborations with renowned design brands such as Alexander McQueen and Mihara Yasuhiro to bring innovative and fast designs to the sports world. That increases the company’s perceived value.

{Shatu, ID# 153 1014 660}

2. Mission, Vision, Business Plan, and Corporate Strategy of Puma

2.1 Mission of Puma:

http://www.sitemarca.com/wp-content/uploads/2014/08/pp.png

The mission statement of Puma is “PUMA WILL BE THE FASTEST SPORTS BRAND IN THE WORLD”

2.2 Vision of Puma:

Puma’s vision looks at the world which is safer, more creative, sustainable, fastest brand for the generations to come. They believe that by staying true to their values, inspiring the passion and talent of their people, and working in sustainable, innovative ways, will bring customer satisfaction and at the same time bring that vision of a better world a little closer every day.

2.3 Business Plan and Corporate Strategy of Puma:

Proper business plan and corporate strategy is very crucial for any organization. They give the direction of a corporation about the activities of each business unit to achieve the organizational goals.

PUMA is one of the world’s leading Sports Brands, designing, developing, selling and marketing footwear, apparel and accessories. Puma firstly focuses on its product expansion according to their target market’s needs and wants. It develops its existing product and expand new product. It entered into fashion based product with sports products. Puma emphasizes on innovation, performance, quality to design its new products to make it unique from its competitors. Puma’s corporate strategies encompass five strategic priorities. They are:

Puma’s five corporate strategic priorities

1. Reposition PUMA as the World’s fastest Sports Brand in the world and create brand heat.

2. Improve the product engine.

3. Optimize the distribution quality.

4. Increase the speed of Puma’s organization and infrastructure

5. Renew the IT infrastructure.

{Shatu, ID#153 1014 660}

3. SWOT Analysis of Puma

SWOT Analysis
I N T E R N A L	Strength	1. Puma has a very strong brand image and it is one of the world’s leading sports brands. 2. It produces innovative, high quality, comfortable products for the fastest athletes on the planet. 3. Puma has entered into partnership with famous companies like Ferrari, BMW. 4. Puma has entered into sponsorship with various players and team in different sector of the sport industry. 5. Puma was the official sponsor of the FIFA Football World Cup. 6. International celebrities like Usain Bolt, Rihanna, star striker Sergio Agüero etc represent Puma as brand ambassador. 7. It has strong marketing and distribution strategies.
I N T E R N A L	Weakness	1. Price is one of the major weaknesses of Puma. 2. In case of economic slowdown it cannot reduce its price product and cannot reduce price as sales promotion to compete with competitors due to product positioning and pricing strategy. 3. It has huge competition and limited market share. 4. It has less financial strength compared to others big competitors in the industry.
E X T E R N A L	Opportunity	1. Puma can enter into more sponsorship with International events related to sports. 2. It can expand its market segment according to the customer’s demand through effective marketing research. 3. Puma can attempt to increase efforts toward loyalty programs that will help them to create strong customer relationship and increase customer base.
E X T E R N A L	Threats	1. New players in the industry with more financial power and marketing activities will be a great threat for Puma. 2. Imitation of product is increasing. So, fake or cheap imitation can damage the brand image. 3. Increasing tax, government restriction, and economic downturns can slow down the performance of the company.

{Shatu, ID#153 1014 660}

4. PESTEL Analysis of Puma

A PESTEL analysis is a tool used by marketers to analyze and monitor the macro-environmental (external marketing environment) factors of an organization.

Political	Economics
1. Political instability effect the business. Puma try to expand its market in the political stable country and they become success. 2. Political situation of outsourcing country affect the business. 3. Puma have to comply with any restrictions imposed on users. 4. New tax or tariff imposed by government affect the business.	1. Exchange rate fluctuation influence the business as puma operates its business in different countries. 2. Inflation increase the cost of goods sold. 3. Higher rate of interest may affect the financial position of puma. 4. Economic slowdown or downturn may affect the consumers purchase and decrease the sales of puma. 5. Increasing material price and labor cost has a great impact on Puma.
Social	Technological
1. Consumers are more health conscious and participation in the sports are increasing that increase the demands of sports products. 2. Consumers are aware about CSR 3. Increasing market share of female consumers have positive effect on Puma. 4. Perception and preferences about the sports products are changing.	1. Technological advancement increasing sales and enable cost efficiency. 2. Up-to-date technology adoption, increase the change of products features and quality. 3. Rate of technological obsolescence increased due to new technologies. 4. Innovative and superior products increased because of advance technology.

Environmental	Legal
1. Tackling climate change becomes a challenge for organization. 2. Attaining the sustainable goals is a great issue for the company as there remains a possibility to fail. 3. May have to reduce energy consumptions. 4. As the popularity of green products increased, Puma may have to adopt more waste disposal, recycle and reuse policy.	1. There is a risk for the violation of employment laws and environmental issues. 2. Tougher business rules may hamper the business activities. 3. Trade agreement to safeguard for business operation is important. 4. Risk of contract manufacturers copying of product (Intellectual property rights) is a great concern.

{Sharif, ID# 153 1254 660}

5. Michael Porter’s Five Forces

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6. Marketing Strategy, Core Marketing Concept and Market Segmentation of Puma:

Marketing Strategy, Core Marketing Concept:

Marketing strategy combines all the marketing activities into a comprehensive plan that focuses on right segment, right products mix, and right promotional tools to achieve the organizations goals.

Core marketing concept of Puma is to identify the needs, wants and demand of their target customers and provide them best quality, comfortable, stylist, performance products. PUMA offers performance and sport inspired lifestyle products in categories such as Football, Running and Training, Golf, and Motorsports. They want to be the fastest sports brand in the world. To achieve this mission their marketing concept focuses on fast products, the fastest athletes, fast in reacting to new trends, fast innovators, fast in decision making, fast in solving partners for the partners.

Positioning of the Brand:

Positioning is the act of designing a company’s offering and image to occupy a distinctive place in the minds of the target market.

Puma is positioning its brand as an international brand with creativity, energy, comfortable, performance and stylist products in the sportswear industry at a premium price.

Marketing Strategy of Puma:

Ø Repositioning the Brand with Brand Ambassadors and sponsorship:

Puma invested several million Euros in 2015 for brand ambassadors to reposition their brand. They show how they are training with PUMA products to get into peak form for the major competitions. Rihanna joined Usain Bolt, Arsenal London and other athletes for the campaign on a number of fronts, including the first TV spot for their training shoe IGNITE XT. Leading up to this, she ensured a high level of attention in the media and on social networks.

Puma entered into sponsorship with FIFA World Cup and other famous players and teams. It also created partnership with Ferrari and BMW. It helps the company to increase their market share significantly.

Ø Improved quality of sales and distribution strategy:

Puma introduced joint product and marketing programs with their key retailers to showcase their brand in the right retail environment and drive sell through with their partners. During the year we began collaborating with other well known retailers with the aim of improving the presence of the PUMA brand in stores, better communicating our product promise on site, and thereby achieving a sustained sales increase.

Ø Online web shop:

To further expand their online presence, they launched an improved, integrated web shop and rolled it out in other markets in 2015. The continuous optimization of the website and their online product offering is a high priority for PUMA.

Ø Expand Market Segment with different strategy:

Puma expand their market segment. They introduced life style products and products for female and kids. Female consumers are above average performer for the sports products. Every year a large number of female enter into the sports world. Puma identify their preferences and collaborates with the designers. Here, the key element of strategy is to enter into the partnership with international star Rihanna as brand ambassador. She plays a vital part in product offering for female in their performance and sport style categories.

Puma entered into a new exciting partnership with Warner Brothers fulfilling childhood dreams by offering co-branded apparel, accessories and foot wear collections.

Ø Advertising on Media:

Puma has been invested huge amount of dollar on TV Ads, super support website Banner Ads, Twitter promos, YouTube, Google Ad words, advertising agency, bill board etc.

Graph 6.1: Marketing Strategy of Puma

{Shatu, 153 1014 660}

7. Market Segmentation of Puma

A market segment consists of a group of customers who share a similar set of needs and wants. Marketing segmentation is to divide the customer base in cluster groups with different needs and behaviors in order to create different and appropriate marketing proposition.

Puma segment its market based on geographic, demographic, psychographic behavioral factors.

Geographic Segmentation

Ø Geographic segmentation divides the market based on nations, states, country, and regions. Cities etc.

Ø Regions covered by puma: EMEA (Europe, Middle East and Africa), Americas (North and Latin America) and Asia/Pacific.

Demographic Segmentation

Ø Variables like age, family size, gender, income, generation, social class, occupation, education, religion etc are considered in case of demographic segmentation.

Ø Puma’s demographic bases:

·        
  Age: Kids, young, middle age (10-30 years)

· Gender: Male, Female.

· Income: Upper middle, High

· Occupation: Mainly Sportsperson

Psychographic Segmentation

Ø In psychographic segmentation buyers are divided into group based on personality, life style, values.

Ø Bases of puma:

· Lifestyle: Sports-oriented, Outdoor-oriented

· Personality: Energetic, ambitious.

Ø Main bases of Puma on VALs Framework:

· INNOVATORS: Successful, active

· ACHIEVERS: Successful, goal oriented

· Experiencers: Young, variety and excitement seeker.

Behavioral Segmentation

Ø Here, Marketers divide the groups on the basis of their knowledge, attitude, use of, or response to a product.

Ø Puma’s Bases:

· Benefit: Quality, performance, comfort

· Loyalty Status: Sports persons are highly loyal toward the brand

· Attitude towards the products: Majority of the customers have positive attitude towards the product.

{Shatu, ID#153 1014 660}

8. Marketing Mix ( 7P) + 4C

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4C’s of Puma

Cost – PUMA carefully plan their pricing strategies by considering people. They set their prices according to the customers purchase power making the products saleable and mostly premium pricing is used.

Consumer – PUMA make products by targeting the needs of the customers. From sportswear to casual wears and clothing all are designed which the customers prefer thus satisfying the customers.

Communication – PUMA keeps effectively communicates with their customers in events held by PUMA giving valuable insights about their products and even taking feedbacks.

Convenience – The exclusive stores of PUMA are located all around the world where the customer has access to wide range of their products. Their products can be also found on multiband stores as well and for even more convenient shopping customers can order online sitting from their home. {Rezvi, ID#1530709060}

9. Value Chain Model

Value Chain is the process or activities by which a company adds value to an article, including production, marketing, and the provision of after-sales service. Below diagram represents the sections of PUMA’s value chain.

Cotton field, cattle Dye house, Embroidery Footwear,

Firm, rubber tanneries, cutting, apparel,

Plantation Packaging Printing Accessories

Graph 9.1 Value Chain Model of Puma

PUMA outsources the majority of its production and approximately 90% of this production takes place in the Far East. With outsourced activities, it is more difficult to control the impact on issues such as sustainability. The range of environmental impacts that occurs across the value chain differs significantly.

Tier 4 represents both natural and synthetic materials in their raw state, for example cotton plants, raw hides and rubber trees. Leather and cotton production require significant quantities of water, land, herbicides, insecticides and fertilizer.

Tier 3 represents the processing of raw materials, for example a leather tannery or a rubber processing facility. The tanning process transforms a wet blue hide into a useable form of leather and is associated with large environmental impacts.

Tier 2 represents any outsourced processes, for example embroiders, cutters and printers. The impact at this stage is relatively minimal compared to other stages in the value chain due to the minimal and often simple processes undertaken.

Tier 1 represents the manufacture of the finished product and is the last stage in the manufacturing process. Some of our suppliers have vulcanization processes.

PUMA’s Operations:

Warehouses, retail and offices have relatively little impact compared to other areas of the value chain, the most important being water and energy consumption and municipal waste generation. Logistics represents the transportation of goods from the Tier 1 suppliers to the warehouses, storehouses and subsidiary businesses. Modes used to transport freight include shipping, road, rail and air. The majority of the impact caused by logistics relates to the combustion of fossil fuels such air pollutants produced and include carbon dioxide, nitrogen oxides, particulate matter, and ozone, VOCs, water vapor, carbon monoxide, hydrocarbons and sulphur dioxide. There can also be significant marine pollution caused by the shipping of products.

{Sharif, ID# 153 1254 660}

10. TQM-Loyalty-Quality & Control

Total Quality Management (TQM) is a management approach that seeks to improve quality and performance so that the company can achieve long term success by meeting or exceeding customer expectations. This can be achieved by improving processes, products, services, and the culture in which they work by all the members of the organization.

Wilkinson and Witcher (1993) summarized TQM as having three major requirements as follow:

Total - involving the whole company,

Quality - with all its complexities has to be defined

Management - the structure of managing the process by following some steps like Planning, Organizing, Controlling, Leading, Staffing.

Followings are the main factors which influences and ensures Total Quality Management OF Puma.

Graph 10.1 TQM of Puma

Quality and Control:

Quality is "the totality of features and characteristics of a product or service that bears its ability to satisfy state do implied needs. "Puma always think about the maximum quality. So, they established a commercial department which identify customer expectations and their satisfaction and constantly monitor them. They use different software to save data, so that they can compare it overtime.

Customer Loyalty:

Customer loyalty is the tendency to favor one brand over all others. Puma has a very strong customer loyalty. Puma achieve this loyalty due to better quality, performance and comfortable products. It arranges different types of customer loyalty programs. This loyalty encourages consumers to shop more consistently and feel positive about a shopping experience which attract other consumers in this competitive market.

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11. Brand & Branding

A 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 them from those of competitors.

Puma is a worldwide well-known brand by everybody. This is because puma maintains a strict rules and use of its logo and other symbols, patterns etc.

Logo: Puma is committed to make best quality, performance sports products and their logo is a visual expression of that commitment.

Living at the edge of fashion, PUMA’s identity has become a trend setter and sports lifestyle for the youth. From the maker of sportswear now they are well known all over the world for premium quality athletic and casual footwear, apparel, accessories and many more. Their effective branding strategies has helped PUMA maximized their brand value steadily competing with other major brands. When people talk or hear about PUMA the few things that pops up on their mind are comfort, accessibility and quality. This proves PUMA’s successful branding strategy.

The PUMA Group owns the brands PUMA and Cobra Golf, as well as the affiliate companies Dobotex and Brandon. These brands are closely interlinked with PUMA’s core business and will adapt and implement PUMA's new brand direction under the Forever Faster platform for their own strategies.

Cobra Golf

Brandon

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Dobotex

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12. Box Analysis of Brand Elements (6 Categories) of Puma

Memorable	Meaningful
Likeable	Transferable
Adaptable	Protectable

1. Memorable: How easily do consumers recall and recognize the brand element, and when—at both purchase and consumption? Puma is very well known and recognized by everybody.

2. Meaningful: Is the brand element credible? Does it suggest the corresponding category and a product ingredient or the type of person who might use the brand? Puma’s products remind the name of different players and it reflects the sports ob heart.

3. Likability: How aesthetically appealing is the brand element? Puma spends a lot to make its brands likable and as the customers can feel the attachment of the brand proposal and their needs they are very likable.

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13. Brand dynamics pyramid for PUMA

Strong Relationship

Weak Relationship

Bonding: Bonding happens when a company is doing business at least for 20 years and well received by the customers. Puma is doing its business since 1924 and it keeps it reputation successfully. So, it is in the bonding section.

{Sharif, ID# 153 1254 660}

14. The Five M’s of Advertisement

The following Five M of advertising is for a new product launch proposal of Puma in which is Puma Glow shoe that provides high quality, performance, flexibility and comfort to sports lovers.

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{Shatu, ID# 153 1014 660}

15. Mass Communication

15.1 Advertising and Budget Campaign Cost

PUMA the famous German sportswear company recently reported they had better sales than expected in new products thanks to its marketing as it has started to pay off leading to an increase in shares as much as 3 percent. Following this the brand is now tripling their advertising campaign cost increasing their budget campaign as well globally. This led to an increase in advertising cost from 4% to 12% in Australia to drive sales and improve performance. This was indeed a very splendid step taken by PUMA to cover the loss they had recent years when competing with its giant rivals Nike and Adidas. PUMA also started sponsoring Arsenal for their ad campaign to create more brand awareness among its customers. This all lead to an increase or advertising and budget campaign cost by 10.2% from € 544.1 million to € 599.7 million.

{Rezvi, 1530709060}

Graph 15.1 Advertisement Costs of Puma

15.2 Sales Promotion and Budget

PUMA’s marketing promotion to enhance their sales plays a crucial role in increasing their overall sales starting from footwear’s to other various products made by PUMA. For PUMA’s sales promotions they endorse many athletes in order to boost their sales. Endorsing athletes as a sales promotion is a very quick way to build strong sales figure as people follow their favorite players and seeing them using such product leads to buying of suck products. PUMA also features their product in their website and stores as well with attractive discount which acts as a solid sales promotion mostly in developing countries. Another sales promotion strategy used by PUMA is giving customers tickets when entering the shop. Their success is backed by sweet marketing in India that leads to the highest number of sales having RS1600 cores leaving Nike and Adidas behind by making and expects to make RS 2000 corers by the end of the year. This success has lead to an increase in consolidated retail sales of € 726.2. PUMA expects to increase their sales promotion budget by 18% due to increase in sales of their products following the huge popularity that amounted to consolidated sales of €3387.4 million. In Footwear it amounted to €1506.1 million, Apparel it amounted to € 1244.8 million and in Accessories it amounted to €636.4 million.

15.3 Events and Experiences/ Sponsors

PUMA in their business years had done many events showcasing their products to its customers so that they can have a experience of each product before actually buying it. This concept of PUMA has a very positive reaction from its customers as they had such opportunity. They were also shown beta products and ask for feedbacks which would PUMA reconsider if found valid and made changes on their final product. PUMA also launches their new products in numerous events one such example would be in the Red Bull Racing Event where PUMA worked with Innovation in marketing their products. PUMA also sponsors many sports teams starting from Football, Cricket, Baseball and more. One of the recent sponsorship is with the Great Sun Series, PUMA will be the official sportswear and merchandise supplier for the series. {Rezvi, ID# 1530709060}

15.4 Public relation and Government Lobbying

PUMA always try to keep interacting with the public in every different ways possible. PUMA believes maintaining good relationship with the public helps create a positive image and maintain strong relationship with them. As PUMA is now a global brand that is well known all over the world it becomes increasingly difficult for them to maintain good public relation which is why PUMA hires the best Public Relation Agencies based on those countries who knows the people better and they do all the public relation work for PUMA.

15.5 Corporate Social Responsibility

PUMA has received many corporate social responsibility awards for their countless efforts and contributions to world peace with the recent most recent award PUMA Energy in 2014. To make the world a better place to live, PUMA reduced their use of hazardous chemicals, to minimize packaging waste they redesigned their shoe boxes, they started to made products that are environmental friendly. They also took many initiatives after tons of research such as cleaning water, recycling of products, and wild life habitat and storm protection when in time of danger. This way PUMA is giving back to the community in many ways thus helping and making each individual’s life better with one sole vision on creating a better world for future generations.

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16. Marketing Budget & Expenditure

Puma spends a significant amount of money for its marketing activities. Through TVC, Facebook, You Tube Ads, Twitter promos, billboard, magazine Ads etc Puma markets its products. In 2015, Puma increase its marketing budget to increase its sales and gain market share. Puma’s marketing budget and expenditures are following:

Year	2015 (€ Million)	2014(€ Million)	2013(€ Million)
Marketing Expenditure	1,140.4	997.7	899.5

Figure: Marketing Budget and Expenditure (€ in Millions)

Graph 16.1 Marketing Budget & Expenditure

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17. Pricing strategy

Proper pricing strategy is very important for every organization. Puma follow the following pricing strategy:

Ø Puma flow the competitive pricing strategy. Puma compete with adidas, Nike and other fashion shoe retailers and brands.

Ø The pricing is based on the basis of premium segment as target customers also. So we can say puma also flow the price skimming strategy to attract the premium customer who have high income and want to take the best value of the product from the market.

Ø Puma also set its price by considering the geographic area. For example, In Asia, puma reduce its product price and capture the whole market and ensure a large scale of sales in each year.

Puma follow some steps to set price:

{Sharif, ID# 153 1254 660}

18. Break-even analysis of Puma

The break-even level or break-even point (BEP) represents the sales amount—in either unit or revenue terms—that is required to cover total costs. Total profit at the break-even point is zero. The main purpose of break-even analysis is to determine the minimum output that must be exceeded in order to make profit.

Price per unit in 2015= $90.50

Variable cost per unit in 2014= $39.50

Fixed cost = $22570500

So, Break even Volume in 2014 = fixed cost/ (price-variable cost)

= $25570500/ ($90.50-$39.50)

= 501,382 units

	2013	2014	2015
Total Fixed cost	$25,570,500	$25,570,500	$25,570,500
Total Variable cost	$22,580,270	$20,271,071	$19,804,589
Total cost	$26,653,579	$26,753,570	$45,375,089
Variable per unit	$41.39	$40.50	$39.50
Price per unit	$86.50	$87.00	$90.50

501,382 units

Graph 18.1 Break-even analysis of Puma

19. Recommendation

1. Puma must have more company owned distributors to increase their sales

2. Puma must do an actively advertisement of non puma brand to increase market awareness

3. Create more sponsorship with professional athletes especially with NBA basketball star players.

4. It can increase its store outlets worldwide

5. Puma should advertise their products differently. Creating a differentiation to Nike and Adidas.

6. It can increase its product line to give variety of choices to its customers.

7. Puma should produce more eco friendly products like their re-suede shoes.

8. They can more focus on basketball because it is one of the popular sports in the world.

20. Conclusion

Marketing is a very crucial part of every organization. Puma adopted different strategies that the repositioning of PUMA as the World’s Fastest Sports Brand, the improvement of our product engine, and the optimization of our distribution quality, increasing the speed within our organization and infrastructure, and renewing our IT infrastructure. PUMA was also trying with the ad campaigns to reposition itself on the mind of the consumers as a sports performance brand instead of everyone taking them as the casual thing. PUMA even signed a Multi-year deal with the famous singer Rihana and making her the brand ambassador to promote women fitness footwear’s. It also focuses on sustainability that fosters its success.