Under Armour Marketing Plan
Under Armour Inc is a footwear, sports and casual apparel manufacturing company, its headquarters are located in Baltimore, Maryland with additional offices located all over the globe. The company was founded in 1996 by Kevin Plank. As a result of globalization and innovation Under Armour has turned out to be one of the leading manufactures of sports apparel. Since the establishment of the company the sports industry has changed a lot. A competitive analysis conducted revealed that Nike, Adidas and Reebok are the company’s top competitors. Nike is the company’s top competitor, Nike has been in the sports footwear manufacturing field since its establishment in 1964, it is recorded that Nike has 61,700 more employees compared to the employees of Under Armour. Adidas has also been viewed as one of Under Armour Competitor, the company was founded in 1924, it is recorded that Adidas generates $24.7b more that Under Armour. Reebok is the company’s third competitor; Rebook generates 36% more revenue compared to Under Armour. Under Armour is an innovative company seeking to remain at the top in a highly competitive industry and to do so it must continue to increase its innovative efforts.
As one of the leading sports apparel manufacturing companies Under Armour has numerous strengths that have helped the company thrive in the market since its establishment. This market strengths play an important role in helping the company protect its market shares in the existing market and to penetrate new markets. The first strength of Under Armour is that it has created a track record of developing new innovative products, the company has wowed investors with its rapid growth. Overtime, Under Armour is now the third largest athletic brand (Business Strategy Hub, n.d). The company initially begun with a heat gear t-shirt that moisturized the body using synthetic fibers and a cold gear fabric that was also designed to keep the body of an athlete moisturized, the company has grown to manufacture a variety of products, the ability to keep on producing innovative products gives the company a strong competitive advantage.
Many distribution channels are another strength of the company, the company’s accelerated growth can also be as a result of broad wide distribution channels, the company operates through, multiple distribution channels. 65% of the company’s revenue is acquired through wholesale distribution while 31% of the revenue is gathered through direct consumer sales. The company is selling its products in various countries through licensing, the many operational modification the company is embracing has helped the company continue to broaden its distribution channels globally (Business Strategy Hub, n.d). Brand recognition is another strength of the company, Under Armour was voted as the world’s fifth most valuable brand in the year 2017. Brand recognition has enabled the company to develop trustworthiness and authenticity similar to that of its already established competitors such as Nike. Authenticity helps in removing the doubts of the investors. Lastly, among the many strengths of the company is the highly skilled workforce built through successful training and learning programs.
Weaknesses mark areas that a company requires to improve on. The company needs to increase its investment in new and cutting-edge technologies. The company has planned a geographical expansion that is only possible if the company invests in the right technologies. Limited operation presence forms another weakness of this sports apparel manufacturing giant, the company is still relatively new and has a limited operating presence in the international market (Business Strategy Hub, n.d). Research conducted reveals that 83% of this company’s revenue is from the Northern American Market which shows that the company has not yet fully expanded in the international market. The company is yet to expand and generate the same amount of revenue in the international market since this is necessary to sustain the company’s growth. High investment expenditure is another of Under Armour weakness, the company has consistently taken risks with its high investment expenditure over the years. This high investment can be considered positive only if it generates a higher revenue in return (Business Strategy Hub, n.d). Recently the company has not been able to generate higher revenues to match its high investments. There are gaps in the products sold by the company and this is another weakness, this market gaps present competitors with a competitive advantage.
There are many opportunities for Under Armour, the company has the ability to introduce new products. The company parades its self as an innovative company, each product produced by the company since its establishment has been technologically advanced. This gives the company power to continue the trend by offering brand new innovative products with the necessary modification to increase its competitive advantage. An extension of the company’s product line could go a long way in proving beneficial to the company in the long run (Business Strategy Hub, n.d). The company’s collaboration with various stores opens opportunities for the brand. Its collaboration with Kohl’s begun in 2017 when the stores started selling Under Armour merchandises, this cooperation has proved to be very beneficial for Under Armour, the company should and is in a position to enter into partnership agreements to penetrate more markets to ensure that it continues to grow its revenue. It has been established that the revenues generated from the company’s sales are from North America and the company has not yet fully ventured in the international market. Venturing in the international market is another opportunity for the company to increase its sales and gain a competitive advantage.
With Opportunities comes threats, just like any other company, Under Armour is facing major threats that would result in a decrease its overall profits. Increased competition is a major threat. The major competitors of the brand such as Nike and Adidas have a higher brand recognition oversees and in the international market and this gives them a competitive advantage over Under Armour (Business Strategy Hub, n.d). The company product including chin straps and athletes cup have faced criticism by experts and have been associated with athletic injuries, any form of inflicted injury by products of this brand could damage the reputation and drive away endorsements. Shortage of skilled workforce in various global markets is a threat to the steady growth of the company’s profits in those markets. The SWOT analysis of Under Armour shows a brighter future for the brand. For a brighter future the company only needs to restructure by cutting its expenditure. The brand has also gained worldwide recognition and has a larger market share in the North America all it has to do is strengthen its position in the international market and establish a strong foothold.
As mentioned in the previous document in the development of a marketing plan the company can only aim for the international market through sponsorships and endorsements. The company should target sports teams and athletes. The company should seek to differentiate its products to fit the needs in the emerging market. The products of the company cannot be for all people therefore market segmentation is important. Under Armour was started by an athlete to make the experience of fellow athletes more memorable (James, et al., 2018). The company is dedicated to supplying sportswear to athletes, the company’s customer expects nothing but unmatched level of quality and service. Athletes form a large segment of Under Armours customers who are often loyal to the brand ad seeks high quality materials and high-quality crafting. This segment of customers is willing to pay a high price for quality products that will ensure comfort and last long. Demographically the average Under Armour customer is 18 to 35 years old, this segment of customers enjoy working out and sports every day. They also expect a lot from their Under Armour gears and are willing to continue paying high prices for quality sportswear since it is what they love.
Under Armour initially targeted young athletes mostly ones at the collegiate level. Evidence of this can be traced from various advertisements the company released since 1995 using slogans such as “make athletes better” and “this is your armour”. This advertisement shows that the company’s main focus is and will always remain to be athletes in the past the company has partnered with various universities across the United States to provide sports apparel mostly to the football teams. However, as the years evolved the company has grown and has expanded its target market to include men, women and children of all ages. Their products are relatively expensive than those of some of their competitors therefore the company tends to target more financial stable customers. Under Armour mostly sells its products to wholesale distributors who are more financially stable. The company targets its consumers best by utilizing selective distribution strategy (James, et al., 2018). Under Armour is in partnership with major distributing stores such as Dick’s, the company knows that customers will be shopping in these stores to find sporting goods and sports apparel, Under Armour only needs stores similar to Dick’s to reach its targeted market.
The Brand’s dedication to innovation is one of the factors that sets the brand apart from other brands and its competitors. When the company was founded, Kevin Plank based it on innovating a shirt that helps athletes stay cool and dry. Today the brand has not only made innovation a goal but also a way of life (Delano, 2017). The latest innovative invention of the company is the ColdGear which is an insulation system designed to provide warmth without bulk to athletes. Under Armour hopes to become a leader in sportswear wear manufacturing and footwear by 2020. However, things don’t always turn out as expected, following a turn of events the company has suffered a major drawback following a controversy created by the CEO and founder when he supported president Donald Trump and them withdrew his support. It is tough to keep the image of the brand intact on every front in the digital world. Under Armour is trying its best to uphold its reputation as a leader in the sportswear market and a negative external factor would easily send the reputation of the brand tumbling down.
Companies in the sports apparel market are looking for various ways to improve their products and marketing tactics. Companies are seeking ways they can differentiate their products from those of other manufactures. Under Armour is under pressures to diversify its products and expand to reach new sports. One of the main drivers will be technology and connected apparel. Under Armour is already a leader and has cemented its place in the production of connected apparel and the company should be focusing on this mainly. New technology at the company’s displays will act as the drive for growth and mostly in influencing the 18 to 25 years old segment (Dembosz, 2017). Price is one of another components of the marketing mix. Under Armour is looking forward to pushing its products over a wide array of price points. This gives the company a chance to amp its selling price in innovative apparel products that include ColdGear, Infrared, Storm and Charged cotton lines. To enhance the customer satisfaction of brand’s customers seeking value the company went ahead and launched MagZip in 2016 which has helped the company gain back much of its market shares from Nike and Adidas (Delano, 2017). When all factors are put in consideration Under Armour apparel are overpriced compared to the apparel of its direct competitors.
Promotion is another component of the marketing mix, for the company’s marketing plan to go through a promotion strategy has to be in place. An increasing number of people today spend much time on their mobile phones, Under Armour seeks to improve its mobile shopping experience. The company believes that this will be profitable in the long run. The company recently introduced a new Under Armour shop app that allows shoppers to look for products through its “connected Fitness” platform. The platform over time has gained over 175 million registered users and continues to grow rapidly everyday (Delano, 2017). The company is more than certain that online and mobile commerce initiatives are key revenue and growth drivers. Another promotion strategy will involve the brand partnering with major retail distributors. This will ensure a wider availability of products and expand the company’s consumer base.
Place is the last component of the marketing Ps and for the marketing plan to be effective it must consider this component. China has just begun to be a revenue driver for the company. The company has high expectations to grab the largest market share of sportswear and open a billion-dollar opportunity. The brand is looking forward to build a strong presence in the Chinese market as a long-term investment that will improve the revenue (Delano, 2017). To Evaluate the success of the marketing plan it is important to appraise three metrics namely; sales growth, international expansion and profitability. The Growth pace of Under Armour is slowing down, the marketing plans is devised to boost this growth (Maese et al., 2019). The purpose of the marketing plan is to enhance the growth rate of the brand and its product thus watching the sales growth will help in evaluating the effectiveness and efficiency of the marketing plan.
International expansions are another metrics to watch for when evaluating the success of the marketing plan. Currently the company is focused on establishing a foothold in the international market and gaining revenue outside the US (Delano, 2017). The success of the marketing plan will enable the brand to expand into the international market. The main reason of devising a marketing plan is to increase the profitability of a business, therefore another metric to be watched when evaluating the success of the business plan is the overall profitability of the brand. The profitability of the brand is relatively low and a rise in the profitability of the business will assure of the success of the marketing plan.
Under Armour aims to enter the international market, the company is set against a social cultural background and its customers are of different cultural orientation. The United States, Canadian, European and Asian market consist of highly different cultures, the company must strive to satisfy these cultures in its line of sportswear. The company should also ensure that its products are not highly priced while ensuring quality (Keshkar, et al., 2018). With the company extending to market its products beyond the United States and to increase its revenue in this culturally diverse market the company has to ensure that its products are culturally sensitive and can be used across these global markets.
In conclusion Under Armour is a sportswear manufacturing giant that seeks to remain at the top in the industry despite the high competition form already established competitors such as Nike and Adidas. To remain at the top Under Armour has to devise and fund a new marketing plan that will help it cement its place in the international market and gain a larger market share. The company should aim at giving sponsorships and endorsement to athletes and differentiate its products from the products of its competitors as well as reduce the high prices it charges for its products. The growth of this sportswear manufacturing giant is slowing down. To increase the revenue and profitability the company should consider extending its presence in the international market.
References
Business Strategy Hub, (n.d). Under Armour SWOT Analysis 2019 | SWOT analysis of Under Armour. Retrieved from; https://bstrategyhub.com/swot-analysis-of-under-armour-2019- under-armour-swot-analysis/
Delano, (2017). How Under Armour can grow to $7.5B by 2018 (Full Report). Retrieved from; https://medium.com/@delano.b.98/how-under-armour-can-grow-to-7-5b-by-2018-full- report-b44f17cb507b
Dembosz A., (2017). Market Segmentation – Under Armour. Retrieved from; https://ashleydembosz.wordpress.com/2017/09/18/market-segmentation-under-armour/
James, C. R., & Whitney, K. (2018). Under Armour: repositioning for the global stage. The CASE Journal, 14(2), 164-193.
Keshkar, S., Lawrence, I., Dodds, M., Morris, E., Mahoney, T., Heisey, K., ... & Faruq, A. (2018). The Role of Culture in Sports Sponsorship: an Update. Annals of Applied Sport Science, 7(1).
Maese R., & Giambalvo E., (2019). As Under Armour struggles, Maryland keeps a watchful eye. Retrieved from; https://www.washingtonpost.com/sports/2019/11/05/under-armour- struggles-maryland-keeps-watchful-eye/
