Promotion is a very vital component that every business should adopt for success in its operations. The company that is covered in this article is Under Armour and in this session, the focus is based on a comprehensive analysis of the promotion mix. The promotion mix will involve the analysis of the direct marketing, public relations, sale promotion, and advertising together with the communication mix.
The mission of Under Armour is to ensure that they are able to provide the world with products that are advanced technically, whose engineering is enhanced through superior construction of the fabric, fashionable management of the moisture and innovation that is proven (Under Armour, 2007).
The under Armour products are aimed at providing catering to men, women as well as young athletes of all levels, size and shape. The products offered are limited to three major apparel lines that are consistent of HotGear for competition during the hot weather, ColdGear for cold weather together with AllSeasonGear which are specially designed to adapt to both weather. Limited athletic footwear are also offered including the football cleats. Recently, Under Armour has been on a mission geared towards creation of other footwear types specifically for other sporting activities. With the new line of product in place, there is hope that Under Armour will be able to compete at all the levels and aspects.
In the market of sports apparel has been characterized with competition which has over has been dominant in this retail industry for more than 20 years (Mercurio, 2009). The major competitors in this industry are inclusive of Adidas, Columbia Sportswear and Nike. These companies have been listed in many records as the strongest competitors to Under Armour. The foundation of Nike is dated back to 1972 whereas Adidas foundation dates back to 1924. It is obvious that the period that these competitors have been in business is long together with the market experience by far exceeds that of Under Armour in the industry, based on its foundation which is in 1996 (Under Armour, 2007. There is in addition a striking similarity in the type of products that are carried by each company. In all these companies, they manufacture shirts that are “moisture- wicking”, various clothing for athletic use together with athletic shoe lines. In addition, the pricing is very similar; factors that have resulted in a very strong rivalry in the sports apparel companies. The intensification of this rivalry has been commensurate with the increase in the competitor number. There is a similarity in all these companies which are all in the apparel industry making Under Armour to operate in an industry characterized with intensive competition.
The Under Armour competitive advantage is enhanced by the company’s strong will for innovativeness through which it is able to come up with new products ahead of the competitors. This does not mean that these competitors do not make effort to catch up, however, by the time they try to catch up, the company comes up with another innovative idea through which it is able to stay ahead in the market. For instance, initially, Under Armour has been involved in designing a fabric through use of a combination of elastane and polyester through which the moisture would be kept out of the body. The initial outcome was market domination depicting a competitive advantage. However, this technology was countered by Nike introduction of Dri-FIT technology. This competition was maintained a stiff level and in the process acted as a barrier to the new small companies entrants into the market, therefore creating a territory where the market can be dominated by only a few industrial giants.
Therefore, as noted above, the innovation enhances Under Armour to grow ahead of the competitors. Whereas the large competitors have a high recognition in the market, the selling of their products is mainly based on the name of the company. However, entering of Under Armour into this competitive is not very strongly attributed to its name but to the products performance and quality. Through incorporation of the existing skills of the company as well as the know-how on technology, they have the opportunity of entering new lines of the product.
TARGET MARKET AND PRODUCT STRATEGY
Under Armour target market is inclusive of the children, youths and adults that are physically fit. The new strategy is driving the company into exploring new markets in which it can be able to sell its products. With the ambition of succeeding on the soccer front in Western Europe, Under Armour is considering targeting Asia and South America in marketing its soccer cleat. Whereas it factual that the competitor Adidas holds the European soccer market, there is a representation of a growing market in South America and Asia, a market that is targeted by Under Armour based on the fact that there is no strong preference in the products from America. Therefore, the new target market that is spelling another dawn for Under Armour is the soccer clubs.
Under Armour has developed many products which enhance its ability to differentiate from the competitors. Through the incorporation of the LockerTag technology that was created by Plank (the initiator of Under Armour), one of the product categories of the company’s products is developed. This is aimed at offering a solution to the athlete apparel problem of getting a mix up in the locker room. In addition, other products that are created by Under Armour are; Cold Gear, Heat Gear together with AllSeason Gear. These categories are designed to ensure that the consumers are kept cold during the warm weather, warm during the cold weather as well as maintaining their comfort during all the weather types. In each of the gear line, a choice is also provided between three types of fit; lose, fit and compression. Through specializing on a specific line of products therefore enhancing expertise, Under Armour has been able to maintain a competitive advantage over the competitors. The company clearly knows the market that it is targeting and goes ahead to design the specific products that will maximize satisfaction to these consumers.
In order to be able to explore the areas in the world that have not been tapped, a company has to explore ways through which the distribution logistics can be improved (Thompson et al., 2007). Majority of the Under Armour products are packaged and distributed through two facilities of distribution that are located in Maryland, Glen Burnie. The high bay facility is the first distribution facility that was built in 2000. The second high bay facility was manufactured in 2003 in which 200,000 square feet is occupied by the company. Through these distribution facilities, the company is able to meet its needs in the short run. The products of Under Armour are in addition distributed in Europe through a provider of third party logistics that is based in Tilburg.
In order to facilitate the production and retailing of the products, a retailer’s physical facility is usually very essential. Under Armour have an office in Hong Kong which not only acts as the retail outlet bot also supports the efforts of sourcing, manufacturing together with quality assurance. In addition, the China office is used for the purpose of providing support to quality assurance in the effort to develop the high quality footwear products. The Maryland distribution facility is readily available to the customers who have specific needs. In this retail shop, there is a stock of various fabrics and various colors which in addition assists in building and shipment of the products that are on strict deadlines. Through these stores, a competitive advantage is enhanced to the company through ensuring it has the ability to provide a specialized service to the customers.
Marketing communication mix: Through the marketing mix, a specific combination of tools is provided through which Under Armour has been able to meet its communication objectives in marketing. According to Christ (2011), these tools are inclusive of are inclusive of personal sales, sales promotion, direct marketing, advertisement together with public relations. In Under Armour, public relations, direct marketing, advertisement together with sales promotion are employed in the process of communicating its product to the consumers.
Advertising: There are various approaches that are used by Under Armour in advertisement of its products. Through advertisement, there is paid presentation which is utilized in the communication mix of marketing (Riley, 2010). The main approach that Under Armour uses in advertisement in commercials is the television. However, Under Armour had not commenced its first advertisement in television until the year 2001, six years after its foundation. In addition to use of television as its primary advertisement source, it has also utilized the bill boards and magazines. As evident, Under Armour primarily targets the football players in its marketing based on the use of slogans on advertisement such as ‘Click- Clack”. In addition, there is an official websites that Under Armour together with catalogs for sporting goods.
Direct marketing: Through the use of direct marketing, Under Armour is able to communicate with its customers coupled with enticing them through the website to place orders for their merchandise. Mainly, what is used by Under Armour is direct mail, email, together with catalogs to enhance direct marketing interaction with the customers. In addition, the customers can place a request for a catalog through the website, which is simply done through ensuring that the address and name of the customer is put on the website. Under Armour customers are in addition given the option of leaving their address to ensure the company frequently updates them on the promotions and news (Under Armour, 2007).
Sales promotion: Under Armour least uses sales promotion when in comparison to the other approaches. Even though sales promotion is usually not highly used by Under Armour in its product sale, there are subtle things that are used by Under Armour that can be compared to promotions. One of the approaches that have been used is that of free shipment for the goods ordered through the website. In most cases, this promotional opportunity is highly used based on the fact that it is very easy for the Under Armour shoppers to have such an expenditure online, if certain sports items are needed by them. In addition, if the customers place frequent orders online, it is possible for them being sent rebates and coupons during the next purchases. In the outlets of retail, points of purchase promotion are very common, which characteristically is usually on the store merchandise and not products of under Armour; to be specific.
Public relations: Through this promotion approach, relationships are created and maintained with the publics, and great effort made by Under Armour is aimed at public relations utilization. What Under Armour aims at specifically maintaining is a relationship that is positive with the stakeholders. On the Under Armour website, there is a link through which the stakeholders are able to track the company’s performance. Maintenance of stakeholder relations that is of quality is important with an aim of making sure that there is a continuous supply of funds to the company by these stakeholders. The transferred information is inclusive of the press releases, quarterly reports, stock prices together with the company standings financially. This is aimed at ensuring that the company can maintain a relationship characterized with trust to the public. Based on the fact that the company information is released in a consistent and voluntary manner, trust has been built and maintained with the stake holders.
The strategy of promotion mix: A pull strategy is used by Under Armour, implying a bottom down pull of the product demand. Little assistance is required by the customers in their decision to purchase. The assumption is that the consumers already know how to use the products that they are looking for. Therefore, no assistance will be required in the decision to purchase. In relation to this strategy, substantial advertisement is used with an aim of promoting the product. In addition, the advertisements will be done through the websites and magazines.
Basically, the footwear and performance athletics market is characterized with rapid competition; which is inclusive of new competitors together with the competition coming from the companies that are already well established; that are seeking expansion for their production. The major competitive advantage of Under Armour over one of its major rivals; Colombia Sportswear is its large size, great potential financially together with being well enriched with resources, marketing and distribution. In addition, the strong customer recognition and operation under the economies of scale has enabled Under Armour to operate ahead of Colombia Sportswear. Besides, Under Armour has established a long term relationship with the main customers and as a result, this company has been better equipped than its competitor in inducing the preferences of the consumers through; quick adaptation to the customer needs changes, being opportunistic of the acquisitions, adoption of pricing policies that are appropriate and resources devotion to their products sale and marketing; inclusive of major advertisements, endorsement of products and media placement.
Pricing strategy and tactics
Various issues are usually considered in the pricing strategy. The strategy is aimed at revenue maximization in the long run. Setting of price is done with a careful consideration of the competitors and for Under Armour, the price is mainly been maintained at the mid-range. Nike, being a more experienced competitor in the market has adopted the lower range pricing strategy through which its prices are relatively cheap in comparison to those of Under Armour and Columbia Sportswear which is also another major competitor. There is however maintenance of a price differentiation between the competitors’ products and in most cases, there are times when the prices are usually at the highest levels between the two competitors (Under Armour and Columbia Sportswear).
In the process of determining the price of a product, the price adaptation by the customer is usually considered by the company because through this approach, there is enhancement of developing long term customers as well as success in the referral program (NetMBA, 2008). For competitive pricing establishment, cumulative quantity discount is adopted together with special discounts on shipment to encourage the customers into placing orders for more purchases. Price adaptation has also enabled Under Armour to become successful in the business growth based on the number of customers together with the profitability.
The process of integration for Under Armour began being non- existent based on the fact that the Plank (the founder) has pondered the company’s idea. To enhance implementation of the adopted system, the company has in the past had to integrate the employees with other firms to ensure that its projects are finished in a manner that is timely. Through the incorporation of the technology, it has been possible for the company to form integration with the sales, finance, distribution and production associates. With the company’s direction being headed for the future, there is a possibility of even more integration in the company. As the expansion spreads to other countries, exploration is done on how distribution logistics can be enhanced in these areas.
To Under Armour, a lot of importance is not given to personal sales and public relations when it comes to the promotion mix. Although there is indication of Under Armour Representatives holding conferences, there has been a release of the future advertisement through television but not much has been announced in relation to the products of the company. In addition, the use of face to face sales by under Armour is aimed at ensuring that more customers are attracted to the products of the company, therefore making personal sales not to be a very appropriate tool. Through the incorporation of the competitive advantage as well as the competency, Under Armour has a high potential of emerging as a leader in this market. This competitive advantage can be enhanced in design, manufacturing and development of apparel that are characterized with high quality.