Professional Documents
Culture Documents
Hasan Akbar, Aamena Javed, Ari Prado, Chris Lewis, Umaima Nasir
MKT 3300.009
Professor Parneet Pahwa
December 9,2016
OVERVIEW
Executive Summary
Background
Core Values
Mission Statement
Vision Statement
Organizational culture
Industry Analysis
Competitor Analysis
Customer Analysis
Product strategy
Distribution Strategy
Advertising Strategy
References
EXECUTIVE SUMMARY
This Marketing report discusses Under Armours current marketing plan, the
company's positioning in the sporting goods market, and how they are trying to improve
their market share. After analyzing several sources, this report has combined key
information about Under Armour. As well as, the external forces affecting Under Armour,
consumers buying behavior and the various strategies used in the marketing mix. A
SWOT analysis of Under Armour was also performed, identifying the strengths,
weaknesses, opportunities, and threats facing the company. Under Armours strengths are
great brand equity, as well as producing and selling a very high quality product. Their
biggest weakness is their lack of a global presence, but this also presents them with an
opportunity to expand their brand into Europe and Asia. As for threats, Under Armour
risks losing its sales to competitors who mimic their products. This SWOT analysis and
other details of the marketing plan will be covered in much more depth later in this
report.
BACKGROUND
Under Armour, Inc. is an American sportswear company. Kevin Plank, who is the
current CEO, founded it in 1996. During Planks senior year at the University of
team, Plank got tired of sweating in cotton shirts that he wore under his jersey during
practices, while his compression shorts stayed dry. This inspired him to develop a T-shirt
shirt using microfibers and gave them to some of his old teammates who went on to play
in the NFL. This was the start of his company: Under Armour. Soon after, Nike and other
Under Armour received its first big break in 1999 when Warner Brothers asked
Under Armour to outfit two of its feature films, Leveraging their release, Plank bought an
ad in the ESPN magazine. It generated close to $750,000 in sales. Under Armour made
$17,000 that first year. Under Armour began offering footwear in 2006, in that year alone
the company made $400 million. Last year, Under Armour overtook Adidas, and became
the second largest sportswear brand in the United States. Now, the company is neck-and-
MISSION STATEMENT
To make all athletes better through passion, design, and the relentless pursuit of
innovation
VISION STATEMENT
Empower Athletes Everywhere
ORGANIZATIONAL CULTURE
company underwent some management changes toward the end of 2014, in which
multiple managers were moved to different divisions to bring their experience and
expertise to different areas of the company. The changes specifically affected how the
company continues its international growth. Global growth is big part of because in the
most recent quarter, Under Armours international sales grew more than 90%.
Under Armours corporate culture, so much so that employees refer to each other as
teammates. The phrase aggressive, young, fearless is plastered all over the walls of
the companys headquarters in Baltimore. Kevin Plank is very focused on growing the
company, and representing his city, and this fervour is represented in every aspect of
Under Armour.
INDUSTRY ANALYSIS
Under Armour is a Global Brand with offices in: North America, Latin America,
Europe, & Asia Pacific. The brand started was founded by Kevin Plank, who played on
University of Maryland football team in 1996. The brand emerged out from Washington
D.C. in his grandmothers basement, and began branching out globally by 2003.
Under Armour is a growing market, Sponsoring Top athletes like Cam Newton &
Stephen Curry. Since bring Curry onboard the footwears net revenue has increased 58%
from the year prior. Thats almost $100 Million more than last year!
Under Armour is intending to make comfortable, affordable athletic wear that fits
correctly on most body types. They have products with features like heat gear which is
perfect for when its warm out as it specializes in keeping your body at cool temperatures.
They have outlet stores across the country to appeal to anyone looking for a deal. They
even offer their brand at major sporting stores like Dicks & Cabelas.
The company states, Under Armour suppliers and their subcontractors will
comply with all environmental rules, regulations, and standards applicable to their
operations. With that being said, I dont believe the regulatory environment affects the
industry as a whole because Under Armour is already complying with all of the
These three companies are all considered competitors to one another because they
all sell similar products: Sportswear, shoes, sporting goods. Some of these companies
have been around longer than others, and there are other companies that sell these goods.
Nike and Adidas are considered the main competitors because although there are other
brands out there, there arent any that are growing nearly as fast as: Nike, Adidas, and
Under Armour.
Size of Competitors:
two other major well-known companies that consist of Reebok & TaylorMade. The iconic
3 Stripes & the trefoil are recognized globally throughout all cultures and age groups.
The company is nearing $16 billion in yearly revenues. Adidas Initially started out as a
soccer brand but with its acquisitions of the two major brands, they quickly became a top
for many different types of sports. Nike dominates other brands when it comes to brand
recognition and sales. The company has the iconic Check mark and the phrase Just do
it coined to its name. They make over $31 billion in revenue over a 12-month period.
This company is focused on growing another $19 billion annually in the next 4 years!
Under Armour has only been public for 17 years so they are the youngest of the
bunch. Using their sponsorships on young and up and coming athletes Under Armour has
been steadily growing by aiming their marketing strategy towards the younger generation
who have not developed a bias with Nike or Adidas yet. Under Armour is mainly focused
on sportswear similarly to Nike. They have 12-months revenues of about $3.6 billion.
more firms dominate said market. Therefore, Under Armour, Adidas, and Nike are said to
be the Big three in the sportswear market. These three companies offer sponsorship to
some of the most popular athletes, universities, and even to sports themselves.
Strengths:
A strength for all of the companies would be endorsements & sponsors it gives
out to influential athletes. They also all have an effective distribution system (Online, in
Adidas: Diverse because they also own Reebok & Taylor made. Strong financial position
Under Armour: Their prices are affordable in comparison to the other two leaders.
Weaknesses:
Adidas: They have outsourced manufacturing. That being said they risk being too
Under Armour: It is a very young company, focusing on younger crowds instead of the
average consumer.
These companies are all growing at a fast rate. All of these companies are
If we are comparing companies by $ dollar amount and size, then the order of which of
these is more advanced would go Nike > Adidas > Under Armour.
COMPANY ANALYSIS
Under Armour is a particularly strong company that does well in the domestic
sphere and possesses many key strengths that outweigh their weaknesses. One of the
things that really stands out is the fact that Under Armour is on the come up even though
its such a young company. Currently, Under Armour possesses a miniscule share of the
market when compared to its leading competitors, but for the past 5 years UA has been
Some of the weaknesses that Under Armour has is its lack of focus on female
consumers and the threat of being knock out of the global competition because of it lack
opportunities because if UA addresses these problems then they could potentially tap into
Overall, UA is doing extremely well for themselves considering how young they
are in comparison to leading competitors. UA still has a lot of untapped potential and
because of this they will be very prosperous and profitable in the future.
SWOT Analysis:
CUSTOMER ANALYSIS
Problem Recognition:
Under Armour has been very good at producing things that its customers are
interested in. The brand is also expanding beyond just what it started with, dri-fit athletic
wear. In 2006 they started making shoes, and sports gear. Under Armour appeals to
clothing/gear.
Additionally, UA over the past two years has spent close to $1B "buying and
investing in three leading makers of activity- and diet-tracking mobile apps." By doing
so, the company "has amassed the world's largest digital health-and-fitness community,
with 150 million users. attracting a variety of customers (not just the athletic kind).
Also, Under Armour has recently made clear that the company "isnt just about
mainstream sports anymore," because it is "gunning for core consumers in the outdoor
market. This is attracting even more customers toward the brand that wouldnt normally
Usually a consumer researches what product best fits his/her needs. Ex: running
shoes, what type, etc. This may seem easy when it comes to athletic wear because there
are a few well-known, high quality brands that offer those products. However, when the
choices are so similar its hard to decide which one is the best. So, most customers look at
price. Under Armour has very competitive pricing, offering both high function and decent
pricing. Another way for customers to confirm that Under Armour is the right choice over
Nike and Adidas, is through internet research, and word of mouth. Every person has a
different experience with each brand, so it helps for customers to ask around, and learn
people's experiences.
Purchase Decision:
If a customer was buying from Under Armour he/she would look at the function
and the price of the product, and make an informed decision. Retail and Outlet stores
attract the most consumers, especially because at Outlets the prices are lower. However,
Many consumers like to shop online as well because not all retail or outlet stores carry
Under Armours overall mission is to make all athletes better through passion,
design and the relentless pursuit of innovation (Under Armour Mission, Vision &
Values). With that being said, Under Armour also has many other goals, both short term
and long term. One such goal is to have total revenues reach $8 billion by the year 2020.
With last years revenues just under $4 billion, this goal is very ambitious, but given
current growth rates it can be done. This being said Under Armour can potentially
increase its market share, increase sales while decreasing competitor sales. Another
increasing the popularity of their womens and kids clothing line. In fact, CEO Kevin
Plank has been quoting saying, We want to make a statement that UA Women has
really arrived. The majority of Under Arms brand focuses on mens apparel but it is
time to start expanding womens and kids apparel as well. If emphasis is put on these
Target Markets
for use in athletics, fitness, training and outdoor activities. UA seeks to drive consumer
demand by building brand equity and awareness that products deliver advantages that
help athletes perform better. Under Armours marketing and promotion strategy begins
with providing and selling Under Armour products to athletes and teams on the high
and collegiate sponsorships, and individual athlete agreements Under Armour products
are seen on the field, giving them exposure to various target consumer audiences through
the internet, television, magazines and live at sporting events. This exposure to
consumers helps establish on-field authenticity as consumers can see Under Armour
sponsors and sells products to several European and Latin American soccer and rugby
teams, which helps drive brand awareness in various countries. UA also sponsors brand
authenticity from a grassroots level by hosting combines, camps and clinics for athletes in
many sports across the country. These events, along with the products, are designed to
help young athletes improve their training methods and their overall performance.
Points of Difference
In terms of points of difference each brand are running campaigns that are unique
to them. Nike has created the NikeiD series where you can customize your own shoes and
gear. Therefore appealing to customers who like to create their own style and unique
identity. In addition the brand has a much more casual-friendly product line that allows
people to wear Nike-branded products in their everyday life outside of sporting activities.
So much that Jordan product-line has become a brand itself within the brand with its own
logo easily recognizable. Under Armour is essentially about high-tech, innovative and
performance oriented athletic and fitness gears. The brand is trying to diversify its
portfolio and appeal to greater masses with football, golf, basketball and other popular
sports and the female customers, which are still lacking behind.
Positioning
UA likes to embrace the underdog view because it is very appealing to most. The
brands slogan, I WILL makes UA seem like a brand that anyone can buy in to and
gives the company more of an attitude than Nikes Just do it. Under Armour pushes the
agenda of hard work, teamwork and aggressiveness, which is shown through their ads
and promotions which exponentially increases customer appeal. While pushing this
agenda UA also focuses on creating high performance products through innovation and
integrity, which gives consumers assurance that they are receiving quality products.
Product Strategy
Under Armour focuses on creating products that include top of the line technology
and incorporate them into their apparel. Under Armour has HeatGear, ColdGear, and
StormGear which all serve a different purpose. HeatGear keeps athletes cool and wicks
sweat, ColdGear keeps you warm by trapping heat close to the body and StormGear
keeps you dry because it is waterproof. In addition to the technological advances in their
apparel, Under Armour has also introduced the UA band which is similar to the fitbit and
apple watch. The band can be synced with shirts to monitor heart rates and shoes to see
how many steps you have walked. All these technologies have been copyrighted but that
still hasnt stopped competitors from trying to emulate UAs success. Nike has Dri-Fit
which is very similar to HeatGear but still doesnt compare in the performance aspect. On
the other hand UA still has a long way to go to catch up to the fitbit and apple watch
Under Armour values relationships with its customer and in this way they build a large
brand loyalty from their consumers who do not mind paying the high mark up for their
products. UA has been building this reputation over the years and is now established as a
As of right now Under Armour is at the growth stage of these products, for the
past handful of quarters UA has increased their revenue consistently and they dont seem
to be stopping anytime soon. Their target market is always looking at Under Armour to
improve their products and keep making strides forward. UA is placed in mainly America
and Europe but is available all over the world. By making deals with sports organizations,
teams and athletes as well as sponsoring many events UA is mainly targeting consumers
in America and Europe promoting their brand and gaining worldwide exposure.
PRICING STRATEGY
Benefits offered:
Under Armour is the youngest company within its competitors, Nike and Adidas,
established in 1996. Although its growth has been incredible for the company, it is still
article, Adidas vs. Nike vs. Under Armour, the company has a market capitalization
around $15.5 billion and 12-month revenues of $3.6 billion. The stock ended 2015
trading around $80 per share with a P/E ratio of approximately 40. Due to its younger
growth-phase company, the stock does not currently pay a dividend. The company does
provide prices that are in between its competitors. For example, Under Armour's
Heatgear products are priced from $29.99 -$39.99 compared to Nike's DriFit priced at
around $35.99 -$49.99 and Adidas' ClimaCool is priced at around $19.99- $39.99. The
prices are not cheap and that is only because they do have high quality products in their
apparel. Although, their shoes are relatively cheaper in comparison to the competitors due
Pricing Objective:
Under Armour uses a value-based strategy, which basically means that they put
more effort into the quality of their product rather than lowering the price of the product.
According to Investopedia, the reason why the company has been flourishing is due to
their product value. If we look into compression gear, Under Armour is leading that
industry because of their high quality, hence they can charge at a higher price that their
competitors.
Their products can be considered premium products, as they are similar to their
competitors product. Due to their higher price point, people do associate it with higher
quality. The company does tend to go through a skimming procedure, just because prices
are initially very high but decline as the style or color grows older and out of the trend.
They are very much competition oriented as well since it is a sort of an Oligopoly due to
target market is mostly athletes and collegiate teams. Therefore, for this type of audience
their demand is more for higher quality of the product than cheaper price point. For
athletes their number priority is functionality over style hence why this brand is trying to
accomplish the value based strategy. As mentioned before, they are in between process
with Nike and Adidas, just to show their customers that their products are just as high of a
Estimate demand:
Compared to its competitors, Under Armour has more room to grow because of its
young age. They have had significant growth in their apparel and footwear but they also
plan to enter new markets, as they are hiring more people to look into outdoor
rose 22.2 percent to $864.8 million in the fourth quarter, driven by demand for training,
running, golf and basketball clothing. The company has also Cash(ed) in on their
athleisure, which is basically a hybrid of streetwear and athletic styles, and that has
helped maintain the revenue growth to more than 20 percent. Also due to the popular
celebrity endorsements, such as Stephen Curry and Jordan Spieth, their overall sales
rose 31 percent to $1.17 billion, beating analysts' average estimate of $1.12 billion.
These endorsements have been very beneficial for the brand as it portrayed brand
Under Armour usually does not tend to give out any discounts or promotional
codes, but they do offer lower price at their outlets. According to their tag line on the new
arrivals, they dont believe in giving out discounts or promo codes because they believe
in delivering only the latest and greatest innovations around. This statement alone just
proves that Under Armour are highly confident in the price bar they are in and they
expect their consumers to know that they are getting the best product on the market.
CHANNEL/DISTRIBUTION/PLACE STRATEGY
Under Armour uses various distribution channels that range from direct to indirect. Some
prime examples of its direct channels are the orders that occur directly through UAs
website. When going through this channel the customer only deals with UA and no other
intermediaries. Typically, this channel also possesses the most breadth and depth of UAs
products.
The second channel, a more indirect channel, is mainly all of the orders that UA has
through its own retail stores and other Retailers such as Dicks Sporting Goods. The fact
that UA has its own retail stores and uses other department stores is brilliant because it
The last indirect channel that UA has is through their wholesalers such as Macys,
Footlocker, Champs and Jcpennys. The fact that UA has so many channels displays their
selective distribution because while they sell their product through a numerous amount of
outlets, they keep it exclusive by not selling it everywhere. Places such as Walmart,
Some of the factors that influence channel choice are the consumer factors.
Different consumer prefer different products, so in the case of more serious consumer as
opposed to a recreational consumer theyd tend to go online and search for UAs gear
because of the wider variety found online. In the case of more recreational consumers
that prefer to save on purchases,the channel that they'd go through is typically the outlet
their indirect channels at a much cheaper price. This undercuts UAs profit through their
UA uses forward integration by being a manufacturer that has its own outlet stores
at the intermediary level. Generally, all of UAs channels are priced the same with the
UA uses its own personal stores for service level quality. In terms of product line,
they use their online website for all the products line and depth of the product line.
Advertising Strategy:
Under Armour has created many campaigns to promote their values and how they
are different than their competitors. Companies such as Nike and Adidas sell similar
products, but the reason why Under Armour stands out is because they dont just address
males or athletes. The company had a campaign called I Will What I Want which
showcased women representing the brand. They had some unorthodox picks to
represent the athletic brand: Ballet dancer Misty Copeland and supermodel Gisele
Bndchen. In Ms. Copelands ad it reflects on how she was rejected from a top school
because she had the wrong body for ballet due to her muscular body type. In Ms.
Bndchen's ad features her kickboxing workout as she reflects on the unforgiving media
that has always been extremely critical on her body. Under Armours goal with this
campaign is to celebrate women "who had the physical and mental strength to tune out
the external pressures and turn inward and chart their own course." Consider this like the
anti-Nike approach because Nike tends to partner up with successful athletes such as
Michael Jordan and LeBron James. Athletes that are already the best in their field. Under
Armour wants to highlight the growth of their athletes. Hence they pick out celebrity
endorsements who were rejected and struggled and hence grew from their weaknesses.
Their advertisements have mostly been about the person representing the product rather
than the apparel itself. They believe that if they link their product with the story of the
endorser, their consumer will purchase the product because of that emotional appeal and
relatability.
Public Relations for promotions:
Under Armours marketing executive Adrienne Lofton considers the brand as the
underdog brand. They work with people who have been rejected in their field and
hence have come out stronger than before. This rejection motivated them to work harder
and be diligent to strive for more success. Under Armour believes that rejection should
not put a person down but rather lift them up to progress farther. Hence, they picked
Stephen Curry. His endorsement to the brand has tremendously been paying off as his
merchandise is the top seller for the company. He rose to success because he trained
every day, got up when he fell down, continuing to drive with all that unsexy work to
achieve his goals, and thats the ideology that Under Armour persists on. As mentioned
earlier, they also had endorsements from Misty Copeland and Gisele Bndchen. Hence
the brand is a competitor not just for Nike, but also Lululemon as its sales are peaking in
the women's apparel line. This ideology of working harder for the main goal has been
This graph was taken from the Market Realist which gathered all their
information from the revenue of the sales of Under Armour. Through this graph, it is
quite visible that Under Armour relies more on direct selling with 11% of sales in 2007 to
30% of sales in 2014. Foot Locker (FL) and Dicks Sporting Goods (DKS) are Under
Armours and Nikes (NKE) largest wholesale partners. Same-store sales were up 9.6%
and 1.2% for FL and DKS, respectively, in 2Q16. Therefore, Under Armour is taking the
direct selling approach more and expanding their stores around the nation. The Web has
also helped increase the source for both sales and global brand awareness. The Under
Armour connected fitness purchases have been the largest fitness community worldwide.
example of that would be their Rule Yourself campaign that was launched during the
Olympics featuring the Olympic athletes. These ad campaigns focused how the sport
itself played such an important role in the athlete's life rather than just showcasing their
skills. It made the campaign more relatable for the audience because obviously not
everyone will be as skilled as the athlete playing for US, but our drive for success can
help unify us. What sets these commercials apart is the emphasis on making a visual
impression as opposed to an audible call to actions. There was no link shown between
the performances of the athlete with the Under Armour gear. Instead it was more about
making a mentality link with the audience watching the advertisement. Clearly not all of
us are capable of being as flexible as the gymnasts or as fast as Phelps, but their
exhaustion after every workout, or celebration with their teammates is what an audience
member can connect to. The first ad was with the US Olympic Gymnastics Team, where
they showed long bus rides to competitions, painful visits with the team doctor, and
relentless cross training. With the background music being upbeat and their expressions
being extremely intense, the audience can really feel motivated as well. And then they
just end the ad with a simple black screen with the text Its what you do in the dark that
puts you in the light. They used the same slogan for Michael Phelps advertisement too
but they had a different approach for that one. Instead of bringing upbeat vibes they used
The Last Goodbye for their song choice and highlighted the major points in his career.
They celebrated his achievements and also highlighted his struggles to showcase how he
grew from them. This commercial was definitely meant to appeal to consumers hearts,
which will then hopefully lead to their wallets. These commercials are not complicated
taglines or announcements for sales or comparing their product with their competitors,
its just a clip of people behind the brand and what makes the brand more special.
Push or Pull Strategy:
Under Armour uses a pull strategy, which basically means that the demand for
the product is being pulled from the bottom down. So the consumers are already aware
of the product and its function, therefore they would come to the company for the product
due to consumer demand. Because of the mass media advertising, everyone is aware of
the brand name and hence has created a lot if demand for the product. Under Armour just
needs to keep working on their advertisements and the supply channels will look after
themselves.
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