Professional Documents
Culture Documents
PrOJECT REORT ON Puma
PrOJECT REORT ON Puma
Submitted in partial fulfilment of the requirements for the award of the degree of
35761101722
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CERTIFICATE
The work has been done under my supervision during second semester
Signature of supervisor:
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ACKNOWLEDGEMENT
I have taken efforts in this project. However, it would not have been possible without
the kind support and help of many individuals and organizations. I would like to extend
my sincere thanks to all of them.
I would also like to thank my parents and friends who helped me a lot in finishing this
project within the limited time.
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DECLARATION
Aryaman Sharma
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TABLE OF CONTENTS
Certificate i
Acknowledgement ii
1. INTRODUCTION
1.1.ABOUT PUMA
1.2.COMPANY OVERVIEW
2.1.SIGNIFICANCE
2.2. OBJECTIVES
2.3. SCOPE OF THE STUDY
2.4. METHODOLOGY
3. LITERATURE REVIEW
4. DATA ANALYSIS
5. CONCLUSION
7. BIBLOGRAPHY
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CHAPTER 1
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INTRODUCTION
Puma SE, branded as Puma, is a German multinational company 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 Dassler had jointly formed the company
GebrüderDassler 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 at the Frankfurt Stock Exchange. French
luxury group Kering(formerly known as Pinault-Printemps-Redoute or PPR) holds
16%, Kering's largest shareholder Artemis SA owns 29% of the share capital.
Since 1 July 2013, the company has been led by former football professional Bjørn
Gulden (CEO).As of 2017, Puma SE employs more than 13,000people worldwide and
distributes its products in morethan 120 countries.Following the split from his brother,
Rudolf Dassleroriginally registered the new-established companies Ruda, 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 andclothing designs
feature the Puma logo and the distinctive "Form strip" which was introduced in 1958.
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PUMA MAX SIGHT
“It makes the eye look distinct, the large-pupil effect,” says Alan Reichow, Puma Vision
Consultant. “It looks competitive.”
Marco Materazzi of Italy’s Inter Milan football club and Baltimore Orioles second
baseman BrianRoberts are among the pro athletes wearing Puma MaxSight. “It has been
a lot of fun to start the season this hot,” said Roberts early in the MLB season. In fact,
he became one of the first true fans of Puma MaxSight after impressiveinitial results.
During a spring daytime game, Roberts said, “I wore the lenses and went 2 for 4. They
are so awesome.” With Puma MaxSight, there’s minimal squinting in bright light, and
quicker visual definition when going from bright light to shadows. Puma MaxSight is
a 30-day lens, though most athletes will wear them selectively and for short durations.
Lenses come in six-pack packaging. Puma MaxSight is available with or without a
correction, thereby making it accessible to athletes whether they wear contacts or not.
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THE HISTORY
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 fromfighting 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 intheir mother's laundry. At the time,
electricity supplies in thetown 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 Olympicsin
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 200,000pairs 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 andhis
family were already in. "Here are the bloody bastardsagain," Adi remarked, apparently
referring to the Allied warplanes, 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 beinga member of the Waffen SS, he was convinced
that his brother had turned him in.
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1.2. COMPANY OVERVIEW
Organizations that were promoting fair trade and worker's rights did not criticize
PUMA's employment practices in their developing world factories, predominantly
relating to workers in China, Turkey, El Salvador, and Indonesia. The company has
made some steps towards greater transparency. 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. PUMA has made a
strong commitment to respecting workers rights in some areas. For example, PUMA
has obtained the Ethical Clothing Australia accreditation for its Australian-made
products. This labour-friendly accreditation applies to only a tiny percentage of
PUMA’s total production. In May 2011, The Guardian released an article saying that
Puma was the "world's first major company to puta 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."
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PRODUCT PROFILE
Apart from delivering a pair of comfortable sports shoes Puma also provides a number
of value-added features with its products. The features that are a partof every Puma
sports shoe are as follows. High Performance Sports Shoes: Puma has patented
the “Air” system and has made it into a regular feature in most of its models. Many
models feature an air pocket in the shoe that reduces the weight of the shoe and reduces
pressure on the heels. Besides the overall design and compactness of the shoes have
made it a favourite of many professional athletes around the world.
Comfort: Puma shoes are renowned all over the worldfor the comfort they provide.
Well-padded and cushioned, they provide a tremendous level of comfort to the wearer
and reduce the strain to his feet while playing.
Lightweight: This attribute is in line with the two described above. A lightweight shoe
provides greater mobility and eases the pressure on the feet of the wearer.
Durability: People purchasing a pair of shoes at such a high price often feel that they
have made an investment. They would obviously want to see their shoes last a long
time.
Style: Puma’s designs are considered to be the most stylish in the Company and beat
all others as far aslooks are concerned. Attractively packaged, it is adelight to bring a
pair home. Add to this the
“Swoosh”– the most recognizable symbol in sports and you have a product that would
give the user a definite sense of pride. Puma shoes also come with a guarantee card that
enables the owner to return it in case of manufacturing defects.However, owing to the
fact that the company implements strict quality control measures, coming across a
defective pair in a store are a rarity. The most recent additions to their line are the
Puma6.0 and Puma SB shoes, designed for skateboarding. Puma has recently
introduced cricket shoes, called Air Zoom Yorker, designed to be 30% lighter than their
competitors’. Puma positions its products in such away as to try to appeal to a
"youthful materialistic crowd”. It is positioned as a premium performance brand.
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1.3 PROFILE OF ORGANISATION
Puma India Ltd (BIL) is India‘s largest footwear company.The company has a few
dozen small corporate officesaround the world, and four "internationalhubs":Boston,
Massachusetts(moving to AssemblyRow, Somerville, Massachusetts; Hong Kong;Ho
ChiMinh City, Vietnam; and global headquartersin Herzogenaurach, Germany.Puma
Sports India Pvt Limited operates as amanufacturer and distributor of sports products
inIndia. The company offers footwear, apparel, andsports accessories for football,
motorsport golf andeveryday use. The company was founded in 2005 andis based in
Bengaluru, India. Puma Sports India PvtLimited operates as a subsidiary of Puma AG
RudolfDassler Sport.
RECENT DEVELOPMENTS
Puma India has said that it’s Faridabad and Mokamehghat units are being taken over by
Fashion Shoe Private Ltd and BDCL Enterprises Pvt Ltd,respectively. The company is
also enabling the buyback provision in its Articles of association to enable buy back of
shares. The assets and liabilities of both the units will be transferred to these companies
and shares will be offered in the agreed ratio to the existing shareholders of Puma India
Ltd on a record date, which will be fixedby the Calcutta High Court.While retail sales
have increased both in value and volume, wholesale sale have declined due to restriction
of supplies as a means to recover customers outstanding. General recession and sluggish
marketconditions in the Company also have had a directimpact on lower sales and
profitability.Resistance of consumers to price rises in popularvolume products as well
as discounts to clear slowmoving stocks and under utilization of productioncapacity
adversely affected the operational results. Thelockout declared at the Peenya factory on
October 1,2007 due to serious industrial relation problems andnon-compliance with the
tripartite settlement has been withdrawn. The footwear manufactured in this
factory,which was shifted to the company‘s other factories and associated
manufacturers, will now be gradually produced within the factory. The commencement
of production from this factory will help in re-cooping the minimal loss being suffered
by the company from this lockout.
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“customer preferences are often ill-definedand susceptible to various influences, and in
manycases, customers have poor insight into their preferences.”
In one of his recent papers, Simonson tackles the issueof one-to-one marketing and
mass customization.Supporters of these marketing approaches havesuggested that
learning what customers want and giving them exactly what they will create
customerloyalty and an insurmountable barrier to competition.But
Simonson has this to say: “The fact that consumerpreferences are often fuzzy, unstable,
andmanipulatable is unlikely to change. So, theeffectiveness of methods to give
customers exactlywhat they (say they) want has been grossly exaggerated.” His take on
the long-held assumption that individual marketing will supplant targeted marketing is
“not so fast.” In studies, he has learned that “even when customers have well -defined
preferences and receive offers that fit those preferences, it is far from certain that the
response tosuch offers will consistently be more favourable than those directed at larger
market segments.” It’s all psychology. Consumers with well-defined preferences may
be skeptical that a marketer could match expectations. Those who don’t know what they
wantmay not ever see the fit with what the seller wants them to buy. So, individualized
offers depend on customers’ preferences &; how the offer was extended& and on trust.
“Effective individual marketing requires not only an understanding of
individualpreferences and matching offers to those preferences,but also a thorough
familiarity with the various factors that impact customers’ responses,” Simonson
writes. This is a tall order, one that somecompanies have been able to fill, at least to
someextent. For example, Amazon keeps track of customers’purchases and suggests
other books they might like.Dell builds computers from mass-made parts to customers’
specifications. But Simonson argues somecompanies can take the concept too far, like
the Custom Foot chain of shoe stores that took detailed measurements and
specifications from each customer to design one-of-a-kind shoes.Custom Foot didn’t
take into account that some customers were put off by the individualized attention,
Simonson says, and felt obligated to buy the shoes because the store went to so much
trouble. They often didn’t come back. So knowing only the customer preferences is not
enough. It is required to understand other aspects of customer behaviour. Kipping this
in mind, present study will find out and analyse consumer behaviour of Puma shoes
with reference to ladies segment.
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FUTURE PLAN
The management says that it is not averse tooutsourcing if it worked out cheaper. It is
also open tothe idea of importing shoes - mostly from China - if itworks out
cheaper.Puma and Reebok Company have announced anagreement to foray into
retailing partnership for sale ofReebok and Rockport footwear in Puma outlets.The
partnership entails retailing a range of sports shoesfor walking, running, tennis and
training for personalfitness and sports ranging between Rs 900- 2,500. Anattractive
valuation compared to its peers is the maintrigger for the scrip. Besides, the company’s
aggressive focus on retailing and revamping of business (a divisioninto shoes and
apparels) is also helping sentiment forthe scrip. Plans are afoot to start selling apparel
inIndia made by the joint venture North Star.There’s talk that the company is planning
on a voluntaryretirement scheme (VRS) to cut costs. 97% of the company’s revenues
are from the domesticmarket while the remainder is from exports. PumaIndia is the
biggest player in the Indian shoe market.For the third quarter ended 30 September 2007,
PumaIndia reduced its losses to Rs 5.68 crore (Rs 8.51crore) on a 9.2% increase in net
profit to Rs 154.27crore (Rs 141.26 crore). Despite reducing its losses forthe quarter,
Puma India has, over the last fewquarters, been continuously recording
weakperformances as a result of an overall slowdown in theCompany due to lower
consumer spending. Increasingdomestic competition, particularly from theunorganized
sector, has also been eroding into the
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into a retailing tie-upfor Lee Cooper shoes.Puma India has also been trying to focus on
aggressivemarketing of its product. The company has been goingthrough a period of
transition for the past one year.With the expansion of the retail Company in New
Delhiand Mumbai, the company has recently decided to shiftits marketing operations
to Delhi in order to providevalue shopping for its customers. However,
themanufacturing activity and the registered office will continue at Kolkata.Puma India
has plans to invest in sophisticated machinery to retain its niche place in
manufacturing.The company has put a fresh focus to its retailbusiness. The company
has decided to cleanse itswholesale operation by building relationships withcredit-
worthy buyers.
It is to the company’s credit that it has lately overhauled its marketing set-up into afour-
tier retail structure that will be stocked with products matching the area’s customer
profile. A Puma outlet in an up market place will offer a distinctly different range of
footwear from another in the suburbs. At the top of the four-tier structure will be
international stores stocking brands like Puma and Reebok. Next will be city stores,
located in up market areas and catering to middle and highincome groups.The company
has identified the brands Power, NorthStar, Bubble gummers, Marie Claire and Hush
Puppiesfor the top end of the market. Third in line will befamily stores at commercial
locations displaying basicand mid-range footwear. At the bottom will be bazaar stores
that will basically aim at driving volume sales at lower price points. The management
of Puma India is taking major steps in terms of improving market penetration, focus
onstores configuration, distribution logistics, better industrial relations and overhead
rationalization. Launching of new products always remained at the center stage of the
company’s operations. At the sametime, with the opening up of the economy, more
andmore goods will be imported from China. This maysignificantly affect Puma India’s
prospects unless it manages to wean away customers with a drastic cut incosts.
Alternatively, like other Indian manufacturers, even Puma may consider relocating its
manufacturing bases in China. However, it is not that easy a task to undertake.Puma
India, the 51% subsidiary of Toronto-basedPuma Shoe Organization, remains the
biggest player inthe Indian shoe market, though its share in footfallshas been decreasing
over the years. Now in adetermined bid to straddle across all product and pricepoints,
Puma India has decided to restructure its1,300-outlet strong retail business division
along specific customer segments into Bazaar, Family, andCity and Flagship
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stores.Puma India has decided to appoint brand managers foreach product group in a
newfound aggression to tackledwindling sales. Each of these managers assisted by
adedicated team would be like a brand championresponsible for procurement,
production,advertisement, promotion and re-supply.Puma India has roped in Ogilvy &
Mother for devisingits festive season advertising, side-stepping JWT, itsincumbent
agency. The job involves developing specialcommunication directed towards the
festival season shoppers. Puma India Ltd (BIL) is India’s largest footwear company
selling over 60 Mn pairs per year in India, USA, UK, Europe, Middle East and Far East.
BILhas a market share of 60% in leather products and70% in canvas shoes.The
footwear Company in India is highly fragmentedand dominated by the unorganized
sector. TheCompany size is around Rs 75 Bn and is growing ataround 10% annually. It
competes with Indian players such as Liberty Shoes, Phoenix International,
MirzaTanners, Tatas, Action Shoes and Lakhani Shoes and global players like Adidas,
Reebok and Puma.Accessories and garments contribute footwear salesaccount for more
than 96% of sales while the balance.The turnover break up is as follows Products
Volume (%) Value (%)Rubber and Canvas 50: 30Leather 29 :57Plastic 21: 9
GROWTH DRIVERS
The company has a very comprehensive distributionnetwork which comprises its own
and franchise stores.It has 1500 showrooms, 25 wholesale depots and 8distribution
centers.
POPULAR BRANDS
Focus on middle-class and upper class Puma willcontinue to focus on middle and upper
class customers. It is introducing ‘budget stores’ which will help customers to identify
with the brand. It is also increasing focus on rural thrust for volume growth inthe low-
priced footwear segment.
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segment and in thissegment BIL has no significant presence.Latest Results Sales for Q3
FY2000 increased by 5.5%yoy to Rs1.7bn. profits dropped by 90% yoy to Rs3.8Mn
due to lower operating margins and higherdepreciation and interest. Depreciation
increased by6.3% yoy to Rs 37 Mn while interest cost increased by9.3% yoy to Rs 23.4
Mn.Operating margins dropped by 3.3% due to increase ininput cost. The Peenya plant
has not commencedoperations despite lifting up of the lock out since July3, 2007.
VALUATION
BIL’s long-term success is dependent on the howlabour issue is tackled and the
flexibility, which it canadopt to meet threat of imports and competition fromlocal
footwear companies. Long term investors with a two-year investment horizon can
accumulate the stock at current levels. It is also increasing focus on rural thrust for
volume growth in the low-priced foot wear segment. Lifting of quantitative restriction
on import of footwear will lead to the market being flooded by imports. Labour issues
have always bothered BIL and this resulted in disruption of manufacturing activities on
numerous occasions. Competition is hotting up in the domestic market dueto popular
brands such as Gaitonde, Red Tape, Lotus Bawa and Tatas. These brands are gaining
market share especially in the premium segment and in this segment BIL has no
significant presence. Sales for Q1 CY2001 decreased marginally by 0.6%yoy to Rs
1590.7 mn. There was a net loss of Rs 30.2mn as against a profit of Rs 39.6 mn in the
corresponding period of the previous year. The loss isdue to lower operating margins
and higher interest. BIL’s long-term success is dependent on the labor issueand the
flexibility, which it can adopt to meet threat of imports and competition from local
footwear companies. Long term investors with a two-year investment horizon can
accumulate the stock at current levels.
FINANCIAL HIGHLIGHTS
PUMA SE reported earnings results for the first quarter ended March 31, 2023. For the
first quarter, the company reported sales was EUR 2,187.7 million compared to EUR
1,912.2 million a year ago. Net income was EUR 117.3 million compared to EUR 121.4
million a year ago. Basic earnings per share from continuing operations was EUR 0.78
compared to EUR 0.81 a year ago
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1.3. SWOT ANALYSIS
STRENGTHS
Puma is a very competitive organization. Phil Knight (Founder and CEO) is often
quoted as saying that ‘Business is war without bullets. Puma has a healthy dislike of is
competitors. At the Atlanta Olympics, Reebok went to the expense of sponsoring the
games. Puma did not. However Puma sponsored the top athletes and gained valuable
coverage. Puma has no factories. It does not tie up cash in buildings and manufacturing
workers. This makes avery lean organization. Puma is strong at research and
development, as is evidenced by its evolving and innovative product range. They then
manufacture wherever they can produce high quality product at the lowest possible
price. If prices rise, and products can be made more cheaply elsewhere (to the same or
better specification), Puma will move production.Puma is a global brand. It is the
number one sportsbrand in the World.
WEAKNESSES
The organization does have a diversified range of sports products. However, the income
of the business is still heavily dependent upon its share of the foot wear market. This
may leave it vulnerable if for any reason its market share erodes. The retail sector is
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very price sensitive. Puma does have its own retailer in Puma Town. However, most
ofits income is derived from selling into retailers.Retailers tend to offer a very similar
experience to the consumer. Can you tell one sports retailer from another? So margins
tend to get squeezed as retailers try to pass some of the low price competition pressure
on to Puma.
OPPORTUNITIES
Product development offers Puma many opportunities. The brand is fiercely defended
by its owners whom truly believe that Puma is not a fashion brand. However, like it or
not, consumers that wear Puma product do not always buy it to participate in sport.Some
would argue that in youth culture especially, Puma is a fashion brand. This creates its
own opportunities, since product could become unfashionable before it wears out i.e.
consumers need to replace shoes. There is also the opportunity to develop products such
as sport wear, sunglasses and jewellery. Such high value items do tend to have
associated with them, high profits.The business could also be developed internationally,
building upon its strong global brand recognition.For example,emerging markets such
as China and India have a newricher generation of consumers There are also global
marketing events that can be utilized to support the brand such as the World Cup
(soccer) and The Olympics.
THREATS
Puma is exposed to the international nature of trade. It buys and sells in different
currencies and so costs and margins are not stable over long periods of time. Such an
exposure could mean that Puma may be manufacturing and/or selling at a loss. This is
an issue that faces all global brands.The market for sports shoes and garments is very
competitive. The model developed by Phil Knight in his Stanford Business School days
(high value branded product manufactured at a low cost) is now commonly used and to
an extent is no longer a basis for sustainable competitive advantage. Competitors are
developing alternative brands to take away Puma market share.As discussed above in
weaknesses, the retail sector is becoming price competitive. This ultimately means that
consumers are shopping around for a better deal. So, if one consumer could go to the
store along the street to compare prices for the exactly the same item, and buy the
cheaper of the two. Such consumer price sensitivity is a potential external threat to
Puma.
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CHAPTER 2
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2. OBJECTIVES AND METHODOLOGY
2.1. SIGNIFICANCE
2.2. OBJECTIVES
TYPES OF RESEARCH: -
Descriptive research
Descriptive research includes Surveys and factfinding enquiries of different kinds. The
main characteristic of this method is that the researcher has no control over the
variables; he can only report what has happened or what is happening.
DATA SOURCES
There are two types of data. Source of primary data for the present study is collected
through questionnaire and answered by consumers of Puma shoes. The secondary data
is collected from journals, books and through Internet search.
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PRIMARY DATA
The data that is collected first hand by someone specifically for the purpose of
facilitating the study is known as primary data. So in this research the data is collected
from respondents through questionnaire.
SECONDARY DATA
For the company information I had used secondary data like brochures, web site of the
company etc. The Method used by me is Survey Method as the research done is
Descriptive Research.
Under this method, list of questions pertaining to the survey are prepared for marketing
staff of consumers of Puma shoes. Questionnaire has structured type questions as well
as unstructured type questions. Structured objective type questions are prepared for the
respondents with fixed response categories. Some of the questions are of multiple-
choice type. The questions have more than one alternative.
Open Ended: - Allows respondents to answer in their own words & are difficult to
Interpret and Tabulate.
Close Ended: - Pre-specify all the possible answers &are easy to Interpret and Tabulate.
IMPORTANCE SCALE
RATING SCALE
A scale that rates some attribute from highly satisfied to highly unsatisfied and very
inefficient to very efficient
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SAMPLING UNIT
Who is to be surveyed? The marketing researcher must define the target population that
will be sampled.
EXTENT
Where the survey should be carried out? I have covered entire residential area of Delhi
city for the survey.
TIME FRAME
When the survey should be conducted? I conducted my survey for 8weeks from 10th
may to 10th July.
SAMPLING TECHNIQUE
How should the respondent be chosen? In the Project sampling is done on basis of
Probability sampling. Among the probability sampling design the sampling design
chosen is stratified random sampling. Because in this survey I had stratified the sample
in different age group, different gender and different profession.
1. Libraries at
2. Internet sites containing information on Puma shoes & marketing are browsed.
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2.4. METHODOLOGY
Finally recommendation was made to improve the sales strategy of Puma shoes to
increase the sales volume in ladies segment.
SAMPLE DESIGN
THE BASIS OF SAMPLING: -Consumers of Puma shoes are chosen randomly, so that
unbiased, representative sample may be obtained.
The geographical area was very much limited to residential area & so the results are not
particularly reflection of the current behaviour.
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Then this is interpreted. This involved draw in conclusion from the gathered
data. Interpretation changes the new information immerging from the analysis
into information that is pertinent or relevant to the study.
Due to limited time period and constrained working hours for most of the
respondents, the answers at times were vague enough to be ignored.
Most of the people in India take their Puma Shoes in the period preceding March
& so the response to initial contacts were not all encouraging and that has been
the primary reason in the inability to quantify the results large enough so as to
deduce any relevant outcomes.
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CHAPTER 3
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3. LITERATURE REVIEW
The study of consumer behavior has evolved since the Information Processing Model
(Bettman, 1979)assumed that the individual is logical in his/her buying process. This
model was criticized because it failed totreat different consumption phenomena
motivated bysymbolic meanings (Holbrook and Hirschman, 1982).Individuals are not
always looking for efficiency andeconomy, but also for distraction,
aesthetic,expression, etc. (Boyd and Levy, 1963). Calling for abroadening of theoretical
frameworks of consumerbehavior, many authors pleaded in favor of the studyof all
consumption forms (Holbrook, 1986), beinginspired by European semi logy and
American semiotic(Levy, 1959, 1963, 1981; Hirschman, 1980; Kehret-Ward, Johnson
and Louie, 1985; Mick, 1986; Holbrook,1986;
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relationshipbetween consumers and the products they consume,and suggests that a
significant proportion ofconsumption behaviors consist of social behaviors, andvice
versa (Solomon, 1983). This leads us to consider the importance of socialization
institutions rules such as those coming from family andother reference groups
(Faber,O’Guinn and McCarthy,1987.Thus, Symbolic Interactionism Perspective
considers the human spirit as fundamentally social, anddependent on shared symbols.
The symbols being generated at a global level (Geertz, 1973; Solomon,1983;
McCracken, 1986, 1988; Leigh and Gabel,1992), the Symbolic Interactionism
Perspective accept as precept the fact that society and its culture precedeevery
individual action, and that a cultural consensusresults from interactions,
communication, and negotiation between social actors (Charon, 1989).If, at a
conceptual level, the consumption good becomes an instrument of communication, at
an operational level, image variables may be regarded asthe intangible attributes of the
product that carry cultural and social meanings. According to Erickson,Johansson and
Chao (1984), an image variable is defined as “some aspect of the product that is Distinct
from its physical characteristics but that is nevertheless identified with the product”.
The image variable merge from four cognitive representations individual shave of their
environment: the symbolism of advertising, the celebrity endorsement, the brand,
andthe country of origin of the product.The made-in is considered by Dichter (1962) as
thefifth element of the marketing mix, and is defined asthe country where are located
the corporate headquarters of the organization doing the marketingof the product or the
brand (Johansson, Douglas and Nonaka, 1985). The country of origin carries a rhetoric
that influences consumers’ preconceptions towards theproducts of a country. processes
(family,reference groups) through which individuals learn themeanings of symbols and
those of consumption. Withthe aforementioned meanings being negotiated andbuilt
through interactions with others, consumption isnot only an individual activity, but also
a social processof goods definition (Gallant and Kleinman, 1983).Since individuals are
often motivated to acquireproducts according to what they mean to them and to
members of their social reference groups (Leigh andGabel, 1992), their behavior is
subject to the pressuresof cultural norms and the expectations of socialization
institutions rules such as those coming from family andother reference groups
(Faber,O’Guinn and McCarthy,1987.Thus, Symbolic Interactionism Perspective
considersthe human spirit as fundamentally social, anddependent on shared symbols.
The symbols beinggenerated at a global level (Geertz, 1973; Solomon,1983;
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McCracken, 1986, 1988; Leigh and Gabel,1992), the Symbolic Interactionism
Perspective acceptsas precept the fact that society and its culture precedeevery
individual action, and that a cultural consensusresults from interactions,
communication, andnegotiation between social actors (Charon, 1989).If, at a
conceptual level, the consumption goodbecomes an instrument of communication, at
anoperational level, image variables may be regarded asthe intangible attributes of the
product that carrycultural and social meanings. According to Erickson,Johansson and
Chao (1984), an image variable is defined as “some aspect of the product that is
distinctfrom its physical characteristics but that is neverthelessidentified with the
product”. The image variablesemerge from four cognitive representations
individualshave of their environment: the symbolism ofadvertising, the celebrity
endorsement, the brand, andthe country of origin of the product.The made-in is
considered by Dichter (1962) as thefifth element of the marketing mix, and is defined
asthe country where are located the corporateheadquarters of the organization doing the
marketingof the product or the brand (Johansson, Douglas andNonaka, 1985). The
country of origin carries a rhetoric that influences consumers’ preconceptions towards
the products of a country.
1971). “When entering foreign markets, sellers oftenface quotas, tariffs, and nontariff
barriers. In addition,they may face an intangible barrier in the form ofconsumer bias on
the basis of product origin”(Schooler, 1971).The informational value of the country of
origin wasalso found to vary according to the level of involvementof the consumer in
purchasing the product and thepresence of other cues such as brand name, guaranteeand
price (Ahmed and d’Astous, 1993). In a recentlypublished metaanalysis of country-of-
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origin effects,Peterson and Jolibert (1995) conclude that the averageeffect size is lower
(0.19) for purchase intention, higher(0.30) for quality/reliability perceptions and
contextdependent. More specifically, they found that the characteristics of the study
(research design, type of respondents, study cues, sample size, stimulus context etc.)
influence the relative effect of country of origin to a lesser degree for quality/reliability
perceptions thanfor purchase intention the type of respondent.Stanford GSB marketing
professor Itamar Simonsonand Ran Kivetz, an assistant professor at
ColumbiaUniversity, asked a group of 195 Columbia students todo; eat a lot of
sushi.Participants were offered a"frequent diner" program that would reward them
fortheir patronage at various university dining locationsand given a card that would
track their purchases.They were randomly assigned to one of two groupsthose in the
"low" requirement group were told theywould have to purchase 12 sandwiches to get
two freemovie tickets, whereas those in the "high" requirementgroup were told they
would have to purchase 12sandwiches and 12 orders of sushi to get two freemovie
tickets. So, the second group had to do muchmore to receive the same reward. Kivetz
and Simonsonalso asked participants how much they liked sushirelative to the typical
student. The result? Studentswho liked sushi were much more likely to join the"frequent
diner" program that required them topurchase both 12 sandwiches and 12 orders of
sushi."It shows a common mistake that consumers make & ifthey see an offer that
seems to fit them better thanother consumers, for example, a program that
requiressushi-lovers to eat sushi that fit completely colors theirassessment of how
attractive the offer is," Simonsonsays. "As a result, by creating what appears
likepersonal fit, marketers can attract consumers tofrequency programs and many other
promotionaloffers." Kivetz and Simonson replicated these findingsregarding influences
on participation in frequency, orloyalty, programs in studies with travelers
interviewedat domestic airports. The theme that pervades Simonson's work is
thatcustomers may not know what they want and second-guessing them can be
expensive. In his words, “The benefits and costs of fitting individual
customerpreference are more complex and less deterministicthan has been assumed."
That's because, Simonsonsays, "customer preferences are often ill-defined
andsusceptible to various influences, and in many cases,customers have poor insight
into their preferences."In another recent paper, Simonson tackles the issue ofone-to-one
marketing and mass customization.Supporters of these marketing approaches
havesuggested that learning what customers want andgiving them exactly what they
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want will createcustomer loyalty and an insurmountable barrier tocompetition. In an
example taken to the extreme in the2007 movie Minority Report, Tom Cruise's
characterAnderson runs through a shopping mall past talkingbillboards that recognize
him by name and urge him to buy products he has expressed interest in such as jeans
and Ray-Bans; the ultimate in personalized advertising. But Simonson has this tosay:
"The fact that consumer preferences are often fuzzy, unstable, and manipulatable is
unlikely to change. So, the effectiveness of methods to give customers exactly what
they (say they) want has beengrossly exaggerated." His take on the long held
assumption that individual marketing will supplanttargeted marketing is "not so fast."
That's because consumers are very difficult to figure out, science fiction and technology
notwithstanding. "Further more, even when customers have well defined preferences
and receive offers that fit those preferences.Consumers with well-defined preferences
may be sceptical that a marketer could match expectations.Those who don't know what
they want may not eversee the fit with what the seller wants them to buy.
So,individualized offers depend on customers' preferences;how the offer was extended
& and on trust. "Effectiveindividual marketing requires not only anunderstanding of
individual preferences and matchingoffers to those preferences, but also a thorough
familiarity with the various factors that impactcustomers' responses," he writes.This is
a tall order, one that some companies havebeen able to fill at least to some extent. For
example,Amazon keeps track of customers’ purchases andsuggests other books they
might like.Dell builds computers from mass-made parts tocustomers' specifications.
But Simonson argues somecompanies can take the concept too far, like theCustom Foot
chain of shoe stores that took detailed measurements and specifications from each
customer to design one-of-a-kind shoes. Simonson argues that Custom Foot didn't take
into account that some customers were put off by the individualized attention and felt
obligated to buy the shoes because the storewent to so much trouble.They often didn't
come back. Indeed, an Internetsearch produces no Website. Simonson, who has
received many prestigious awards for his research onconsumer behavior and marketing,
teaches MBA andPh.D. marketing and consumer decision-makingcourses. The loyalty
program article is slated for publication in the Journal of Marketing Research this year.
Online customization gives consumers theopportunity to select a product.Many
companies are looking at online customization asthe future of online business Janis
Crow, Kansas StateUniversity marketing instructor, researched how people make
choices on the Internet. She recently studiedconsumers in an online environment and
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their ability tocustomize several products - pizza, shoes, and electronic devices.Crow
said that her study posed two questions for respondents: first, how difficult is it to
customize aproduct, and secondly, how likely is the person to purchase the product he
or she has customized? All participants in the study chose to customize products.In
terms of customers’ likelihood to purchase, a greater number of customers made
purchase decisions when there are more options to choose, she said. However, It was
slightly more difficult when more features were offered. She created a website where
people could customize products to their individual preferences and needs.Crow
selected three generic products: pizza, shoes, and a Personal Digital Assistant (PDA).
Thirty-one college students took part in the study."Students could customize the three
products, and I provided a drop-down box on the site with attributes tochoose from,"
she explained. Consumers could click ona drop-down box to customize a product they
would want to purchase, she said. She found that more people relied on the default
choices rather than selecting other choices that were offered. She said,some research
suggests that many people do not want to put a lot of effort into purchase decisions. "A
lot oftimes, people may not have preferences already in mind," she said. When
consumers have the chance tocreate preferences.In the future, Crow says she will be
studying strategiesthat consumers go through during purchase decisions."I will be
studying decision processes to developcomputer aids that could help the consumer
reach theirpurchase decision," she said.Although her current project involves analyzing
theconsumer behavior of college students in an onlineenvironment, in future projects
she plans to analyze other demographic groups.” Customization will be a key business
opportunity in the future for businessesonline or in more typical shopping
environments," Crow said. She hopes her research will help consumers inmaking
purchase decisions and help businesses determine products to offer and how to offer
them.Hong Kong companies, including leather consumer goods suppliers, have shown
a growing interest in tapping the mainland consumer market after China'saccession to
the World Trade Organization and gradual opening of its domestic market. For Hong
Kong companies targeting this vast market, a good understanding of the behavior of
mainland consumersis necessary in order to formulate an effective and suitable market
strategy.In view of this, the HKTDC conducted a survey study infour major mainland
cities in February 2007. The studywas composed of two interlocking surveys.The first
survey (survey on shoppers) successfullyinterviewed a total of 1,000 shoppers of
leatherconsumer goods in four major cities, namely Beijing(BJ), Chengdu (CD),
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Guangzhou (GZ) and Shanghai(SH). The second survey (survey on retailers)
interviewed managers/officers-in-charge of major department stores in these four cities.
CONSUMER BEHAVIOR
Shopping locations, Department stores were the most preferred type of retailers,
followed by outlets in shopping malls and chain stores. Product variety,guaranteed
quality, brand choice, price, services and store environment were cited as the major
reasons for visiting a leather consumer goods store.
SHOPPING TIME
Thirty-eight percent of respondents visited leather consumer goods shops at least once
a month.Shopping during weekends is common. Other popular shopping occasions
include National Day (1st October), Chinese New Year (January/February), New Year's
Day(January) and Labour Day (1st May).
MARKETING CHANNELS
Promotional activities in shopping malls and department stores are the most popular
promotional and sales activities, followed by discount/price reduction, TV
commercials, discount coupons, promotional stands, exhibitions, buy-one- (or more)
gets-one-free.
POPULAR BRANDS
SELECTION CRITERIA
When choosing leather consumer goods product quality stood out as the principal
consideration for respondent,followed by product material, craftsmanship, style/design,
price and brand.
PURCHASING POWER
On average, respondents owned 4.2 pairs of shoes, 1.2pieces of wallets, 1.3 pieces of
belts and 1.3 pieces of hand bags/briefcases. Over the past 12 months, an average
respondent's spending on leather consumer goods was as follows:- Shoes: RMB 597
(total) RMB 328 (per pair)- Wallet: RMB 226 (total) and RMB 193 (per piece)- Belt:
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RMB 220 (total) and RMB 194 (per piece)- Handbag/briefcase: RMB 476 (total) and
RMB 359(per piece).
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CHAPTER 4
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4. DATA ANALYSIS
PARTICULARS RESPONDENT
PUMA 32
RELAXO 25
NIKE 43
Chart Title
50
45
40
35
30
25
20
15
10
5
0
PUMA RELAXO NIKE
PARTICULAR RESPONDENT
SPORTS 47
CANVAS 18
FORMAL 35
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Chart Title
50
45
40
35
30
25
20
15
10
5
0
SPORTS CANVAS Category 3
Interpretation:-In the above graph we find out which type of shoes company purchase.
47% company purchase the orderof sports shoe.18% company purchase the order of
canvas shoe, 35% company prefer formal shoes.
Particular Respondent
Advertisement 16
References 33
Past purchase 26
Sale person visit 25
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Chart Title
35
30
25
20
15
10
0
advertisement Reference Past purchase Sale person visit
Interpretation:-In this question we have the survey about the how theother company
should know about the select shoes.Where the result is shown that 16% know through
advertisement, 33% are references , 26% are pastpurchase & 25% are sale person
visit.
particulars respondent
yes 89
no 11
Chart Title
100
90
80
70
60
50
40
30
20
10
0
yes no
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Interpretation:-The graphically result shows that 89% people are known about the
Puma shoes & 11% people are not know about the name of Puma shoes.
Particulars Respondent
Internet 48
TV 22
Bill Boards 9
Newspaper 21
Chart Title
60
50
40
30
20
10
0
internet tv bill boards newspaper
Interpretation:-The graphically result shows that 48% say internet,22% say TV, 9%
say bill boards & remaining 21% say newspaper.
Particulars Respondent
Price 28
Quality 31
Size 11
Brand image 18
Design 12
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Chart Title
35
30
25
20
15
10
0
price quality size brand image design
Interpretation:-Studies reveals that price, quality, size, brand image &design fall
between large extent & extent others attributes like colour of the shoes lies between
the some extent and least extent.
Particulars Respondent
Poor 3
Fair 26
Average 22
Good 44
Excellent 5
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Chart Title
50
45
40
35
30
25
20
15
10
5
0
Poor Fair Average Good Excellent
Yes -17%
No-83%
Column1
yes no
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9. DO YOU PREFER BUYING THE PRODUCTONLINE?
Yes -70%
No- 30%
Column1
yes no
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Chapter 5
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5. CONCLUSION
The specific brand objective of Puma India would be to build up its brand reputation,
image and equity. A brand is not simply a collection of products and benefits, but also
a storehouse of value stemming from awareness, loyalty, and association of quality and
brand personality. 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 from those of competitors.In essence, a brand identifies the seller or maker.
It can convey up to six levels of meaning: Attributes, Benefits, Values, Culture,
Personality and User. If a company treats a brand only as a name it misses the point.
The branding challenge is to develop a deep setof positive associations for the brand.
Although these six meanings are noticeable in thePuma brand in the west and other
parts of the world,they are yet to be cultivated in India. Puma has to ensure that their
brand is built up on these pillars in India.
The secondary brand objective of Puma India would beto ensure that they match the
market share and sales volumes of its competitors. After all, a company is in business
to make profits and stay ahead of its competitors. A company, product or brand may
have a very good reputation and image, but if it is not profitable, it does serve its
purpose. At the same time sales figures and data can be misleading. Hencemarket share
has also to be paid attention to. Puma despite being one of the most popular brands inthe
world has not really caught on in India. Yet, there is reason to believe that Bata’s Power
and Liberty would be ahead of Puma in terms of popularity. Wealso notice that Puma is
at par with Reebok. This again does not reflect too well on the brand, considering that
Puma outsells Reebok everywhere else in the world.Hence it is reasonable to state that
Puma’s popularity level in India could do with a boost. The best way to achieve this
would be some serious brand building.The image of the brand has to be improved and
people must be made aware of its presence. Thus, the rationale behind choosing
improvement of brand image and reputation as the company’s primary objective isquite
clear.Puma’s distinctive competency lies in the area of marketing, particularity in the
area of consumer brandawareness and brand power. On the global scale thiskey
distinctive competency towers over the competitors. As a result, Puma’s market share
is number-one in the athletic footwear Company in most places around the world. Catch
phrases like, "Just DoIt," and symbols like the Puma "Swoosh," couple withsports icons
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to serve as instant reminders of the Puma Empire. It is about time that this competency
is leveraged on to India.Two key attributes of a distinctive competency are itsinability
to be easily replicated and the value or benefitit offers to consumers. Few companies
have such are cognizable image and the resources to promote it.This ultimately
translates into added value for consumers. The public benefits from the strength of
Puma’s image at the point of purchase. For decades, consumers have come to associate
thePuma image with quality products. By associating starathletes and motivational
slogans like, "Just Do It,"with marketing campaigns that emphasize fitness,competition,
and sportsmanship, consumers identifytheir purchases with the prospect of achieving
greatness. Younger consumers especially benefit fromthis positive influence. This
image is something that competing companies can not easily duplicate bysimply
enhancing the physical characteristics of their products.Puma’s vision is to remain the
leader in the Company.The company will continue to produce the qualityproducts that
have been provided in the past. Most importantly, Puma will continue to meet the
everchanging needs of the customers, through produce innovation. In the past, the
company has utilized product differentiation as the main competitive strategy. As
Puma’s reputation dictates, it will continue to place emphasis in this area. Puma has
built its business on providing products that rise above all others and this has made it
the worldwide success that it is today.Puma is known for its technologically advanced
products and is the leader in this area. This allows Puma’s products to stand out from
the rest. The company’s focus also allows it to maintain a somewhat narrow niche that
enables it to effectively capture theneeds and wants of the consumers. An example of
Puma’s superior and innovative technology is its new range of shoes called “Air
Presto”. Termed as the first T-shirt for the feet, these shoes can take the shape and size
of the wearer’s feet.
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CHAPTER 6
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FINDINGS
The most preferred brand in the market is Nike (43%)followed by Puma (32%) &
Relaxo (25%).We find out which type of shoes company purchase. 47% company
purchase the order of sports shoe,18% company purchase the order of canvas shoe, 35%
company prefer formal shoes.We have the survey about the how the other company
should know about the select shoes. Where the result is shown that 16% know through
advertisement, 33%are references, 26% are past purchase & 25% are sale person visit.
We shows that 89% people are known about the Puma shoes & 11% people are not
know about the name of Puma shoes.We shows that 48% say internet, 22% say TV, 9%
say bill boards & remaining 21% say newspaper. Studie sreveals that price, quality, size,
brand image & design fall between large extent & extent others attributes like colour of
the shoes lies between the some extent and least extent.We shows that 3% is poor, 26%
is fair, 22% is average, 44% is good & 5% is excellent quality of shoes.
RECOMMENDATIONS
To explore the mainland market, Hong Kong companies should position themselves in
areas in which they are strong. From the viewpoint of mainland consumers,Hong
Kong's leather consumer goods are considered competitive in the high-end and mid-
range. Main land consumers are brand conscious, and it is vital to apromote own
brands which have clear image.This survey also shows that Hong Kong products are
preferred for their design/style and quality. Bearing these in mind, Hong Kong
companies should never compromise on quality, and they should allocate more
resources to product design, selection of material and crafts Manship.
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BIBLIOGRAPHY
BOOKS
WEBSITES
NEWSPAPER
Economic Times
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