PUMA Marketing Essay

Executive Summary The multi-billion global sportswear industry is a highly competitive sector that is continually evolving. Two of the largest players in this industry are Nike Co., which holds 37% market share, and PUMA with 7% market share. Objectives To support its growth target to $23 billion by 2011, Nike intends to expand its market penetration in India, China, Brazil, and other emerging economies. To achieve this end, the company plans to create brands that are tailored-fit to different markets. PUMA , on the other hand, targets regional and product type expansion. The company has drafted a five year plan to reach this goal. Positioning/Product/Service/Price Strategy Analysis These leading manufacturers have differing approaches in their marketing strategies. Nike has poised itself as an innovator of high quality sportswear, making sports as part of an active lifestyle. It invests heavily in advertising and marketing campaigns to create brand power and awareness. The Nike name is associated wit h quality, success, and greatness. As a result of its successful marketing strategies, Nike has become part of sports culture. Its products are categorized under basketball, soccer, women’s, running, men’s, sports culture, and others. For the year ended December 31, 2007, Nike reported revenues of $16 billion, where more than half of which came from its athletic footwear division. On the other hand, Puma has positioned itself as a manufacturer that combines functionality with style, creating a niche among the fashion-conscious sports enthusiasts. It cooperates with designers from strategic markets, like Japan, to come up with designs that meet the company’s goal of providing stylish sportswear that appeal to the high-end market. Its business is segmented into footwear, apparel and accessories. For the fiscal year 2007, PUMA reported revenues of $2.4 billion, where sixty percent of which was earned from footwear. Market Analysis Both Nike and PUMA target eighteen to thirty-five year old males and females globally. Despite the similarity of its market, the two companies attract different sorts of consumers. Nike has a strong consumer base for its performance shoes, while PUMA’s strength lies on its cas ual shoes. Distribution Strategy Analysis Distribution reach is a key factor for the success of Nike and PUMA. Nike is headquartered in Oregon, and distributes its products in about twenty-two thousand locations with eleven central distribution centers. This extensive reach allows Nike to be available to the most number of people around the world. Puma is based in Herzogenaurach, Germany, with distribution channels in more than eighty countries worldwide. However, it is largely concentrated in the European region, resulting to a lower market share. Both companies do not sell directly to the public. Instead, they sell through retail stores located in malls or department stores. Promotion Strategies Analysis PUMA’s five-year plan for 2006-2010 focuses on expansion of: †¢ product segments, †¢ regional penetration and †¢ non-PUMA brands. To do this, the company is shifting focus to capture younger consumers without losing its high-end costumers. It is also negotiating for the transfer of company control to PPR, a conglomerate that operates luxury brands like Gucci and YSL. This move is seen to increase sales for PUMA’s sneakers and up profits by at least ten percent. For Nike, it continues its innovations coupled with aggressive marketing campaigns to promote its products and hold on to its leading position in the market. Conclusion Nike will continue to be the sportswear industry leader for the years to come. The company’s approach to innovation and its highly aggressive marketing campaigns will ensure the company its top position in the market. As it continue to provide quality products that appeal to majority of the target consumers, Nike will be able to reach its goal of posting a fifty percent revenue increase by 2011. Puma’s shift in focus will help the company achieve a bigger market share. By reinventing its product lines and expanding its reach particularly in the U.S. market, PUMA will be able to increase its share target. The German company also needs to create products that would cater to the middle-end consumers. From this project, I have learned that marketing strategies and promotional campaigns do a lot to the brand. As a result of brand power, a company’s pricing will also be at an advantage. I have also learned that Nike’s management is doing very well to keep the company at the forefront, compared to PUMA’s top executives who are still in the process of making the company more competitive globally.