Market Deliverable:
Joseph Shocker, Patrick Tye, Samuel Chen, Michael
Chelala, Kyle Lynch, Crystal Li
Challenge Summary: Lack of market share in the area of female apparel sales in
comparison to competitors’ market share in the United States. Even though Under
Armour generated over $400 million in women’s apparel sales in 2012 and over
$600 million in 2013, the company can still improve in this area. Even though the
company can afford to improve in other aspects such as footwear and expanding
globally, the female athletic apparel market has seen a recent interest spike and
Under Armour can take advantage of this trend by implementing marketing
strategies that appeal to this market.
Market Analysis: Female consumers between the ages of 10-64 amount to 114
million people in the United States. By focusing strictly on the women’s market in
the United States, females aged 10-64 is our target market. Our market share for
woman’s athletic apparel was 14.1% as of November of 2013, which is 12% lower
than the current leader of the market, Nike. Under Armour women’s business has
grown from 18% in 2011 to 30% as of this year. As women become more and more
interested in Under Armour’s products and in fashionable athletic gear, we can
capitalize on this and continue to increase sales.
Competitor analysis: Our main competitors in the women’s apparel market are
Lululemon, Nike, and Adidas. Nike is the current market leader and generated $4
billion in women’s sales last year, which was a $1 billion increase in the company’s
sales since 2010. The brand name and products that the company puts forth are a
main reason why they are the biggest competitor in this market. Lululemon has
been doubling women sales every two years, but the company has seen a decline in
share prices by 17.55% due to the company’s management and quality control
issues. Lululemon designs and manufactures yoga and other athletic apparel for
women. The company distributes its products through corporate-owned and
operated stores and through wholesale channels such as health clubs and fitness
centers. Due to Adidas recent women’s line by popular designer Stella McCartney,
the company has seen an increase in sales. As all athletic apparel companies
continue to adapt to the “fashionable” athletic gear, Under Armour must adjust, as
well.
Three Responses:
Response 1: Create an effective marketing campaign where the company hires
famous female athletes to help promote our brand.
Consumer Behavior Analysis:
Under Armour’s ad campaigns need to have female athletes or a female
figure to identify with in order to increase sales. For males they have athletes like
Cam Newton and Tom Brady, but Under Armour does not have a female equivalent.
Consumers will buy a product that they can identify with. If they are able to
associate a person they identify with a product they are more likely to buy the
product. Also, Under Armour needs to be put in a place where women look--
whether that is a women’s fitness magazine or during a commercial break of a
popular show directed towards females. This would be an example of promotion;
one of the four P’s of marketing is essential for increasing market share and revenue
as an athletic apparel company.
Competitor Role Playing:
Nike and Lululemon are two companies that are great at marketing towards
women, but have two very different ways of marketing their product. Nike, the titan
of athletic apparel and footwear, uses female athletes to help promote their product.
They use some of the most successful athletes in the world—people like Serena
Williams and Hope Solo—to help women associate with their product and it works.
Lululemon does not use professional athletes, but focuses nearly all of their
campaigns toward women. Their campaigns are aesthetically enticing and are aimed
towards yoga goers. They subtly promote strength, independence, and of course a
healthy lifestyle. Under Armour is better-suited creating campaigns similar to Nike
due to the more aggressive and competitive nature of their product.
Response 2: Develop new products that will help attract female consumers.
According to the Product/Market Expansion Grid, this response would take
advantage of the procedure known as “product development”, where the company
creates new products intended for female consumers. Since it is important for the
company to be positioned on a professional level, it should design high-quality
sportswear that helps maximize performance in competitive contexts by investing
primarily in the technical attributes of new products. If UA can fully apply its
experience in designing products for male athletes to the women's market, the
brand's performance-oriented nature will surely appeal to the majority of the target
market.
Consumer Behavior Analysis:
There has been a major cultural shift within our target market with an
increasing amount of female athletes as well as women seeking a healthier lifestyle
in general. This means that the market will be ready when Under Armour introduces
unique new products designed professionally for maximizing athletic performance.
By the time these new products have established themselves as leading products in
terms of enhancing performance, they will have not only created brand loyalty
among professional female athletes, but also attracted a large amount of female
consumers who look up to these athletes as members of their reference groups.
Competitor Role Playing:
If Under Armour attempts to launch new product campaigns, it will be
obvious how competitors are likely to respond. Since UA's strategy is to develop
new products with performance-oriented attributes and to focus on the
corresponding market segment, companies such as Nike and Adidas will try to
protect their respective market shares by introducing products with similar
qualities. If UA's becomes a much stronger presence in the segment of female
athletes, competitors may also respond by strengthening their images in other
segments within the market. In general, the competitors' willingness to react will
depend heavily on how successful UA's new products turn out to be.
Response 3: Operating independent stores that will help us better connect
with consumers.
Consumer Behavior Analysis:
Part of Under Armour’s strategy to obtain larger market share should be to
open more independent retail stores. There are several reasons why this should be a
priority for Under Armour. Retail stores help develop the image of a brand in a
consumers mind. Getting more exposure to the market through these stores can
help Under Armour expand its market share not only for women but for men as
well. Some consumers prefer the experience of walking into a physical store and
trying on products as opposed to buying online. There is a convenience to being able
to walk into a store and walk out with a product that you wanted without having to
worry about shipping and handling. Under Armour needs to understand this
concept in order to develop a more valued customer experience. Having more retail
stores will also allow for more women to directly see the products that Under
Armour can offer. A strategy that they can use that many other firms have
implemented successfully is dividing the store into male and female sections. If
Under Armour can develop a large enough line of products specifically for women
dividing up retail stores could help target women tremendously.
Competitor Role Playing:
Firms like Lululemon and Nike have done a great Job of developing their
retail stores. LuluLemon specifically targets women and yogi’s by having yoga
professionals perform activities within the store, enhancing the customers overall
experience. As of November 3, 2013, Lululemon operated 247 stores in North
America and Australia. Nike has also developed an enjoyable experience through
their approximately 700 retail stores. If under Armour is interested in being a major
competitor with these firms who control more of the female market, retail stores
should be considered as an option for growth.
Market Size and Market Share:
The size of the Female athletic apparel market in the United States is fairly
large considering it is possible to contain most the females in the United States. We
narrowed it down to women between the ages of 10 and 64 making our female
consumers amount to about 114 million females. This is a large market and gives us
plenty of room to grow; as of now our company is behind in the area of women’s
athletic wear and amounts to about 14.1% of the market share. This is around 12%
lower than one of our biggest rivals: Nike. One of our main goals is to increase that
market share significantly by the use of one of these challenge responses.