Without the big budgets of Converse, but with ingenuity, Panam recovered and today owns 12% of the sports footwear market.
It was at that International Footwear and Leather Articles Fair( SAPICA ) in 2012, in León, Guanajuato, that Andrés and Nuri Pérez, partners of the Mexican footwear brand Panam, met José Eduardo López Morás, who at that time was the in charge of strategic alliances in Adidas Original.
Andrés and Eduardo agreed on the potential that Panam had to be a leader in the sports fashion market in Mexico, whose value is forecast to reach 112,925 million pesos by 2021 according to the American consulting firm NPD Group. Both shared the vision that in order to achieve this objective it was necessary to restructure and reposition the brand, starting with the updating of its distribution channels. Soon, the partners invited Eduardo to be part of their ranks to lead these strategies.
The manager, who has acted as an entrepreneur , says that when he was offered the job he could not believe that a company founded in 1962, with so much history and positioned in the minds of the generations of the 70s and 80s, was abandoned and could not compete or be number one worldwide. “They had all the elements: an iconic product, quality and a large factory.” That is why, from the first day of work, he dedicated himself to making all corporate, factory and direct sales personnel share this vision and believe that this was the number one footwear company in the world.
Drastic measures to hard times
Used by many Mexicans during physical education classes in the school playgrounds, the traditional sports shoes had their glory days in the 80s, but a decade later with the Latin American Free Trade Agreement (TCLAN), Adidas competition , Converse and Nike invaded the national market.
Although the factory never stopped producing, the entrance of the multinationals and their big budgets to do marketing affected the tennis brand because it was only focused on the distribution through neighborhood shoe stores, when the commercial plazas began to proliferate. “The Panam were not seen in all the windows,” says Eduardo. After almost two decades of maintaining a low profile and without innovating, the Pérez family, owner of the brand, was about to let the business die.
Six years ago, when Eduardo arrived at the Marketing management, the sales depended on the licensing maquila of Levi’s and Disney and its flagship product, model 084, was abandoned.
In an attempt to change the course, Andrés Pérez proposed changing the distribution strategy by opening the brand’s first store in a shopping center in Cuautitlán Izcalli, in the State of Mexico, very close to where his factory is located. However, the initiative did not work because it was very far from its real consumer.
The effort was not in vain, since Eduardo later took up the idea although enhanced by a good repositioning strategy. And is that taking control of social networks, which existed since 2006, improve the photographs and launch its first campaign, the manager noticed that users asked where they could get a pair of tennis and even if the brand still existed, because its Visibility was minimal. Derived from this, he understood that he had to turn the strategy around urgently. “We took Panam out to the street,” he recalls.
The second attempt of its physical stores was located in the street of Campeche, in the Condesa neighborhood, one of the most frequented and accessible to new consumers. With skepticism, the owners accepted the proposal of the new manager, who was sure it would work because he had control over a tool and source of information that allowed him to know how his clients moved: social networks.
The result was better than expected. “The consumer began to get hooked and see the store as a place where he could meet all the collections and have more models at hand to buy,” says Eduardo.
The manager’s experience helped him determine that each goal should be translated into measurable action; In this way, every time I opened a store, the team analyzed metrics if it worked as a point of sale or just as a showroom.
That was the beginning of the change. The stores, which were born as a marketing strategy, today are an important business model for the company because in the last five years, it opened 107 nationally, 60% under the franchise model and the rest as its own units. Then came the entrance to department stores such as Sears and online sales since 2010, through the Kichink logistics and fashion platform.
The next step was to listen to that new consumer and speak to him in his language, since his communication was very much encased in nostalgia and, as a consequence, the bulk of his buyers were parents with a high recognition of the brand. Seeking to expand its target, the brand expanded its offer and today it commercializes models from for “non-walking” children (from zero years) to size 31 for adults.
As part of this strategy, they segmented their products and assigned them names to bestow personality on each one and generate loyalty, fidelity and identification among product models, names and brands. Some were: Swing, Dynamo, Ultra, Garden, Fire, Copper, Snow and Black Diamond. “The proposal was to sell 100% Mexican products, made by hand, with lots of color and fashion,” says Eduardo. “Every time we post a product on the networks, traffic goes up and people ask us where they can buy it.”
The company also sought collaborations with rock bands and iconic brands such as Frida Kahlo, Cerveza Indio, Molotov, Ángeles Azules, and the Auténticos Decadentes to create designs. “We take Panam to other horizons and markets through music and what new generations consume,” he explains. The last step was to create new lines of business with armed tennis, more urban and booty, motivated by the demand of the market and to demarcate the most iconic product.
Currently launches two collections a year, which are presented with six months or up to one year in advance, taking at least 600 different models per season, for all ages and formats. This, coupled with temporalities such as back to school and special collaborations.
In addition, the company has opted to rise to the local consumer trend because it wants consumers to remove the stigma of malinchismo and stop supposing that domestic products do not have quality. This campaign is reinforced by prices. “We made a proposal with the Mexican’s pocket in mind.” Thus, the classic model, 084 navy blue champion, is sold in stores at 290 pesos while the special editions are at 360 pesos. The boots cost 620 pesos on average.
Today, Panama regained 12% of the participation of the sports footwear market.
In addition, it produces 400,000 pairs per month, of which, it is exported between 15 and 20% to Spain, Germany, Colombia, Costa Rica and, soon, the United States.
At its plant in the State of Mexico, Panam manufactures 400,000 pairs of tennis a month / Photo: Fernando Díaz Vidaurri
Lessons to resurface as a brand
Eduardo is very clear that “business is stomach: the vision you have must live with passion and with patience because things do not go out overnight.” With this idea in mind, the marketing director of Panama shares these lessons:
1. Generate loyalty. To transform a traditional product like Panam into a love mark known by the new generation, it is necessary to provide excellent customer service and open a communication network with the consumer. “Find, listen and solve the needs of those who buy you. That must be the priority of every company “, Eduardo summarizes.
For this, “you must be open to receiving compliments as well as negative opinions on social networks. To have the maturity to answer everything, solve problems and provide satisfactory attention “. Evidently having a production chain behind you that supports you with well-made products, competitive prices and an offer at hand.
2. Reinvent yourself, reinvent yourself and reinvent yourself. “If you’ve already ‘hit’ do not fall asleep on your laurels, continue to innovate,” Eduardo warns. Panam has a new product development department led by designer Adrián Gallardo, who reviews all the trends that are in the market. “We travel to different places, we see what is happening in Europe and Asia, and we translate those offers and trends into something tropicalized for Mexico.”
The recommendation of the marketing expert is to attend exhibitions and see the showcases of other brands to know what they are doing and how they are innovating in their products.
3. User experience. In marketing there is a premise and reality: the big budgets of international brands leave disadvantaged those who do not have that possibility of investment. “The more you pay, the more you see yourself,” says Eduardo. However, not everything is lost because the consumer’s conscience has changed and is no longer influenced only by a good commercial or advertising.
“There is always the other 50% of the decision that depends on the product and the consumption experience. This last one is worth more than a campaign and if they notice it, they like it, it seems competitive and it has an accessible price, you can generate loyalty “, the young manager explains.
Panam’s growth plan is focused on opening 100 stores throughout the Republic and then taking the brand to other latitudes through commercial partners in Europe, Australia and the United States. In addition to potentiate e-commerce with virtual stores as it happens already in Japan, where young people buy in stores without stock that are attended by a virtual assistant; This helps them decide which shoes look better, pay with a card and then receive it at home.
In addition, Eduardo is aware that it will be the technology applied to his tennis models that will make them lighter and more comfortable. For example, “we are doing tests to make soles with avocado peel (bone or seed) and reduce the consumption of plastics. We also want to try textiles with hemp and recycled papers. ” The objective is to raise the brand to the trend of using raw materials that are much less harmful to the environment.
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