History( Three Phases)

History( three phases)

Phase I 1924 – early 1980s: • •

1924 – Two brother co-founded “Dassler Schuhfabrik” 1948 - split – Rudi set up “Puma Schuhfabrik Rudolf Dassler”

Strategies: • First company used “Vulcansation” techniques and “Velcro” fastener • 1952, Sponsored the German national football team • Sponsored top-soccer players:  Pele(Brazil)-1970 FIFA World Cup  Diego Maradona (Argentina)  Johan Cruyff (The Netherlands)  Fellow Germans: Rudi Voller and Lothar Matthaus • Sponsored German tennis player:  Boris Becker who became the youngest player to win the Wimbledon Championship Result: • Footwear: 1970s and early 1980s – Puma AG –one of the most promising footwear company in the world • Tennis Gear: Puma would overtake ‘Adidas’ to become the world’s leading tennis gear producers Brand Image: • An exclusive brand that catered to the demand of the elite • Synonymous with the best in contemporary sport

Phase II: 1980s to 1993 – on the endangered list • •

1974 – Rudi’s son: Armin took over as CEO 1986 –Went Public Dassler family sold its share in the company –resignation of Armin

Strategies: • •

Make affordably priced met all classes needs Sold at discount shops and department stores at very cheap rates

Results: • Undoing of Puma’s image • The elite and affluent class started avoiding Puma products

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Lack of proper leadership after Armin’s resignation Posted constant losses between 1986 -1993 In later 1993, on the verge of bankruptcy: totaled lost was $32 million and was saddled with $100 million in debt

Brand Image: Cheap and negative

Phase III: 1993-current •

1993 – Zeitz took over as the CEO

Strategies (two stages) Stage I: 1993- 1997 –Restructuring (streamlining Puma’s Production) • Reducing the cost overheads of the company by streamlining the organization in to a more cost-efficient one: • Reduced employees from 719 to 367 • Closed down German factories • Subcontracted the entire production to countries like China, Vietnam, Taiwan and Turkey • Purchased the licensing rights for the U.S. –Enable Puma to regain control over the distribution of its products in the U.S. market. Stage I results: • The restructuring phase reached completion in 1997 • Posted record revenue of 37 million euro • Recorded positive cash flows • Paid off all the debts Stage II: Launched a campaign to make Puma the world’s greatest spot Lifestyle manufacturer • •

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Soul-searching: went to five target markets and just went did focus groups and talked about what Puma was back then and what Puma could be Differentiation: design-driven approach – a very stylish and fashionable approach  CO-OP - Collaborated with world famous fashion designers: o Jil Sander o Neil Barrett o Yasuhiro Mihara : 02 Mihara collection (kickboxing)  Created up-scale fashion ranges: o Pumaville o H Street Celebrity endorsements:  Approached Monarchy Enterprise (purchased 40% until June 2003) –exposure Puma’s in blockbuster movies like “JFK” and “Pretty Woman” and hit TV shows like “Friends” and “Will & Grace.”

 Brad Pitt, Gwyneth Pallrow and Madonna began purchasing Puma products for their personal used • Sponsorships : various from athletes, teams, and events  Sponsor promising athletes who is unconventional and mirrored Puma’s image of being a rebel against established principles: o Serena Willians (US tennis player) o Wilson Kipketer (Danish Runner) o Barry Zito (US Baseball Player) o Italian, Bulganan, Cameroon Soccer team o Lazio, an Italian Soccer club  Sided with the “underdogs” of the sport world o Jamaican Soccer team – great personality (fun)  Signed contracted to equip world-class Formula 1 teams  Supplied sportswear for the “FIA World Rally Championship” – the “Ford Rally Division”  Provided sport gear for Travis Pastrana – the freestyle “Motocross” world Champion  Took up a sponsorship deal with the boxing sensation Oscar De la Hoya – hold on the boxing market  Attained its first National Rugby Union asset in 2005 • Launching of exclusive product lines New collection – the wearer is able to tackle any environment with confidence Shudoh – is a fully integrated collection of footwear, apparel, and accessories. Using carbon fiber materials into PTC ). The new PTC offering players two choices: greater cushioning or more rigidity and stability. Complete- high-performance running shoes was designed with the serious athlete in mind (cell technology) Nuala - created by supermodel Christy Tulington – designed to meet the work, travel and exercise needs of the modern-day woman (incorporates the finest fabrics). Puma expanded the collection to include a greater variety of footwear, appeal, and accessories. Rudolf Dassler Schunfabrik – carry the identity of original sport-influenced products to today’s casual sneaker market. For instance: 01 collection is brought the traditionally heavy staid worker boot to leisure boot (fun to work) Platinum - melding the words fashion and sport by developing cutting edge styles and looks. • Set up its own chain of exclusive stores  Owned 28 boutiques across the major fashion centres of the worlds (11 in USA) in 2003 • Advertising Advertised on “MTV” – enhanced its image of a rebel against social standards Stage II results: • Being featured in exclusive boutiques along with luxury lifestyle brand like “Prada” and “Gucci” • 1998, Puma’s image received a phenomenal boost when Jamaican pulled off an unexpected victory in the 1998 Soccer World Cup.

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Global brand sales grew by 22.6%, had a 4.5% share of the $17 billion global athletic footwear market in 2003 Strong order backlog increased in 2004

Image: Hi-fashion sport lifestyle brand - Rebellious - Dare-to-be different - It is about Prestige, not size! Current: 1. The majority of Puma’s stocks started to be owned by Pinault-Printemps-Redoute (Gucci’s Owner) on 17 July 2007 2. Reported its profits had fallen by 26% due to higher costs linked to its expansion, and sales actually rose by mote than a third