College of Business and Economics

Ramon V. Del Rosario Sr. Graduate School of Business

Case Study

Puma Socks

In Partial Fulfilment of the Requirements

in Marketing Management

Submitted by:

-Group 3-

Dimayuga, Maco
Macalanda, Richard
Ramos, Ava Marie
Realo, Glenn
Wang ,Grace

Submitted to:
Professor Emilio Bruan

Date submitted:
November 6, 2009
I. Summary of Case Facts

Strengths

 Puma is known to be the top-of-the-line sports socks with over four

decades of solid track record in the hosiery industry and established
reputation as the socks authority.
 Puma Sports Socks is a brand exclusively licensed in the Philippines to
Burlington Industries, a corporation known for its innovative and quality
products.
 In terms of promotions and events, Burlington partly relies on the
familiarity of the people with the international brands that they carry. For
instance, every Puma International advertisement should benefit the
company’s Puma socks as well.
 Burlington is affiliated with several related industry associations such
as Philippine Exporters Confederation, Inc., Philippine Garments Industry,
The Hosiery Association, and Philippine Retailers Association. When
businesses are part of a group, they can share best practices with each
other.
 Driven by Burlington’s corporate vision, to be the leading quality socks
manufacturer, the company has done modernization of machines,
innovations in design, intensification of its Research and Development, and
has taken more aggressive steps to establish its presence more widely in
the Philippines.
 The company believes that it manufactures a more extensive line of
socks and in broader price range than any of its competitors allowing them
to capture additional market share. In fact, Burlington is able to capture
41% of the market.

Weaknesses

 As for Puma’s attributes, since it has been registered and licensed with
Puma International apparel, it is limited only to the standard sports socks
made up of thick knitting and the Puma logo and design that is known
internationally.
 In terms of price, Burlington finds it difficult to pull down prices of Puma
as it may affect the quality of the socks.
 Financially speaking, a huge portion of Burlington’s current assets is tied
up to inventory. Looking at its debt and equity ratios, the company is
financing its operations mainly from debt.
 Based from the data in the case, it can be assumed that Burlington has
not clearly defined its target market and properly positioned Puma’s brand.

Opportunities

 Around 40% of Puma’s sales came from SM Department Store.

Burlington can further boost up its sales should SM put up additional
department stores in other areas.

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  Sock-making industry has gone machine-intensive. This means better
workmanship since machines come up with consistent outputs which are
very critical in maintaining high quality.
 The consumer’s buying decision process is affected by seasons and
trends; for example, sales peak up during first days of school and during
Christmas season.
 There is a possibility that individuals could be much more aware of
socks as a means to a more hygienic way of wearing footwear.
 Socks could be used to make fashion statement amongst the fashion
conscious.
 Since Puma has been involved with PBA, any CSR activity of the PBA
league would naturally involve the company.

Threats

 Tight competition with Dickies, Nike and Adidas in terms of brand image
and price.
 Burlington competes with numerous brands and manufacturers of socks,
some of which may be significantly larger and more diversified and have
greater and other resources than the company.
 The summary of the customer survey made by the company for class B
market showed that Puma is perceived as exclusive socks for boys.
 Manufacturing of socks involves the use of chemicals. These chemicals
are harmful to humans upon contract even with just the emitted fumes.
 Purchases of apparel tend to decline during recessionary or other
periods of uncertainties regarding future economic prospects, which could
affect consumer-spending habits and have an adverse effect on the
Company’s results of operations.
 Cheap imports from China have been a continuing threat. Couple this
with increasing prices due to inflation and a stagnant minimum wage, a
large portion of the Philippine population would rather have cheap but
substandard goods rather than their counterparts. This would mean that
Burlington’s products would have to compete with cheaper imported
products from other parts of the world.
 Since the company also imports a substantial portion of its inventory
from China, this could mean higher costs of importation for Burlington.
 Makati City’s re-zoning of their plant’s and office’s location from
industrial to commercial. This would in effect raise the tax rates for the
company and greatly affect its bottom-line.
 Recent trend towards a more care-free lifestyle with regard to the
proliferation of ‘flip flops’ and branded sandals could mean a lesser market
share for the company.

II. Company Issues

 Burlington has a dire need to consider what further segmentation,

targeting and positioning strategies they need to develop to strengthen
Puma Socks brand.

MARKETING MANAGEMENT – PUMA SOCKS 3

  The company needs to think of favorable consumer behavior and
attitudes factors that can be leveraged to achieve Puma’s branding
strategies.

 The company has to discuss what marketing communications strategies

can be availed of to project Puma’s International renown as a sports socks
brand.

Statement of the Problem

 What can be done to establish a distinct brand image for Puma which
will differentiate it from the other in-house brands of Burlington and from
competition?

IV. Objectives

 To identify the barriers that prevents Puma Sports Socks target market
from buying the product.

 To formulate strategies or decision options that would establish a distinct

brand image for Puma Sports Socks.

 To recommend specific plans of action and provide marketing programs

which will strengthen Puma Sports Sock Brand.

V. Decision Options

Decision Option #1:

Further define target market by specifically identifying demographic,
psychographic and behavioral characteristics of PUMA Sports Socks
consumers.

Advantage:
 Identifying a well-defined target market enables Burlington to create a
more fine-tuned product offering. Thus, it helps Burlington to position
Puma Sports Socks effectively and appropriately.
 This action helps Burlington easily select the best distribution and
communication channels, and gives them a clearer picture of its
competitors, which are the companies going after the same segment. By
identifying the best distribution and communication channels, segments
can be effectively reached and served.
 Through concentrated marketing, Burlington gains a strong knowledge
of the segment’s needs and achieves a strong market presence.

Disadvantage:

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  The company has to develop separate marketing plans for this
particular segment. This requires extra marketing research, forecasting,
sales analysis, promotion, planning, and channel management. Thus, it
entails additional administrative costs.
 Concentrated marketing involves risks. A particular market segment
can turn sour. When consumers of Puma Sports Socks stop buying the
product, earnings will drastically fall; or a competitor may invade the
particular segment.

Decision Option #2:

Clearly communicate the central idea behind Puma Sports Socks’
brand to its target customers. The company shall implement benefit,
user, and attribute positioning strategies to reposition Puma’s brand.

Advantage:
 Clearly communicating the central idea behind Puma Sports Socks’
brand delivers a distinct image about the product offering to the target
market. This gives customers a clear picture of what the product
promises or delivers.
 Repositioning the product’s brand creates a customer-focused value
proposition, giving the target market the reason to buy the product.

Disadvantage:
 Repositioning Puma Sports Sock’s brand also involves additional
administrative costs. This requires every tangible aspect of product,
price, place, and promotion to support the chosen to positioning
strategy.
 As Burlington increases the number of claimed benefits or features for
Puma Sports Socks, they risk disbelief and a loss of clear positioning. In
short, Burlington runs the risk of committing a major positioning brand –
underpositioning, overpositioning, confused positioning, or doubtful
positioning.

Decision Option #3:

Re-engineer market offering along product, channel, and image
dimensions to make Puma Sports Socks distinct from competition.

Advantage:
 Consumers will be able to easily distinguish Puma Sports Socks from
other competing brands or Burlington’s in-house brands.
 This will create a highly differentiated picture of Puma Sports Socks in
the target market’s mind.

Disadvantage:
 Puma, being registered and licensed with Puma International apparel,
is limited only to the standard sports socks made up of thick knitting and
the Puma logo and design that is known internationally. Hence, it would
be difficult for Burlington to completely alter the physical attributes of
the product.

MARKETING MANAGEMENT – PUMA SOCKS 5

VI. Recommendation

The group recognizes that all marketing strategy is built on Segmentation,

Targeting, and Positioning. A company discovers different needs and groups
in the marketplace, targets those needs and groups that it can satisfy in a
superior way, and then positions its offerings so that the target market
recognizes the company’s distinctive offering and image. This implies that a
company with clearly defined target market has an advantage of positioning
their products or services more effectively. And by having an excellent job
on positioning, the company can work out the rest of its marketing planning
and differentiation from its positioning strategy. On the other hand, a
company who does not have a clearly defined target market may result to
poor positioning, which can then make the market confused as to what to
expect from the product being offered.

In this regard, the group recommends Decision Option #1 (Further

define target market by specifically identifying demographic,
psychographic and behavioral characteristics of PUMA Sports Socks
consumers.)

VII. Programs / Action Plans

In relation to our recommendation, Burlington has to specifically segment

its market as follows:

 DEMOGRAPHIC
 Gender: Male, Female, Children
 Age: 4-7, 9-12, Teen-aged boys and girls, Adults
 Social Class: Upper Middles, Lower Uppers, and Upper
uppers

 PSYCHOGRAPHIC
 Lifestyle: Sports-oriented, Outdoor-oriented, Fashion-
conscious
 Personality: This variable can be used to segment
markets by endowing products with brand personality that
corresponds to a target consumer personality. In this case,
Burlington may wish to make Puma sock’s brand appear Energetic
and Stylish.
 Benefits: Buyers can be classified according to the
benefits they seek. People vary considerably in the benefits they
seek from the same product. In the case of Puma, Burlington
should emphasize the durability and design of its sports socks.

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To reinforce Puma’s modified market, Burlington may implement the
following marketing programs to promote their product:

 Burlington could select one of the preferred universities in the country

and support its scholarship for athletes. Moreover, Burlington in
coordination with Puma Philippines may grant universities to co-brand its
merchandise. For instance, Adidas Philippines gave the global brand the
exclusive right to co-brand DLSU merchandise. This could pave the way
for them towards the development of more collegiate programs. By
doing so, Puma would be able to increase its popularity and establish its
brand’s reputation while helping deserving students through scholarship
grants.

 People are becoming more interested in running for one reason or

another; some may be for fun, friends and networking, health reasons,
etc. Whatever reason they may have, demands for running accessories
are becoming larger. This is the best time for Burlington/Puma to be
more active and assertive in sponsorships and an opportunity to become
more visible in the market.

 Also, they could sponsor athletic events to promote Puma Socks and
create brand exposure to the participants and the media. One example
of an event is fun-run, where participants will be given Puma Sports
socks.

 Burlington/Puma can also team up with energy drinks and other sports
drink as a form of advertisement.

 Puma Socks can gain a lot of attention from well-placed newspaper

and magazine stories and appearing visually in selected films.

 Burlington shall intensify its event marketing campaign. One project

they can implement is to put up an annual fashion show which will
feature the latest designs of Puma Socks. The concept can be patterned
from Bench Underwear or Massimo Bikini fashion shows. This will help
Burlington to showcase that Puma Socks can be worn by both genders.

 They could also promote loyalty card where the customers get a
discount every time they buy Puma and Burlington products. This will
encourage existing customers to patronize Puma Sports Socks every
time they would want to buy socks.

 Aside from the existing product lines of Puma Sports Socks, create new
set of socks specifically appealing to ladies with athletic fashion sense
and with active lifestyle.

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 Create billboards and utilize internet and mobile phone marketing that
promote Puma Sports Socks – focusing on its unique athletic yet stylish
design.

 Other advertising campaigns would involve hiring endorsers like Chris

Tiu and Rachelle Ann Daquis who are fitted with Puma’s description of its
target market – stylish and athletic.
 Burlington/Puma must also expand its distribution channel to efficiently
serve its target market. They may expand its operations to Ayala Malls
and Rustans. Furthermore, they shall continue distributing their products
to specialty stores such as Toby’s, Olympic World, Planet Sports, and
other Sports-related boutiques.

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