Can Under Armour Keep it's Pace?

What Under Armour needs to do to continue to grow globally is to continue market penetration in the global marketplace. When they are able to establish these global connections they will then be able to grow their company on an international scope. Some of the issue UA has according to the article “Why Under Armour’s Profitability Is Declining” it’s selling, general, and administrative costs are very high cutting down profitability. They are also selling 70% of their revenue through whole sale channels while only around 25% is through Direct-to-Consumer sales. This is all occurring while other companies are focusing on DTC sales rather than whole sale and the article “Under Armour Needs a New Sales Channel Mix to Compete Effectively” states that “Wholesale channel growth will be vital. In a trade¬off between revenue growth and expanding margins, this strategy will spur revenues but impact the company’s profitability with respect to its peers.” Under Armour’s primary channel partners in the US are Dick’s Sporting Goods, Foot Locker, Sports Authority, and Finish Line. The top though for Under Armour has been Dick’s and Sports Authority.

Under Armour: Catching the Athletic Apparel Scene by Storm.

Under Armour has evolved from its humble beginnings by always remembering where they came from as described in the Mad Money video with Jim Cramer. The CEO of Under Armour, Kevin Plank, tells the story where he could not pay his 2 dollar toll after gambling away all the money he was trying to use to win enough money to pay, payroll that week. He said it is that experience that he vividly remembers that drives him day in and day out to never return to that state ever again and it’s working. The key decisions that are playing into its quick growth is effective marketing and the use of up and coming but also established stars in Tom Brady, Jordan Spieth, and Stephen Curry. Their advertising is “aggressive, young, and fearless” as described by Jordan Spieth and this marketing plan is clicking with the younger generations and they are buying in. The use of the stars they sponsor is key because with signing all of these athletes they are sort of modeling themselves after Nike’s model of signing that new star in the game. UA are using this by signing the up and coming point guard Stephen Curry, who rivals as one of the most popular but also best players in the NBA.

The recent steps being taken by UA to have more growth in the future is its investment into the women’s market, sign new endorsers, and increase brick and mortar stores. All of these steps are being put into place to keep up the growth they have experienced in the recent past and hopefully to be continued in the future. The reason that Under Armour was named the top marketer in 2014 was because of their wildly successful womens focused ad campaign of “I Will What I Want” which caught fire. My personal experience with Under Armour products is not positive but also not negative. I believe that their apparel is definitely the strongsuit of the brand. I still do not trust the UA brand as a shoe manufacturer seeing their shoes fall below the mark when comparing to Nike. I do however enjoy some of their clothing but I also feel some of their clothes are somewhat childish. For example the line that they came out with that was exclusively superhero themed.

Nike: A Global Powerhouse.

Nike grew to be the #1 global brand in the athletic wear category through innovation and effective marketing campaigns. It began as a man, Bill Bowerman, trying to create the most effective and light track shoes for his runners at Oregon University. This is where he met, Phil Knight, a runner on the team and he believed there was a spot for Bowerman’s shoes on the market and thus Nike was born. The first key turning point was the innovation of the shoe and trying to create a better shoe than anyone had put on the market and this innovation is what led to the expansion of Nike. Secondly, was their decision to go into the advertising field where they created cutting edge ads that consumers had not been seen before. This is where they got their internationally recognized slogan of “Just Do It.” Lastly, their acquisition of an up and coming basketball Phenom of Michael Jordan. Nike stepped out on a limb when they decided to give a half of a million dollars to a kid who had not touched and NBA court. This move propelled them to the top when Jordan and his signature shoes took off.

The way that Nike stays on top is through the use of advertising and always looking to innovate shoes to amaze customers. They are really always trying to go places no one has gone before and that is what keeps them at the top. They also sign other up and coming stars such as Tiger Woods, LeBron James, and various other athletes shown in the video. I learned about the troubles that are occurring in the third world supply chain where most of their shoes are made. I also learned about the ways that Nike is trying to combat these problems they are facing in those manufacturing plants. My own experience is very positive with the Nike brand. I almost exclusively shop Nike products because of its look and dependability. The only down side that comes into play when looking at Nike is its price point being a little bit higher but you can avoid that by looking for deals and steals.

Types of Demand: Primary, Secondary and Tertiary

Primary demand is creating a demand from consumers on a new product class of either a narrow or broad scope. An example of this would be Tesla cars. This is a new product class and the consumer base has very little knowledge of the product so Tesla will have to create a primary demand for their automobiles.

Secondary demand is the demand for a brand in product category and does not require educating the consumer and also involves proving your brand is "greater" than another. An example of secondary demand is the ad pictured below of Pepsodent toothpaste providing a statement on how its toothpaste is more effective than the competitor of Colgate.

Tertiary demand is taking a new or different angle of marketing on what can be an age old product. An example of tertiary demand would be the ad campaign by the California Milk Advisory Board. This is similar to the "Got Milk?" ad campaign we discussed in class but they were able to look at it in a new light and came with a new approach.