Strategic Flexibility in the High Street

8/18/2019 Strategic Flexibility in the High Street

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Abstract

Strategic flexibility is given utmost importance today because of the ever changing

environment, which is very dynamic in nature. On the other side, there is the promotional

aspect of the marketing mix, which plays a very important role in the growth, and

profitability of the organisation. A good promotion strategy would help the overall

corporate strategy to be flexible. However, there is very little or no research done on this

topic of the relationship between strategic flexibility and promotion in the UK high street.

Therefore, the primary objective is to analyse the importance of the role of promotion in

strategic flexibility.

In this paper, firstly, literatures about strategic flexibility, promotional aspect and thechange in consumers perception due to promotional activities are displayed in order to

understand them from the academic point of view. After that taking PUMA AG as the

basis of the research, secondary data is collected. After data collection, an overall

analysis is discussed in order to assess the importance of promotion in order to attain

flexibility in the strategy, taking PUMA AG as an example.


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Table Of Contents

1. Introduction ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, 4

1.1 Brief overview ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, 4

1.2 Aim ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, 5

1.3 Research objectives: ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, 5

1.4 Dissertation structure ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, 5

2. Literature review ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, 67

2.1 Strategic flexibility ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, 67

2.2 Marketing Strategy ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, 68

2.3 Influences on marketing strategy ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, 69

2.4 Promotion ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, 6:

2.5 Puma AG ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, 6;

2.6 Strategic flexibility in promotion mix. ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, 65

2.7 Change in consumer’s perception due to promotion strategies ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, 6<

3. Methodology ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, 86

3.1 Research Design ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, 86

3.1.1 Exploratory research %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%

3.1.2 Descriptive research %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%

3.1.3 Causal research %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%

3.2 Data Collection ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, 88

3.2.1 Secondary Data collection %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%

3.2.2 Primary Data %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%

3.4 Research objectives ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, 89

3.5 Research Approach ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, 8=

3.6. Research Strategy: Case Study ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, 8:

3.7. Sample Population ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, 84

3.8. Data Analysis ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, 84

4. Analysis & Discussion ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, 8;

4.1 Marketing and Promotion ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, 8;

4.2 Strat egic flexibility and Promotion ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, 8;


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4.3 PUMA Analysis ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, 85

4.4 Strategic evolution of PUMA ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, 97

4.5 Strategy with respect to the changing trends ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, 96

4.6 Strategic flexibility and fashion ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, 98

4.7 Strategic placements of PUMA stores ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, 99

4.8 Importance of Innovation in PUMA’s success ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, 99

4.9 Strategy with competition ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, 9:

4.10 PUMA and CSR (Corporate Social Responsibility) ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, 9:

4.11 PUMA’s changing promotional strategies ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, 94

4.12 Interview Analysis ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, 9;

4.1 3 Conclusion ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, 95

5. Conclusion ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, =7

5.1 Introduction ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, =7

5.2 Research Analysis ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, =6

5.3 Conclusion ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, ==

5.4 Limitations ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, =:

5.5 Future Research ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, =:

6. References ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, =4

Interview ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, =<

Transcripts ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, :7


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1. Introduction

1.1 Brief overview

In the fast changing environment of today, which is defined by rapid technological

changes, global competition, high rate of emergent economic issues and short product

lifestyles surviving in today's global environment is a critical issue for firms. This is

especially in the high street which is characterised as a place where people gather to

socialise, celebrate events and shop. The companies are facing dramatic challenges due to

increase in channels which might be recognised as very convenient and reasonable to

make purchases.

Consequently, the rate at which customers visit high street stores has considerably gone

down after the recession. Therefore it is a critical issue for firms to survive in this

dynamic environment and deal with the problem of change. Due to the increase in

competition and ever changing environment many firms go bankrupt every day. In order

to tackle these issues organisations need to formulate flexible strategies which would help

them survive in today's dynamic market.

The role of strategy for an organisation in the high street is to attain competitive

advantage. Competitive advantage is the source which helps an organisation to satisfy its

consumers needs in a more enhanced way than its competitors. It can be through a

number of factors like product, services, technology, processes or culture.

The use of strategy is a way in which managers keep a tab of the constantly changing

external environment. A good strategy allows an organisation to optimally use its

resources, to tap the opportunities and to reduce the threats in the external environment

(Henry, 2008).

Managers need to possess a flexible strategy within the high street, which is greatlyquestionable and affecting environment prompting a response towards complications

promptly. Strategic flexibility can be defined as the capability of the organisation to

acclimatize itself to the significant, indeterminate and fast-moving changes in the

environment that have an important impact on the organisation’s performance. It focuses

on environmental changes that are significant enough to influence long term constraints


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and to compose a requirement for strategic adaptations (Aaker and Mascarenhas, 1984).

This strategic flexibility demands the managers to discover the right equilibrium between

committing the supplies essential to convey out a decision and bypassing into buying of

good cash in awful projects. .

In the 21st century, in this case of high street, managers found that the issue was hard to

detect as the environment changed so quickly and therefore they cannot react as they

could have before. Literatures suggest that strategy has emerged as an important topic for

researchers in recent years (Grewal and Tansuhaj, 2001; Kastsuhiko and Hitt 2004;

Nadkarni and Nareyannan, 2007; Sanchez, 1995, 1997).

There are different aspects of the marketing strategy which would help the overall

corporate strategy to be flexible. Being flexible in today's marketing environment is very

important because environment changing at a very high rate. Promotion is one of thosefactors. Promotion is an important aspect of the marketing mix as it attracts the end users

i.e. the consumers to the product. Several communications activities attempting to endow

with incentives or added value to consumers, retailers, wholesalers or other

organisational clients to rouse current sales are included in sales promotion. Sweepstakes,

point-of-purchase (pop), coupons, contests, premiums, rebates, samples and displays are

some of the examples of devices which are used in sale promotion.

These resources are expensive so their productive management is absolutely crucial to

gain optimum profit from the advancement expenditures. Close coordination is required

across the responsible entities in the organisation in order to combine these components

into dependable endorsement strategy (Cravens and Piercy, 2006).

The major benefits affiliated with promotional sales are a straightforward way to discover

clientele answer and it works fast. It is furthermore a cheap trading technique. Sales

advancement does not habitually convey affirmative influence to enterprise; sometime

this kind of promotion can give root to pessimistic brand impact on consumer’s mind in

the longterm. Therefore, by taking into account the cost of losing brand value, a

promotional technique is required to be planned. And so, marketers are required to be

cautious and must recognise the dissimilarity between advertising and sales promotion.

As stated above, promotional activities generally affect the consumer's perception about

different products. Promotion plays a vital role in the growth and performance of a


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product in the high street, where the competition is very high and survival is difficult.

It has been seen in the earlier researches that buyers’ purchase decisions are changed by

retail price promotions and also that in order to boost their sales, the retailers make use of

price promotions very frequently (Inman and McAlister, 1993). This makes promotion a

vital aspect of the marketing mix. Organisations understand the importance of the role

that promotional activities play in order to change the consumer's perception of their

product. They spend more than 50% of their revenues on promotion i.e. attracting new

customers and retaining the old ones.

1.2 Aim

The aim of this research is to understand the role of promotion in the overall strategy and

how it can help the strategy be flexible.

1.3 Research objectives:

1. To study the importance of flexibility in marketing strategy. 2. To study the role of

promotion in strategic flexibility. 3. Role of promotion in strategic flexibility, explain

with the help of PUMA AG. 4. The strategic flexibility followed by PUMA AG for its

recent success.

1.4 Dissertation structure

The structure of this dissertation follows through an examination and review of existingliterature related to research objectives whereby trying to gain an explanation about the

importance of the promotion strategy being flexible with an example of an organisation

(PUMA AG) operating in the high street. The next step describes the method used in the

research done and also its justifications for using secondary data sources for collecting

the necessary information. The next chapter involves analysing the data in order to see


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how different promotional aspects affect the consumers. Later based on the conclusions

drawn we would state the importance of the promotional aspect in order to achieve

strategic flexibility.


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2. Literature review

Literature review is a summary of the published and researched topics by researchers and

scholars.

As the objective of this study is to identify or explore the relationship between strategic

flexibility and promotion, taking the company PUMA AG as the basis for the study. It is

therefore, essential to have an overall view of each item and also the relationship between

these items.

Therefore, this chapter tries to utilise the numerous researchers from journals and books

so as to achieve the objectives.

2.1 Strategic flexibility

An enterprise’s ability to recognise transitions in the background and to rapidly dedicate

wherewithal to new activities as a reaction to the transitions and to immediately act when

it is time to stop or reverse such dedicated wherewithal is known as tactical adaptability

(Katsuhiko and Hitt, 2004). According to the opinion held by Edith Penrose (1959, p.24)

an enterprise is a set of wherewithal which are constructive and it is not the wherewithal

that act as the input for the manufacturing processes but it is merely the service that the

wherewithal actually provide. As per Sanchez (1959, p.25)), tactical adaptability relies

mutually on the intrinsic adaptabilities of the extant wherewithal in the enterprises and on

the enterprise’s adaptability in using those wherewithal to substitute activities. Sanchez

further adds that tactical adaptability includes wherewithal adaptability and

synchronisation adaptability; moreover under tactical adaptability an enterprise needs to

be able to employ adaptable wherewithal to direct those wherewithal in substitute

applications (Sanchez, 1997, p. 73). Wherewithal adaptability is typified by three facetsof possible applications of the wherewithal: (1) the extent of substitute applications to

which the wherewithal may be used; (2) the outlays and problems in alternatively

utilising one wherewithal to another (Sanchez, 1997, p. 73). The intrinsic attributes of the

wherewithal may be utilised to ascertain the wherewithal adaptability, while organisation

adaptability denotes the ability of the enterprise to utilise those wherewithal (Grewal and


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Tansuhaj, 2001). There are three facets in organisation adaptability: (1) classifying the

applications to which the firm’s wherewithal will be employed; (2) configuring

(recognising and formatting); and (3) using wherewithal through institutional structures

and procedures which employ extant wherewithal to intended applications (Sanchez,

1997). Organisation adaptability as per Sanchez (1997) focuses on how to classify,

configure and use the extant wherewithal. On the other hand, the forceful ability

viewpoint recommends that, when enterprises have to deal with extreme indeterminate

settings, they need to create their forceful abilities to amalgamate, develop and

reconfigure intrinsic and extrinsic skills to deal with the quickly altering settings (Sirmon

and Hitt, 2003; Sirmon et al., 2007; Teece et al., 1997). Dynamic abilities need not solely

depend on the enterprise’s extant wherewithal and abilities; they also need to comprise of

the enterprise’s capability to successfully get extrinsic wherewithal and skills andadditionally to control these in coordination to consistently develop novel wherewithal

and abilities (Eisenhardt and Martin, 2000). Furthermore, Ireland et al. (2003) indicate

that the ability to deal with the rising issues which essentially belong to the firm’s

dynamic ability and becomes a crucial aspect to attain an upper hand over other rivals.

Thus, depending on the forceful ability viewpoint, organisation adaptability also needs to

amalgamate the enterprise’s ability to discover new wherewithal and novel applications

of extant wherewithal for progress, and successfully lower the adverse influence of

greater environmental ambiguity. As a result, it is contended that organisation

adaptability denotes the enterprise’s ability to successfully and competently amalgamate

and use intrinsic and extrinsic wherewithal by discovering manners to augment the worth,

and quickly get unexpected advantages and gain an upper hand over rivals in the

ambiguous setting. Thus, as discussed there are four facets which detail the extended idea

of organisation adaptability: (1) discovering novel applications and/or novel

arrangements of extant wherewithal; (2) discovering new applications and/or novel

arrangements of new wherewithal; (3) using wherewithal quickly through institutional

systems and procedures to intended applications; and (4) dealing with the rising issues

successfully to enhance the advantage from a rapidly altering setting. Many analysts have

undertaken some superb researches and offered worthwhile information related to it

similar to the influence of tactical adaptability related to modernising the goods. For


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instance, Martinez- Sanches et al. (in press) signified that enterprises that are tactically

adaptable generally are competent to foresee market needs and react to them by suitably

producing creative goods and facilities. The researchers identified an affirmative

correlation amongst tactical adaptability and modernism by employing a sample of

Spanish enterprises and such an affirmative correlation is enhanced when the

environmental transition is more. Verdu-Jover et al. (2005) discovered that in a sample of

417 European enterprises that tactical adaptability has a crucial impact on the firm’s

reaction ability via modernisation. On the other hand, it is contended by few researchers

that tactical adaptability need not always provide input to creativity. It was discovered

that organisation adaptability strongly contributed to local enterprise creativity, while the

impact of wherewithal adaptability is adverse but not crucial (Li et al. (2008a, b)).

Irrespective of such studies, majority of the extant studies recommend an affirmativecorrelation amongst tactical adaptability and goods creativity. Tactical adaptability is

considered as a sole, combined concept in majority of the extant editorials, with Li et al.

(2008a, b) being one exception. On the other hand, due to the crucial variations amongst

resource adaptability and organisation adaptability, they may enact varied functions in

correlating product creativity and performance of the enterprises (Sanchez, 1995, 1997).

Consequently, the restraining impacts of wherewithal adaptability and organisation

adaptability on the correlation amongst product creativity and performance of the

enterprises would be evaluated independently in the current research.

2.2 Marketing Strategy

There are many common characteristics between the marketing strategy and the overall

company strategy. Marketing looks into the requirements of the consumer and the

organisations ability to satisfy them (Slater & Olson, 2000, 2001). Most of the strategic

planning of the company deals with the variables of marketing such as market growth,

market share, market development and it is at times difficult to detach strategic-planning

from marketing-planning. (Yin & Zajac, 2004)

Few companies term their strategic planning as strategic marketing planning. Marketing


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has a key role in the strategic planning of any organisation. Firstly, marketing gives a

leading philosophy- the strategies of the company should be according to the needs and

wants of the different consumer groups. Secondly Marketing helps the strategic planners

to discover the opportunities in the market and assesses the potential of the firm so as to

grab the opportunity (Zheng, Yang, & McLean, 2010). Lastly within each respective

business unit, on the basis of marketing certain strategies are designed to attain the unit’s

objective. Marketing management helps in attaining the different strategic objectives in

the different business units.

“Marketing strategy is a set of integrated decisions and actions” (Day, 1990, pp. 254) “by

which a business expects to achieve its marketing objectives and meet the value

requirements of its customers”, (Cravens, 1999, p. 14; Vardarajan and Clark, 1994, p/

87). It is related to making decisions about market segmentation and development andtargeting of a positioning strategy on the basis of distribution, promotion, price and

product decisions.

Johnson and Scholes (1986) state that, “marketing strategy for a company is to ensure

that the company’s capabilities are matched to the competitive marketing environment in

which it operates, not just for today but into the predictable future. For a commercial

organisation this means ensuring that its resources and capabilities match the needs and

requirements of the markets in which it operates. For a non-commercial organisation,

such as a charity or a public utility, it means achieving a fit between its abilities to serve

and the requirements of the public or causes it is seeking to serve.”

2.3 Influences on marketing strategy

The company’s objectives and mission are defined by the strategic plan. Marketing helps

in achieving the strategic objectives in the respective business units. . (Kotler, 1999)

Companies have to understand the external environment or the macroeconomic

environment in which they exist so as to plan and make decisions about the future events.

All the factors that have an influence on an organisation are included in the macro

environment and are out of control. A firm cannot influence these factors on its own and


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nor can these factors have an effect on the profitability of the firm directly. Any firm can

minimise its threats and maximise its opportunities by understanding the external

environment. Carrying out a strategic analysis involves a scanning of this macroeconomic

environment so as to understand and detect the long term, broad trends. (Kotler, 1999)

The marketing strategy of the company influenced by certain internal factors like the

suppliers, the various marketing channels, the public and the competitors. The marketing

strategy should be formulated after scanning these factors as they have an impact on the

whole company strategy.

After the company has decided its competitive marketing strategy, it is in a state of

preparing its marketing mix. In modern marketing, the concept of marketing mix is

considered as a central idea. We define marketing mix as “the set of controllable tactical

marketing tools that the firm blends to produce the response it wants in the target market.The marketing mix consists of everything the firm can do to influence the demand for its

product. The many possibilities gather into four groups of variables known as the 'four

Ps'; product, price, pace and promotion”. (Kotler, 1999, pp. 432)

“Product means the totality of 'goods and services' that the company offers the target

market”. Pistons, spark plugs, headlights, bolts, nuts, and many more are the Honda Civic

‘product’. Many civic styles and plenty of optional features are offered by Honda . The

car comes fully equipped with proper servicing, finance and warranty which are as

important as the car steering. (Kotler, 1999, pp. 437)

“Price is what customers pay to get the product.” The retail price that the dealers would

charge for each of its cars is suggested by Honda, but generally the full price is not

charged by the dealers. Rather each and every customer the dealers negotiate the price.

They provide credit terms, trade in allowances and discounts to bring the price of the car

with perceived cost and benefits by the customer and the current market situation. (Kotler

, 1999, pp. 439)

“Place includes company activities that make the product available to target consumers.”

Honda sells its cars through a set of dealerships which are independently owned. The

selection of dealers is done carefully and they give a strong support to them. The dealers

stock the Hondas cars, display and demonstrate them to the people, convert the potential

buyers to their customers, negotiate the car prices, achieve sales targets, arrange for


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finances, and do the after sales service.( Kotler,1999)

“Promotion means activities that communicate the merits of the product and persuade

target customers to buy it”. Honda spends hundreds of thousands on advertisement and

promotion every year to communicate and educate the customers about the company and

the products offered. Dealership salesmen assist the potential buyers and convince them

that the ultimate choice for them is ‘The Honda Car’. The company and its dealers offer

exceptional promotions like - cash rebates, sales, and low financing rates - as an added

purchase incentive.( Kotler,1999)

2.4 Promotion

The organisations promotion strategy integrates its communication initiatives which

include direct marketing, internet marketing, sales promotion, public relations, personal

selling , advertising to interact with the buyers and other people who influence the buying

decisions. Internet provides an emerging opportunity for one to one marketing for

consumer buyers and business. Billions are spent every week on promotion activities in

the world. These activities or resources are expensive so their effective management is

essential to untilise the expenses optimally. “Close coordination is required across the

responsible units in the organisation in order to combine these components into a

consistent overall promotion strategy.” (Cravens and Piercy , 2006, pp. 17)

In the last few, the companies have spent a major part of their promotion and advertising

expenses on consumer promotions. Consumer promotions can be offered in a variety of

ways such as free samples, sweepstakes, premiums, discounts, sales, rebates and

coupons. An organisation should keep in mind the effect different promotional activities

have on the consumers. How marketing managers decide among these types of

promotions is undoubtedly a consequence of both consumers oriented and firm orientedconsiderations.

“


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Promotion strategies are fundamental for a hierarchical organization, this being a

scientific group, a company, a public administration, a cluster of computers, or a group

of animals. They are important for one to understand the dynamics of a pyramidal system

and eventually provide ways to improve its efficiency. It is not strange that physicists are

also working in this direction. In fact, in recent years, physicists have started to

collaborate with economists and social scientists in order to get a more quantitative

understanding of social science mechanisms (Buchanan , 2008). Actually, it is by now

largely accepted that, even in social sciences, simple schematic models and computer

simulations inspired by statistical physics are able to take into account unexpected

collective behaviors of large groups of individuals, discovering emergent features that are

independent of their individual psychological attributes, which are very often

counterintuitive and difficult to predict simply by following common sense. Along theselines, by means of an agent-based simulation approach (Epstein et al., 2006), we study

here the effects of the Peter principle within a very general context in which different

promotion strategies are investigated in order to maximize the global efficiency in a

given hierarchical system.

Advertisement is any form of paid non personal communication by a specific sponsor

with a n intention of communicating a product, idea or organisation.

Personal selling consists of verbal communication among a salesperson and a potential

buyer in order to influence or make a sale. The annual selling expenditures are higher

than advertising, perhaps twice as much. Sales promotion includes many different

promotional activities such as coupons, trade incentives, point of purchase display,

samples, contests and trade shows, the expenditure on promotion is much higher than the

expenditure on advertising and as large as sales force expenditures.

Direct marketing includes the numerous communicating channels through which the

individual buyers can be directly contacted by the companies. For example through

electronic shopping, newspaper/ magazine/ radio selling, television selling,

telemarketing, direct mail, catalogues. Interactive/ Internet marketing promotion

component include the interactive television, Kiosks, CD-ROM, and internet. The sellers

and buyers can interact through interactive media too. Public relations are


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communications through commercial media placed at no charge to the company

promoting its product and its services and yet gaining publicity. Like for instance the

news of a new product might be printed in a trade magazine and the organisation does not

have to pay for this communication.

Promotion is an important tool in achieving financial performance and impressive growth

in the high street. For example In the world Louis Vuitton is the most profitable and

largest brand. The French producer of handbags, briefcases, and wallets is continuously

developing new products, improving the quality and efficiency of production processes

and rigorously promoting its brand against its rivals.. In 2003 the expenditure on

advertising was increased by 20 percent by Louis Vuitton while the competition cut down

on spending. Even with its aggressive advertising strategy, the company spends only 5

percent of its revenues on advertising.

2.5 Puma AG

Puma AG can be advised as one the premier manufacturers of athletic footwear,

sportswear, as well as accessories in the world. It is best renowned for its goods like

soccer footwear, and values sponsorship for its marketing strategy. Several sponsorships

for various superstars such as Diego Armando Maradonna has already been done by the

company, it also has offered various sport clothing line created by renowned designers

like Lamine Kouyate.

Dassler brothers (Adi and Rudi) first founded the organization as Gebrüder Dassler

Schuhfabrik in English, the Dassler Brother’s Shoe Factory In 1924. The separation of

the brothers because of a great fight between them during World War II lead to an end to

their partnership. Adi carried on the business and renamed it as Adidas, having the first

three letters of his own name. Whereas, on the other end, Puma AG Schufabrik RudolfDassles, on the other side of Aurach, was created by Rudi as his own company in 1948.

Due to innovative products like process of vulcanization in producing their soccer shoes,

the company was recognized as that process had become the standard process of those

times. With the help of the Velcro strap ad the unique shape sole, the company launched

itself in running shoes.


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Cosa Liebermann bought the company and it was retitled as PUMA AG Rudolf Dassler

sport. Even after the new ownership coming into place, PUMA AG continued to back its

innovation philosophy by getting in new products and technology like S.P.A technology

in the mid- 1970’s; Puma AG Duoflex sole in 1982; trinomic sport shoe system in 1989;

inspector shoes for children; and also the disc system.

Like many well to do companies, PUMA AG also had to face several problems regarding

their financial aspects. This led to the management deciding to to sell low cost products

in the market. This was aimed at the working class markets in various parts of the world

and also to compete with American giants Nike and also brands like Adidas and Reebok.

This would lead to a better market share and eventually leading to more money and

profits. But unfortunately for PUMA AG, the strategy did not work thereby leading to

grave problems. This was because PUMA’s customer base was the higher class, but sincethey started selling cheaper products, their loyal customers switched to other brands. The

overall sales of the company decreased because of the above situation.

When Jochen Zeitz became the CEO of the company, it was said to be a start of better

times for the organisation. During that time he was the one of the youngest CEO’s of all

European publicly traded organisation. He had a masters degree form various European

business schools. He also acted as a product manager at organisations like Colgate and

Palmolive in Hamburg and also in New York. When he had become the Vice-president in

the year 1990 for international marketing and sales, his role for the company was to

manage its international communications and sales worldwide. Jochen Zeitz became the

CEO of PUMA AG in the year 1991. It was during that year that PUMA AG had stated a

profit of DM 25 million. This was for the first time since the year 1986.

For the financial period of 2010 PUMA AG had reported sales worth $ 2.70 billion.

2.6 Strategic flexibility in promotion mix.

Promotion is one of the most important parts of any business and for the whole marketing

process; it’s a basic ingredient. Through promotion the potential customers are made

aware of the various choices that are available to them regarding different services and

products. Generally, through the use of print media and broadcast advertising or through


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personal selling, sales promotion, direct mail and public relations this undertaking can be

achieved. Although, each tool in the promotion mix has its own communication

capabilities in order to promote the products and services that are offered by the firm, all

of them would not be considered to be of equal importance. therefore it is important for

the company to have an adequate strategy to promote its products and services.

Promotion is considered an important component of the overall strategy because it leads

to brand switching, purchase quantity and stockpiling. It also has been documented that

promotion acts as a catalyst for to switch brands or to purchase earlier or more. A flexible

strategy would not only help in brand switching, purchase quantity or stockpiling but also

help understand as to what kinds of promotional activities attracts the consumers. A

flexible strategy would assist in quickly adapting to the needs and wants of the customers

and also to the activities and strategies of the competitors. A promotion strategy that isflexible also helps retain the existing customers. Promotion promotes consumer

awareness as well, so if a product is newly launched in the market, an aggressive

promotion strategy creates awareness among consumers thereby leading to a purchase.

“National brand expenditures on sales promotions for frequently purchased consumer

products have increased dramatically in the past decade, with many companies spending

more on promotions than they do on advertising “(Blattberg, Briesch, and Fox 1995). As

the competition is increasing in the market, the organisations have increased their

revenue spent on promotional activities. Since the amount spent is high, there should be a

flexible promotion strategy which shields the organisations against the risks involved.

The intense competition and slow growth in the recent years has made the retailers to

focus their strategies on attracting and retaining the right customers. But , “a strategy that

is effective in acquiring new customers may not be the most effective in retaining current

customers “(Sirohi, McLaughlin, Wittink, 1998)

2.7 Change in consumer’s perception due to promotion strategies

For a retailer to sustain and achieve success in a highly competitive market, they need to

have a high value merchandise and good store image. “Three important components that

appear to be key to store patronage decisions are the retailer's store image, quality of the


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merchandise/brands sold and price/promotions. Consumers use certain cues as signals for

these components; store name, brand name and price discounts” (Dawar and Parker,

1994; Dodds et al., 1991)

In the recent years price discounts as a form of sales promotion is widely used by

marketers. For example the price reduction offers in departmental stores increased to 19

percent in 1986 of total sales from 6 percent in 1963. (Blattberg & Neslin 1991), and the

distribution of coupons by the manufacturers quadrupled with 1976-2000. (Promotion

Marketing Association Coupon Council 2001). To add to this, many practical studies

have shown that price discounts lead to an increase in value perception. (Compeau &

Grewal ,1998).

Advertising is considered as the most visible element of marketing mix to the consumers.

A normal U.S. person is exposed to some 3000-5000 advertisements on any day. (Bower2000) Advertising can be in different forms i.e. television, radio, newspapers magazines.

Advertisement acts as an essential tool in changing consumers perceptions because the

consumers are most exposed to promotions through advertising and also advertising is

low cost per exposure.

According to previous studies the consumers buying decisions are changed by retail price

promotions and this means of promotion is used often by the retailers to enhance store

sales. (Inman and McAlister, 1993). Whereas the effect of price promotion on consumers

buying decision and perceptions have been studied insufficiently.


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3. Methodology

This report will be totally focusing on promotional activities by PUMA sports promotion

perceptions by the general public.

Promotional techniques are the sales promotion practices which is preferred by the

customers. The sales promotion techniques are an important part of the marketing

activities, strategic flexibility with respect to promotion is studied in the research.

3.1 Research Design

Churchill and Iacobucci (2002) found three fundamental types of research design, which

are exploratory, descriptive and casual research. These three styles of research designs

seem to have slight correlation and are affected of concerned respectively.

According to Emory & Cooper (1991), investigative plans can be described in many

ways; an appropriate version for the current study, from latter sources, would speak of

investigative plan as a structure or plan with particulars of processes for gathering and

evaluating the pertinent data, from different sources, essential to recognise or respond to

an investigative conundrum or chance, so that the variation amongst the price of attaining

different extents of preciseness and the anticipated worth of information linked with each

degree of preciseness is optimised.

3.1.1 Exploratory research

The chief aim of investigative studies is to offer insights into and understand the

conundrum which the investigator has to deal with. The outcomes, on the other hand, are

directives to attain a superior comprehension of the conundrum dealt with instead of

anticipating being succinct ascertainment, and at the same time supporting the prudence

and innovation of the analyst (Malhotra, 1996).


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3.1.2 Descriptive research

As per Malhotra (1996), the main objective of the explanatory studies is to explain things

related to marketing attributes, roles or any incidents. It also investigates the correlation

(if present) amongst two variables opine Churchill & Peter (1998).

3.1.3 Causal research

The chief objective of causal studies (also termed as investigational studies) is to identify

and procure proof in context to the reason-and-consequence amongst variables in the

conundrum prototype. Reason-and-consequence correlation investigations are generally

the outcome of elucidatory and explanatory investigations.

In this case exploratory research is best suited because understanding of thetopicRole of

flexibility in Marketing strategy is done. The concept is understood with the help of

PUMA AG's case. PUMA's reasons for success in the recent years will be studied and the

role of strategic flexibility in the success will be analylzed.

3.2 Data Collection

The data gathered may either be primary or secondary in nature.

3.2.1 Secondary Data collection

Secondary data refers to data which has been gathered to fulfil the aim of a research

conducted previously by other analysts (Churchill and Iacobucci (2005)). To commence

evaluating a specific theme it is essential to have secondary data. It includes printed

sources such as broadsheets, articles which have been appraised b y colleagues, sources

present on the web and the like. The basis for any scholastic investigation is secondary

data.


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3.2.2 Primary Data

As per (Hooley, et al. 2008), primary data is collected by a researcher in the event of

secondary data being inadequate to offer comprehensive information related to the

investigative conundrum. Primary data, state Churchill and Iacobucci (2005), primary

data includes data, which has been solely amassed for the investigation undertaken by the

researcher. Myers (2009), states that sources of primary data are not printed and include

interviews, fieldwork and unprinted records.

The current study opted for primary research methodology wherein the data was collected

through interviews. The secondary data was also used from reliable academic sources to

form the literature review written in previous chapter.

Interviews can be highly structured, semi structured or unstructured. Structured

interviews consist of the interviewer asking each respondent the same questions in the

same way. A tightly structured schedule of questions is used, very much like a

questionnaire. The questions may even be phrased in such a way that a limited range of

responses can be elicited. For example: "Do you think that health services in this area are

excellent, good, average or poor? Bearing in mind the cost of conducting a series of one

to one interviews, the researcher planning to use structured interviews should carefully

consider the information could be more efficiently collected using questionnaires.

(Denscombe, 2000)

For the purpose of getting information regarding the strategic flexibility in organization,

the interview questionnaire was prepared for the management of chosen organizations.

The interview questionnaire with open-ended questions was prepared while keeping the

perception of information quality in the mind.

3.4 Research objectives

The research will be done on the basis of following research objectives.

1. To study the importance of flexibility in marketing strategy.


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2. To study the role of promotion in strategic flexibility.

3. Role of promotion in strategic flexibility, explain with the help of PUMA AG

4. The strategic flexibility followed by PUMA AG for its recent success.

3.5 Research Approach

For any investigative study the ideas related to Induction and Deduction is essential. It is

clarified that any studies depending on the Inductive technique chiefly include making

generalised deductions by relying on the examinations (Bryman and Bell (2003)). It

encompasses correlating the investigation to a premise which is relevant to the results

which have been investigated. On the other hand, under the Deductive technique, an

analyst builds up postulations depending on earlier studies and checks it depends on the

real knowledge. According to researchers (Bryman and Bell, 2003; Lee and Lings, 2008),

the chief rationale for a deductive investigation is to ably build a postulation and link it to

the functional limits.

An analyst can employ two techniques for validating the systems adopted – Qualitative

method or quantitative method. A qualitative technique is abounding in text as majority

of the evaluation is textual in character. This method chiefly depends on the outlook of an

inductive analysis of the premise and investigation, thereby resulting in the study

reaching a conclusive premise opines Bryman and Bell (2003). This technique has some

limitations which include that the data collected through a Qualitative method may be

prejudiced or skewed and transparency is absent in context to gathering data (Myers,

2009; Bryman and Bell, 2003). A quantitative method is employed when the outcomes

need to be quantified and the selected populace is huge (Myers (2009)). This method is

chiefly a numerical method. The chief limitation of this technique is that the data lacksthe data intensity and chiefly puts forth a universal perspective.

Further PUMA's success will be evaluated on the basis of different comparative metrics.


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3.6. Research Strategy: Case Study

There are particular polices which are superior in character to handle particular

conundrums when varied investigative polices are considered. According to Denscombe

(2000), crucial tactical and systematic choices are actually taken prior to commencing the

real investigation in several instances. Five varied investigative polices are explained by

Yin (2003). These include: experiment, survey, archival analysis, history and case study.

There are three chief choices to consider before planning the investigative policy (Yin,

2003). These include:

i. The kind of investigative query asked;

ii. The degree of influence the investigator has on the real behavioural incidents;iii. The extent of emphasis on modern in contrast to the historical incidents;

As stated before, case studies are suitable for small scale investigations which deal with

small units in a limited outlook and where comprehensive investigation would be

undertaken opines Denscombe (2000). He additionally elucidates that the emphasis of a

case study is on associations and procedures to obtain a perception of how these are

correlated with one another; the study is also undertaken in an environmental setting

which the investigator cannot influence; furthermore it offers the analyst a chance to

employ varied sources and techniques. It is asserted that a case study is an experiential

investigation which studies a modern event in its real-life setting, particularly when the

limits between occurrences and situations are blurred (Yin (2003, p. 13)). He additionally

mentions that a case study responds to queries which typically seek to answer how and

why things occur. A multiple-case study is appropriate when a researcher is investigating

two or more bodies and contrasting them; the advantage of this opines Yin (2003) is that

it enhances the soundness of a study. Yin (1994) further contends that within multiple-

case studies there are holistic multiple-case plans which are appropriate when the

universal character of an institute is studied.


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3.7. Sample Population

For the purpose of getting information regarding the strategic flexibility, the interview

questionnaire was prepared for the management of chosen organization. The interview

questionnaire with open-ended questions and 10 in number was prepared while keeping

the perception of given context in the mind. The reason behind keeping only 10 questions

in the interview was to make the respondents interesting in answering them.

The respondents for the interview were consisted of management of chosen organization,

who are working in the relative department. The researcher contacted the Human

Resource (HR) department of the organization who provided the names and contact

details of the respondents on random basis. The respondents were then contacted over the

phone so that the appointment can be taken and they can give the quality time for theinterview. The on-to-one interview was taken from each respondent and was recorded in

the tape. The researcher took almost 4 interviews which were then converted into

transcripts which has been included in Appendix section. This whole process took 1.5

months and then the researcher ended up with the data for survey questionnaire and

interview transcripts.

3.8. Data Analysis

This section provides the analytical framework used for the quantitative data analysis

methods to interpret the findings. According to Yin (2003), researchers must select a

specific mode of investigative method before they decide to review the information from

the context of questionnaires.

Miles and Huberman (2003) assert that researchers can identify the connection between

different concepts through descriptions and models, also by suggestions andconsistencies. In this research, the approach supports determined propositions related to

the structure of studying information for a relevant end.


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4. Analysis & Discussion

4.1 Marketing and Promotion

Marketing and promotion are terms which have been in existence from the time the

product selling has been in the picture. The concept of promoting the products and

services to the consumers so as to influence their decisions has been present before the

medieval times as well. The promotion approach has changed over the years and with

time. Promotion of products has become necessary due to the increasing competition and

so as to create a brand recall in the minds of the consumer. In today’s world the subject of

promotion has become all the more important as companies are exploring all ways of

capturing the customers and increasing their loyal customer base.

As a result of the increasing dynamism in the industry and the marketplace, the marketing

strategies of the organizations need to be in sync with the consumer demands. Cravens

(1999) also pointed out that market strategy of an organization needs to meet the value

requirements of its customers. The job of marketers has become all the more significant

and complex with the increasing fluidity of the market. It is no more possible today for

the marketing managers to devise a marketing and promotion plan and then follow the

same for years together. Moreover the companies cannot ignore the changing

requirements of the consumers in today’s market place. Such rapid transformations in the

industry call for a pro-active approach by the marketers in designing the promotional

strategies. Moreover the plan once devised cannot be rigid in itself to ignore the changes

in the market.

4.2 Strat egic flexibility and Promotion

The current research is directed at understanding the concept of flexibility in the

marketing and promotion strategy. The concept of strategic flexibility has already been

discussed in the literature review section of the study and the idea here is to understand

its relevance with Puma. Sports goods industry has been experiencing a lot of changes


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over the past few years. With globalization and opening up of economy the sports good

manufacturers have come across a sudden spurt in sales followed by stiff competition.

Puma has been a known brand in the sports good industry for quite long and has been

associated with a good amount of controversy and fame. The current chapter is directed

at understanding how has strategic flexibility been able to assist Puma in its growth and

expansion approach.

The chapter analyzes the perspective of various researchers and articles and then

discusses the same in the light of the research objectives. This section brings out the

application of the concept of strategic flexibility by Puma in designing its promotion and

marketing strategy.

4.3 PUMA Analysis

The research is directed at understanding the concept of strategic flexibility in designing

the promotional strategy by the organizations. The sports goods industry has always been

quite competitive and with the turn of the events over the past few years, this competition

has only increased. As such the study is quite relevant for the present situation of the

sector. In order to understand the same, researcher carried out the study of marketing and

promotion strategies of Puma over the past few years. The approach followed by the

researcher for the study is secondary, wherein various articles were studied by the

researcher.

For the purpose of determining how the concept of strategic flexibility is adopted by

Puma and how the same has influenced the organization’s numbers and growth,

researcher analyzed a number of articles and material.

The study of the material provided a lot of important information on the subject. Further adetailed analysis of the articles brought out significant points on how the concept of

flexibility has been applied by Puma in its promotional campaigns. One of the most

significant step that shows the flexible approach of Puma in the marketing and promotion

of its products is the shift from being an activity focussed product to a lifestyle based

product. Puma has traditionally been focussing on developing products for the particular


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sports and had been targeting to promote the goods for that particular segment. For

instance, it developed shoes for running, for playing basketball, for playing football etc.

However the marketers realized that the people are buying and using products not just for

the sole activity for which the company was promoting its products. As such the

organization modified its approach and adapted to the consumer requirement. Through

this approach the company was able to shift its focus from producing products for

specific activity to developing goods as per the lifestyle of the consumers. This not only

enabled the company to stand out among the various other sports goods manufacturing

organizations, but also it allowed Puma to create a niche brand image for itself. Aaker

and Mascarenhas, (1984) have also indicated to the point that the organizations need to

adopt a strategic flexible approach, wherein the organization needs to adapt its strategy as

per the changes taking place in the environment external to the organization. Theflexibility shown by the company in changing its marketing strategy brought a lot of

success for the organization. Puma is now seen differently by the consumers in

comparison to its other rivals and competitors. The strategic approach in this case that the

company undertook was to create a different brand and segment for its products in the

longterm. As a large majority of the customers do not use the products just for what it

was designed, hence it made a lot of sense for Puma to place its products as a

multipurpose one. It gave the advantage to the consumers for using the products for

different purposes and use it as a trendy and lifestyle product. A number of sports goods

manufacturers have a rigid approach in terms of promoting their products as an activity

based goods which means that such organizations would promote their shoe as a shoe for

running only or as a shoe for playing football only or so. However on the other hand

Puma with its flexible approach has removed such a label from its products, which means

a shoe is marketed as a lifestyle product and not for a single purpose. This allowed the

company to attract a bigger section of customers and created one shoe that could serve a

variety of purposes which was the key requirement of majority of the consumers. The

strategic flexibility of the company gave it an edge over its competitors and allowed it to

shrug off the activity based sports good manufacturer image to become a lifestyle brand

in the sports goods segment.


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4.4 Strategic evolution of PUMA

With the approach of the company changing from being a specialized activity based

product manufacturer to a lifestyle brand, the company had to produce products which

appealed to the customers and which were in line with the current fashion trends. In order

to do the same the marketers demonstrated their flexible approach once again, wherein

the products were redesigned to suit the requirements of the consumers. This enabled the

company to be inline with the requirements of the consumer and to appeal to them as a

product which is not just worn for its use but also for its fashion statement. Puma showed

a lot of flexibility in changing its approach from being a performance footwear to a

fashionable and comfortable footwear manufacturing company. Vardarajan and Clark,

(1994, pp 87) also indicated that marketing strategy of the organization must meet thevalue requirements of the customers. The prospect which the company saw in becoming a

fashionable brand rather than being a performance brand was to appeal to about 80% of

the customers who buy the sports shoes as a fashion statement rather than for the

performance of the same. The constantly changing trends and fashion in the footwear

industry require that the company be flexible and adapt to the changing scenario and

requirements of the customers. In addition the company also found out that the customers

perceive fashion and performance to be symmetrical, i.e. the more fashionable the shoe

is, the more performance it would deliver. This made the organization to focus more on

the fashion and to be trendy in accordance with the current trends of the market. The

study of the articles also pointed out that good looks was one of the important

perspectives which the consumers kept in mind while purchasing sports goods such as

shoes. The strategic approach adopted by Puma in going along with the fashion and trend,

was directed at fulfilling the short term objective of increasing sales and accomplishing

the long term goal of being a fashion brand rather than a performance brand. The flexible

approach of marketers enabled the company to adopt such an approach and to move

ahead with the fashion aspect. Moreover the fashion approach enabled the company to

turn the tide in its favour in terms of the loosing market share with which it was grappling

for some time. The same was visible from the financials of the company. In addition to

all these aspects, the fashion approach allowed the company to create a fresh look for its


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products and goods in the mind of the consumer.

4.5 Strategy with respect to the changing trends

The trend and fashion approach that the company adopted to was directed at a marketing

approach wherein the focus was more on the younger generation. The article 2 pointed

out that the company promoted the brand as a young and hip brand which further

strengthened its fashionable approach. The company adopted a flexible approach in this

as well by partnering with Monarchy/Regency, which enabled the organization to free

advertising with some of the biggest Hollywood flicks such as Pretty Woman and JFK. In

addition the organization got into the television segment as well through a number of

popular TV shows. Moreover the company was able to en-cash on its Hollywood

connection even more with a number of celebrities sporting the shoes of Puma. All this

not only enabled the company to gather a lot of publicity but it also gave the company a

definite position in the fashion world. Puma was moved from just being a performance

sports goods manufacturing organization to a lifestyle and fashionable brand in the sports

goods segment. All this resulted in more and more youngsters going in for the products of

Puma and increasing its revenues. Organizations that have strategic flexibility are quite

likely to foresee the market needs and react in an appropriate manner to create products

and services, as per the requirements of customers (Martinez- Sanches et al., in press)

The focus on younger generation was more suitable for the company as it is this segment

which is more conscious of the fashion and trends and also the younger generation

spending power had increased over the past few years. The company in this case also

adopted a flexible approach with modifying its target customers segment and moving

along with the current market practices in the industry. The strategic approach followed

by the company enabled the organization to create a positive image for the company andto target the more active portion of the population, in terms of the sports good

purchasing. The study also pointed out that the younger generation approach was seen as

a positive outlook and a number of customers wanted to go along with a product which

was portrayed as being for young people rather than just being performance oriented or

targeting the mature section of the customers. This flexible approach provided a long


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term objective of creating a young brand and in the short term it was able to attract the

younger and more active customers of the lot.

4.6 Strategic flexibility and fashion

The approach of turning Puma into a fashionable and trendy lifestyle brand from a

performance oriented product manufacturer, was coupled with the company introducing

apparels and other associated products in addition to the footwear. According to the

articles, it can be deduced that with this approach, the company saw a lot of scope in the

apparel and other miscellaneous products and it also went along with the image of the

company of fashion sports goods manufacturer. The company went into producing

apparels not just for the sporting activities but also the ones which were seen as a fashion

statement and which boosted its younger generation approach. This approach required a

completely flexible mindset as the company was to again shrug off its image of being just

a sports goods manufacturer. It enabled Puma to become a complete fashion brand in the

sports segment. In addition the company was able to offer a one stop shop solution with

this approach which is what the consumers are looking for in almost all the cases, as

evident from the researches of the various scholars. The approach also boosted

company’s revenues by a significant amount and the focus on the apparel sector provided

an additional option for the customers when visiting a Puma store. In addition to this the

company was able to create a revenue source which was complimentary with its main

product options. The flexibility in marketing was further demonstrated by the company

when promoting its apparels for the consumers. The apparels were not shown off as a

requirement for fitness or for sports but it was demonstrated as a fashion statement and

having a segment of their own. The company adopted the flexible approach in this

segment which provided the organization an edge over its rivals and competitors. Thefindings are in line with the findings of Verdu-Jover et al. (2005), which pointed out that

strategic flexibility plays a significant role in the organization’s reaction ability towards

modernization. Thus implying that companies which are flexible in their approach are

likely to adapt to the modernization requirements more easily.


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4.7 Strategic placements of PUMA stores

With the availability of apparel along-with the sports goods, the company had a lot to

offer to the customers in the sports segment. However the organization needed to reach

out to the customers through exclusive stores wherein the consumers could come and

have an experience of the real Puma products in the way the company would like them to

have a feel of. The marketing approach called for flexibility in this as well. The company

needed to open concept stores which provided the customers a unique opportunity of

capturing the Puma experience in the real sense. According to the articles, the company

set up about 50 such stores for the consumers in the different parts of the world. These

stores were directed at not creating huge revenues for the organization but the key

objective was to create a brand image for the company. The branding objective was moreimportant with the concept stores as compared to the revenues. Dawar and Parker (1994)

point out that store name and brand name are important factors considered by a customer

while taking a decision regarding the store selection. Thus creating branding is an

important factor in attracting the consumer to a particular product or store. As per the

study the concept stores provided the opportunity for the consumers to experience the

technology and innovation which the company was about to introduce or had introduced

recently. Moreover it offered a feeling of being treated as special for the customers since

the consumers get access to different products and information on Puma’s developments.

This promotional approach was mainly concerned with creating a popular brand name

and top of the mind recall for the company. Even-though the concept stores are not

opened with revenues in mind but even then they are generating about 9-10% of the

company’s revenues and the same are expected to further increase as the popularity of the

brand goes up and the idea of concept stores catches on with the consumers across the

different parts of the world.

4.8 Importance of Innovation in PUMA’s success

Innovation is the success for any product or service in today’s world. People are always

on the lookout for something new and novel. Moreover innovative approach of the


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companies is what is driving them to growth and success, as can be seen in the different

industries. Innovation is about creating something unique and novel, which offers

additional value for the consumer. With the growth in competition and the increasing

demands of customers, innovation is one of the most important tools for creating a

satisfied customer base. The sports good industry is no stranger to the subject of

innovation. On the contrary, innovation is a part and parcel for this sector as people look

out for different new products and ways. The sports goods manufacturers are always on

the lookout to create a new technology, new product or an additional advantage which

they can offer to the consumer. Innovation plays a lot of role in determining the

preference of the consumers towards a particular sports goods manufacturer. Puma has

adopted the innovative attitude in a positive way and the marketers have exploited the

same to benefit the company in a significant manner. The company has been working onintroducing newer products and technologies regularly so as to keep the consumer

interested in the products of the company. The flexible approach adopted in promotion of

the innovative products can be observed from the point that the new technologies and

products are focused more on the utilization of the product as a solution to all the

problems rather than just as an answer to one particular problem. The innovative

approach is directed at providing a product which gives a solution for all the different

needs of the customers rather than on the specific needs. The marketing strategy of

promoting the innovation has an important role to play in increasing the numbers and the

revenues for the company. The study of various articles pointed out that the company’s

numbers and revenues have seen a positive trend in majority of the cases when a new

technology or product is introduced by the company. This points out that the consumers

are always on the lookout for such products and goods. The flexible approach of the

marketing can be seen from the point that the company is promoted as producing

innovative products that provide a solution to the customer demands, rather than

resolving issues of athletes or sportsperson only. This gives the company a different

perspective from a normal sports good manufacturing organization and it also requires

that the company adopt to changing market needs, which Puma is able to do by way of its

flexible approach.


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4.9 Strategy with competition

The company has demonstrated a lot of flexibility in its approach over the previous years

with regards to its marketing and branding. Puma has also been quite aggressive in

promoting its products and has tied up with a number of unique and controversial

athletes, as pointed out by the articles. According to the same the company’s tie up with

sporting personalities like Serena Williams and Nicolas Anelka has been beneficial for

Puma. Although these sporting stars have been involved in controversies but the same has

only had a positive effect on the sales of the company. This points out that the company

has been quite flexible in approaching the issue of promoting the products through

controversial personalities and then taking the controversies in its stride which has been

beneficial for the organization in totality. According to what can be deduced from thevarious articles, the marketers of the company have been flexible in their approach

towards whether to tie-up with such sports personalities or not. Moreover the promotion

of the company has been positively influenced by the controversies generated from these

stars. Ireland et al., (2003) point out that strategic flexibility of an organization plays a

definite role in its capacity to deal with the rising issues and attain an upper hand over its

rivals or competitors. The company’s marketing department has been quite flexible in

promoting their products through the controversial sportspersons. The flexibility in the

approach can be seen from the fact that a normal organization would try and avoid tying

up with such people who are involved in controversies. However Puma has adopted a

flexible approach and used the same to its advantage. The same has benefitted the

company in the short term by attracting a lot of customers for the products over which the

controversies had erupted. The concept of utilizing the controversies to their advantage

has been seen as a quite bold and flexible approach by a number of people in the industry.

4.10 PUMA and CSR (Corporate Social Responsibility)

Tying up with controversial sports persons is one side of Puma and on the other side the

company has adopted a flexible approach in the caring attitude for the environment. The

corporate social responsibility part has been played quite well by the company and it has


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been quite aggressive in reducing toxic pollution generated from its plants. According to

the article the company has responded quite positively in committing to the elimination

of the release of hazardous chemicals from its complete product life cycle by the year

2020. This has created a lot of positive promotion for the company and has enabled the

organization to cash in on the green concern of the company. The company has been

quite flexible in adopting the approach as it requires a lot of investment and commitment

from the organization at all levels. Moreover the company has been aggressive in

marketing the same to its customers in various parts of the world.

4.11 PUMA’s changing promotional strategies

One of the most significant marketing strategies which demonstrates the flexibility in the

promotional aspect of Puma, is the Street Soccer Cup. This was a unique and novel

approach adopted by Puma wherein street soccer was popularized. The idea was to

promote technique and finesse over athleticism and casual fun over regulations. Also the

company promoted free style dress over uniforms and the game was played on the street

over concrete or asphalt surface. The innovative marketing approach required a flexible

mindset on the part of the management as the marketing could have bounced back for

Puma in the negative sense and which would have proved to be disastrous for the

organization. As such the company had to be quite flexible for adopting this strategy for

promoting its products. However as the studies point out, the methodology proved to be

quite successful for the company and a large number of customers were added to the

company’s books, increasing the revenue by a significant amount. The same has been

followed for quite long after that and the company’s has been able to capitalize the same

in effective manner for the benefit of the organization. The marketers of various other

organizations dread on taking such a flexible approach as it can play havoc for thecompany if it goes in the wrong direction. However Puma has taken the stride and has

been able to benefit from the same.

Another important step in the marketing history of Puma has been the tie-up with Ferrari.

The company has again demonstrated its flexible approach by going in for a tie-up with a


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brand which does not really correspond to the athletics or the usual sporting activities

such as soccer or basket ball on which majority of the sports goods manufacturers have

concentrated upon. The promotion of goods through tie-up with Ferrari has been seen by

the company as a positive one, since Ferrari is the best brand in the Formula one segment.

In the tie-up with Ferrari, Puma has tried to depict itself as a fashion brand and being with

the best. This is in sync with the company’s overall marketing strategy of being a

fashionable sports brand rather than just a performance oriented sporting activity.

According to Johnson and Scholes (1986), the organizations need to create marketing

strategies not just for the present but keeping in view the unpredictable future as well.

Thus Puma is developing strategies in line with the future requirements.

4.12 Interview Analysis

In order to further understand the concept of strategic flexibility and its relevance to

Puma, researcher captured the perspective of employees at Puma. For this purpose

researcher utilized the qualitative approach and carried out interviews with the employees

in Puma so as to find out how strategic flexibility approach has been put to use in the

company. A total of three interviews were carried out by the researcher. Due to

confidentiality reasons the name and details of interviewees were not disclosed.

The first interview was carried out with the sales manager at Puma, who had been part of

the company for about 4 years. The interviewee pointed out that Puma follows a

marketing approach where consumer is the centre of the activity and all the work is

focused on him or her. Puma has been making use of strategic flexibility and the change

from being a sports brand to a lifestyle brand demonstrates the same, as pointed out by

the respondent. Further, the interview also indicated that strategic flexibility is used in

promotion as well by the company, and promotion helps to change consumer perception.On the whole interviewee pointed out that strategic flexibility is part of Puma’s

marketing success and the tie-up with controversial stars is an example of the strategic

flexibility.

Manager from Marketing department was the next person to be interviewed by the

researcher, who had been in the company for 3 years. According to the interviewee,


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company follows an aggressive and out of the box approach. Strategic flexibility is used

by the company in almost every segment of marketing and the tie-up with controversial

stars and branding with Ferrari are examples of the same, as per the respondent. Further,

interviewee indicated that while establishing stores whose focus was to create a brand

rather than focus on sales, are indicative of how strategic flexibility is used in promotion.

Moreover promoting in this manner has helped the company in creating a brand, which

helps in attracting customers. Overall the use of strategic flexibility in Puma is apparent

by way of its migration to lifestyle brand from sports brand and introducing garments as

well.

The final interviewee was from the vendor operation and store sales department with five

years of experience in the company. As per the respondent, strategic flexibility is about

adapting tactically to the dynamic environment, and it has been used by Puma toovercome issues. Further, the tie-up with Ferrari is an example of use of strategic

flexibility in promotion. The ability to set apart Puma through promotion as a lifestyle

brand has enabled the company to standout among the competitors. On the whole,

interviewee pointed out that strategic flexibility has been used by the company in

marketing tie-ups, branding, changing product profile etc., which has benefited the

company in a significant manner.

4.13 Conclusion

The research has been quite comprehensive in bringing out significant points on the

subject of flexible strategy in promotion. As evident from the various articles, Puma has

adopted a quite flexible approach in the marketing and promotion of its products. The

most significant example of flexible approach as demonstrated by Puma has been the

shift from being a performance oriented consumer brand to a fashion and lifestyle sportsgoods manufacturer. This approach has been quite beneficial for the organization as it

enabled the company to target a large section of the customers who were not being

catered to by the various other sports goods manufacturers and who buy products as a

style statement more rather than for the designated purpose for which it is manufactured.

This enabled the company to create a positive shift and change the complete outlook of


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the organization.

Another important approach which has demonstrated flexibility in the company’s

marketing strategy is the Street Soccer. The idea of popularizing the game to be played

on streets rather than on field and promoting technique over athleticism and freedom over

rules was a bold step in itself. This marketing approach required quite a flexibility and

bold step taking attitude in the company as it could have bounced back and resulted in a

lot of embarrassment for the organization. The flexible approach followed by the

marketing department proved to be quite successful and created a unique idea.

Various other approaches that the marketing department has adopted have also shown the

company’s flexible approach. This includes the company’s tie-up with a non athletic

sporting team like Ferrari which is into F1 racing and not into the normal league of sports

such as football or basket ball which the other companies target for. The intervieweesalso pointed out that strategic flexibility is an important part of marketing strategy for

Puma and it has brought in several advantages for the company. The research also

pointed out that strategic flexibility approach has been used in promotion as well by the

company, in its tie-ups with controversial stars and Ferrari. Further the study indicated

that strategic flexibility used in promotion and marketing has created a different brand for

the company and has benefited the company substantially.

On the whole the research has been able to bring out that Puma has a flexible approach in

promotion of its products and the same has been quite beneficial for the company. It has

resulted in the company coming back from brinks and becoming one of the favourite

sporting brands of the customers across the world.


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5. Conclusion

5.1 Introduction

Promotion of products is one of the most researched areas in the marketing segment. The

promotional strategy which a company adopts and the success of the same, plays a very

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Strategic Flexibility in the High Street

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