Puma Marketing Plan

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Our line of Puma Style will only be available through our own integrated distribution network, our online store and high end retail outlets as we want to promote the exclusivity of this brand. (See Exhibit 6 for visual)

Pricing - Puma Performance & Puma Style

We will be using a value based pricing for all our products as we believe our brand positioning and strength will allows us to charge a premium for our products. We will be charging more of a premium for Puma Style and Puma Performance as our positioning and promotional strategies will generate more experiential and social value for consumers. These two segments will also be less price sensitive than Puma Fit due to their high incomes. Furthermore, Puma Performance consumers will have greater usage and understanding of the product and what it offers and hence will be less price sensitive. This will help reduce the gap between perceived value and total economic value.

Puma Fit

PUMA Fit products will be priced based on Value Based Pricing model and will be affordable for consumers. It considers the value of the product offered to consumers rather than the how much it cost to produce it. Products are sold at base price for entry level shoes and higher price for high performance shoes and apparel. For customerization of product, consumers will be charged additional price.

IV. Marketing Implementation:

Budget and Economics (See Exhibit # ___)

The marketing proposal requires a budget of $62.5 million. The remodeling of the stores – including the layout to highlight our three targeted segments and the addition of iPads to showcase more products - will cost $4.95 million, at an average estimate of $25,000 per store and 198 stores. Next, brand ambassadors are a key component of making our product visible and relevant to the different consumer segments. Rihanna, Usain Bolt, and Arsenal are all already under contract and we have budgeted another $5 million for a celebrity to headline our Puma Fit and Puma Performance lines. Rihanna has a $1 million contract, Usain $10 million, and Arsenal $30 million and therefore we settled on $5 million as this should allow us to recruit 2 big name brand ambassadors. In addition to individual brand ambassadors, we suggest Puma sponsor a major sporting event, such as London 2017. This will likely cost around $40 million dollars considering Forbes reports FIFA generated $400 million from the 10 sponsors in the last World Cup. The next major expense is print advertising. We will focus solely on four magazines to target our segmented markets: Sports Illustrated, ESPN Magazine, Women’s Health, and Cosmopolitan. Placing advertisements in each of these every two weeks for the first six months and then once per month over the next six months will cost $12 million. This should give us exposure to approximately 164 million consumers of sports apparel on a weekly and monthly basis. Lastly, we realize that these changes to the marketing and social media strategies will require restructuring. For that purpose, we propose hiring external consultants for six months to guide Puma and transform the team in the transition process.

Calendar

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Measurement Plan:

Revenue Generation

PUMA’s revenue grew a modest 4.3% in 2015. Based on recent market result for a campaign ran by UA (Ad Age’s 2014 Marketer of the Year: Under Armour) we have conservatively estimates a growth of 25% in year 1. It is important to note that UA received their returns of 20% on far higher revenue than ours. In our campaign we are looking to grow a revenue pool that is half of that of UA and our budget is 3x what they spent. UA had significant momentum and revenue growth (circa 20% for its 18th consecutive quarter).

Market Share

From our recent marketing campaigns launch by competitors (UA) and previous campaigns we have done we expect to increase our market share 2.4% to 2.9%. This is based on our projected increase in sales (25%) relative to revenue growth in the sector (2.5%). See exhibit 10 for calculation.

Level of Social Media Interaction

Puma currently employees Digitas to manage their social media strategy. This will continue into the future. Based on a recent campaign to launch Rihanna’s collaboration with Puma we expect to receive one impression for every $0.30 invested in social media. We have budgeted an additional $5m for brand ambassadors who will promote Puma via social media. Across all platforms we are estimating 16 million impressions. See exhibit 9 for current numbers.

Foot Traffic in Stores & Online Visits

We expect the level of foot traffic to rise by 4.2% in 2017. This is based on current predictions (Puma Financial Statements 2015) plus our expected increase in customer number due to a more friendly shopping experience in our renovated stores. We will monitor the number of online visits to our website and expect to see an increase at the rate of 1% - 3% of the of increase in social media impressions (Display Advertising Clickthrough Rates).

V. Rationale:

We approached the development of this marketing strategy for Puma with an open mind and it allowed us to create our strategy based on market data and fundamental marketing frameworks.

By exploring the different attributes, emotional connections and the engagement consumers make with their sports apparel, we gained a great insight and understanding into what consumers value, their buying patterns and the DMU. Leveraging this knowledge, we segmented the market to find consumers who met the criteria identified. These segments have needs that match our capabilities, this is a key part of our strategy as we are marketing to segments who will pay for and value our products. Across the targeted segments Puma has higher brand recognition (Brands Owned by Affluent Americans), this strategy will allow us to grow our market share from the strongest base we have available. Having identified potential customer segments and their buying process we began to work backwards to our product, company capabilities and evaluated our brand, brand positioning, the supply chain and collaborations.

The strategy is within the capabilities of Puma. We are in a unique position: we have skilled teams with years of experience, expert external consultants to help us launch