University of Strathclyde

30 April 2008

Business School

Department of Marketing

MSc Marketing 2007/ 2008

Semester 2

Class Title: Integrated Marketing Communications

Individual Written Assignment

Choice of Industry: Sportswear

Analysis of Puma′s current Marketing Communications Programme

Student: Daniel Hischer

1. Introduction ______________________________________________________ 3

2. Industry-Level Analysis _____________________________________________ 3

2.1 Competitive Environment _________________________________________ 3

2.2 Key Trends ____________________________________________________ 4

2.3 Product Portfolios _______________________________________________ 4

2.4 Main characteristics of marketing communication programmes ___________ 5

2.5 Important trends affecting current and future IMC programmes ___________ 5

2.6 Conclusion ____________________________________________________ 6

3. Puma′s current marketing communications programme ____________________ 7

3.1 Introduction____________________________________________________ 7

3.2 Principal Approach ______________________________________________ 7

3.3 Key programme characteristics ____________________________________ 9

3.3.1 Target audience profile _______________________________________ 9

3.3.2 Strategic Positioning ________________________________________ 10

3.3.3 Communication objectives ____________________________________ 10

3.3.5 Media/ Communication Channel _______________________________ 11

3.3.6 Campaign Evaluation________________________________________ 12

3.3.7 Future recommendations for future campaigns ____________________ 13

Bibliography _______________________________________________________ 14

1. Introduction

Today′s sportswear has undergone a significant transformation from its functional past to an

all-embracing concept belonging to modern culture, fashion and competitive sports. The term

itself encompasses high functioning performance clothing, footwear and casual leisurewear.

Predominantly, the term is understood to include high profile sporting brands such as Adidas,

Nike, Reebok and Puma, but many smaller niche brands also fall in this category, such as

New Balance Running or Calloway Golf. This essay offers an initial analysis of the wider

sportswear industry, its make-up and current trends. Following this a deeper analysis of the

integrated marketing communications of Puma is conducted.

2. Industry-Level Analysis

2.1 Competitive Environment

The sportswear industry is a highly competitive, global business environment that has

traditionally been dominated by a few major companies. Nike remains the industry leader in

the world market, although faces intense competition from rivals such as Puma and the

Adidas Group. Adidas currently holds the position of European market leader (Key Note,

2007a). The acquisition of Reebok by Adidas in 2005 brought together two of the world′s

largest sportswear manufacturers, and total group revenues are expected to increase over the

next few years and may yet challenge the dominance of Nike (Key Note, 2007a).

Sportswear historically served a functional purpose, but since the 1970′s it has been used as

both fashion and casual clothing. As such, sportswear can now be considered a key

constituent of the mainstream clothing market (Key Note 2007a). This has served to increase

both opportunity and competition within the market. Sportswear manufacturers can now be

seen as facing direct competition from traditional fashion producers.

The abundance of sportswear manufacturers and retailers has created a market experiencing

increased levels of saturation. As a result, market growth has slowed in recent years, with a

drop in sales of 3.4 percent between 2004 and 2006 (Key Note, 2007a). Sales are expected to

grow significantly in 2008 however (Key Note, 2007a), which may partly be explained by the

fact that both the Euro 2008 football championships and Summer Olympics are being held in

this year.

2.2 Key Trends

The key trends currently affecting this industry can be seen in both the macro and micro

environments. Firstly, alongside Government health campaigns, consumers are exercising

more (Keynote 2005). Dichotomously, the World Health Organisation predicts that there will

be 2.3 billion overweight adults in the world by 2015, and currently 24.2 percent of the UK

population is clinically obese (BBC, 2005). Therefore an interesting paradox is emerging

between consumers becoming more fitness-oriented and those who are being pushed to

exercise more. Keynote (2007a) further reports that an increase in health-club memberships

has driven sales of sportswear.

More specific to the sportswear sector, an initial trend is the rise of consumer nostalgia, which

has led to many brands re-releasing heritage or `retro′ products for fashion-related purposes.

Another key trend is the merging of sportswear and technology as brands develop advanced

fabrics and continue to develop activity-specific technologies in each sport. Keynote (2007a)

also reports that these companies have a bias towards male consumers, but this being

addressed by more attention to women′s sporting needs and tastes. Moreover, in response to a

higher bargaining power of retailers, sportswear companies are opening their own concept

stores.

2.3 Product Portfolios

Each of the three market leading brands segment their product ranges into numerous sub-

brands designed to specifically target consumers in a variety of niches such as football, tennis,

running, and golf. To compete, brands astutely follow consumer trends, design developments

and technology advances. In many cases, the line has become blurred between performance

and fashion sportswear through the use of high technology fabrics in tailored apparel, and

collections of urbanised sports leisurewear highly influenced by street culture, music and the

arts.

Collaboration and customisation are the two major trends influencing the current product

portfolios of the key market players. Collaborations include signature collections by high-end

fashion designers and joint ventures with electronics companies to enhance the functionality

of products, for example running shoes that synchronise with mobile phones and music

players to create jointly branded product lines. Customer interactivity is a key feature of the

websites of leading brands, which offer interchangeable colour-ways, optional material