Under Armour Marketing Mix 6v664j

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TO MAKE ALL ATHLETES BETTER THROUGH ION, SCIENCE AND THE RELENTLESS PURSUIT OF INNOVATION. Team Opinion We feel as though Under Armour®’s mission statement is straight and to the point, but is a little bit vague. There are many good things about their mission statement, but we think they could have added a little more. By saying “all athletes,” we concluded that Under Armour®’s market objective is to be a market share leader. However, Under Armour®’s brand is often correlated with great quality which goes against their mission statement. Their market coverage strategy is concentrated because they primarily focus on selling products to athletes. Any other customer that is not an athlete is a bonus for them because they are not focusing their marketing communication tools and strategies on non-athletes. We could tell that they are in the sporting goods business or some business related to sports because they say “athletes” in their mission. Also, their primary customer is clearly defined because of the use of the word “athletes.” The one big thing that the mission statement lacks is they don’t say what their distinct competencies are. They don’t have specific words in the statement that say what they are really good at. That is the main reason why we thought it was a little bit unclear. PRODUCT History Under Armour® is a clothing manufacturer that was founded in 1996 by Kevin Plank, a football player for Maryland. His original idea started as a t-shirt using high-tech fabrics. He believed that if the hightech fabric could keep athletes dry and regulate body temperature, they could perform better. Originally designed for use underneath uniforms and pads in sports, Under Armour® now makes other clothing such as hooded sweatshirts, t-shirts, and sweat pants. Its headquarters is located in Baltimore, Maryland, but it has offices in cities all over the world including Denver, Toronto, and Hong Kong (The History of Under Armour-A Mastermind for Performance Apparel, 2008 ). There are currently five lines of Under Armour® apparel products: Cold Gear, Loose Gear, Turf Gear, All-Season Gear, and Heat Gear. We will be focusing on the Heat Gear apparel. Product Classification Under Armour® Heat Gear is classified as a shopping product, which means that the consumer will put for effort in purchasing the product. This occurs because the product is not so widely distributed that you will find it in almost any retail outlet (Trimble, C., January 2008). Shopping products are reasonably priced. Because people will put forth the effort to purchase the product, they may be willing to pay more than they would for a convenience product. Consumers of Under Armour® will find that products are priced higher than convenience products, but lower than most specialty products. In

purchasing this product, consumers make the decision to purchase this particular brand of sportswear in a particular retailer, or through the online store. Product Description Under Armour® Heat Gear is a specific type of Under Armour® apparel that is designed to keep athletes in their optimal state. Heat Gear is worn when the weather outside is hot. It breathes easier than other Under Armour® apparel and creates a comfortable temperature for the athlete by using "super-lightweight micro-pique fabric" to keep you "cool, dry and comfortable" (Under Armour® Official Website, 2008). This product benefits the consumer because it allows the to maintain peak performance for a prolonged period of time. In addition, for those consumers who desire to enhance their appearance, the compression technology of Heat Gear accentuates muscular visibility. Product Differentiation from Competitors Since 1996, Under Armour® has been the most dominant athletic gear producer in the sporting world. It has experienced great success due to the high demands of the product. Under Armour® was the first company that offered these this type of athletic gear. Heat Gear allows you to perform to your maximum potential. Since then, many companies have tried to imitate Under Armour® products such as Nike, Adidas, Reebok, and even Wal-Mart . All of these stores create major competition for Under Armour® . The competitors have essentially the same product line but the Under Armour® company makes a unique product that cannot be beaten. Due to the micro-pique fabric technology, the company has been able to deliver a consistently high quality product. A combination of Under Armour's innovation and high quality products keep it at the top of the food chain for compression gear. USP (Unique Selling Proposition) A unique selling proposition is what distinguishes a product from its competitors. It exhibits how the product differentiates or is better than similar products( Trimble, C., January 2008). Under Armour® Heat Gear differentiates itself from the market by allowing athletes to compete at high levels in the midst of stressful climates. This is done by maximizing breathability and moisture management. s will remain cool and dry, which will allow higher quality performance and longer muscle usability. Under Armour also uses top of the line material such as its newly created PolyArmour and elastane. This creation makes it difficult for copycat manufacturers to duplicate Under Armour® products. Product Strengths Under Armour® Heatgear’s unique compression fit enhances moisture transport and bolsters muscle (Under Armour® Official Website, 2008). For on the field use, the long sleeve provides total upper body protection. This prevents abrasions to the skin, especially due to high friction which is very common in athletic performance. The PolyAmour® has a very distinct design that does an amazing job in preventing chafing. In addition, Under Armour® Heatgear protects the skin from harmful UV sunrays, preventing premature aging. The Heatgear line keeps the body cool in a sizzling environment. This enhances the comfort of the in heated situations. It also prevents the body from overheating. The compressed fit of Under Armour® gives purchasers a greater range of motion while maintaining the high quality protection less comfortable clothing. Product Weaknesses Under Armour® Heat Gear does not sell very well during the winter season. Although Under Armour® has other products to make up for the drop off in sales, our product concern is that of Heat

Gear. Another weakness of Under Armour® is that it is on the expensive side. There are many other competitors that sell similar products at a much cheaper price. For example, in a bike forum someone posted that he purchased CoolMax gear for $8.00 compared to Under Armour® for $20.00 and CoolMax was just as effective. (Bikeforums.net, 2008). To go along with being expensive, Under Armour® is losing its uniqueness because so many different brands offer very similar products. PRODUCT GRAPH

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t l e d . b m p Core Product The core benefit of Under Armour® Heat Gear is that it keeps muscles warm, helps maintain optimal body temperature, and enhances overall athletic appearance and performance in any situation. By wearing Heat Gear apparel the consumer doesn’t worry about being in the best possible position to perform at his or her highest possible level. Furthermore, wearing this product may boost self-esteem and can also lead to increased social status. All of these positive attributes of wearing the product will lead to a more efficient athlete when his or her time comes. Actual Product Brand Name Under Armour was developed in 1996 by Kevin Plank, and since then the company has spread all over the world selling top of the line products. Under Armour® is a name that is known around the world for products that keep athletes cool, dry and light throughout the course of a game, practice or workout. Attributes & Features The Under Armour® Heatgear line was especially designed for comfort, temperature control, and an athletic appearance. The longsleeve Heatgear line enhances moisture transport, which assist in keeping the body cool and dry. It also provides for the muscles with it compressed fit. The PolyArmour® protects the body from harmful UV sun rays. This is especially important to those who spend long periods of time outside. Premature aging is thus inhibited (Under Armour® Official Website, 2008). Quality Level The quality of Under Armour® Heat Gear is an extremely important reason why the company is number one in the market. The shirts are made of 81% PolyArmour® and 19% Elastine. The Under Armour® Heat Gear are quite expensive ranging from around $30.00 to $50.00 (Under Armour® Official Website, 2008), but the company thrives on the idea that you get what you pay for. The company wants you to know that you’re paying for a durable, efficient, quality product when you buy Under Armour® Heat Gear. Design Under Armour has a design that is most recognizable on game day. It has micro-pique fabrication that is durable through any workout, practice, or game. Also, antimicrobial technology doesn’t allow for odors to be present during competition. Lastly, Under Armour has a heatseal logo and lockertag. Packaging The packaging differs depending where the merchandise is purchased. If the long sleeve is purchased through a retailer, it may be found hanging on a rack. In this case, it will be packaged with the retailers own bag. If the product is purchased through Under Armour® online shopping center, it will arrive individually-packaged in plastic flasks with a raised Under Armour logo (Under Armour® Infuses Energy Into Sporting Goods, 2008). Augmented Product

Warranty If a product is defective it will be replaced with an item of equal value. Exchanges or returns must be accompanied by the original receipt received when product arrived. In addition, a summary note must be included detailing the reason for the return. Items not purchased from www.underarmour.com are not returnable. After-sale Service All products purchased through www.underarmour.com must be returned within 30 days of receipt and must be in resalable condition if it is a non-defective item. Delivery Buyers have the option of purchasing the product through retailers. If the buyer prefers purchasing directly from Under Armour®, there is an online store on the company’s official website www.underarmour.com. Buyers should expect products to be delivered within 4-10 business days for standard shipping, which is free. There is also an option to 2 day or next day shipping. PRICE General Pricing Strategy A general pricing strategy is a pricing scheme used to maximize the profitability of a product. Usually the strategy is based on the type of product being sold. The general pricing strategy provides a starting point for companies when deciding how much they will charge for the product (Trimble, C., February, 2008). The general pricing strategy for Under Armour® Heat Gear is value-based. There are a lot more factors involved with this strategy than with cost-based or competitor-based pricing strategies, one of which is reputation. Under Armour® products have a reputation that is unchallenged and will remain that way unless there is a dramatic change in the market. People have come to expect great value out of Under Armour® and their reputation is one reason why they do so well. The Under Armour® Heat Gear products thrive because no one can duplicate what they have done in the sporting goods market. People automatically correlate great value with Under Armour® products. Basic Price Points Price points are incremental steps in price. When the quantity or quality of price increases, the price increases (Trimble, C., February, 2008). Under Armour® makes use of this system in the pricing of the Heat Gear that they offer. A consumer can purchase various types of Heat Gear such as short sleeve and long sleeve products. The short sleeve products are priced around $35, while the long sleeve products are around $45. The increase in price is due to the additional fabric being used in making the long sleeve gear. The additional fabric also provides higher quality protection. Team Opinion It is our belief that Under Armour® Heat Gear has a well-planned pricing strategy. Because their product is considered high quality, it is obvious that they would use a value-based pricing strategy. There are competitors in the market. However, when consumers think about purchasing compression athletic apparel, Under Armour® is the first company in mind. Under Armour® has set their prices based on what their product is worth to the consumer (Trimble, C., February, 2008). While consumers may feel that $29.99-$39.99 is expensive for Heat Gear, they are willing to purchase the item because they are expecting high quality. If the price was lower but the product maintained the same quality, consumers might believe that similar products are equal to Under Armour® products in quality. All of the items purchased through Under Armour® essentially serve the same purpose. This is why they cannot make prices too much different from other products in the line. It is clear that they use a price points system. By observing other products offered you see that the higher quality products are more expensive. Just as our group is satisfied with the pricing, it seems as if consumers are satisfied also.

Based on our experiences, the Under Armour® is worn by nearly every player on IWU’s athletic teams. PLACEMENT Distribution Strategy Under Armour® Corporation uses the selective distribution strategy as their method for getting their product to consumers. This strategy is used for products that are not in every retail store, but they are some within a geographical area. For Under Armour®, the company chooses the retail stores that would be the best fit for selling their product, such as sporting goods stores. Stores like Dicks, Sports Authority, and Sportmart are just some of the stores that you can find the Under Armour product in. Consumers know that the Under Armour® products can be found in only a specific store which is almost every sporting good store which makes it a shopping product. Distribution Channel A distribution channel is a set of interdependent organizations involved in the process of making a product for use to the final consumer. There are many different distribution channels that can be used to distribute a product including: indirect channel, direct channel, and hybrid channel. The nature of the product determines whether the channel is direct, indirect or hybrid. Direct channels are used when there are no intermediaries between the manufacturer and the consumer. Indirect channels are used when there are intermediaries such as wholesalers and retailers between the manufacturer and the ultimate consumer. A hybrid channel is a combination of both (Trimble, C., February, 2008). Under Armour® distributes their product in a couple different ways. They sell directly to the consumer through their web site, but they also sell wholesale to sporting goods carriers who in turn sell to consumers. Therefore, we would consider Under Armour®'s distribution channel as a hybrid channel. Under Armour®’s statement in 2005 said, “Approximately 90.5% of our net revenues were derived from wholesale distribution” (Edgar-Online.com). Their principal customers are places like Dick’s Sporting Goods, Eastbay, and Sports Authority. Not all stores carry their products, but there are still a good amount of places you can find their product. Also, because their strategy is selective, the products are considered shopping products. Team Opinion Our team believes that Under Armour®’s placement strategy works well for their product. The fact that they use a hybrid system allows them to maximize sales. Under Armour® expands the amount of places that the products can be bought by distributing them to various sporting good retailers. Being able to find Under Armour® in your local mall is valuable to consumers. It is convenient to the consumer to be able to obtain the product immediately. This eliminates the delivery time and satisfies consumers desire to have the product instantly. Distributing to retailers also helps Under Armour® because their products may be purchased while a consumer is searching for other goods. Disintermediation, eliminating some of the intermediaries (Trimble, C., February, 2008), also serves both the consumer and the manufacturer well. The online store is beneficial in various ways. It allows Under Armour® to have a greater amount of control over distribution. Also, there is a greater variety of apparel available online. Retailers may run out of a product, whereas the online store is less likely to have a shortage. PROMOTION Marketing Communication Mix The marketing communication mix is a specific blend of tools used to meet marketing communication objectives. The tools include: advertising, personal sales, direct marketing, sales promotion, and public relations (Trimble, C., March, 2008). Under Armour® utilizes advertising, direct marketing, sales promotions, and public relations to communicate its product to consumers. We did not find any

evidence of Under Armour® using personal sales to promote its products. Advertising Under Armour® uses numerous approaches to their products. Advertising is a paid, nonpersonal presentation that is usually the most widely used tool in the marketing communication mix (Trimble, C., March, 2008). The primary source of Under Armour®’s advertising comes from television commercials. However, their first actual television advertising campaign did not start until 2002, seven years after Kevin Plank founded the company in 1995 (Under Armour Launches First-Ever Television Commercial, 2008). Although television is the primary source of advertising, they also have ments in magazines and on billboards. It seems that they’re primary target market is football players because of their wide use of the “Protect This House” and “Click-Clack” campaign slogans on such ments. Under Armour® also s on their official web site and in sporting goods catalogs such as Eastbay. Direct Marketing Direct marketing is a tailored, personal (not interpersonal), paid presentation (Trimble, C., March, 2008). Some examples include telemarketing, direct mail and e-mail. Under Armour® uses direct marketing to communicate with potential consumers and entice them to order their merchandise from their official web site online, or attract them to visit their nearest sporting goods store to purchase their products. Under Armour® mainly uses e-mail, direct mail, and catalogs to directly market to potential consumers. The company actually won the Interactive Advertising Official Honoree award for e-mail marketing in 2007 (UABiz.com, 2008). You can also easily request a catalog from Under Armour’s official web site by simply putting your name and address into their system. In addition, they also give you the option to leave your e-mail address so they can keep you in the loop for special Under Armour® news and promotions (Under Armour® Official Website Catalog Retrieval, 2008). Sales Promotion Out of the three that they primarily use, sales promotion is probably the marketing communication tool that is the least used by Under Armour®. Sales promotions are defined as short-term sales incentives that usually work very effectively, but are subject to price sensitivity (Trimble, C., March, 2008). Although Under Armour® does not usually use sales promotions to sell their products; they do subtle things that can be considered promotions. One promotion that they have is if you order $150 or more on their website, shipping is free. This is probably an oft-used promotional opportunity because avid shoppers of Under Armour® products can easily spend $150 if they need multiple items for a particular sport or sports. Also, if you order online frequently you will be sent coupons and rebates on later purchases (Under Armour® Official Website, 2008). In retail outlets that carry Under Armour® there are often point of purchase promotions, but that is typically on all store merchandise and not specifically Under Armour® products. Public Relations Described as an earned presentation used to create and maintain relationships with an organization’s publics, Under Armour® contributes great effort into the use of public relations (Trimble, C., March, 2008). To be more specific, Under Armour® seeks to maintain positive relationships with its investors, also called investor relations. On the Under Armour® web site (UABiz.com) a link is available for investors to track the performance of the company. It is important for Under Armour® to maintain quality investor relations to ensure that current and potential shareholders continue to supply the company with funds. Under Armour® supplies information such as stock price, press releases, financial standings, and quarterly reports in an attempt to secure the publics trust in the company.

One of the main purposes of using public relations is for the public to develop a greater level of trust in a company. Because Under Armour® voluntarily and consistently releases information on the happenings of the company, they are building on the trust that shareholders currently have. Summary Public relations and personal sales are not important parts of Under Armour®’s marketing communication mix. Public relations is defined as earned presentations used to create and maintain positive relationships with an organization's publics and personal sales is paid, personal presentation that is interpersonal (Trimble, C., March, 2008). Although we found evidence of some press conferences from Under Armour® representatives, they mostly announced the releases of future television ments and didn’t really announce anything about their products. Also, Under Armour® does not use one-on-one or face-to-face sales to attract customers to their products, so personal sales is not an applicable tool for them to use. The following graph will exemplify our group’s estimate of Under Armour®’s use of each marketing communication tool: mc tool usage.bmp  Details   872 KB

Promotion Mix Strategy Under Armour® uses a pull strategy, which means that the demand for the product is being pulled from the bottom down. Customers do not need much assistance in purchasing the product (Trimble, C., March, 2008). If a consumer is looking to by Heat Gear, they already know its use. They will not need any assistance to make a purchasing decision. Typical of a pull strategy, Under Armour® uses a good amount of advertising to promote the product. Commercials will be seen very often on networks commonly viewed by potential consumers such as ESPN. They also in sports magazines and websites. Market Coverage Strategy A market coverage strategy is a plan of promotion tailored to fit the particular target market that interests the planner (Trimble, C., March, 2008). Some companies use a strategy that fits a wide variety of people, while others focus on a small population. Under Armour® uses what is called a differentiated strategy. In this strategy, a different promotional offer is made to fit each segment (Trimble, C., March, 2008. Under Armour® offers a variety of products, Heat Gear being one of them. When they want to promote Heat Gear, commercials or other methods of communication are seen to promote this specific line of products. This is also the case with its other lines such as Cold Gear and All Season Gear. Because these products differ in their benefits, Under Armour® tailors its marketing mix to each individual gear line. As for Heat Gear, they make use of commercials by displaying athletes in very warm climates. This would not be a suitable means of advertising if they were attempting to sell a different line of products.

Team's Opinion Our team feels that the Under Armour® has a solid marketing communication mix. They have made good use of advertising through catchy phrases viewed on billboards, e-mail, and commercials. Being that they have a pull promotion mix strategy, they have used the marketing communication tools that are most effective to promote Heat Gear. It would be a waste of capital to hire a personal sales staff. Public relations is a good addition to marketing communication mix that is present. Maintaining this form of communication is essential to ensure the flow of capital from investors. Generally, it is athletes who purchase Heat Gear. It is purchased for a variety of reasons, but the same type of people do the purchasing. Therefore, it is most efficient and productive to use advertising direct marketing, and public relations as ways to communicate to the target market. It is most beneficial to have a differentiated market coverage strategy due to the various lines of apparel offered by Under Armour®. To be number one is a label that all athletes strive for in their sporting involvement. In a market where being the best is very profitable, Under Armour® has achieved what so many of its produt consumers desire. This elite status is exactly what Under Armour® intends to provide. This is evident when you observe the numerous aspects of marketing that have gone into delivering their products. Under Armour®’s objective is to be the market share leader in sporting apparel. The goal is to achieve this objective through a high-quality product. Although the company emphasizes product quality, they are not so heavily focused on quality that they create a rare, high-priced product. This is why it is classified as a shopping product. Consumers know the specific retailers who will distribute Heat Gear. There is more than one retailer in a given geographic location. Under Armour® uses a selective distribution strategy. It chooses its retailers based on the characteristics of the retailer. Using a hybrid channel, consumers can purchase Heat Gear from Under Armour® or any retailer distributing the product. The pricing of Under Armour® Heat Gear is right in line with buyer expectation. The company uses a value-based pricing strategy. While it is true that Under Armour® faces competition in the market, its superior quality of product allows them to price products outside of competitor prices. Consumers recognize the product’s excellence and are willing to pay the additional cost. Heat Gear is not priced based on its competitors’ prices; it is priced based on consumer expectation. Therefore, Under Armour® must still remain within the boundary of what consumers deem acceptable pricing. In addition to the quality of Under Armour® products, the company has done an excellent job enticing the public to purchase its products. It uses a pull marketing communication mix strategy. Consumers are aware of the uses of the product and do not need any explanation or help purchasing it. The demand is pulled from the bottom down. Under Armour has made use of advertising, sales promotion, direct marketing, and public relations as marketing communication tools. The company has applied these tools to a differentiated market coverage strategy. Under Armour® tailors its marketing mix to each individual product line. Because the company has so many different products, it is most beneficial to have many different strategies aimed at a specific segment. Under Armour® has done a great job in most aspects of marketing. Unfortunately, their mission statement is not as solid as it should be. Reading the mission statement without the knowledge of what company it belonged to, a person might not have a clear understanding of what Under Armour® is all about. Under Armour® could be a training program, sports drink, or any number of things based on how the mission statement is written. Under Armour®’s commitment to all athletes shows that they strive for market share leadership. They do not mention anything about the quality of the products they produce in their mission statement, which is a major factor in selling Under Armour®. After observing the many aspects of Under Armour®, it is easier to understand the choices that they have made in their marketing mix. These choices have led them to experience great success in their industry. Although they need to tighten up the mission statement, they have done a great job marketing the product, overall.

SWOT ANALYSIS OF UNDER ARMOUR Under Armour is an company based in the United States, best known for its introduction of form-fitting, moisture-wicking clothing designed to be worn under sportswear. Founder Kevin Plank was a football player with the University of Maryland who got tired of having to change out of the sweat-soaked T-shirts he wore under his jersey, but noticed that his compression shorts stayed dry. This was the inspiration to make a T-shirt using moisture-wicking fabric for athletic performance and Plank founded the company on January 29, 1996. The company is a supplier of a much wider range of sportswear and casual apparel. Under Armour began offering footwear in 2006, and continues to expand its offerings. In late 2007, Under Armour opened its first retail location, at the Westfield Annapolis mall in Annapolis, Maryland. In May 2008, Under Armour also opened a larger 6,000-square-foot (560 m2) store at Westfield Fox Valley in Aurora, Illinois. Under Armour has opened several other stores in 2008. Under Armour recently opened their first store outside of North America. This is located in Edinburgh, Scotland, and is run and owned by First XV, the rugby store situated next door. SWOT ANALYSIS OF UNDER ARMOUR Strengths 

Brand equity

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Innovation

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Professional & college athletes sponsorship

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Attractive Logo

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Many loyal Consumers

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Being financially strong helps under armour deal with any problems, ride any dip in profits and out perform their rivals.

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A strong brand is an essential strength of under armour as it is recognized and respected.

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Under armour's distribution chain can be listed as one of their strengths and links to success.

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High net income in year 2009

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Offering wide range of casual apparel and sports wear

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High profit to earnings ratio

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Positive response from customers

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Official outfitter of schools and universities teams

Weaknesses 

Pricing

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Narrow focus

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Advertising

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United States Marine Crops banned them for not being fire retardant - lost large part of military market.

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Very expensive

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Not reducing costs in the same way as their competitors' means under armour is outlaying more of their profits. Having higher costs than competitors is a major weakness.

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Not having an effective marketing strategy seriously hampers the success of under armour.

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Online presence is vital for success these days, and lack of one is a limitation for under armour.

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Under armour's limited product line is a major weakness.

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Narrow focus

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It is considered as male targeted brand

Opportunities 

Emphasize Variety of sports

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Lowered Prices

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Branch out outside of sports

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Pricing tiers

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Focus on consumer lifestyle improvements

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Include designs in the fabric to attract new customers

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Create alliance with fabric manufacturer and patent product then license product to

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Other companies

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Looking at export opportunities is a way for under armour to raise profits.

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The changes in the way consumers spend and what they buy provides a big opportunity for under armour to explore.

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New market opportunities could be a way to push under armour forward.

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Expanding the product/service lines by under armour could help them raise sales and increase their product portfolio.

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Expanding into other markets could be a possibility for under armour.

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Forming strategic alliances and t ventures is an opportunity for under armour to maximize profit and gain new business.

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Reduce prices of the products

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Increase number of retail outlets

Threats 

Economic Recession

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Other companies in same space (Nike, Adidas, etc)

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Male dominant focus

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Recently has become a Publicly traded company

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Fairly new company (can they keep creating new ideas)

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Negative Impact on the "Green" Market

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Tax increases placing additional financial burdens on under armour could be a threat.

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The financial burden of increasing interest rates could be a threat to under armour.

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Changes in the way consumers shop and spend and other changing consumer patterns could be a threat to under armour's performance.

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The actions of a competitor could be a major threat against under armour, for instance, if they bring in new technology or increase their workforce to meet demand.

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Substitute products available on he market present a major threat to under armour.

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Hard competition from companies such as Nike and adidas.

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Recession may impact the sale of company

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Low price importers can fetch market share

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Male dominated focus