UNDER ARMOUR’S
MARKETING PLAN
Principles of Marketing
18534400SEPTEMBER 27, 2018
DR. IRINA TOTEVA
Ebony Smith, Aniyah Shealey, Breandra McDuffie
SEPTEMBER 27, 2018
DR. IRINA TOTEVA
Ebony Smith, Aniyah Shealey, Breandra McDuffie
Group members:
Aniyah Schealey ([email protected])
Ebony Smith ([email protected])
Group name:
The Almighty Athletes
Date:
November 15, 2018
Table of Contents
Executive Summary……………………………………………………………………………..……………… 2
New Product and Company Description…………………………………………………………..…. 3
Strategic Focus and Plan……………………………………………………………………………………… 3
Situational Analysis…………………………………………………………………………………………….. 3
Market-Product Focus………………………………………………………………………………………… 4
Customer…………………………………………………………………………………………………………….9
The Marketing Program………………………………………………………………………………………9
References…………………………………………………………………………………………………………. 10
2. Executive Summary
Why did my partner and I choose Under Armour, you may ask? Under Armour is a company that bases around athletes and their gear. It started with an ex-football player that wanted to find a solution to a problem that he was having. After countless hours in his mother and grandmother’s garage he finally found a solution and made the well-known company that it is today. That is the sole reason why I chose this company because their foundation and position has not faltered since the beginning. With this, I believe that my new product idea greatly correlates with the value of Under Armour.
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Ask yourself this. Do I really want to continue to buy various athletic shoes? If your answer was no, I have the solution for you. Over the course of 8 months, my partner and I were coming trying to come up with an innovative idea to bring something new to this company. After many months, there was eventually a breakthrough for our thoughts. We came up with the idea of producing a shoe that has a retractable sole.
Under Armour’s mission statement means to basically continue to enhance athletic wear for athletes through innovation. Our product does exactly that and has the benefit to be a great branding to put Under Armour ahead of its competitors. Having a background in multiple sports, I know exactly how buying different pairs of shoes for each sport can get on the expensive side. Also, the downfall of having to go to practice back to back and remembering to pack each pair of shoe. My mother dreaded practice days because the backseat was always filled my equipment. To clarify, I cheered and ran track. Both sports needing completely different shoes to practice in. The retractable sole makes the transition easier and with less hassle.
Despite my history in multiple sports, my partner and I wanted to put our ideas toward the footwear department, especially. Study has shown that Under Armour’s revenue comes heavily from footwear, 75% of its sales to be exact. Under Armour is ranked number 4 with its competitors within the athletic wear department and my partner and I are confident that our product will make Under Armour go up into ranks. I say this with confidence because intense research has been done on the company and we set out to ask future customers and existing customer about our idea and have been getting nothing, but positive feedback. We understand that this idea will be costly in the beginning, but we believe that the risk is worth. Innovators are the ones that take the most risk in the market, so let us all take a risk with this idea and “take a step in the right direction.”
2. New Product and Company Description
The product idea that we came up with is a retractable shoe sole. The retractable shoe sole is targeted directly towards athletes. The company that we are developing this product is Under Armour. Under Armour is an apparel store that is specifically meant to support and enhanced the lifestyle of athletes.
3. Strategic Focus and Plan
a. The Mission
Under Armour’s mission statement “is to make all athletes better through passion, design and the relentless pursuit of innovation” (uabiz.com). We have no critiques about the mission statement because it coincides with our product idea perfectly.
b. Goals
Under Armour’s overall goal is to “empower and provide all athletes around the globe with the most innovative performance apparel, footwear and accessories” (uabiz.com).
c. Core competencies and sustainable competitive advantage
Under Armour is a company that strives to always improve their innovation in their market, with “improving their materials and product design” while trying to reduce waste in the environment. They are a company that prioritize social responsibility, while maintaining ethical responsibility. They are also a company who “engage with their strategic partners, their teams, and their communities to provide additional value to, with and through them” (uabiz.com).
4. Situational Analysis
a. The Industry
The industry that our company is a part of is the sports apparel market. Sports apparel is clothing, including footwear, that is specifically designed for people doing physical exercise and sports. It is “designed to provide comfort and agility during physical movements” (alliedmarketresearch.com). The sports apparel market is a huge and growing industry. As of 2018, the market size for sports apparel is $178.63 billion dollars. Many are expecting it to grow to $184.6 billion by the year of 2020. The numbers previously reported is on a global scale.
b. The Company
Under Armour was developed by athletes for athletes. Products are created with microfiber to keep the body comfortable, dry, and anything else to help relieve the consumer from conditions from all seasons. Under Armour’s product lines were meant to keep athletes comfortable during their activities. “Their apparel and footwear became a sensation when it helped various university sports in the US, such as: football, soccer, track and field, hockey, baseball, NASCAR drivers, and even Olympians” (www.referenceforbusiness).
Within the first eight years of being founded by football player, Kevin Plank, the company earned $110 million in profit. Different product lines support to men, women and youth, and are now distributed internationally to athletes in other countries. There are some lines: HotGear, ColdGear, and AllSeasonGear, which are meant to be worn in hot weather, cold weather, and weather between the extremes. So, these products can be worn all year around. The product line for footwear is mainly to help consumers to be more comfortable when they are active to help them perform better at their sport or fitness routines.
c. SWOT Analysis
Strengths
Revenue doubles in short amount of time
Because revenue is increasing so much, they are seen to be a major player in their respective market.
They now have a variety of products
They have expanded their products making them more profitable in the market.
Weaknesses
Rapid growth
Although grow is a strength, Under Armour is growing too fast that the money that it takes to keep up keeps increasing.
Rapid reconstructing
Under Armour is quickly making new innovations and products that it is a weakness. They can come off as a company that “prioritizes rapid revenue increases over smart and sustainable long-term growth” (fool.com).
Opportunities
Relationships with major retail stores
They are being sold in many big-name retail stores around the world like: Kohl’s, Macy’s, Dillard’s, And Target.
Growing International Market
Under Armour is slowly expanding in the market outside of the United States, which is great for the company.
Threats
Major competitors
Under Armour is in a market with big name competitors that are well known like: Nike and Puma.
Perception of having a diluted image
Under Armour started off as just a t-shirt company and now they sell a very wide variety of products and that it is as though the company does not have the same values as before.
d. The Competitors
Nike:
Strengths: Nike has a large variety of shoes that can be used for different sports, such as: tennis, cheerleading, soccer, football, baseball, etc. They have also created many different designs for those as well. Nike has a strong brand image that evolves through the quality of their products. The famous “Swoosh” symbol on a product is usually the first thing for people to think it’s Nike’s. “The company is known globally in over 100 countries and has a strong global product and distribution network that allows it some dominance in the market” (panmore.com). The company also has rapid innovation processes. They can quickly come up with new ideas for shoe designs, apparel and equipment, which keeps the brand fresh and brings in traction from new and loyal customers.
Weaknesses: Nike has a limitation on its product mix, meaning there isn’t a large enough share on products for many apparel, equipment and shoe market. There is also a limited presence in developing markets. This issue is mainly due to high prices, imitation, and patent protection. Nike’s prices are usually higher than those of its competitors, which may make them higher profits, but would not be very affordable for some loyal customers. Poor labor practices and working conditions is an issue for Nike that has faced a lot of criticism for. “There are many concerns about the low wages the company gives its workers, and safety issues in certain locations” (gurufocus.com). Nike has been working on solutions to these concerns to prevent dangerous outcomes for their workers.
Adidas:
Strengths: Adidas has a diversified portfolio that is expanding, with many products for sporting footwear and apparel, under the brand names Adidas and Reebok. The company has a great distribution process, selling products online and in different stores. They also have marketing strategies that will guarantee customers will buy their products.
Weaknesses: Much like Nike, many of Adidas’ products are high in price, which can be unaffordable to potential and loyal customers. There is also a limited product line. There are only a couple of brands under the company (along with Reebok). “Competition is also a weakness, because other companies in the same market have similar products to Adidas and could offer those products at a better price and better quality” (marketing91.com).
6. Market-Product Focus
Marketing and Product Objectives
The concept testing and prototype will be out within the next year.
The alpha and beta testing will begin and conclude 5 months following.
The goal is for the product to be on the shelf around this time in 2020.
We expect sales to begin soon after and we project the profit to be $20,000 gross for the first 3 months.
We are looking forward to promising 5-7% growth rate within the next 5 months after the product release.
Point(s) of Difference
We have a product idea and concept that no other company has thought of. Our product will have a patent on it, so that no one else will be able to copy our idea. Even though our product is innovative, it will be significantly cheaper than our other competitors. Just like our company’s mission, we only want make athletes, and non-athletes, better through innovation.
Thanks to the retractable shoe sole, the products that feature this sole will have
Better performance capabilities
More versatile shoe based on the sole
The SOLE is the SOUL of the shoe. Why not have the ability to change it at will?
Positioning
We want the consumer to see that, just like our founder, we only want to find solutions to a problem that athletes have. We are only here to help with costs that it takes to be an athlete and we do not want that to be a burden on the athlete’s family. We want you to view this product as an affordable and reliable substitute that you will not be able to find anywhere else. We want you to see that we value athletes’ lifestyles and only want to make it easier for them.
7. The Customer
Under Armour’s target market is athletes and people who enjoy fitness and being active. Athletes and people who exercise often are looking for comfortable, lightweight, and flexible shoes (along with clothing) to wear while doing their activities. Producing a fresh, new product with such features will be sure to catch their attention. The appeal of having exactly what the target market needs in a shoe will create an incentive for them to purchase the new products, that have yet to be released. Under Armour’s ideal customer would be someone that has an active lifestyle, brand loyal, and cares about the performance of their gear. Under Armour makes products for all ages and everyone who wants to change, or even enhance, their active lifestyles. Their consumers know that Under Armour’s products are expensive and still they are loyal to the brand. With that, customers will be interested in what Under Armour will bring out and come up with next.
8. The Marketing Program
Product Strategy
We have two products, to be specific. We are producing a shoe that can have a retractable sole and soles that have the ability to be retractable. The retractability of the two products is what is going to be patent, so that that idea is specific to Under Armour. With the patent and the new product, it goes hand and hand with the company’s mission statement and goal since the beginning, “is to make all athletes better through passion, design and the relentless pursuit of innovation” (uabiz.com). The design of the retractability is something a twist and lock method to latch the two products together. Some of the shoes will be of similar design to the ones already manufactured in Under Armour and others will be of our own creative design. The designs of the sole will also be of like the ones of Under Armour as well.
Price Strategy
At first, the decision was to make the product less expensive, however study shows that with least expensive products, customers may not want the product or believe something is wrong with it. No one wants the consumers to think something is wrong the product. Our product will be meant for mostly customers who are interested in premium products. Because our product will be patented and will have more fees than that of Under Armour’s others, the product will be more expensive. Basing the price on the features, legal fees, and production of itself, we are going to have it around $325 per shoe (without the sole) and $100 per sole.
Promotion (and ecommerce – website) Strategy
There are going to be advertisements that include famous celebrities that are already signed under Under Armour. One example, Steph Curry. He is going to be playing basketball in our shoe and then decide that he wants to run track with his little girl. Instead of going home to change, we show him taking off the sole of his basketball shoe and put on a sole for track (with spikes). At the end, he says “Let us all take a step in the right direction,” while he is holding one of our soles. That frame freeze and slogan will be posted on every social media site and will be replayed through all mediums. To clarify, the advertisement will mostly be on ESPN and other sports related channels, along with Freeform and ABC Family, so that it can reach families and athletes.
Physical distribution (Place)
Under Armour uses a few marketing techniques when it comes to the distribution channel, such as: “forming alliances with sports teams, retailing, independent sales to specific businesses and individuals, institutional advertising, etc” (bussinessays.com). We are going to use this existing exclusive intensity distribution method toward consumer sales.
References
Bhasin, H., BhasinI, H., Paul, Facebook, ; HOZIFA. (2018, March 07). SWOT analysis of Adidas – Adidas SWOT Analysis. Retrieved November 15, 2018, from https://www.marketing91.com/adidas-swot-analysis/
Dima. (2018, February 08). Under Armour’s Distribution Strategy. Retrieved November 15, 2018, from https://businessays.net/under-armours-distribution-strategy/Kissinger, D. (2017, February 07). Nike Inc. SWOT Analysis & Recommendations. Retrieved November 15, 2018, from http://panmore.com/nike-inc-swot-analysis-recommendationsNike: Analysis of Strengths, Weaknesses, Opportunities, Threats. (n.d.). Retrieved November 15, 2018, from https://www.gurufocus.com/news/325905/nike-analysis-of-strengths-weaknesses-opportunities-threatsUnder Armour. (n.d.). Retrieved November 15, 2018, from http://www.uabiz.com/
https://www.referenceforbusiness.com/history2/26/Under-Armour-Performance-Apparel.html
