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Under Armour Marketing Plan

Cynthia Walters
American Public University
August 15, 2016
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Abstract
This paper will discuss and analyze Under Armours current position in the sporting goods

market. This paper will also supply Under Armour with recommendations and strategies that

have the potential to augment their current market segment. With their newly developed sector,

identified as Team Under Armour, the firm has to transition and redevelop its current marketing

mix. This paper will outline the external forces effecting the success of this firm. To successfully

transform into an international brand, Under Armour has to strongly develop their Team Under

Armour sector by sponsoring more prominent athletes domestically and internationally.

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Under Armour Marketing Plan

In 1996, Kevin Plank created Under Armour. Under Armours original core business was selling

compression clothing made from technologically advanced materials. Since its emergence into

the sporting goods market, Under Armour has expanded tremendously. It is now a publicly

traded company on the New York Stock Exchange under the UA ticker symbol. Even though

their original core business was compression clothing, they have expanded their business to

athletic gear, footwear, and sports relate accessories. However, with the rise of Team Under

Armour, they have refocused their business on sponsoring prominent celebrities. Under

Armours marketing director stated that we pick that athlete with a chip on their shoulder and

their desire to win because it aligns with our own attitude (2015)

As mentioned in their 2013 Mission, Vision, and Values Statement, their overall mission is to

make all athletes better through passion, design, and the relentless pursuit of innovation (2013).

Majority of their current sales are accumulated by the apparel sector. With new sponsorships

with athletes like Stephen Curry and Cam Newton, Under Armour has the potential to compete

with their larger competitors, Nike and Adidas.

External Forces

Competition and Economic Advances

Under Armours competitive atmosphere resembles the foundation of pure competition market.

Although Nike and Adidas are the only other companies that dominate the market, several other

companies sell similar products in the same price range. Nike is a global powerhouse who

obtained $30 billion in yearly revenue in 2015. Whereas Adidas obtained $17 billion. As for

Under Armour, a fairly new company, they approached $4 billion in annual revenue. In 2009, the
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company made less than $1 billion (Nasdaq, 2015). Under Armour was named the 53rd fastest

growing company in 2013 (Colbert,2013).

In the terms of a products life cycle, Under Armour is still within its growth stage, meaning that

the company will continue to grow and gain market share. Nike and Adidas were founded

decades before Under Armour. These two companies have reached a later stage in the product

life cycle in are closer to maturity than UA. In 2013, Nike 12-Month revenue growth was 4.9%,

Adidas was 11.5%, and Under Armour exceeded its competitors with 24.6% (Colbert, 2013). The

market for sports apparel is growing rapidly. According to Forbes, the sporting apparel market

was worth nearly $135 billion in 2012 and it is estimated to reach nearly $178 billion by the end

2019 (Forbes, 2013). Under Armour has the ability to occupy a large portion of the market share

for this industry.

Social Factor

All around the world people are desiring to live a healthier lifestyle. The increase in the desire to

live healthier is the framework for the success of the sporting apparel market. In 2014, over 54

million Americans paid for a gym membership. Between 2008 and 2014, membership growth

has increased by 18.6% (Franchise Help, 2015). Under Armor provides athletic performance gear

to these 54 million Americans who play collegiate sports, professional sports, recreational sports,

and gym participants. This increase in physical activeness can also be accredited to the rapid

increase of women becoming more active. In 2014, Under Armour begun a campaign to target

athletic women to outshine their competition who reluctantly neglects their female sector. This

idea helped boost sales and the companys reputation.

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Technology

To actively stay ahead of competitions, Under Armour has to continue to make revolutionary

strives in technology. They believe in their technology model, everything here makes you

better. Fabric, footwear, and mobile apps have all been technically redesigned to make every

athlete better. UA record is a dashboard that stores all of an individuals activity, sleep, and

workouts on a daily basis. This information is connected directly to a device and can be viewed

to track accomplishments (Under Armour, 2016). Under Armour has three different groups of

fabrics that were designed to keep athletes cool, warm, and dry. For instance, the ColdBlack lines

is not like ordinary fabrics that heat up in extreme temperatures. ColdBlack fabric reduces sweat,

fatigue, and focus lose by reflecting heat and IR rays. They have also revolutionized the comfort

and performance of athletic shoes. Charge cushioning is one of Under Armours new

technological advances. Athletic shoes with this technology absorbs the impact of a foot strike

and converts it into a level of responsive comfort.

SWOT Analysis

Strengths

Under Armour has demonstrated steady growth since 2008. This growth has also

highlighted the development and launch of new products and growing the companys portfolio.

This makes UA a competitive brand in the sporting apparel market. Under Armours strengths

include strong online sales, high brand equity, customer loyalty, innovative culture, and strong

product recognition.

Unlike its competitor Nike, Under Armour is not associated with indecent labor. As stated in

their Code of Ethics, We require that all of our manufactures adhere to a code of conduct
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regarding quality of manufacturing, working conditions, and other social concerns (Under

Armour Inc., 2013). Also, Under Armour endorses two of todays biggest names in sports,

Stephen Curry and Cam Newton. Sales of Currys signature basketball shoes are up 350% since

2015, which makes them higher than sales of any Nike signature shoes except Jordans (Inc,

2016).

Weaknesses
Nike developed Nike ID to allow consumers to customize their famous style of shoes with their

own custom colors and even embroidered numbers and names. As for Under Armour, products

are standard and cannot be customized to an individuals liking.

Recently the company has taken strives to increase the presence of loyal female customers but

they have to stay focused on the task at hand to increase the number of female customers. Under

Armours problem with womens apparel is not the performance or design, but it distribution of

the apparel (Townsend, 2015). This aspect is also proven in their higher prices than their

competition. High prices decrease their customer base. Under Armours prices are typically

higher than its competitors. Even though this may market their brand as prestigious, average

individuals who participate in recreational activities are reluctant to pay premium prices for

clothing and footwear that is used for leisure.

Nike Adidas are globally recognized brands. For Under Armour to successfully compete within

this market they have to shift their focus internationally, lower cost, and address their female

market.
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Opportunities

Overall, Under Armour is a successful company. To increase their brand image and their

presence in the market, they have to explore the multitude of opportunities. As mentioned earlier,

Under Armour has to broaden its target audience. Since its creation, men have been at the

forefront of their campaign. With women becoming more active and involved in physical fitness,

one of their largest opportunities is to target women.

Also Under Armour needs to expand globally. Although they have present in a few foreign

countries, they competitors Nike and Adidas are dominating the international market. In 2015,

Under Armour expanded in China, which has started their international progress. This is an

important factor to expansion. In 2016 third quarter, Nikes China sales increased by 23%

(Market Realist, 2016). With their new found technology and the increase of Team Under

Armour, expanding to Asia, Europe, and Australia could benefit the overall success of the

company.

Threats

With a large number of substitutes, Under Armour has to proclaim their spot in the sporting

apparel market. With products that are closely substitutable, it has to make sure its image and

brand prevails over the competitors. This also puts a cap on the prices Under Armour can charge

for products regardless of the innovation associated with it. Nike has DriFit and Adidas has

ClimaCool, which are two alternatives to consumers within this market. The presence of close

substitutes could also lessen the chance of Under Armour obtaining successful celebrity

endorsements. It was reported that Nike spends nearly $1 billion dollars every 12 months on
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endorsements (CNN, 2002). Under Armour is still in its growth stage and is not able to spend a

large sum of their funds on prominent athletes.

Marketing Strategy

Product Strategy

Under Armour focuses on how their products utilize the newest and best technology. This is also

a characteristic that distinguishes Under Armour from its competition. Under Armour currently

has over 15 different innovative fabrics including HeatGear, StormGear, and ColdGear. Although

competitors have recreated their own version of these products they do not perform on the same

levels as Under Armour. Exceptional marketing of these products has created Under Armours

high brand equity. By constantly employing famous athletes with positive images to foster long

relationships with consumers who support these athletes.

Pricing strategy

Warren Buffet once stated that the single most important decision in evaluating a business is

pricing power (Forbes, 2014). Under Armour uses their customers value as a price determinant,

which is referred to as value-based pricing. This approach does not simply strive to increase

prices to the highest level consumers are willing to pay, but it strives to create additional

customer value to increase their willingness to pay, despite the presence of strong competition. In

2013, Under Armour sold their Highlight Football Cleat for $110, in 2014 the price rose to $130

(Forbes, 2014).
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Promotional Strategy

Under Armour advertises their products through television, billboards, magazines, sponsorships,

and the internet. UA focuses on being relatable to its consumers. The start of the I WILL

campaign was created to impact a large number of viewers regardless of race, age, gender, or

active level. The internet is one of Under Armours biggest means of promotion. YouTube, an

online video source, streams their advertisements to individuals who have browser histories that

reflect their interest in healthy living.

Another key component to Under Armours promotion is through community outreach.

They use public relations to promote its brand and to ensure the public of their good image.

Under Armour has created a separate sector entitled UA Gives Back to continue to provide the

community with support. For instance, in 2014 Under Armour started a campaign in its

hometown to improve the functionality to local basketball courts in hopes to empower the

neighborhood by providing productive activities.

Under Armours biggest promotional are accredited to their commercials and slogans. Their

commercials focus on personal endurance and achievements. Generally, the individuals in the

commercials are depicted as hardworking and dedicated. The commercials endorse their products

as well as their sponsored athletes like Cam Newton, Tom Brady, and Steph Curry. Another way

Under Armour increases exposure is by elaborating with large sporting goods stores like Dicks

and Sports Authority to showcase their new collections. This promotional strategy reduces cost

of advertising because the sporting goods store and UA split the cost evenly.
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Distribution Strategy

Under Armour uses direct and indirect channels to distribute their products to their consumers.

Their products are sold directly from their website,(underamour.com), as well as Under Armour

stores. Consumers are able to browse through a large database of products and learn about

innovation and technology associated with each product directly. Their direct sales approach only

contributes to 20% of their overall sales. The largest percentage of their sales are streamed from

selling their products to wholesalers like the Sports Authority and Dicks. They selective

distribute their products to stores. Their products are not easily found in all retail locations,

typically just sporting goods stores. By utilizing a mix of distributions tactics, Under Armour has

the potential to maximize their sales. Internet sales also work as a prominent factor in

distribution. Consumers are able to browse through a large database of products and learn about

innovation and technology associated with each product directly.

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References

Colbert, Catherine. Under Armour, Inc. Hoovers, n.d. Web. 16 August 2016.

http://subscriber.hoovers.com/H/company360/overview.html?companyId=10660700000

(n.d.). Retrieved August 19, 2016, from

http://www.forbes.com/sites/greatspeculations/2014/03/03/factors-underlying-our-74-valuation-

of-under-armour-part-1/#4a2345b94b4b

China Drove 3Q15 Sales Growth for Under Armour, Nike, and Adidas. (n.d.). Retrieved August

19, 2016, from http://marketrealist.com/2015/10/china-driving-sales-growth-armour-nike-adidas/

Fitness Industry Analysis 2016 - Cost & Trends. (n.d.). Retrieved August 19, 2016, from

https://www.franchisehelp.com/industry-reports/fitness-industry-report/

Haden, J. (n.d.). The $14 Billion Man: Why Nike Lost NBA Superstar Stephen Curry to Under

Armour. Retrieved August 19, 2016, from http://www.inc.com/jeff-haden/the-14-billion-man-

why-nike-lost-nba-superstar-stephen-curry-to-under-armour.html

Now its status as such a big spender has helped draw Nike into the unprecedented bribery

scandal engulfing FIFA. (n.d.). How Nike became king of endorsements. Retrieved August 19,

2016, from http://money.cnn.com/2015/06/05/news/companies/nike-endorsement-dollars/

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Under Armour Aims High To Close Gap On Nike, Adidas. (2015). Retrieved August 19, 2016,

from http://www.nasdaq.com/article/under-armour-aims-high-to-close-gap-on-nike-adidas-

cm527249