2. 1
A Project Report on
1. Consumer Behaviour
Do consumers know what brand ‘Puma’ represents?
Common tendencyof customers towards promotion campaigns.
Average Bucket Size & Bill Value.
2. LoyaltyPrograms
Capillary System: What is the reaction?
Advocate Scheme: Does it work?
3. Sustainability
Puma - 100 Feet Road Store
Bring me Back Bin
Clever Little Bags & Chargeable Carry Bags
PVC free products
Project Area: Marketing
Faculty Guide: Dr. Kiran Sharma
Project Guide: Mr. Kailash Joshi
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Acknowledgements
I would like to express my sincere gratitude to my company guide Mr. Kailash Joshi, Store Manager, Puma
Marathahalli for guiding me throughout my summer internship and research project. His encouragement,
time and effort are highly appreciated.
I would also thank Mr. Chirag for his unending support in my research project. It was a great learning
opportunity.
I would then like to thank my faculty guide, Dr. Kiran Sharma, for all her valuable inputs and support
throughout my project and providing me an opportunity to learn outside the classroom.
I would also thank my fellow interns for their valuable suggestions.
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DECLARATION
This report “Consumer Behaviour and Sustainability”, is done during mysummer internship program is submitted as
a partial fulfilment of the requirement of PGDM IB program of
KJ Somaiya Institute of Management Studies and Research, Mumbai
DATE 30/6/2014
Suraj Kumar Bothra
ROLLNO. 06
PGDM IB (2013-15)
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CERTIFICATE FROM FACULTY GUIDE
This is to certify that Suraj Kumar Bothra, a student of the Post Graduate Diploma in
Management (International Business) has worked under my guidance and supervision. This
Summer Project Report has the requisite standard and to the best of our knowledge no part of
it has been reproduced from any other summer project, monograph, report or book.
Faculty Guide: Dr. Kiran Sharma
Organization: KJ Somaiya Institute of Management Studies and Research, Mumbai
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Contents
Introduction 07
Strategy 07
Puma India 08
Global Sports Retail Landscape 10
India Sports Retail Landscape 11
Consumer Behaviour 15
Brand Awareness – Puma India 15
Customer reaction to Promotions 16
Average Bucket Size & UPT 17
Capillary System 17
AdvoCat Scheme 18
Puma 100 feet road 19
Bring Back Bin 20
Clever Little Bags 21
Recommendations 22
References 23
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Was ist Puma?
(What is Puma?)
Puma SE (officially branded as PUMA) is a major German multinational company that produces
athletic and casual footwear, as well as sportswear, headquartered
in Herzogenaurach, Bavaria, Germany. The company was formed in 1924 as Gebrüder Dassler
Schuhfabrik by Adolf and Rudolf Dassler. 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 is the sponsor of the Jamaican track athlete Usain Bolt. In the United States, the company is
known for the suede basketball shoe it introduced in 1968, which eventually bore the name of New
York Knicks basketball star Walt "Clyde" Frazier, and for its endorsement partnership with Joe
Namath.
Following the split from his brother, Rudolf Dassler originally registered the new-established company as
Ruda, but later changed 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 designs feature the
distinctive "Formstrip" with clothing and other products having the logo printed on them.
The company offers lines of shoes and sports clothing designed by Lamine Kouyate, Amy Garbers, and
others. Since 1996 Puma has intensified its activities in the United States. Puma owns 25% of American
brand sports clothing maker Logo Athletic, which is licensed by American professional basketball and
association football leagues.
Since 2007 Puma has been part of French group Kering (formerly known as Pinault-Printemps-Redoute
or PPR)
PUMA is one of the world’s leading Sports Brands, designing, developing, selling and marketing
footwear, apparel and accessories. For over 65 years, PUMA has established a history of making fast
product designs for the fastest athletes on the planet. PUMA offers performance and sport-inspired
lifestyle products in categories such as Football, Running, Training and Fitness, Golf, and Motorsports.
It engages in exciting collaborations with renowned design brands such as Alexander McQueen and
Mihara Yasuhiro to bring innovative and fast designs to the sports world. The PUMA Group owns the
brands PUMA, Cobra Golf, Tretorn, Dobotex and Brandon.
The company distributes its products in more than 120 countries, employs more than 10,000 people
worldwide, and is headquartered in Herzogenaurach/Germany.
Registered Office:
Herzogenaurach, Germany
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Official Company Language:
English
Stock:
The PUMA share is listed for official trading on the Frankfurt and Munich stock exchanges. It is trading
in the Prime Standard Segment and the Index SDAX of the German Stock Exchange (Deutsche Börse).
Shareholders (as of October 2013):
84 % Kering Group (Main Shareholder) 16 % of the PUMA shares in free float
Consolidated Sales:
PUMA’s consolidated sales for the financial year 2013 were € 2,985.3 million.
Strategy
Going forward, PUMA will be the Fastest Sports Brand in the World. This simplified mission will result
in a single brand purpose and a single consumer message. PUMA will be: "Forever faster". The
statement, a new tag line Puma will launch to consumers in 2014, reflects a 65 year history of making
fast product designs for the fastest athletes on the planet.
But "Forever" references more than just history, and commitment to classic products. It's a recognition of
the endless pursuit of whatever is next - in performance innovations, in cultural trends, and in style and
fashion. While "Faster" is more than just delivering the rational benefit of speed to athletes, Puma will
have a single minded purpose of celebrating faster in every sense of the word - lighter products, better fit
for greater agility, enhanced benefits that allow for extended training for speed, and every other possible
way Puma can deliver the fastest products for the fastest performers. The phrase simultaneously
references the emotional benefit of owning speed - the thrill, the fun, and the swagger of Usain Bolt
himself, the man who best personifies this new strategy and ambition.
While Forever Faster is the new brand platform for PUMA, it will also be the guiding principles for the
company in its action and decisions: Our objective is to be fast in reacting to new trends, fast in
innovations, fast in decision making and fast in solving problems for our partners.
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PUMA India
Puma Sports India Pvt Limited operates as a manufacturer and distributor of sports products in India. The
company offers footwear, apparel, and sports accessories for football, motorsport golf and everyday use.
The company was founded in 2005 and is based in Bangalore, India. Puma Sports India Pvt Limited
operates as a subsidiary of Puma AG Rudolf Dassler Sport.
The Puma brand deals in footwear, apparel and accessories. Of the four leading sportswear brands
available in India, Puma is the youngest - started India operations in 2005. The outlets of all leading
brands may number between 1800 and 2000, and Puma has 270 stores: 50 are company owned and, the
rest run by franchisees. Puma products are available at other multi-brand outlets, too. Puma India
business has been profitable since 2009, and about 15 per cent of revenues come from sales through e-
commerce platforms. Footwear accounts for 55 per cent of our sales, and we import them mostly from
Vietnam. With the Indian rupee slipping below Rs 60 to a dollar, imports will get costlier now. This will
generally have an impact on consumer spending.
When Puma entered the Indian market, the focus was mainly on the lifestyle segment since we always
had a foothold in that space. But in the last one and a half years, globally, Puma made progress in the
performance category. In India too, we have now entered the performance market in a big way with our
running shoe called the Mobium. When running, our feet expand anywhere between 4 and 6 per cent -
Mobium expands and contracts with your feet and thus creates a new running category called 'Adaptive
Running'. This is a first of its kind product to be introduced not only in India but also the world.
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PUMA is the Apparel Sponsor for Indian Premier League (IPL) team Sun Risers Hyderabad and the
official licensee of the best known names in Motorsport, including Ferrari, Ducati, Mercedes, BMW and
MINI. Indian cricketer Yuvraj Singh is the Brand Ambassador for PUMA India and Chitrangda Singh is
the Fitness Ambassador.
.
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Global Sports Retail Sector
The global retail sports apparel industry has grown rapidly over the last five years and is expected to
continue that trend as it reaches approximately US $125 billion in 2017 with a CAGR of 6% over the
next five years. Increase in demand for sports-style apparel and favorable demographic conditions
throughout Asia are expected to boost the sports apparel market during the forecast period.
Lucintel, a leading global management consulting and market research firm, has analyzed the global
retail sports apparel market and presents its findings in “Global Retail Sports Apparel Market Analysis
2012–2017: Market Trends, Profit, and Forecast Analysis.”
The sports apparel industry comprises various enterprises that are primarily engaged in the
manufacturing and retailing of new sports apparel and accessories such as running and training apparel,
golf wear, lifestyle apparel, soccer uniforms, baseball and softball apparel, as well as the clothing worn
for participating in many other sports. As per the study, the sports apparel industry is fragmented, with
the top five and the top 10 players accounting for approximately 21% and 25% shares respectively in
2011.
Although North America currently dominates this industry, APAC’s retail sports apparel market is
expected to lead the industry. APAC is forecast to grow at the highest rate among all the regions during
the six-year forecast period. The apparel industry is expected to extend its presence with rapidly growing
markets, with countries such as India, Indonesia, and Vietnam providing significant potential for regional
and global sporting apparel brands.
The sensitivity of the industry to seasonal conditions and frequent changes in consumer taste and
preference are some of the challenges being faced by retail sports apparel industry. Among the factors
that drive growth in the industry include increasing individual sports and athletic participation, changing
lifestyles in emerging economies, and the continuing growth in awareness for health and fitness are likely
to drive the sports apparel market.
Lucintel’s research report is a cost-effective tool that portrays the key aspects of the retail sports apparel
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industry, providing the reader with the most up-to-date and useful analysis of the market to support
confident and timely decision making.
Indian Sports Retail Sector
Sports retail is a small but fast growing segment of modern retail in India. Recently, the country has been
hosting many international sports and this has given a boost to this sector. Many foreign and domestic
corporate retailers have entered sports retail. Sports goods manufacturing is a focus area in the Foreign
Trade Policy (2009-2014) and the government is taking a fresh look at the current foreign direct
investment policy in retail.
There is no formal definition of sports. It can be a game, a fitness activity or an organised competitive
sport. Competitive sports are governed by a set of rules often designed by national or international sports
organisations. Sports can also be a recreational activity. The same sport can be played as a competitive
sport or a fitness activity (for instance, swimming or cycling). Different people treat sports differently.
For some, it is a profession, while for most it is just a means of recreation and staying fit. Sports can be
an indoor activity or an outdoor activity. It can be a team activity (for example, cricket and hockey) or an
individual activity (for example, squash). While most sports are associated with some form of physical
activity, there are some sports, like chess, which do not need strenuous physical activity. Globally, there
are a large number of sports, and each can be played in multiple formats. For example, volleyball can be
played on court, grass, or beach. Similarly, cricket can be played in the one-day, test match and twenty-
over formats. Some sports have received international recognition while others can be country specific,
regional and even local, played by a limited number of people. The recognition of sports, its
classification and formats may vary across countries. All sports require some kind of infrastructure, but
the requirements vary across different sports. For example, team sports like football, cricket and hockey
require stadiums while chess can be played in a room with a chessboard. Similarly, all sports require
some sports product. For instance, a person can stay fit by running for which he needs a running shoe or
by skipping for which there is a requirement of skipping rope.
Sports like cricket, hockey and tennis require equipment like bat, balls, kneepads, specialised shoes and
racquets. Some sports like shooting and motor racing require sophisticated infrastructure and technology-
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oriented, expensive equipment while equipment for sports like cricket, badminton and tennis are
available at all price ranges and are easier to purchase and store. Overtime, across all sports, equipment
has become more sophisticated. For instance, lightweight metal sticks have now replaced the wooden
hockey sticks. In the past, many sports equipment/goods were unbranded, but with increased
sophistication and research and development, branding and specialised equipment manufacturers have
emerged. Proliferation of brands and specialisation in manufacturing has led to the growth of sports
product retailing.
Sports retail is a niche segment of retail. It generally refers to retail sale of sports goods/equipment,
apparel, shoes and accessories (such as sunglasses, watches, headband etc.)
For instance, Reebok sells products for a number of sports including football, rugby and tennis while
Nordica (Italy) specialise in footwear, equipment and accessories (jackets, gloves, etc.) for a single sport
– skiing. They can cater to niche consumers (like in the case of racing cars) or a large number of
consumers (as is the case for a tennis racquet).Sports products can also be used as a casual wear or a
lifestyle product (for instance, a Reebok t-shirt). Sports retailers generally decide how they would
position their products. For instance, the German company Puma AG Rudolf Dassler Sport (brand Puma)
has positioned itself as a sports and lifestyle company that specialises in footwear, apparel and equipment
for a number of sports including athletics, football, golf, sailing and motor sports.
A sports company (whether a retailer, brand or manufacturer) exploring the global market, therefore,
needs to know its market, and re-orient its products and strategies and customise its products to meet
consumer preferences. For instance, brands like Reebok and Nike have modified their global strategy; in
India, they sponsor cricket and retail cricket equipment, clothing and accessories.
They liaise with international federations to get their products/brands recognised and for global reach.
Within a country, they co-ordinate with national federations (who follow international norms) to get their
products/brands approved. They also work closely with individual sportspersons and private sports clubs
and associations to popularise and market their products.
Private participation has increased the retail market for sports. For instance, private team owners of the
Indian Premium League (IPL) in
Cricket have contracted the team apparel to brands like Reebok, Nike, Adidas and Puma. This has
increased retail sales.
Foreign brands such as Adidas and Lotto have had a presence in India for a long time in the footwear
segment through multi-brand retailers like Bata. Hence, these brands were known even before they
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formally entered India through exclusive outlets. Normally, brands enter India through multi-brand
outlets and gradually establish a presence through exclusive brand outlets once the Indian consumers
become aware of the brand.
The survey found that foreign brands have entered the Indian market through multiple routes. For
instance, Nike initially entered the market in 1995 under an exclusive seven-year licensing agreement
with Sierra Trading Enterprise; in 2003, it established a wholly -owned subsidiary. Brands such as
Reebok, Puma and Adidas have wholly owned subsidiaries in India. They source products from India
both for domestic and foreign markets and have an integrated operation encompassing sourcing,
distribution and retailing. Since they are incorporated in India, they are considered to be Indian
companies. Others, like Technogym, has entered through a distribution agreement, whereas Lotto entered
through a licensing agreement, which gave it the right to manufacture, source locally and distribute
products. Others, like Lacoste, enter through franchisee agreements. Some have a mixed model of
licensing and distribution agreement or franchising and distribution agreement. Most sports brands have
positioned themselves as sports-cum-lifestyle brands.
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Although Indian consumers are less oriented towards sports, the failure to associate with a sport may
adversely affect the retail of the brand. In fact, brands like Kappa, which had positioned themselves only
as lifestyle products, have not been very successful in India while others like Puma, which have
positioned themselves as both sports and lifestyle products, have been successful. An association with a
sports event is the key to the success of a sports brand and, therefore, the retail of that brand in India.
Successful brands like Reebok, Nike, Puma and Adidas have associated themselves with popular sports
like cricket. Some international players are working closely with federations and sports development at
school, colleges, clubs etc. For instance, in the past, Indian brands had a dominant position in the school
shoe market but now foreign brands like Reebok have entered this segment. This is an important segment
for volume sales. Of late, there has been an increase in brands for sports like golf and motor sports;
examples are Callaway (Golf) and Ferrari (Motor Sports). The survey found that most successful brands
have carefully planned their brand positioning, sports sponsorship, pricing and selection of Indian
partner. The Indian franchisee partner is carefully selected on the basis of a sound financial background,
experience in the trade, and ownership of shops in prime locations. The parent company provides training
to the franchisee and their employees.
All successful foreign brands in India have re-oriented their products to meet local tastes and
preferences; for instance, since Indians have broader feet in front than Europeans, Reebok has customised
its footwear for Indian consumers. To cater to the niche market, Reebok also associates with designers
from the National Institute of Fashion Technology (NIFT), Footwear Design Institute and famous
designers like Manish Arora to design their product range, generate niche products and become
competitive.
The Indian market is also unsaturated in terms of retail spread. The bulk of corporate retailers are
concentrated in large cities but established players such as Reebok and Adidas are now penetrating Tier
II and Tier III cities, while relatively new players like Lotto are planning to expand beyond metropolitan
cities. The growth of sports retail in Tier II and III cities has been propelled by the establishment of IT
and other companies in these cities, development of housing complexes with facilities for sports like
swimming and tennis and the development of malls, which has increased sports awareness. However, the
penetration of sports retailers in smaller cities is somewhat restricted because of poor availability and
access to sports infrastructure. The survey also found that “right-pricing” of the product is important for
penetration beyond metro cities. Companies like Reebok and Adidas have designed right-pricing policies,
as a result of which they saw an increase in sales of over 70 per cent in semi-urban areas.
The survey found that Indian companies manufacture for a large number of foreign brands including
Reebok (Germany), Puma (Germany), Lotto (Italy), Nike (US), Adidas (Germany), Fila (Italy/Korea),
Rawling (US), Dunlop (Australia) and Spalding (US). The number of foreign brands sourcing from India
has increased in recent years.
This has increased knowledge about Indian manufacturing and the domestic market among foreign
retailers. Indian companies are also trying to diversify into new product categories like ski equipment
(which has limited demand in the domestic market) and golf balls (largely exported to countries like
Germany). During interviews, manufacturers and retailers pointed out that technology is percolating
down from brands/foreigner retailers to Indian manufacturers. Manufacturers are sometimes sent abroad
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to learn the requisite technology (for example, Nike). Reebok was among the first to enter India and the
biggest challenge for the brand at that time was to upgrade factories and provide them with appropriate
technology and training. Many Reebok contractors re-equipped their factories and upgraded the
technology to meet Reebok’s requirements. Some clients like Nike strictly monitor quality,
environmental, labour and other standards. Thus, the entry of foreign retailers has helped manufacturers
to upgrade and attain global standards.
……………………………………………………………………………………………….
1. Consumer Behaviour
The studyof consumers helps firms and organizations improve their marketing strategies byunderstanding issues
such as how
The psychologyof how consumers think, feel, reason, and select between different alternatives (e.g., brands,
products, and retailers);
The psychologyof how the consumer is influenced byhis or her environment (e.g., culture, family, signs, media);
The behaviour of consumers while shopping or making other marketing decisions;
Limitations in consumer knowledge or information processing abilities influence decisions and marketing outcome;
How consumer motivation and decision strategies differ between products that differ in their level of importance or
interest that theyentail for the consumer; and
How marketers can adapt and improve their marketing campaigns and marketing strategies to more effectivelyreach
the consumer.
A. Do consumers know what brand ‘Puma’ represents?
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B. Tendency of customers towards promotion campaigns
C. Average Bucket Size &Bill Value
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…………………………………………………………………………………………………
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2. LoyaltyPrograms
A. Capillary System: What is the reaction?
Capillaryprovides easy-to-use, high-ROIcloud software solutions that empower retail businesses to engage
intelligentlywith their customers in real time through mobile, social, online and in-store channels. With a visionto
build the first billion-dollar product companyout of India and to become a major player in the booming mobile and
retail sectors, the companygot its start byproviding businesses in emerging economies (mainlyIndia and South-East
Asia) affordable access to state-of-the-art customer relationship and loyaltymanagement technology. By
emphasizing paperless mobile technology, real-time analytics and consumer engagement, marketing life cycle
automation and sophisticated, innovative analytics that surpass capabilities of much larger, more expensive and
complex customer relationship management (CRM) solutions, Capillaryquicklyattracted the attention of large
global retail brands – and venture capital. Rapid growth has enabled the companyto build out a complete, end-to-end
software-as-a-service (SaaS) CRM platform, encompassing customer engagement, clientele, loyalty, big data
analytics and social CRM suites. Capillarynow serves over 140 major global brands, including Pizza Hut, Puma,
Jack Wills, Marks & Spencer, Benetton, Courts, Nike and Nokia, across 10,000+ stores and over 70 million
consumer interactions.
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B. Advocate Scheme: Does it work?
AdvoCAT is a mobile-based loyaltyprogram designed exclusivelyfor PUMA customers. The program
membership entitles you to rewards and privileges. AdvoCAT does not require you to carryanyloyaltycard in
your wallet. You just register your mobile number once and mention the same number each time you shop
with PUMA.
Instead of a physical card, PUMA considers one’s unique mobile number as his/her identification. Upon
registration the customer receives a confirmation message. When you shop with PUMA, the registered mobile
number has to be quoted at the cash desk. The total purchase value and points of the customer since
registration will be updated accordinglyagainst his/her registered mobile number.
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#Customers Reaction towards AdvoCat Scheme
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3. Sustainability
A. Puma - 100 Feet Road Store, Bangalore
PUMA launched its first sustainable store on 100 Ft. Road in Indira Nagar, Bangalore. With this store,
PUMA claims to have revolutionized the concept of retail spaces in India. This launch event was executed
byCream Events, who have a long-standing relationship with Puma. Poised to be the flagship store for
PUMA in India, the store is a global first for the brand.
Conceived byPUMA India, in collaboration with the PUMA EEMEA (Eastern Europe, Middle East &
Africa) Regional Office, the store is spread over 5,000 sq. feet and incorporates the elements of
sustainabilitythrough innovative design, mechanical and electrical installations, and material selections.
The store retails a range of merchandise made from organic (pesticide-free) cotton as well as PUMA's
Wilderness Collection - a range primarilysourced and produced in Africa using environmentally
sustainable materials and certified bythe Aid byTrade Foundation (AbTF). For the first time in India, the
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Sustainable Store also introduces PUMA's global ‘Bring Me Back I:CO Program' - an in-store recycling
program for footwear, apparel and soft accessories.
B. Bring Back Bin
The PUMA “Bring Me Back” program, which is run in cooperation with global recycling company I:CO,
aims at encouraging the recycling and re-usability of sport lifestyle products among consumers by
providing a convenient and simple process: Consumers bring used shoes, clothing and accessories from
any manufacturer to a PUMA Store and deposit them in the designated Bring Me Back bins. The used
products are then sent off to be re-used or recycled. This means they are either broken down or re-used to
create raw materials, or they will be re-used in case they are still in a suitable condition, or they will be
recycled into new products. With this new initiative PUMA helps to protect the environment, aspiring to
eliminate waste by recycling used products to create new ones. This effort is one more step forward
toward the long-term goal of transitioning to a closed cycle loop for materials usage.
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C. Clever Little Bags
When it comes to reducing packaging waste and carbon emissions, plastic isn't the only material that
companies are looking to cut. The shoe and apparel company PUMA recently introduced its "Clever
Little Bag" - the company's newest initiative to reducing harmful waste associated with paper production,
transportation and disposal. The Clever Little Bag replaces traditional shoeboxes with a reusable bag
slipped over a recyclable cardboard box.
Although materials such as paper cardboard may be easy to recycle, the production of these materials are
still harmful to the environment - with large amounts of carbon emissions and energy required to process
and transport. The Clever Little Bag reduces paper material and weight for a lighter, eco-friendly and
reusable package that not only reduces energy use, but also reduces paper waste. In addition, the bag's
creative design includes a convenient handle, eliminating the need for a plastic bag to carry the box.
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Recommendations
Brand Puma and its facets are clearly not perceived by Indian Mass. Puma India can fine tune its
positioning as the colourful Sports Lifestyle brand.
To stand out (competing against Nike, Adidas and other brands) Puma already is doing a lot of
campaigns like Rock the Vote, Runners for Life which is clearly very effective. So Puma India
should continue and reinforce such events.
As interpreted from survey results, Promotional campaigns such as End of Season sale and Gift cards
are very successful. But to increase its effect Puma can redesign its product portfolio during sale time
so as to provide enough good choices.
Average units per transaction is around 2.4, so there is an immediate need to improve this by
consistent training and validation of fashion consultants.
Average transaction value is around Rs. 3000, which can be increased by setting up special exclusive
luxury stores with Premier Limited Collections such as Motorsports (Ferrari, BMW merchandise).
Capillary system shows dramatic effect on customer retention and ease in communication. One thing
which can be done is to assure customers of privacy so that they share their contact numbers without
hesitation.
AdvoCat scheme is acting like a magnet for customers. Actually it’s a delight, but surprisingly not
many customers are aware of it. AdvoCat scheme is clearly under-marketed, so it should be promoted
as much as possible.
Through campaigns like 100 feet road, clever little bags Puma serves social good in its unique
manner. If this continues, Puma will soon outplay other competitors who are stubbornly professional.
