Puma Street Soccer Cup
Arming thought that y making shoes affordable to everybody the sales in Puma would increase, however this strategy failed and made Puma had liquidity problems.
The company needed a new organizational structure to be able to comeback stronger than ever. One of the first problems Zit solved was the company’s accounting. He presented Puma with a new way of monitoring the products by profit centers and distribution-oriented controlling to Identify products and adjust profit margins. Another problem was the efficiency, in order to increase it half of the employees were aid off and they began outsourcing to Asia and Turkey.
After making organizational changes Puma began concentrating in their core competencies: brand and product management and marketing and decided to once again make Puma and appealing sports brand.
Their strategy was to appear in Hollywood bestseller movies, which made Puma earn 85 million euros and have record sales. This proved their strategy worked and placed Puma In the market again. In just four years, from 1999 to 2002, Puma was able to more than double their net ales and was able to compete with the high and recognized brands.
Other marketing strategies included producing exceptional events such as the Puma Street Soccer Cup and the SOME Competition. Puma had two main product lines: Functional and Punctuating and its most famous product were the Puma King Football shoes, which also were the best soccer shoes In the market.
In the year 2000 Puma saw the opportunity of opening to new markets due to emerging sports (BMW, skateboarding and biking) and started and Action Sports line. Puma also started a brand for women’s clothing and a luxury footwear line. These new lines estimated to be 10% of Puma’s revenues.
For Puma and its competitors It became difficult to recognize major trends in the sports market, since by 2003 new sports were emerging. People were also looking for high-value products and It became a trend In sports apparel as well.
Each company had its main strengths. Ideas and Nikkei were the only suppliers that covered all sports, but Ideas strength was soccer and Nikkei was traditional American sports such as basketball and baseball. Rebook specialized in football, baseball and track and field, Fill was known for its tennis apparel, footwear and accessories and Diesel and Pravda for Its luxury brand In sport.
Each of the competitors also had different marketing strategies. Ideas sponsored nudge sports events sun as HAY world cup Ana ten BEEF champions League Ana sponsored well-known athletes in different sports such as David Beckman and Anna Karamazov. Sometimes Ideas even invested in sports teams.
Nikkei created the slogan “Just do it”, which is now known all over the world, in order to target people arm the ages of 20 to 30. It also sponsored many sports events and outstanding athletes such as Michael Jordan and Tiger Woods.
Nikkei spent huge amounts of money in marketing by sponsoring teams like Manchester United. Rebook had a different approach. The company created licensing agreements with many labels, two very important ones were with the NAB and the NFG. This gave Rebook huge brand awareness.
It also sponsored athletes in different sports and well as events and even TV shows. Fill sponsored the Ferreira racing team in Formula One as well as a famous NAB player. Puma knew that in order to keep up with its competitors it had to invest in research and development.
The company innovated each part of the production process and launched high quality products, both in design and functionality. To keep low costs, Puma outsourced the production and raw materials to Asia and the manufactures to Mexico and Turkey. This reduced the inventory by 21%.
Puma knew logistics was not a core competence, and it was 62% of Puma’s revenues. Brand management was one of Puma’s core competencies. The company pondered charismatic athletes form different sports to be present in a wider market.
Puma wanted to transmit its philosophy not Just its brand. Another important factor was when to launch a new product line. By investigating Puma knew that each sport cycle lasted for about 12 to 15 years, but it would only be popular for 5 to 8 years, which caused that investments had to be carefully planned.
Puma made advertising in MET and several Hollywood movies that communicated the same message as them, as well as the Internet. Puma has been present for a long period of time in the sports market and I live it is not going anywhere.