Covid-19 Update: We've taken precautionary measures to enable all staff to work away from the office. These changes have already rolled out with no interruptions, and will allow us to continue offering the same great service at your busiest time in the year.

Trends in the footwear industry

3885 words (16 pages) Essay in Marketing

5/12/16 Marketing Reference this

Disclaimer: This work has been submitted by a student. This is not an example of the work produced by our Essay Writing Service. You can view samples of our professional work here.

Any opinions, findings, conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of UK Essays.

Todays sportswear has experienced many transformations, starting from functional past and ending with current global phenomenon rooted in culture, sports and fashion (Pedersen, Parks, Quaterman and Thibault 2010, p. 203). Nowadays the term “sportswear” includes sport clothes of various purpose, footwear and even leisurewear. Sportswear is usually associated with well-known brands of market leaders such as Adidas, Reebok, Nike and Puma, but a number of smaller competing companies are also engaged in sportswear.

Strategic thinking, strategic globalization and technology are the primary reasons for those changes that had happened in sportswear (Thompson and Baden-Fuller 2010, p. 39). Globalization and technology had helped many companies and organizations to have different competitive advantage by having larger market as well as offering different products and services to their customers in easier manner. But, although globalization and technology offer different advantages on the part of the companies and businesses, there are many things that must be considered as well as done in order to maintain the competitive advantage, and eventually maintain their positions in the market. Management and communications are considered as the most important activities that must be done by any business or companies.

This essay is aimed to present a brief analysis of sport footwear sphere, current tendencies and trends. Furthermore, the paper will focus on a deeper analysis of the marketing communications of Puma is conducted.

Literature Review

Key Trends in Footwear Industry

In order to analyze current state of footwear industry and its trends, it is necessary to research micro- and microenvironments. On one hand, according to Government health campaigns and their objectives, people should be exercising more (Bauer 2008, p.14). On the other hand, the World Health Organization forecast states that world number of overweigh adults will reach 2.3 billion by 2015 (BBC News, 2008). Thus, two visible trends can be outlined: some consumers will be more devoted to healthy lifestyle and exercise, while some will be urged to train more. Bauer further states that the growth of health club popularity and membership number results in increased sportswear sales.

One more important trend in sportswear is the increasing consumer nostalgia: many companies have revived their old brands, products for “retro” fashion and heritage items. Meanwhile, in this sector technology is quickly developing, since most brands have their own specific production lines and “continue to develop activity-specific technologies in each sport” (Pedersen, Parks, Quaterman and Thibault 2010, p. 80). Bauer also states that sportswear companies are traditionally more directed towards male customers, but currently the products for women’s needs and tastes are being introduced. A new tendency in sportswear is to open own concept and brand stores as a result of retailer price pressure.

Company Background

Puma AG can be considered as one the leading manufacturers of athletic shoes, sportswear and accessories in the world. It is best known for its footwear products like soccer shoes.

Puma AG uses sponsorship for its marketing strategy. The company has already maintained several sponsorships for different international sports superstars like Diego Armando Maradonna and offers different line of sport clothing that designed by renowned designers (for example, Lamine Kouyate).

The company was first founded in 1924 and was named Gebruder Dassler Schuhfabrik (the Dassler Brother’s Shoe Factory) founded by the Dassler brothers, Adi and Rudi. Their partnership ended during the World War II, when the brothers had significant discrepancies which resulted in separation of the business. Adi continued the business and renamed it from his nickname and first 3 letters of his surname: Adidas. Meanwhile, Rudi founded his own company in 1948 on the other side of Aurach and called it Puma AG Schufabrik Rudolf Dassles (Pedersen 2006, p.513).

The company became famous due to their innovative products such as the process of vulcanization in producing their soccer shoes that had become the standard process for the soccer shoes during that time (Pedersen 2006, p.514). The company has also introduced their innovation in running shoes with the help of the unique shape sole and the Velcro strap.

Puma brand differentiation

During the last decade, Puma brands are associated with fashion, style, and sport. The clues for Puma’s success and vivid brand image are innovative design, co-branding and cooperation with famous sportsmen and designers. Due to this marketing policy, Puma has entered the world of fashion and has several fashion brands in addition to sporting footwear products. Brand communication style chosen by this company is directed towards different target groups, but the main message to customers promotes innovation for an “active lifestyle” (Sports in America 2008). For each customer category Puma develops individualized marketing messages, but the general motive of its marketing communication is special brand identity and personality.

One of successful ideas was to create Puma retail stores “that enable people to experience the brand in engaging and compelling ways” (Cassidy 2001, p.31). Creative Mongolian barbeque initiative was launched which enabled customers to invent and construct their own footwear. Puma is favorably differing from competitors by its accentuation on active lifestyle and promotions based on music and fashion events, dining and entertainment occasions.

Puma creative advertising

Puma’s clear distinction from competitors is that it has managed to create a trendy brand. During 2002 Japanese World Cup major players (Adidas and Nike) were spending millions on advertising; Puma at the same time used creative idea to showcase its products in sushi bars and occupied many bars worldwide. This idea was developed by Antonio Bertone, Puma’s brand director; he stated that Puma’s target customers, trendy and fashion-loving, will certainly be eating sushi. Also, Puma succeeds in cooperating with famous players: in 2002 advertising of Vinnie Jones, English former soccer player (Tkacik 2002, p. B8), and several more well-known sportsmen in a sushi bar attracted a lot of customers.

The practice of inviting celebrity athletes and using their images in marketing campaigns was widely used by many footwear leaders and is not new at all. However, New Balance uses a technique of promoting ordinary people and their interests, and stands against celebrity endorsements; for example, one of their campaigns had the slogan “There are two motivations in sports. Which is yours? For love or money?” (White 2005, p. 13). Thus, New Balance is more oriented towards serious runners and sportsmen. Although Puma uses quite different tactics, the strategy of New Balance might be of interest to Puma AG because the target groups of devoted sportsmen and ordinary people not being after fashion (middle age and older) are largely untouched my Puma marketing, and it would be useful to introduce several brands in order to attract their attention.

Fashionization

Consumers conscious about their style attracted by Puma extensive and diverse marketing would prefer the shoes that would not only serve their purpose but would also enhance their image. Fashion-devoted customers pay attention to their sneakers producing a swoosh and to other details such as style of footwear, symbols and trademarks etc. It is notable that even in the athletic sector of footwear fashion is becoming more important than function. The fashionization of footwear was initiated by Puma’s designer Jil Sander. In 1997 he suggested to produce a special edition of fashionable running shoes for women (Orecklin 2002, p. Y4) to revive sales and to turn attention to Puma brands.

Celebrity advertising

The value of celebrity advertising currently is increasing. The importance of this strategy is grounded on two theories dealing with social influence (All-Star Athletes Reveal -Almost- All for Puma TV Campaign 2005, p.9). In general, two forms of social influence can be distinguished: The first one is called “informational social influence”, and represents a tendency to accept reality on the basis of information from other people. The second form of social influence is conforming to an individual or to a certain social group and is named “normative social influence” (Pedersen, Parks, Quaterman and Thibault 2010, p. 112). Celebrity advertising uses both types of social influence. Since Puma’s mission is to combine active lifestyle, sport and fashion together, the use of celebrity advertising is one of the best choices for marketing.

“New Stuff” campaign

Since 2008, Puma launched one of its most successful product-focused campaigns; it was aimed at young audience from 16 to 34 years old and promoted marketing communicating through advertising cutting edge style to this customer group (Sports Industry Trends 2008). The “New Style” campaign managed to promote leadership of Puma’s design and emphasized that Puma styles were destined to provide customers with best innovative lifestyle and trendy footwear.

This campaign managed to reach three core objectives: to mark out Puma brands as being different and unique, to increase the interest of the public to the brands and to raise sales. The idea was to showcase the main products to the audience by choosing some creative way that was “unexpected, unique and different” (Sports Industry Trends 2008). To implement this idea, animated animals were used. Mice, monkeys, bats, bees and fish were shown with Puma brands in very innovative and fresh style. First of all, TV channels were used to launch this campaign as short 15-second videos (Thompson and Baden-Fuller 2010, p. 118).

The campaign was very unusual in terms of its clear colors and bright photographs; fanciful ideas and unexpected TV spots. Following the TV ads, during the next two seasons print ads with new Puma products were introduced. Stylistics of this campaign was used in different media environments “engaging advertising savvy young adults who might be suspicious of broadcast advertising” (Pedersen, Parks, Quaterman and Thibault 2010, p. 218).

Findings and Analysis

Industry overview

This industry is characterized by the absence of price competition in its traditional form. Existing competitors use a variety of indirect methods such as different price levels aimed at reaching all market segments (Pedersen, Parks, Quaterman and Thibault 2010, p. 37). Direct competition takes place among a limited number of key players, while smaller companies are usually specializing in specific footwear. Thus, the market has divided into several sector with fewer firms competing within each sector than it would be within the whole industry.

The possibilities of increasing market share in such situation are in the form of mergers, acquisitions, and internal production decisions (Thompson and Baden-Fuller 2010, p. 43). Companies tend to use consolidation as a means of extending their product range. In order to complements the mergers, companies are likely to provide a bigger variety of brands in order to get access to more market segments (Pedersen, Parks, Quaterman and Thibault 2010, p.197).

Product Portfolios

Each of market leader in footwear has various segments of product range with multiple sub-brands that are developed to attract consumers in different sports such as running, tennis, football, golf etc. Brands are developed for different age categories, for different purposes ands styles. “To compete, brands astutely follow consumer trends, design developments and technology advances” (Johansson 2003, p. 368). The process of fashionization has entered virtually every sector of sportswear; the use of modern technologies in tailored apparel and fashion sports footwear have blended with society and penetrated into music, arts and street culture (Fill 2006, p. 118).

Key strategies of footwear market leaders are collaboration and customization with customers and society (Daft 2009, p.250). Collaborating with fashion designers, offering their signature collections and stylish electronic features expanding the functionality (such as footwear that can synchronize with mobiles and players) within unusually branded lines is the trend of nowadays. One more idea is using Web resources for collaboration is providing online resources for customers and enabling interactive communication.

Table 1 shows leading companies that participate in the various segments of foorwear market, and their product lines.

Type of ShoeCompany

Nike

Adidas

Reebok

K-Swiss

Converse

Puma

Asics

Vans

Brooks

AND1

Stride Rite Corp

Spira

Mizuno

Saucony

Running

X

X

X

X

X

X

X

X

X

Walking

X

X

X

X

X

X

Basketball

X

X

X

X

X

X

Children’s

X

X

X

X

X

Tennis

X

X

X

X

X

Lifestyle

X

X

X

X

X

X

X

Skating

X

X

Cross-Training

X

X

X

X

Soccer

X

X

X

X

Table 1. Footwear market specialization (Ohmes 2006, p.35)

Puma Brands Overview

It is possible to distinguish three major brand lines within Puma AG production. The classic brands appeal to well-known sport models slightly re-designed to match the changing times; their popularity is based on Puma’s sporting heritage.

Second line of brands is related to widely promoted Puma’s value of “active lifestyle”. Besides stylish footwear, the production line includes apparel and accessories for urban, trendy and ultra hip streamlines. Puma’s marketing message is aimed to associate own brands with other design savvy icons such as Ferrari, F1 Racing, and Cooper Mini (Pedersen, Parks, Quaterman and Thibault 2010, p. 228); Puma is actively partnering with these companies and using co-branding.

Third brand line is sports footwear operating in two sectors: extreme and mainstream sports. Key features of Puma’s success are brand diversity, different brand identification and targeted customer messaging for each brand line.

Elements of Marketing Communication

Sport lifestyle brands

Puma’s team of designers and promoters is highly creative, and uses a great variety of techniques to announce the relation of Puma and sport to customers. Puma brands are advertised to be associated with lifestyle, fashion and active times. To a certain extent, Puma is now concentrating on fashion sector and emphasizing fashion, social events and shopping (Daft 2009, p.313) than sports events.

Brand images differ from showing the products for close examination to showing celebrities and fashion models advertising Puma’s footwear, and to street young people being fond of Puma production. The strength of Puma’s visual messaging is in clear and crisp imagery. One of new groups targeted by 2010 campaigns are active urban females as a particular customer group.

Sport brands

For more traditional sport products, Puma delivers a more consistent brand message showing athletes in Puma products engaged into some sports activity. The gestures and movement of the athlete focus attention at the product. Most often, Puma’s athletes are shown alone, and not in a team play (Fill 2006, p. 130). However, Puma did not overuse athlete endorsements, thus not being directly associated with a particular sport. In this way Puma managed to reach certain universality, to the extent it’s possible in footwear.

Retail stores

Besides brand messaging, a powerful source of promotion for Puma is the set of special retail stores. Retail stores are the fastest way to showcase the brand and to deliver innovative products and ideas to the customers in the quickest way. Since 2006, Puma launched about 20 “concept stores” and a large number of specialized outlets and retail stores (Fill 2006, p. 255). Puma concept stores provide customers a variety of opportunities for discovering new brands and a special dimension for interaction with company and its innovative mainstream, “displaying the depth of the brand” (Puma Launches New Retail Concept 2009, p. 7). One of most successful marketing communication means is the Mongolian BBQ in the concept stores, where customers can design own personalized footwear (Heilmann 2006, p.307).

Cultural Connection

Puma’s position in the sports world is like a pinnacle (Pelsmarker, Geuens and van den Bergh 2007, p. 167), since its high production technology and creativity discovering the potentials of clients are a unique combination. However, during the last 5 years main target of Puma was the younger part of society: the company ventured into fashion and appeared to be a strong player on this unexpected for footwear field. Unique styles provided by classical background, innovative ideas and technologies and fashionable outlook of Puma brands can be found anywhere in the world and possess unlimited potential. Puma is present virtually everywhere, but despite such diffusion Puma brands allow their customers to express their individuality though fashion and utility.

Recommendations and Conclusions

Retail industry perspectives

Current state of retail industry is affected by changing economic conditions, tight credits, high overhead and money shortage. Consumers are becoming smarter and better informed, which is also creating difficulties for retailers. Changing environment forces retailers to seek access to new market segments and revenues by creating new market strategies and targeting new consumer groups. Additional sources where retail industry can look for financing and support is merchant banking (Pelsmarker, Geuens and van den Bergh 2007, p. 497).

For athletic footwear, major sales driver is brand image and its position on the marketplace. This sphere is characterized by non-price competition such as various product lines and specialized branding. Consolidation in footwear industry is expected to continue in the form of buyouts and mergers.

The industry itself is mature and is seeking to address neighboring markets such as apparel and higher technology outlets. One of key trends of footwear currently is unstoppable innovation which is essential to keep customers’ interest. Finally, the leading differences in marketing and alignment are likely to focus on the lifestyle footwear and performance athletic shoes (Pedersen, Parks, Quaterman and Thibault 2010, p. 207).

Puma positioning

Although Puma is one of the oldest players in footwear retail, its brands would still sell today and in future, because of its great variety and popularity. The lines of three brands, specialized retail stores and fun marketing tools like “Pick me up” hang tags help to get the public interested. Awareness of new Puma products is kept high due to extensive and original advertising on media and TV. Online tools such as cooperation with online retailers and online shopping sites also plays a role in getting customers (2008 Ad 2007, p.4).

Puma is considered a leading brand in sport lifestyle providing classical legitimacy and reliability; however, it is also perceived fashionable and popular in tech savvy urban circles. Concerning its sports brands, the main strength of Puma is football industry since it’s provided performance footwear for soccer athletes of world class. Another great finding of Puma marketing communication was the message about “active lifestyle” and the connection with fringe sports such as BMX racing and motor sports. Due to its original campaigns, Puma gained a lot of credibility in nonconformist circles compared even to such strong players as Adidas, Reebok and Nike. A number of successful marketing campaigns resulted in increase of Puma stock prices in recent years (Appendix C, Figure C1).

Thus, using fresh and creative design, partnering with famous designers, celebrities and companies associated with savvy urban circles Puma has promoted its brands in such a way that they can compete not only in the sector of sports footwear but also with fashion brands like Gucci, Dolce & Gabanna, DKNY, Prada etc. (Ruihley, Runyan and Lear 2010, p. 22). By creating offerings outside the existing brands, by introducing lines of sub-brands and cooperating with famous artists and designers Puma has created a brand name in fashion industry and managed to build a unique brand identity.

Puma marketing mix

The best instrument for positioning a product is the marketing mix fulfilling the core idea of marketing: “Putting the right product in the right place, at the right price. at the right time” (McLoughlin and Aaker 2010, p. 55). Thus, marketing mix needs to include details of the promotion decision on the product, price, place and promotion.

Taking into account recent trends in retail industry, customer preferences pf Puma Ag footwear (Appendix B) and Puma’s updated branding and advertising, it is possible to suggest the following marketing mix for 2011-2012.

In terms of product, key objectives for Puma AG should be innovation and quality. The strategy of continuous innovation with greater variety of footwear and choices for every social and age group with special collection for young and energetic clients should be the objective. Quality is needed to increase market share of Puma AG in comparison with competitors like Nike and Adidas; idea of guaranteeing quality and exchanging sneakers in case of any defect can be used to attract more conservative customers.

In terms of price, it is necessary to offer competitive prices, with possible discounts and sportswear gifts to the customers. Differentiated pricing strategy should be suggested to students, professional sportsmen and separate lines of shoes with weight control gifts for middle-aged women.

Promotion campaigns should be varied. First of all, Puma should strengthen its online presence and support online initiatives like contests, virtual rooms, resources on exercising etc. Use of social networks and advertising there, as well as using Twitter and similar services for announcing the events will increase the interest of target audience. Sponsoring sport and charity events is a well-known and efficient way to catch public attention. Since Puma is known for its flexibility and innovation, taking part in scientific campaigns aimed at sportswear and exercising will add to its strong brand. Finally, partnering with producers of healthy foods and drinks in order to promote healthy life-style is be a promising promotional opportunity.

Places for delivering Puma’s brands should be extended to public places like large shopping centers, specialized shops etc. Fitness centers and health-related organizations are the right place to offer catalogues of shoes and samples of new shoes. Establishing contacts with medical organizations and stimulating sales of orthopedic shoes for medical purposes in another important direction of development. Finally, sponsoring youth sports contest and rewarding the winners, as well as organizing promotion campaigns with future sport talents is likely to increase Puma’s popularity and sales.

Marketing ideas and methods used by Puma can be classified as Kotler’s category of information economy. However, Puma marketing methods are fitting the “industrial economy” paradigm (Pedersen, Parks, Quaterman and Thibault 2010, p. 29). Puma’s strength is in customer acquisition, and not in retention of customers. Puma’s strength is heritage in sports footwear category, but the company managed to extend its branding line to all customers who seek active lifestyle. Although the company’s actions are in alignment with information economy, unusual for this type of economy heavy advertising is actively used for brand building (Pedersen, Parks, Quaterman and Thibault 2010, p. 224). The combination of these strategies is quite efficient since Puma manages to create memorable and distinctive advertising, and its target customers are sensible to visual and audio media campaigns.

Get Help With Your Essay

If you need assistance with writing your essay, our professional essay writing service is here to help!

Find out more

Cite This Work

To export a reference to this article please select a referencing style below:

Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.

Related Services

View all

DMCA / Removal Request

If you are the original writer of this essay and no longer wish to have the essay published on the UK Essays website then please:

McAfee SECURE sites help keep you safe from identity theft, credit card fraud, spyware, spam, viruses and online scams Prices from
£124

Undergraduate 2:2 • 1000 words • 7 day delivery

Order now

Delivered on-time or your money back

Rated 4.6 out of 5 by
Reviews.co.uk Logo (201 Reviews)