PUMA (BRAND)

Puma SE, branded as Puma, is a German multinational corporation that designs and

manufactures athletic and casual footwear, apparel and accessories, which is

headquartered in Herzogenaurach, Bavaria, Germany. Puma is the third largest

sportswear manufacturer in the world. The company was founded in 1948 by Rudolf

Dassler. In 1924, Rudolf and his brother Adolf "Adi" Dassler had jointly formed the

company Gebrüder Dassler Schuhfabrik (Dassler Brothers Shoe Factory). The

relationship between the two brothers deteriorated until the two agreed to split in

1948, forming two separate entities, Adidas and Puma. Both companies are currently

based in Herzogenaurach, Germany. Puma has been a public company since 1986,

listed on the Frankfurt Stock Exchange. French luxury group Kering (formerly known

as PPR) holds 9,8%, Kering's largest shareholder Groupe Artemis owns 29% of the

share capital. Since 1 July 2013, the company has been led by former football

professional Bjørn Gulden (chief executive officer). As of 2017, Puma SE employs

more than 13,000 people worldwide and distributes its products in more than 120

countries. Following the split from his brother, Rudolf originally registered the newly

established company as Ruda (derived from Rudolf Dassler, as Adidas was based on

Adi Dassler), but later changed the name to Puma. Puma's earliest logo consisted of a

square and beast jumping through a D, which was registered, along with the

company's name, in 1948. Puma's shoe and clothing designs feature the Puma logo

and the distinctive "Formstrip" which was introduced in 1958.

SPONSORSHIPS

Puma offers products for Football, Basketball, Running, Training and Fitness, Golf,

Motorsports and Sportstyle. It has sponsored a number of legendary athletes,

including Pelé, Eusébio, Johan Cruyff, Diego Maradona, Lothar Matthaus, Clyde

Frazier, Jim Hines, Boris Becker, Martina Navratilova, Tommie Smith, Joe Namath,

Linford Christie, Colin Jackson, Heike Drechsler and Michael Schumacher among

others. Currently, international footballers, including Neymar, Gianluigi Buffon,

Sergio Agüero, Antoine Griezmann, Marco Reus, Raphael Varane, Luis Suárez,

David Silva, Vincent Kompany, Christian Pulisic and many more are sporting Puma

football boots. In terms of football clubs, Puma sponsors Borussia Dortmund,

Manchester City F.C., Olympique de Marseille, Fenerbahçe S.K., Sociedade

Esportiva Palmeiras, Borussia Mönchengladbach, Crystal Palace F.C., Lillestrøm

Sportsklubb Valencia CF, AC Milan, US Sassuolo, Club de Fútbol Monterrey,

Bengaluru FC, Mumbai City FC and many others. National football teams include

Italy, Iceland, Switzerland, Austria, Morocco, Egypt and Uruguay. In athletics (track

and field), Puma sponsors several athletic associations such as the Jamaica, Cuba,

Bahamas, Grenada, Trinidad & Tobago, Dominican, Barbados, Portugal, Switzerland

and Norway. It also has the world's fastest man and Jamaican track athlete Usain Bolt

under contract along with other track and field athletes like Andre Degrasse, Karsten

Warholm and Gianmarco Tamberi. Over the past decades, several world records were

achieved by athletes wearing Puma shoes, such as Heinz Futterer (1954), Armin Hary

(1960), Jim Hines (1976), Tommie Smith (1968), Asafa Powell (2005), and Usain

Bolt (2009).
In 2018, Puma announced its entrance back into basketball after a break of almost 20

years. The brand appointed Jay-Z as creative director of Puma basketball. Marvin

Bagley, Deandre Ayton, Zhaire Smith, and Michael Porter Jr. are the first players to

join Puma's basketball roster and play in performance Puma basketball shoes. Also,

Puma made its partnership with Netball after 28 years by sponsoring the Melbourne

Vixens, the only netball team to be partnered with the global firm From 2018, Puma

became the official apparel sponsor of New Zealand's national netball team, the Silver

Ferns. The firm sponsors Indian cricketer Virat Kohli the captain of the India cricket

team. Golfers such as Rickie Fowler, Bryson DeChambeau and Lexi Thompson are

equipped by Puma's golf brand Cobra Puma Golf. In Formula 1, Puma equips the

teams of Mercedes AMG Petronas, Scuderia Ferrari and Red Bull Racing. In addition,

Puma also sponsors BMW and Porsche in all of their Motorsports activities. In

NASCAR Puma equips Team Penske with fire suits, gloves, and shoes. In order to

support its women's business, Puma endorses supermodel Cara Delevingne and

Adriana Lima as well as actress/singer Selena Gomez. Puma is also the main sponsor

of the Israel Football Association (IFA) and is currently a focus of the Palestinian

Boycott, Divestment and Sanctions movement. The IFA, with sponsorship from Puma

and other companies, operates from settlements, as does Puma itself via its past and

present licensees in Israel. In July 2021, there were anti-sweatshop protests outside

Puma's offices in Manchester, UK, as well as at 30 UK Puma stores.

HISTORY

BACKGROUND

Christoph von Wilhelm Dassler was a worker in a shoe factory, while his wife Pauline

ran a small laundry in the Franconian town of Herzogenaurach, 20 km (12.4 mi) from

the city of Nuremberg. After leaving school, their son, Rudolf Dassler, joined his

father at the shoe factory. When he returned from fighting in World War I, Rudolf

was trained as a salesman at a porcelain factory, and later in a leather trading business

in Nuremberg. In 1924, Rudolf and his younger brother, Adolf, nicknamed "Adi",

founded a shoe factory. They named the new business "Gebrüder Dassler

Schuhfabrik" (Dassler Brothers Shoe Factory) which was the only business at the time

that manufactured sports shoes. The pair started their venture in their mother's

laundry. At the time, electricity supplies in the town were unreliable, and the brothers

sometimes had to use pedal power from a stationary bicycle to run their equipment. In

1927, they moved into a separate building. The brothers drove from Bavaria to the

1936 Summer Olympics in Berlin with a suitcase full of spikes and persuaded United

States sprinter Jesse Owens to use them, the first sponsorship for an African

American. Owens won four gold medals. Business boomed; the Dasslers were selling

200,000 pairs of shoes annually before World War II. Both brothers joined the Nazi

Party, but Rudolf was slightly closer to the party. A growing rift between the brothers

reached a breaking point during a 1943 Allied bomb attack. Adi and his wife climbed

into a bomb shelter that Rudolf and his family were already in. "Here are the bloody

bastards again," Adi remarked, apparently referring to the Allied war planes, but

Rudolf, due to his apparent insecurity, was convinced his brother meant him and his

family. When Rudolf was later picked up by American soldiers and accused of being
a member of the Waffen SS, he was convinced that his brother had turned him in.

After increasingly different views of how to run the business, the brothers split the

business in 1948. Rudolf moved to the other side of the Aurach River to start his own

company. Adolf started his own company using a name he formed using his nickname

—Adi—and the first three letters of his last name—Das—to establish Adidas. Rudolf

created a new firm that he called "Ruda", from "Ru" in Rudolf and "Da" in Dassler. A

few months later, Rudolf's company changed its name to Puma Schuhfabrik Rudolf

Dassler in 1948. Puma and Adidas entered a fierce and bitter rivalry after the split.

The town of Herzogenaurach was divided on the issue, leading to the nickname "the

town of bent necks"—people looked down to see which shoes strangers wore. In

1948, the first football match after World War II, several members of the West

German national football team wore Puma boots, including the scorer of West

Germany's first post-war goal, Herbert Burdenski. At the 1960 Summer Olympics

Puma paid German sprinter Armin Hary to wear Pumas in the 100-metre sprint final.

Hary had worn Adidas before and asked Adolf for payment, but Adidas rejected this

request. The German won gold in Pumas but then laced up Adidas for the medals

ceremony, to the shock of the two Dassler brothers. Hary hoped to cash in from both,

but Adi was so enraged he banned the Olympic champion. During the 1968 Olympics

Black Power Salute, Puma sponsored African-American athletes Tommie Smith and

John Carlos, after having won gold and bronze in the 200 meters respectively, took to

the podium with their Puma Suedes in hand and bowed their heads and raised their

black-gloved fists in silent protest during the playing of the national anthem, an act

meant to stand up for human rights and to stand up for black Americans. In February

2007, Puma reported that its profits had fallen by 26% to €32.8 million ($43 million;

£22 million) during the final three months of 2006. Most of the decline in profits was
due to higher costs linked to its expansion; sales rose by more than a third to €480.6

million. In early April 2007, Puma's shares rose €29.25 per share, or about 10.2%, to

€315.24 per share. On 10 April 2007, the French conglomerate PPR (which became

Kering in 2013) announced that it had bought a 27% stake in Puma, clearing the way

for a full takeover. The deal valued Puma at €5.3 billion. PPR said that it would

launch a friendly takeover for Puma, worth €330 a share, once the acquisition of the

smaller stake was completed. The board of Puma welcomed the move, saying it was

fair and in the firm's best interests. As of July 2007, PPR owned over 60% of Puma

stock. Puma holds a 5% stake at German sports club Borussia Dortmund, whose

supplier has been the company since 2012. The company has been led by former

football professional Bjørn Gulden (chief executive officer) since 1 July 2013. Puma

is the main producer of enthusiast driving shoes and race suits. They are the primary

producer for Formula One and NASCAR clothing. They won the rights to sponsor the

2006 FIFA World Cup champions, the Italian national football team, making and

sponsoring the clothing worn by the team. They entered a partnership with BMW,

Ducati and Ferrari to make Puma-Ferrari, Puma-Ducati and Puma-BMW shoes.

Rihanna was named creative director of Puma overseeing direction of the

womenswear line in December 2014. In 2014, Puma and Arsenal Football Club

entered a 5-year merchandising partnership. The commercial partnership represents

the biggest deal in Puma and Arsenal's history. The partnership ended in 2019. In

March 2018, Puma launched its venture with its ambassador Selena Gomez called

"Phenom Lux''. In 2018, Puma re-entered the basketball sneaker market for the first

time in 20 years and announced Jay-Z will be the creative director for Puma

Basketball. Puma last sponsored Vince Carter in 1998. They signed young basketball

players Marvin Bagley III and Deandre Ayton, both of whom became the Top 2 picks
of the 2018 NBA Draft. In December 2018, Puma reintroduced the RS Computer,

with "RS" standing for "running system." The shoe contains technologies such as an

accelerometer and Bluetooth. In September 2020, Puma signed with Brazilian football

superstar Neymar. In July 2021, Puma signed with 18 athletes in India to represent the

country in national and international events across sports such as hockey, shooting

etc. In December, the brand launched High Court, its first-ever women's basketball

line, designed by creative director June Ambrose.

LABOUR PRACTICES AND FACTORY CONDITIONS

In 2000, Puma began auditing all of its suppliers on a yearly basis, and makes the

results available in its sustainability reports. Since 2005, it has publicly provided a list

of its suppliers. In August 2004, a joint report from the National Labor Committee

and China Labor Watch stated that workers at some of Puma's Chinese factories were

enduring sweatshop conditions, working up to 16.5 hours per day for about US$0.31

an hour. Puma said they would investigate the claims. In February 2012, a woman

who worked for one of Puma's suppliers in Cambodia was shot during a protest over

factory working conditions. Puma acknowledged the poor working conditions and

said they would work to improve the situation. According to a joint report from

Labour Behind the Label and Community Legal Education Centre, 30 workers fainted

in November 2012 while producing clothing for Puma in China. The faintings were

caused by excessive heat and alleged forced overtime. In 2014, almost 120 workers

fainted in two Cambodian clothing factories where sportswear was being produced for

Puma and Adidas, due to temperatures above 100 degrees. In March 2017, 150

workers assembling Puma products in Cambodia fainted due to thick smoke. Puma

has obtained the Ethical Clothing Australia accreditation for its Australian-made
products. This labour-friendly accreditation applies to only a small percentage of

Puma's total production. In May 2011, English newspaper The Guardian released an

article saying that Puma was the "world's first major company to put a value on its

environmental impact". According to the article the company "has made a

commitment that within four years, half its international collections will be

manufactured according to its internal sustainability standard, by using more

sustainable materials such as recycled polyester, as well as ensuring its suppliers

develop more sustainable materials and products." Puma is also known for boosting

positive environmental practices in its supply chain through financial incentives. The

innovative Supply Chain Finance scheme implemented links the sustainability

performance of key suppliers to the costs at which they can access finance. Such

scheme won the company an "Innovation Award" in Supply Chain Finance in 2016.

MARKETING STRATEGY OF PUMA

Puma is one of the most well-known manufacturers of sports shoes but they also have

marketed their diversified product line using Ambassadors, CSR Strategies. They

have an Innovative Research and Development team that helps them in getting new

and advanced products for them in the market Let’s discuss their marketing strategy

in detail. First, let us see the product diversification of puma which has made it

branches in all fields of sports.

1. Product Diversification

Puma has come a long way, from producing only footwear products to diversifying

their products like Gymnasium equipment, Trekking Equipment. Puma makes

custom-made shoes, racer suits, and shoes for Formula One, Puma has been providing
football shoes for football players and various equipment for various sports. Let us

now see Puma’s brand ambassador strategy.

2. National Brand Ambassadors

Puma has signed deals with various sports personalities like Virat Kohli, KL Rahul,

Sushma Verma, Sunil Chhetri to promote their brand. Puma also endorses its

products with different celebrities for example Saina Nehwal endorsed Badminton

racket and cork. Puma has made its brand image by making famous sports players

who most Indians follow in their fields. their brand ambassadors influence people in

buying their products. Making a person feel proud of the brand they are purchasing is

also an important marketing tactic. Let us now see some of Puma’s CSR strategies

implemented to bring awareness.

3. CSR strategies

Puma had been providing Sports Scholarships to promote sports culture and also Anti

Child Labour Campaign. Puma has 10 sustainable goals to fulfill by 2050 ie Human

rights, Being socially responsible, taking responsibility for environmental care,

Biodiversity, using sustainable materials, less usage of chemicals, etc

4. Gaining Commercial Advantage from Research & Development

Instead of a Shoe Box and cover for the box, Puma started replacing them with Clever

Little boxes to reduce the use of cardboard, paper, plastic, and less emission of

Carbon Dioxide. Let us now see the marketing budget of Puma.

6. Puma’s Marketing Campaign

Puma did some great work in creating campaigns that hit people differently and subtly

promote their brand. Here, we have discussed the best campaign by Puma. Propah

Lady Campaign The campaign celebrates the shift from women being told what to do

and not do. The campaign celebrates breaking the stereotypes. The ambassadors of

this campaign are Boxer Mary Kom, Actress Sara Ali Khan, International Athlete

Dutee Chand, and Transgender model Anjali Lama. This campaign focuses on how

women are always told to be feminine, wear decent clothes, be soft and not be

opinionated. From a very young age, women are always told to be proper but this

campaign focuses on how women can be a Propah Lady which means women can be

however she wants to be and not how society wants her to be. During the past years,

people have started using social media on a large scale and every company should

have a social media campaign. Let us now look at Puma’s social media campaigns.

7. Puma Social Media Strategy

Every different social media account has its unique use. Puma has managed all of its

accounts properly and is posting all relevant content on its social media. Let us start

by looking at Puma’s Instagram strategy. On their various social media handles, they

feature the player of that sport wearing their products.

PUMA’S GENERIC STRATEGY, INTENSIVE GROWTH

STRATEGIES & COMPETITIVE ADVANTAGE

Puma SE’s generic strategy for competitive advantage emphasizes making the

company and its products different from the competition, based on Michael E.

Porter’s model for generic competitive strategies. On the other hand, the company’s

intensive growth strategies focus on gaining a larger share of the international sports

shoes, apparel, and equipment market, based on Igor Ansoff’s Matrix for growth

strategies. In this case, Puma uses its generic strategy and growth strategies in directly

competing against such companies as Nike, Adidas, ASICS, Under Armour, and VF

Corporation. Given the global market’s dynamics, these firms need competitive

advantages that strengthen the attractiveness of their sporting goods among target

customers. Through an appropriate generic strategy, Puma uses its competitive

advantages to support the corporation’s intensive growth strategies. This condition

makes the sporting goods business competitive, continuing in its growth and

organizational development with the competitive position as one of the biggest

players in the industry. The combination of Puma’s generic strategy and intensive

growth strategies translates to strategic management initiatives for maximizing

profitability through business competitive advantages. For example, the company’s

strategic plans for business growth capitalize on competitive advantages based on

sporting goods innovation and design. Puma’s operations management approaches

also further strengthen these competitive advantages, in support of the enterprise’s

generic strategy and corresponding intensive growth strategies, and the strategic

position of the business. Puma’s Generic Strategy for Competitive Advantage

(Porter’s Model) Puma’s generic strategy is differentiation, broadly applied to

business operations in the global market. Based on Porter’s model, this generic
strategy creates competitive advantage by developing the uniqueness of the business

and its products, such as through innovation in the design of athletic footwear. This

generic strategy moves the business toward attaining Puma’s corporate mission and

vision statements. Through differentiation, the resulting competitive advantage

empowers the multinational company to successfully reach and satisfy its target

customers, despite rivalry against competitors, especially large and aggressive firms

that offer comparable sporting goods. The success of this generic strategy for

competitive advantage is partly based on its alignment with Puma’s intensive

strategies for growth. The company also uses focus strategies for some of its product

lines, such as athletic shoes for certain market segments involving specific types of

sports activities. The cost leadership (best cost provider) generic strategy is not used

because Puma’s emphasis is on showcasing its sporting goods as high quality,

innovative, and technologically advanced, entailing relatively high prices. An

implication of the differentiation generic strategy is the strategic objective of

maintaining Puma’s high investments in product design and innovation. This strategic

objective supports the generic strategy’s requirement of making the business and its

sporting goods unique in order to develop competitive advantage. Puma’s corporate

social responsibility strategy helps build the uniqueness of the company’s corporate

image and product attractiveness. In addition, differentiation leads to the corporate

strategic objective of using radical marketing strategies in reaching customers in the

global market for athletic shoes and accessories. For example, Puma’s marketing mix

or 4P helps strengthen competitive advantage through radical business strategies and

tactics for marketing communications. The company’s intensive growth strategies are

used to achieve such strategic objectives pertinent to the global sports shoes and

equipment industry.
Market Penetration (Primary). Puma’s main intensive growth strategy is market

penetration. In the Ansoff Matrix, this intensive strategy for growth focuses on selling

more of the company’s current sports shoes, apparel, and equipment to current

markets. The SWOT analysis of Puma SE outlines the business strengths used to

successfully implement market penetration. This intensive growth strategy depends on

the use of competitive advantages based on the company’s generic strategy, which

implies innovation in the design of sporting goods. A strategic objective based on

market penetration is to grow the business by aggressively marketing Puma’s

products.

Product Development (Secondary). Puma’s product development is a secondary

intensive strategy for growing the business. For example, the company integrates

computing technology in its athletic shoes, leading to better products that satisfy

athletes and non-athletes alike. In this regard, this intensive growth strategy pushes for

products’ competitive advantage, thereby contributing to the effectiveness of Puma’s

generic strategy of differentiation. The implementation of product development

depends on the company’s organizational structure, especially with regard to

resources used for innovating sporting goods. For instance, Puma’s corporate

structure includes human resources that are dedicated to innovation in the design of

products. Also, the success of this intensive growth strategy and the corporation’s

generic strategy depends on how cultural factors enable competitive advantages.

Puma’s corporate culture provides support for human resource development necessary

in product innovation. A strategic objective based on product development is to

continue increasing investment in research for new and improved designs of athletic

footwear and accessories.

Market Development. Puma’s business performance minimally depends on market

development as an intensive growth strategy. In this case, the Igor Ansoff Matrix

definition of market development entails selling the company’s current sporting goods

in new markets, or offering current sporting goods for new purposes or uses.

However, Puma relies more on market penetration and product development as

intensive growth strategies. Nonetheless, the company occasionally implements

market development, such as in offering certain sports accessories for a market

segment’s casual (non-athletic) use. The generic strategy of differentiation provides

the competitive advantage to ensure this intensive growth strategy’s success. In using

market development, a strategic objective is to determine new possible uses of

Puma’s existing products, in order to create new revenue streams for the business.

Diversification. The growth strategy of diversification is minimally significant in

Puma’s business development. Diversification involves the development of new

products in new industries or markets other than the company’s current ones, which in

this case is the market for athletic footwear, apparel, accessories, and equipment.

Puma maintains its operations within this current market. This market focus means

that the diversification intensive growth strategy has insignificant contribution to the

sporting goods corporation’s growth. Considering that Puma uses the differentiation

generic strategy, the use of diversification would likely involve the same generic

strategy to create competitive advantage in new markets or industries. In

implementing this intensive growth strategy, the company needs to obtain adequate

market information to determine the best approach for developing competitive

advantage. A PESTEL/PESTLE analysis of Puma SE can provide information about

the technological and social trends relevant to business design and product

development.
PUMA BRAND AND DRIVERS OF GROWTH IN THE INDIAN

SPORTSWEAR INDUSTRY

Several things made Puma a successful product. As a brand, Puma focused more on

its consumers than on the profit margins. The company provided footwear that fit

their clientele. For example, while entering the Indian market, the company realized

that more clients preferred flip-flops and sandals as compared to closed shoes. The

company included the said type of shoes for the Indian market to their portfolio. In

turn, the company recorded massive profits compared to their competitors. In the

same breath, it is crucial to acknowledge that the company’s strategy takes a country

approach as opposed to a global approach. By doing so, the company customized its

products based on the socio-economic and cultural preferences of its clients in

different countries. The company’s retail strategy also led to its success. For example,

franchising helped the company become very successful. Taking the case of Puma

India, in 2016, the company had 340 stores in the country. 320 of the 340 stores were

franchises (Puri & Krishna, 2016). According to Puri and Krishna (2016) franchising

is an efficient way of pushing one’s product to a new market as it uses local

connections to develop trust amongst its target clients. In the same breath, Puma did

not pick out partners for the franchises. The company used a strategic approach,

where they made deals with local footwear stakeholders to sell their products. For

example, the company made a partnership deal with Rishabh Sports Station, which

was Reebok’s largest vendor (Puri & Krishna, 2016) when Reebok closed some of

their shops. Thirdly, the promotional strategy used moved the company ahead of

many of its competitors. The company invested in other ventures, such as a posh

social club in the Indian suburbs, to attract its clients. The Forever Faster campaign

was also enhanced to capture the new markets. Initially, the said campaign focused on
athletes, but with the new markets, it focused more on the client, creating the idea that

Puma’s shoes were not only fit for athletes, but for everyone who wears them. The

Indian sportswear industry grew by 25% in 2013 due to sports-inspired clothing.

Many of the locals began to prefer lighter sportswear with high-performance rates.

Puma took advantage of the new trend to create lighter footwear for the Indian

market. Additionally, it changed its marketing strategy also to involve the ordinary

people. Another growth factor of the Indian sportswear as the disposable income level

increased. Additionally, the consumers became more aware in regards to fitness and

health. Thus, exercising became an excellent way for Puma to make profits.

Additionally, the public became more invested in good health. More people joined

gyms and started exercising. The trend increased consumer demand of sports gear and

companies such as Puma took advantage of the situation. The company also provided

a variety of sporting merchandise that would entice the general public.

MAINTAINING THE LEADERSHIP POSITION IN THE INDIAN

SPORTSWEAR MARKET

Even though Puma leads its rivals in the Indian market, the company still has much to

do regarding maintaining the leadership position it enjoys. To begin with, Puma has to

change its strategy. The company has used the same marketing approach for

approximately eight years. It is the said plan that has allowed Puma to become the

number one brand in India. Indeed, one can argue that even though the strategy

ensured the company recorded the highest profits compared to its competitors, it has

to be adjusted to fit the company well enough to maintain its current position. In the

new strategy, Puma has to consider the growing E-Commerce model and the evolving

Indian market as well. Whereas the market is still pushed by fitness and healthy
living, the cost of living in India has gone up (Nakassis, 2016). Even though Puma

tapped into the E-Commerce model, much still has to be done in the same regard.

Additionally, new online marketing strategies have come up. The company would

have to revise their online marketing strategies to incorporate the said new policies.

For example, the current prevailing trend in digital marketing is the use of “online

focus groups”. For instance, sports fanatics have online groups, which offer a great

opportunity for organizations such as Puma to advertise their products. One can argue

that Puma already has experience in this type of marketing, albeit using the strategy

offline. As stated, the company has already set up a high-end social club in the Indian

suburbs. The same concept applies to the use of online focus groups. It can also be

argued that Puma has to revise its prices or make better shoes at a more affordable

rate. With the cost of living going up, access to disposable income is limited. Thus, to

the target market, the purchase of shoes and other sportswear is preferential. The

revision of prices will ensure that clients can still purchase Puma products at all times.

It is vital that the company does not stop manufacturing their top brands in the

country. The reason behind this is that some consumers are loyal to brand and product

(Sengupta, 2013). Thus, replacing or removing the product from the market would

mean losing profits. Puma also has to ensure that they manufacture high-quality

merchandise. According to Baisya (2013), the modern consumer is very keen on

quality. The trend is expected to grow more in the near future.

FIGHTING FOREIGN BRANDS IN THE MARKET

According to the 2016 census, India has approximately 1.3 billion people (NPCS,

2014). The large population has attracted numerous companies in the country.

Suffices to mention, more sportswear companies have also entered the Indian market.
To fight the competitors, Puma has to become the ultimate household name in the

region. There are several things that the company should consider in an attempt to

become the biggest domestic name in India. First, the company has to produce

footwear for all people regardless of their socio-economic status. According to NPCS

(2014), 22% of the population in India is living below the country’s poverty line. 267

million people in the country are in the middle-class economic bracket. The change in

the structure of the Indian society has allowed more people to amass wealth and live

well. It is important to note that whereas Puma offers low-priced products compared

to its competitors, a large percentage of people in the country cannot afford their

products. Thus, the company has to make sure it has products for each type of

individual in the market.

Secondly, to fight the response from the other international brands and become the

number one footwear brand, the company has to create a monopoly in the market.

Since it is not the first footwear company in the region, Puma has to make sure its

products are in every store all across the country. Baisya (2013) argues that the

marketing strategy ensures that a potential consumer will always have a Puma product

to consider regardless of the type of footwear he/she is looking for, or the store he or

she loves to shop. It is important to mention that this strategy will require massive

production. Thus, the company has to consider its capacity to produce that many

shoes to cover all major stores in India. It is advisable that the company start with one

city at a time. The process of choosing which cities to start with should be based on

the company’s current profitability margin, where the most profitable regions get the

full store coverage.

THEORIES OF INTERNATIONAL BUSINESS

One theory of international business that can be found in the Puma case is the

Monopolistic Advantage Theory. Buckley and Ghauri (2015) explain that the

Monopolistic Advantage Theory explains that international companies have to create

a sense of monopoly, or near monopoly, to be successful in a foreign market. The

theory applies to the Puma case as the company seeks to achieve monopoly through

franchising. As stated, in 2016, Puma had 340 stores in India out of which 320 were

franchised. Buckley and Ghauri (2015) confirm that many franchises are a partnership

between local stores and international brands. By partnering with the local stores,

Puma creates a form of trust with its target audience. Additionally, the monopoly is

achieved as Puma shoes can be found in almost all stores. Since it is much cheaper for

the company to use franchises, it is easier for them to also supply products all through

the country. Another theory that can be applied in the Puma case is the product life

cycle theory. Buckley and Ghauri (2015) explain that the product lifecycle notes that

international products usually have their first successful venture in the US. Other

companies in developing countries then import the said merchandise attracting the

companies producing said materials to establish manufacturing plants in the

developing countries. In the case of Puma, whereas the brand is German, it is very

successful in the US. Before Puma moved into the market, some local shops imported

the brand. Due to the large market size, and the popularity of the brand, the company

decided to open its stores in the country. The New Trade Theory can also be used to

analyze Puma’s experience in the Indian market. According to the New Trade Theory,

international trade increases the choices available to consumers and at the same time,

reduces the costs of the products (Buckley & Ghauri, 2015). When Puma entered the

Indian market, it found Nike and Reeboks among other competitors. Due to the
availability of various brands, the company had to lower its costs considerably to gain

an advantage over the rest. The other companies were also forced to revise their prices

making footwear more affordable to the target market. It is important to note that

while New Trade Theory pushes for reduction of cost based on the availability of

different brands, it also stresses the need for quality. Many international companies

fail to capture global markets due to their compromise on quality. To succeed in

achieving the ultimate monopoly, Puma has to ensure all its merchandise, even the

more affordable ones, are of high quality.