LAL BAHADUR SHASTRI INSTITUTE OF
MANAGEMENT &TECHNOLOGY BAREILLY
PROJECT ON PUMA
Submitted to:
Mr. Abhinav Nath
(Assistant Professor )
Submitted by :
Abhinandan Malhotra
PGDM (2014-16)
CONTENTS
1.
2.
3.
4.
5.
6.
7.
8.
9.
Acknowledgement
Profile
Products & Services
Presence in the Country
Marketing Practices
Market Share & Industry Competitiveness
Profile of Competitors
Future Marketing Strategies
CSR
10. Association with IPL
11. BIBLOGRPHY
PROFILE
It was founded in 1924 and has head quarter in Germany .In 1948 ,
Adolf Dassler split from his brothers company , Adidas to form his
own company called Puma .Puma is a large German multinational
company which designs and develops athletic shoes, lifestyle
footwear and other sportswear and accessories. The company also
offers lines shoes and sports clothing, designed by Lamine Kouyate,
Amy Garbers, and other. It distributes its product in more than 120
countries, employees more than 9000 people and generates revenue of
$2.5 million. They sponsor many football teams all over the world
and have a big involvement in terms of sponsorships in the football
matches and player Puma is partnered with several major national
soccer leagues in countries such as Germany and Egypt. Christoph
von Wilhelm Dassler was a worker in a shoe factory, while his wife
Pauline ran a small laundry in the Bavarian 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 received a
management position at a porcelain factory, and later in leather
wholesale business in Nuremberg. Rudolf returned to Herzogenaurach
in 1924 to join his younger brother, Adolf, nicknamed "Adi", who had
founded his own shoe factory. They named the new business
"Gebrder Dassler Schuhfabrik" (Dassler Brothers Shoe Factory). 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 powe from a stationary bicycle to run
their equipment.[5]
Adolf 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. PUMA introduces its most powerful boot evo POWER.
Inspired by the freedom of movement of barefoot kicking, evo
POWER features the most advanced PUMA technologies to date and
is designed to enhance a player's natural kicking ability as well as
power and accuracy when striking the ball.
PUMA and Arsenal Football Club announce a long-term partnership,
effective 1 July 2014. PUMA has acquired wide-ranging licensing
rights to develop Arsenal branded merchandise on a global basis. It
represents the biggest deal in both PUMAs and Arsenals history.
The 2014 FIFA World Cup in Brazil proves to be a fantastic stage
for PUMAs innovative football products: Both the eight different
National Team shirts featuring PUMAs apparel innovation PWR
ACTV as well as PUMAs colourful pink and blue interpretation of its
revolutionary evoPOWER and evoSPEED football boots Tricks
spotted in 72% of all games are eye-catchers and create lots of
positive headlines.
PUMA IN INDIAJune 2006, the first Puma Store opened in Chennai. Puma India
closed 2007 with 14 exclusive stores, presence in hundred outlets
and a Regional Office in Gurgaon (NCR).Within a short span of 2
years PUMA India has established itself as the most desirable
sports lifestyle brand of the country. Currently, Rajiv Mehta is the
Managing Director of Puma India, Bangalore, India..
LOGO: Puma logo grips a notion of strong and chic icon with
the help of a leaping animal and
bold font. A distinguished
impression is immediately cast
on the spectator, narrating the
kind of image the company
possesse
Shape of Puma Logo: A leaping
Puma, an animal known as
cougar, panther or a mountain lion, is highlighted in the Puma
logo. It summarizes the power beast-like nature of the firm and
its products. The logo enhances the attributes of the firms
reliability and its products aptitude in the international market.
Color of Puma Logo: Puma logo is wrapped graciously in
black hue which depicts immense supremacy and strength of the
firm itself.
Font of Puma Logo: The complete Puma logo is a sign of
authority and confidence. The bold font featured in Puma logo
projects the firms stability and prominence.
PRODUCTS
As outlined in our Sustainability
strategy section, PUMAs focus is
on integrating sustainability, and
nowhere is that more true than for
our products. PUMA is working
to embed sustainability in our
design language and innovating
raw materials to deliver more
dynamic, fast and commercially
sustainable products that express
our DNA as a sports brand.
Sustainability remains an
important value in PUMAs
product strategy as we are
constantly innovating and
investing in more sustainable
products. Learn more about
PUMAs most important
initiatives on the following pages
such as Organic Cotton, Recycled
Polyester and bluesign approved
materials.
It has wide range of footwear, sportswear, sports goods, fashion
accessories.
Black Labe include collaboration with renowned designer such as
Alexander,Mcqueen,Yasuhiro,Mihara and Rossi.
Puma group owns Puma , Tretorn , Hussein ,chalayan.
Foot wear
Custom made shoes
sports shoes
Running Shoes
Apparel
T shirts,
Tracks
Boxers
Accessories Gloves
Helmets
Water bottles
Phone cases
Caps
Wallets
PRESENCE IN COUNTRY
Its all started when Puma first opened its first showroom in Delhi.
The company plans to open exclusive showrooms in Delhi, Mumbai,
Pune, Bangalore and Chandigarh before the end of the current fiscal,
Puma Sports India Private Limited Managing Director Rajiv Mehta
said. These showrooms would sell imported sportswear and shoes
manufactured by the company's units abroad. The company would
also use India's expertise in garment sector and would manufacture
sportswear in the country. It would also export sports garments
manufactured in India.
Ahmadabad
Pune
Bangalore
Meerut
New Delhi
Bareilly
Bhopal
Mysore
Rampur
Moradabad
Lucknow
Indore
Guragon
Chandigarh
Jaipur
Gohwati
Mumbai
Raipur
Ranchi
Rajasthan
Punjab
Hyderabad
Chennai
Ludhiana
Patna
Ranchi
Noida
Ghaziabad
Jabalpur
Jalander
Bhubaneswar
Viskapatnam
Orissa
Kota
Agra
Allahabad
Nepal
Kolkata
Nagpur
Chittagong
Haryana
Gujarat
Jaunpur
Mathura
Haridwar
Pali
Varanasi
Surat
Kochi
Marketing operations
PUMAS FIVE KEY STRAGIES
FOR 2014 AND MORE
Reposition Puma as the fastest sports brands in the world and
create brand heat.
Improve the product engine
Optimize the distribution quality
Increase the speed of puma so organization
Renew IT infrastructure
Fastest Brands
In terms of our brand repositioning, August 2014 saw the successful
launch of our worldwide Forever Faster brand campaign the biggest
marketing campaign in PUMAs history. This marked the start of our
repositioning as a true sports brand to our consumers and retail
partners. The objective of the campaign is to demonstrate that PUMA
is back in sports and that our brand has great assets and a distinctive
attitude: Brave, confident, determined, and joyful. We achieved this
goal by focusing our campaign on customers in 35 countries. In the
first three months after the start, our advertising generated 1 billion
TV impressions in our target group as well as 31 million online views.
The launch of this campaign marked the start of a long-term
marketing strategy, which will be continued and run through the Rio
de Janeiro Olympic Games in 2016 and beyond. In 2015, the focus is
on our new, long-term partnership with Rihanna, currently the worlds
greatest style icon. PUMAs second major Forever Faster brand
campaign, launched in August 2015 through a multi-million euro
media investment, has a dedicated focus on Training. Offering up the
question What are you training for?, it challenges individuals and
teams to put more energy into training and more positivity back into
sport. Bringing the campaign to life are the unique training stories
documented on film of PUMAs elite ambassadors Worlds Fastest
Man Usain Bolt, multi-platinum recording artist Rihanna, star striker
Sergio Agero, Arsenal Football Club, the Cuban National Boxing
team, and more
COMMERCIAL PRODUCTS
To improve our product engine, we initiated key projects to enhance
our product designs, develop more innovative technologies and
increase the commerciality of
Our product range. The first results have already been implemented
for 2015 collections, and the feedback from our retail partners make
us very confident that we are heading in the right direction.
SALES QUALITY
In order to improve the quality of our revenues and distribution, we
have developed joint product and marketing programs with our key
retailers to showcase our brand in the right retail environment and
drive sell through with our partners. In February 2014, together with
our partner Foot Locker USA, we introduced the jointly developed
retail concept PUMA Lab and successfully rolled it out in the US
market. The success of the PUMA Lab has not only improved our
business with Foot Locker USA but also generated a positive spillover effect onto other key retailers in the US marketplace both with
performance and lifestyle accounts. In 2015, we will continue to
foster collaborations and will launch further product and marketing
programs with our most important key accounts in every region.
IMPROVED ORGANIZATION
In 2014, we also continued to optimize our organizational structure
and setup by making them faster. With the finalization of the
relocation of our Global and European Retail Organization from
Oensingen, Switzerland, to our headquarters in Herzogenaurach as of
September 30th, we completed the last out of our three major
consolidation projects in 2014. This relocation followed the closure of
our PUMA Village Development Center in Vietnam as of May 2nd
and the relocation of our Lifestyle Business Unit from London to our
headquarters in Herzogenaurach as of May 31st. In 2015 we will be
focusing on standardizing and optimizing processes between PUMA
and its partners. The key projects in this area are the implementation
of a sourcing organization to manage global order and invoice flows
and the conceptual design of a European trading company to optimize
regional flows of goods. Another strategic priority is the renewal and
expansion of our IT infrastructure to create a basis for more extensive
optimization measures. In 2015, we will focus on three areas:
optimize our IT infrastructure, start the implementation of a standard
ERP system to support our sourcing and trading functions, and set-up
platforms purported to improve the design, development and planning
processes. We are very confident that our investment in these areas
will lay the foundation for a lean and efficient company in the future.
Puma can be related to personality which has characteristics like
innovative, fun loving, exciting, outgoing, energetic, full of life etc.
For Example - A famous Indian young creative Actors like Zayed
Khan and Shahid Kapoor who has these traits. Puma can be related to
them.
Only now, the setting is not the playground or the track or the court, it
is the urban landscape with its omnipresent traffic jams, crowded
streets and so forth. This way, PUMA becomes a part of life.
Anyones life. You dont have to be the high-voltage performer to be
a part of the PUMA family. And it goes beyond that PUMA
becomes something that makes you better. Not just as an athlete, but
as a sports person, a better human being.
One of the advertisements: The spot featuring Boldon, shows him
chasing a thief (whod stolen a TV set when its owner was in the bath)
through the dark streets. To help a man (the owner, in a towel) in
distress. And he uses all the power that he can, to do what he has to do
and what he needs to do. And PUMA helps him perform better, than
he would otherwise have been able to. This is perhaps shown in an
oblique way when the spot ends at the feet of Boldon and the bather.
One is wearing a pair of PUMA shoes while the other is barefoot.
PUMA makes you better, goes the base. In short, the other man could
have done as well as Boldon. The bather reads any man. Any man
who wears PUMA.
MARKET SHARE & INDUSTRY
COMPETITIVENESS
2015 Second Quarter Facts
Currency adjusted sales up by 7.6% to 772.7 million (+18.5%
reported)
Strong growth in Footwear driven by Running and Training
categories
Gross profit margin stable at 46.7% despite adverse currency
effects
OPEX increase based on additional marketing activity, IT
investments and currency impacts
Operating income (EBIT) comes in at 6.8 million
Tretorn trademark rights sold
PUMA-sponsored national football team of Chile wins Copa
Amrica title for the first time
2015 Half Year Facts
Currency adjusted sales grow across all regions by 5.9% to
1,594.1 million, exceeding expectations
Gross profit margin falls by 90 basis points to 46.8% due to
currency effects
OPEX rise by 19.1% to 708.5 million due to higher marketing
activities, retail expansion and IT investments as well as adverse
currency impacts compared to last year
Operating income (EBIT) amounts to 44.3 million
Earnings per share come in at 1.44
Innovative IGNITE running product platform shows good sellthrough
Bjrn Gulden, Chief Executive Officer of PUMA SE: "We saw a
continued positive development of our sales in Q2. This was again
driven by a strong growth in Footwear. We have said that growth in
footwear is key for us to turn the company around and feel that the
investment in new and innovative products is starting to pay off. The
negative effect of currencies is continuing to hurt our gross profit
margin and increase our operational expenses, thus reducing our
earnings. We are of course working to offset the impact of this by
gradually increasing sales prices in markets that are hurt by the
negative effects, and we are, when possible, moving some of the
sourcing to the local markets. These measures are currently not
enough to totally offset the loss in reported gross profit margin.
Despite the pressure on margins, we have decided to continue our
investments in marketing, IT, and in the modernizing of our retail
network. We believe these investments are needed to regain the
strength of the brand and to ensure long-term growth for the company.
We have a vision of becoming the fastest sports brand in the world
and know that we have to invest now to achieve our goal long term.
Furthermore, we confirm our financial guidance from Q1.
Second Quarter 2015
Currency adjusted sales exceed expectations
In the second quarter of 2015, PUMAs consolidated sales improved by
7.6% currency adjusted to
772.7 million and were above our expectations. This positive
development was primarily driven by the growth in Footwear sales across
all regions. In reported terms, consolidated sales rose a strong 18.5%.
Growth in all regions
Second-quarter sales for the EMEA region (Europe, Middle East and
Africa) rose by 3.9% currency adjusted to 270.5 million. The development
was particularly encouraging in Germany, France and Turkey, while Italy
and Switzerland suffered a decline on high comparables (last years World
Cup replica sales not repeating this year).
Sales performance in the Americas was stronger in the second quarter
with growth in both, North and Latin America. Currency adjusted sales
increased by 11.6% to 328.4 million. In particular, Argentina and Mexico
showed above average sales developments.
Asia/Pacific (APAC) showed a satisfying second-quarter performance,
with sales rising by 6.2% currency adjusted to 173.8 million. The increase
was primarily attributable to good performances in China and India, each
reporting double-digit growth.
Footwear leads product segment performance
Sales in Footwear increased for the fourth quarter in a row, rising by 16.2%
currency adjusted to
358.8 million. This development was mainly driven by the Running,
Training and Sportstyle categories and especially the PUMA IGNITE
product platform.
Apparel sales were broadly flat at 263.3 million. This is against high
comparables in the second quarter 2014, when sales in replica jerseys
driven by the FIFA World Cup were particularly strong.
Accessories grew by 3.6% currency adjusted to 150.7 million and
developed in line with our expectations.
Gross profit margin stable
Gross profit margin was stable at 46.7%, despite significant negative
currency effects. The footwear gross profit margin decreased slightly from
42.7% to 42.3%, the apparel margin rose from 48.2% to 50.7% and the
margin for accessories fell from 52.4% to 50.0%.
Higher OPEX in line with expectations
Operating expenditures (OPEX) - significantly impacted by adverse
currency effects - saw an increase of 20.4% in reported terms, rising to
357.4 million. During the quarter, we continued to invest heavily in
marketing activities to strengthen PUMAs positioning as the Fastest Sports
Brand in the World. The main cause for the increase was higher media
spend and the partnerships with global sports and pop culture icons
Rihanna and Arsenal, which both commenced in the second half of 2014.
The opening of new retail stores at selected locations and investing into the
IT-infrastructure also contributed to the increase of OPEX in the second
quarter. In constant currencies, the increase in OPEX amounts to 10.6%
versus last year.
Operating income (EBIT)
The rise in operating expenses led to a decrease of operating
income (EBIT) from 12.6 million to 6.8 million.
Financial result
In the second quarter, the financial result declined from -1.3
million last year to -5.7 million this year due to unfavorable impacts
from currency conversion.
Net earnings
Net earnings came in at -3.3 million in the second quarter, resulting
inearnings per share of -0.22.
First Half-Year 2015
In the first half-year 2015, consolidated sales increased by 5.9%
currency adjusted to 1,594.1 million and were above our
expectations. In reported terms, the improvement is significantly
higher with an increase of 15.7%.
All regions contribute to sales growth
In the EMEA region, sales rose by 1.8% currency adjusted to 612.2
million. Germany, France, Spain and Turkey showed a positive
development in Europe, while the Middle East and Africa regions
continued their solid performance.
In the Americas, sales grew by 8.7% currency adjusted to 617.4
million. Argentina and Mexico stood out within the Latin American
region, driving double-digit growth, while North America was
growing at a mid-single-digit pace with acceleration in the second
quarter.
Asia/Pacific also developed well, with an increase of 8.6% currency
adjusted to 364.5 million. Performances in China and India were
strong, while sales in Japan were stagnant and Korea declined in a
difficult economic environment.
Footwear supported by IGNITE
In terms of product segments, Footwear was positively impacted by
the successful launch of the PUMA IGNITE product platform, leading
to an overall increase of 11.7% currency adjusted to 736.9 million.
The Running, Training, and Football categories were the main growth
drivers. Apparel also grew with sales amounting to 543.1 million
(+2.7%), while Accessories decreased slightly to 314.1 million (0.9%).
PUMAs retail sales grew
Supported by the increased number of stores operating (44 more
stores compared to one year ago; 4 less than at the end of
2014), retail salesincreased by 9.3% currency adjusted to 322.2
million in the first half of 2015. This represented 20.2% of total sales
compared to 19.6% last year.
Gross profit margin impacted by adverse currency effects
PUMA has already taken and will continue to take countermeasures to
offset the negative currency impact on the gross profit margin. The
effect of these measures helped us to limit the impact on the gross
profit margin to 90 basis points for the first half-year, as the second
quarter gross profit margin was stable. However, PUMA cannot
currently fully neutralize the impact of volatile currencies, as prices
can only be adjusted very carefully in order not to impact consumer
demand. Furthermore, in some countries, the costs of hedging
outweigh its financial benefits, or in some instances, currency hedging
is not possible at all. In addition, we are considering to source
products more in local markets in order to reduce the exposure to
foreign currencies in these markets. PUMAs gross profit margin for
the first half-year went down by 90 basis points to 46.8%. The
footwear gross profit margin decreased from 43.4% to 42.6%, apparel
margin was largely stable at 50.7% and the margin for accessories
decreased from 50.9% to 49.8%.
Continued higher OPEX due to heavy marketing activities
PUMAs operating expenses (OPEX) increased by 19.1% to 708.5
million, as negative currency effects continued to have an impact and
the company continued its marketing activities. Opening up new
stores and investing into IT-infrastructure also contributed to the rise
in OPEX. At the same time, PUMAs management continued to put a
strong emphasis on strict control of other operating costs. In constant
currencies, the increase in OPEX amounts to 9.7% versus last year.
Operating result (EBIT)
Operating income was down by 37.7% to 44.3 million in the first
half 2015, impacted by the negative currency effects already
described.
Financial result
The financial result was almost stable at -4.8 million compared to
-4.5 million in the first half year of 2014.
Net earnings / earnings per share
Half-year consolidated net earnings came in at 21.5 million,
representing earnings per share of 1.44 compared to 2.66 in the
prior year.
Net Assets and Financial Position
Increase in inventory and trade receivables broadly aligned with sales
growth
To ensure product availability and support sales growth as well as a
higher demand from new stores, inventories increased by 20.6% to
704.5 million. This represents a currency adjusted increase of
13.4%. Trade receivables went up by 13.1% to 523.8 million,
broadly in line with reported sales growth.Trade payables were at
557.9 million, rising 27.6% compared to last years figure. In
total, working capital rose 7.3% to 640.0 million.
Cashflow / Capex
As a consequence of the higher working capital requirement, the free
cash flow before acquisitions was at -167.8 million compared with
-69.7 million for the same period last year.
PROFILE OF COMPETITOR
PRADA SPORTS
Well known luxury brand
4 years ago Prada dared to step into the sport segment
Focus on fashion and trends but their price strategy is still too
high.
DIESEL
Major fashion brand including: sunglasses, footwear,
watches, fragrances and writing tools
Experienced an unexpected growth
Brand is still situated in Italy (jeans production)
NIKE INC
NO.1sports brand in the world
US based: administrative activities, design and product
innovation
Sub brands like Tiger Woods and Michael Jordan
Adidas
Focus on core sports like soccer, tennis, athletics and skiing.
6 times the financial resources.
Design and marketing department are located in France and
Germany.
ADIDAS VS PUMA
PUMA
Puma brand has become synonymous with fashion, style, and sport.
Through fresh design, co-branding and partnerships with celebrities
and famous designers.
It has elevated their brand image so that it now competes with fashion
brands as well as their traditional rivals in the sporting footwear
industry
The Puma brand communication strategy is flexible across multiple
categories, yet communicates innovation for an active lifestyle. To
extend their brand Puma has created concept retail stores that enable
people to experience the brand in engaging and compelling ways.
Puma also engages customers through their Mongolian barbeque
concept that enables customers to design and build their own
footwear from scratch.
ADIDAS Adidass mission is to improve every athletes performance through
innovation.
To compete with the value propositions of their traditional
competitors, Adidas has focused their brand communications in
three different areas: sport performance, sport heritage , sport style.
Adidas spends the majority of its effort communicating to the
sport performance segment.
In response to the sports lifestyle trend being led by Puma,
Adidas has recently co developed product lines with famous
designers and has focused on the timeless and classic nature of
their brand.
FUTURE MARKETING STRATEGIES
They have a clear strategy for sustainable growth that plays to our
strengths as an agile, fast moving, can do company. Over the past
fifteen years, we've grown dramatically through both organic growth
and acquisition and this remains central to future plans.
Theyve grown by spotting and taking opportunities swiftly. They
believe new opportunities will arise in downstream markets,
particularly those in which traditional players dont have refining
capacity. The opening up of state controlled markets to competition
and increasing oil consumption in emerging markets will also present
new growth potential for us.
Together, these trends are creating an exciting dynamic in the global
downstream energy market. Were one of a very limited number of
operators with the size, financial strength, managerial expertise and
operating capacity to enter and unleash the full value of emerging
markets. Our challenge, as a growing business, already operating in
46 countries is to balance the benefits of size and flexibility. We need
to sustain growth in our existing markets through organic and
Greenfield investment, while retaining the speed to market needed to
seize new opportunities. Our investment to deliver the best products,
the best service, the best systems and most importantly, the best
people, convinces us that we can meet this challenge.
Midstream
Building strong, profitable midstream businesses secures the flow of
products to our downstream operations. Over the past five years,
weve expanded our storage capacity by more than 70%, mainly by
constructing and operating new state of the art facilities ourselves.
This has strengthened our in-house expertise in construction and
operations, giving us a key competitive advantage.
Downstream
Weve developed successful retail, wholesale, B2B, aviation,
bunkering, lubricant, bitumen, LPG and supply businesses - building
economies of scale in fast-growing markets across Africa, the
Americas and Asia Pacific.
CSR
The Puma S.A.F.E concepts create a symbiotic relationship
between our environment employees, business partner and
other stake holders. IN essence S.A.F.E highlights Pumas
long standing commitment to being a responsible corporate
citizen. By rigorously enforcing the safe principal, Puma is
able to ensure that labor is not exploited and that production
method continuously revised.
ASSOCIATION WITH IPL
Global sports lifestyle brand puma has announced its
association with the defending champions Rajasthan
royals and Deccan chargers because they believe that
IPL role out an extensive 360-degree communication
programs and this will ensure PUMAS presence in all
marketing activities.
BIBLOGRAPHY
WEBSITE
www.google.com
www.wikipedia.com
Www. PUMA.com
MAGAZINES / NEWSPAPERS
Business Today
The Times of India
India today
Hindustan Times
