Analysis of PUMA's Sponsorship Strategy with the Mercedes-Benz F1 Team

This case study analyzes PUMA's strategic sports sponsorship of the Mercedes-Benz Formula 1 racing team. It delves into PUMA's background as a global sportswear manufacturer, its objectives, and its distribution channels. The study examines the sports rights-holder, the assets leveraged in the partnership, and the budget allocated for rights and activation. It explores the various activation strategies employed, including core branding, public relations, sales promotion, hospitality, and advertising, as well as employee engagement. Furthermore, the case study discusses the role of third-party agencies and the measurements used to evaluate the success of the sponsorship. The paper highlights the marketing strategies, financial aspects, and brand awareness created through this partnership.

Mercedez-Benz F1 Racing
Team and Puma Design
Company

Table of Contents
Introduction................................................................................................................................3
Main Body..................................................................................................................................3
Info to subject spnsor.............................................................................................................3
Understanding of objectives...................................................................................................3
Info on the sports rights-holder and assets.............................................................................4
Budget for rights and activation............................................................................................5
Activation ..............................................................................................................................6
Third Party agencies...............................................................................................................7
Measurements.........................................................................................................................7
Summary..................................................................................................................................10
References ...............................................................................................................................11

Introduction
It is German bases multinational company that dedicate it's product to athletic and in
casual wear. The structure was founded by Rudolf Dassler in 1948, till date it have it's good
reputation in marketplace and also have it's customers all over the world. In 2019, company
announced for a partnership with Formula 1 and became it's retail partner (Tao, Liu and Ye,
2020). Later in the year company got rights of selling it's product with exclusive Formula-1
products. Puma have established as leading motor sport company, it provides team wears to
shining F-1 players. Customers got so influenced by seeing their favourite players wearing
the brand of which they can also purchase in marketplace . This sponsorship helped company
to boost up their profits as a result of excellent marketing decisions taken by management of
company and it is one of the leading company it's product line.
Main Body
Info to subject spnsor
Puma is the third largest sportswear manufacturer in the world. Puma offers variety of
products for Football, Basketball, Running, Golf, Motor sports Training and Fitness and
Sport style. It is famous for providing quality products that are always liked by people.
PUMA also provides products related to famous sport (Ruda and Christ, 2019). The products
offered are available for all men, children and women. They provide different product line at
different countries according to the need and demand of the customers. They also offer
various accessories like bags, belts, caps, wallets, wristbands, bottles etc.
Understanding of objectives
Mission of PUMA
To become the fastest sports brand in the entire world.
Vision of PUMA
To become sustainable and desirable sport life company in the world.
Values shared by PUMA
 Confident
 Brave
 Joyful
 Determined

PUMA has three distribution channels that are Puma owned and operated retail
stores, wholesale and e-commerce stores. They have understood the needs and wants of
customers and are serving them in best possible ways. Being a big organisation it has
presence in around 120 countries through its distribution channels. PUMA has good relations
with retail partners. They have also understood the digitalisation and made presence on online
modes that is advantageous for them and that helps them to attract more and customers. They
are providing employment to 13000 people world wide. It is important to make right
selection of distribution channels to serve all the customers and fulfil their needs and wants.
Online stores makes it easy for people to order according to their preference by sitting at
home. The main target customers are female and the products are best standing in the market.
The customers come to PUMA due to brand name and they fulfil their needs and wants. They
have loyal customers and that is one of the reason for success of the brand. PUMA uses its
own website and social media and also other paid online advertisements to promote the
products and service all over the world. It is important to good strategies and channels to
market its products. It is vital to make customers aware and remind them about the brand by
making advertisements that will attract the customers. The company has different websites to
its local and regional customers (Ruda and Christ, 2018). It has always make research of
market and made and implemented the best strategies to gain the competitive advantage and
gain good image in the market. The marketing strategy used by puma is to restructure the
organisation and earn more profit. The focus of improving brand equity by giving value to its
customers. They are exploring brand potential to increase the desirability of the the products
offered by them. They want to become the most desirable brand in sports life style. They
have used their strategies to make their brand's goodwill and has made sponsorship partner
with companies and attained success. PUMA has brand image and has its operations world
wide they are able to serve their customers according to their needs and wants and have
become successful.
Info on the sports rights-holder and assets
The announcement of sports sponsorship by Puma have exclusively enabled the
sponsorship with Formula 1. they have started this as a merchandising partner with them
starting from 2019.due to this now PUMA stands as well as superstores will; also be present
in 17 out of the total 21 Grand Prix in the given calender. Globally the sports industry is
exploited and dominated by Nike and Adidas however Puma still hods to be third in this
place. There are a number of assets that are used by Puma while they are providing

sponsorship in the formula 1 racing. They are successfully looking out to a number of players
and offering them with apparels as well as shoes. There are also a number of accessories that
will be provided by them in the game (Madrigal and King, 2018). Along with this the
company is successfully gaining visibility in the eyes of consumers through providing their
products to the participants and teams.
Puma is successfully equipping the teams of Mercedes AMG Petronas, Scuderia
Ferrari and Red bull racing as well. There are a number ODF asset that can be used by Puma
in it that is using there logos on the cars as well. The company have not provided their names
on the motor vehicles used in the racing. This was a great way through the help of which
organisation could have successfully provided their consumers with more visibility.
However some sports sales on the venue have helped them to show their visibility and
enhance their image in the eyes of consumers as well. The accessories and apparels that have
been sponsored are enough to bring business to puma and enhance its consumer base. One of
the other reason due to which the organisation did not choose this option available to the was
the investment. One of the major cost that is associated to the Formula one racing is its cars
along with the racing track. If Puma chose to provide the cars to the teams the are sponsoring
it would have cost a lot to the organisation. Along with this it was also required that they are
using the assets that can be technologically advances to compete in the market. All these
factors have led the organisation to not sponsor the vehicles as well. It was a smart decision
on the part of puma as the organisation need to take care of a number of other factors as well
while they are sponsoring a business. The budget is to be kept in mind as the returns from
these sponsorships take a long time to reflect on the balance sheet.
Budget for rights and activation
The price for sponsoring F1 team requires huge amount. It have been mentioned in the Forbes
that in order to sponsor the deal of F1 a company have to pay a huge amount of $3.3million.
This is having a great halo effect on the market of F1 racing which can be seen in present.
When the times are tough in the market it is a great way through which organisation cab
bring a boom in the market (Kulczynski, Ilicic and Baxter, 2017). During 2018 before Puma
took the sponsorship of teams the total sponsorship for F1 teams were accounted to be 44.7%
of the total haul and the turbo payments that have came from the sponsors which will also
help in getting naming rights for them. It also allowed companies to provide with decals on
the parts of car that are most visible.

Activation
Core Branding: PUMA is a well known brand that has been adopted several branding
strategies in order to promote the company at wide level. For this, they sponsor several events
related to sports and more. Here PUMA has also sponsored F1 race during which they apply
several strategies in order to enhance the presence of brand at market place. They use logo of
organisation in order to enhance visibility that is crucial to earn potential profit margin. In
addition, they also provided T- shirt with logo of company to participants with an aim to grab
the attention of audience (Todd and Simpson, 2019). During event, main aim of PUMA was
to enhance the visibility of their brand at market place to attain predefined goals and
objectives.
Public relationship: In order to generate public relations Puma is sponsoring team ans also
organising various events including the teams. Through the help of this they are coming in
news and building their reputation in the market. Th long history of Puma is also helping it
successfully to make sure that the organisation is maintaining its relationship with
Sales promotion: They have used the track to set up their stores and small stalls as well. With
the help of this Puma is using sales promotion. They have also introduced a range of products
specially for formula 1 and its fans that is also a great opportunity for the organisation.
Through this they have successfully expanded their customer base as well.
Hospitality: In order to work on the hospitality in the sponsorship and arrangement with
formula 1 is adding various credentials to the Puma. Puma is also selling the products that
have been specially designed by them for Formula 1 and are selling them on the track side.
They are providing facilities to their consumer directly as their agreement with Formula 1 is
also helping them to connect directly with their consumers. They are also providing their
consumers with the best possible motor sport merchandise for the best experience possible.
Advertising: Advertisement plays an important role in deciding profitability of a business
firm, In the starting of year 2019, Puma took sponsorship of Formula-1 racing organisation. It
was a smart move from companies management as it helped a lot in promotion of it's product.
People got so influenced by watching their favourite players wearing the brand wears. Logos
and hoardings of brand was displayed in racing tracks and hoardings of the brand was shown
outside the stadium also (Kruse et. al., 2020). The marketing team of Puma conducts fun
activities in the workplace and are purely dedicated to extract best from their employees. The
collaboration with F-1 helped in collecting the various aspects of marketing and enabled the
business firm to establish it's marketing strategy at huge chunk of market customers.

Therefore, it resulted in paying of cost of initial investment and motivated company to not
increase in prices of their product for maintaining loyalty of customers towards it's brand.
Employee Engagement: It was necessary for Puma to make sure that they are using their
employees so that maximum profits could be brought for the organisation. It is often seen that
there are a number of employees who require continuous motivation so the employees are
provided with it by the managers of Puma. It was continues do that they can successfully use
the opportunity of sponsoring certain teams of Formula-1.
Third Party agencies
PUMA is a well known brand that has been adopted several branding strategies in
order to promote the company at wide level. For this, they sponsor several events related to
sports and more (Kindt and Logan, 2018). Here PUMA has also sponsored F1 race during
which they apply several strategies in order to enhance the presence of brand at market place.
They use logo of organisation in order to enhance visibility that is crucial to earn potential
profit margin. In addition, they also provided T- shirt with logo of company to participants
with an aim to grab the attention of audience. During event, main aim of PUMA was to
enhance the visibility of their brand at market place to attain predefined goals and objectives.
Measurements
Benchmark:
It is the most important concept that helps to compare their performances and processes.
They set their some benchmark that helps to compare performances of own with others. It
just simply comparison with other entities, so that individual can motivate to achieve that
performance levels (Kelly, Cornwell and Singh, 2019). There are many types of
benchmarking such as internal, competitive, functional, generic, etc. It is most important
activity that helps to accomplish their desired goals and targets. Every organisation set their
benchmarks so that they can achieve their strategic goals and targets.
Puma and Mercedes sponsor sports that helps to set their benchmarking. Puma has
different kind of benchmark that is they set their benchmarking for municipalities, schools
districts and advanced education. They used their benchmarking for different sectors so that
they can achieve their desired targets. They perform many activities that helps to accomplish
their benchmarking. It is very important for Puma because they perform functions only to
achieve their desired targets. Whereas Mercedes set their benchmarking that they innovate
their engines through making technologies like V6 and V8 that help to contribute in
environment factors. They thought they can improve their technologies to improve

environment through making environment friendly engines. They accomplish this benchmark
with the help of introducing third generation direct petrol injection. It is the engine in which
car consumes less fuel that helps to reducing cost of production and make high profits
margins. It also helps in less expansive car that can reduced customers fuel consumption and
their prices.
KPI: KPI is the acronym of Key Performance Indicator that refers to measure the
performance that can be done by their employees, company for achieving their gaols and
strategic objectives. It is the measurement tool that helps to identifying and analysing the
deviations that help to make strategies for meeting their goals and targets. Puma and
Mercedes sponsor sports, they are set their KPIs so that they can decide what they achieve
during sponsorship. Sponsorship is the function that helps to promote their goods and
services for providing to other business organisation (Weeks, Connor and Martin, 2017) .
For this reason Puma set their ROI targets that make their KPI to achieve their targeted
market. There are main five ROI targets that decide by Puma mentioned below:
 Database growth- It is the process in which organisation set their database so that they
can measure with their previous database and find the growth.
 Conversion rates- It is the rate in which organisation to gauge that how effectively
they use marketing program that shows visitors interest.
 Qualified lead volume- After conversion rates organisation need to determine there
targets so that they find leads are qualified.
 Pipeline growth- It is the tool that helps to measure inbound marketing that how they
can effectively done this program.
 Return on marketing income- It gives the information in which organisation found out
the income that gain for their decided targets.
Whereas Mercedes set their KPIs through sales target, inventory management, gross
profits, etc. They measure their performances with their sales target that they achieves their
desired goals or not.
Recommendations:
Through taken this sponsorship and partnership criteria of the world's largest
company Puma and Mercedes. There projects could get better by being a mutual contract
against all the factors in terms ODF sales, promotion and branding the innovative and new
product. It could be done by together contribution towards marketing strategies. It could be
evaluate from the effective sponsorship campaigns and public relations by effective
communications with stakeholders, inverters and employees (Fowler and Thomas, 2019) .

Partnership could get only be successful by mutual efforts regarding process of product
initiative. The main observation from this report has defined lack of agreement and
conversation between two companies which can be resolve by making effective flow of wok
and communication.
Puma is the leading brand in the whole world terms as the biggest sports brand specialised in
selling the best sport outfit in the whole country. It first established their brand in German.
The company was founded in 1948 and selling the best accessories for sports athletes from
around 72 years of services. The company has became the largest exporter and importer of
sports materials like clothing, footwear, and other sponsorship product. The company has its
biggest aim to achieve the brand heat and maintain the best quality sports materials. It follows
all the trends and innovation for making a good experience in athletes lifestyle. athletes make
their life easy and creditable by being apart of puma's customer. The company is on the great
track of its expansion through continuing their unique prestige in the sports culture. Their
business is followed and partnered by various high elect athletes such as sprint legend Usain
Bolt and star striker Antoine Griezmann, Mercedes Benz (Wilson et. al., 2016). In order to
grow their brand with the antique culture and ethics they made their sponsorship influence
more high so that more of audience and large people could trust their high potential and
attribute. Puma has successful in their business by setting innovations heart catching products
design and texture. Customers are influenced by their cheep but high quality product. It has
been a big sponsor of Mercedes Benz by evaluation sports accessories for their new launch
of sports car. These apparels are mainly initialised for riders safety and comfort. They has
been the biggest merger of the biggest company of auto mobile. Puma has scattered their
business in the large area of around 120 countries which has served with a great potential of
customers trust and loyalty.
 Puma has established high position in developing its brand name they has hit their
sales of around 3 million. They established their performance regarding
environmental issues but sitting goals towards their profit and loss. In 2011 they
develop the most effective campaigns for sustainable growth and fair existence
towards environmental problems (Conrad and Thompson, 2016). They has been
winning the awards regarding efforts for launching reuse and recycle campaign so
that employees will indulge in welfare activities. Puma has established with the
sponsorship with Mercedes through which it has attain the contracts which shows
their transparency in their promotion. They have made clear in events to make 10%

increment in sales of sport car athlete accessories though which they could more
easily showcase their innovative aspect of sports car. Their evaluation of rights and
responsibilities against the brand has abolished as it contaminated the brand exposure
but not in increment of sales. Puma campaign about safety rights of athletes has taken
a lead and created impact on their sale of apparels but as Mercedes fails to established
the market strategies over the cars and innovative features which has lead to affect on
Puma expectation of sales contract.
Summary
With the help of following report it can be successfully analysed that joining hands
with Formula-1 was a great deal for Puma as company have enhanced their brand image and
visibility. Taking sponsorship of various sports events is an influential method which can be
adopted by organisations to increase their brand recognition. In this way organisations can
grow globally and increase their market share as well.

References
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Online
https://www.mercedes-benz.com/en/sports/formula-one/mercedes-amg-petronas-and-puma-
to-extend-partnership/