Another, and perhaps more important, reason is that Puma is
facing mounting competition from its arch rivals Adidas and Nike ,
which have encroached on Puma's market for designer athletic gear
with functionally similar products. In light of this, focusing on
lifestyle rather than on functional attributes appears to be a
logical strategy to sidestep the competition and connect with
customers on a more personal level.
Can the lifestyle branding strategy
The success of lifestyle brands stems from their appeal to
consumers' need for self-expression. For example, brands like
Gucci, Polo and Abercrombie & Fitch enable consumers to express
themselves by identifying with the lifestyles represented by these
brands. The problem, however, is that consumers' need for
self-expression, like many other needs, can be satiated. This means
that as alternative outlets for self-expression continue to
proliferate, the marginal importance of many lifestyle brands will
To make matters worse, unlike competition based on functional
attributes, which in most cases is limited to a given product
category, focusing on lifestyle puts brands from different
categories in direct competition with one another. For Puma, this
means that it now has to compete not only with its direct rivals
but also with lifestyle brands from unrelated categories. These
include not only traditional lifestyle brands like Gucci,
Abercrombie & Fitch and Ralph Lauren, but also functional
brands like Gillette, Harley-Davidson, Starbucks, Swatch and Apple
that have come to play a self-defining role for many consumers.
Thus, by switching to lifestyle positioning, Puma might be trading
traditional in-category competition for even fiercer cross-category
Who benefits from lifestyle branding?
The increased competition among lifestyle brands does not
necessarily mean that lifestyle branding is the wrong strategy.
Rather, it means that to succeed a company needs to have core
competency and strategic assets in lifestyle branding. As in any
market, there will be winners and losers. The winners will be the
brands that are best positioned to represent popular lifestyles.
PPR's experience in building luxury brands means Puma is poised to
become one of the winners in the lifestyle category.
Puma's future trajectory might be similar to other brands that
have managed to successfully transition from functional to
lifestyle positioning. For example, Montblanc has repositioned
itself from a functionally focused brand that manufactured high-end
pens into a lifestyle brand spanning different categories that
include leather goods, watches and sunglasses, in addition to its
core pen business. In the same vein, Lacoste managed to broaden the
appeal of its brand from being closely associated with tennis to
representing a lifestyle of exclusivity and luxury.
The casualties of lifestyle branding
Conventional wisdom would argue that a company's switch to
lifestyle branding should have the greatest impact on its direct
competitors. In Puma's case, this means that its repositioning will
have the biggest effect on its direct rivals in the sports gear
market, including Adidas and Nike . By effectively removing itself
from the market in which brands compete on functionality, Puma
might have made life a bit easier for Adidas and Nike .
The brands that will really suffer from Puma's repositioning are
the lifestyle brands that do not have the resources or commitment
to sustain their lifestyle positioning in the face of increasing
competition. Consider, for example, Nestle's Coffee-Mate creamer,
which recently launched the "express yourself" campaign aimed at
repositioning itself from a functional coffee-creamer to a
self-expressive brand. Ironically, Puma might even sink its
competitive claws into fellow feline, Kellogg's Tony the Tiger,
because despite being in different categories both brands compete
to satisfy the same customer need -- the need to express one's
The limits to self-expression
The idea that lifestyle branding puts brands in different
categories in direct competition with one another is supported by
recent findings published in the Journal of Marketing, which
provide experimental evidence that the barrage of lifestyle brands
can end up satiating consumers' need for self-expression.
Specifically, the study shows that exposure to a series of
self-expressive brands can weaken consumers' future preference for
lifestyle brands by making them appear less personally relevant,
lest distinct and less desirable. The study is among the first to
explore how brands serve as a means of self-expression, revealing
the limitations of expressing one's identity through brands.
The competitive landscape is rapidly evolving and is no longer
constrained by the boundaries of category. Now brands are competing
across categories for a share of consumers' identity. Fulfilling
individuals' need for self-expression is becoming the new frontier
of brand competition.
ABOUT THE AUTHOR
Alexander Chernev is
associate professor of marketing at the Kellogg School of
Management, Northwestern University.