Kayla Childress
Melanie Birch
Phil Maddox
Eric Smith
Kevin Tracy
Greg Lang
Under Armour Shoes
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Table of Contents:
Company Overview……
Current Target Market and Demographics…..
Benefit Segmentation…..
New Target Market…..
Focus Group…..
Analysis of the Chosen Segment Market…..
Decision Making…..
Target Market…..
Recommendations for Changes in Strategy…..
Appendix A…..
References…..
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Company overview
Under Armour (UA) is a $2.3 billion Baltimore based company founded in 1996 by
Kevin Plank (Mirabella), a then assistant college football coach at the University of Maryland
who saw a need for better performing workout fabric for the players he was coaching. After
discovering a fabric that met his goals, Plank found great success marketing his product first to
college football programs, followed closely by NFL teams (Under Armour, 2014). UA got its
first big break when Plank contracted with Warner Brothers for apparel placement in two major
upcoming football themed movies – Any Given Sunday and The Replacements (Under Armour,
2014). UA is primarily a North American company with 91% of its gross revenue in 2013
coming from North America; due in part to increased attention to the international market, sales
are beginning to increase outside of North America and this is seen to be a major growth area for
the company (Cheng, 2013).
Current target markets and demographics
UA’s mission statement is “To make all Athletes Better through Passion, Design and the
Relentless Pursuit of Innovation”; the company Vision is “Vision to Empower Athletes
Everywhere” (Under Armour, 2014). These two defining statements indicate that UA’s primary
target markets are hardcore athletes, i.e. dedicated athletes engaged in primarily team based
organized or structured sporting activities as opposed to the more casual athletic enthusiast. This
is further reinforced in one of their Core Brand Value statements “No One Person is Bigger than
the Brand – Team…no athlete either.” (Under Armour, 2014). Within the broad “hardcore
athlete” primary market, there are sub-markets that UA targets.
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The main sub-market consists of relatively affluent adult male and female athletes, ages
15 to 28. Although originally targeted to male athletes, UA is more actively targeting women
athletes and believes this will be a larger market in the not-too-distant future for them than the
male segment is today (Learned).
Another and one of the first sub-markets UA targeted are college and professional sports
teams. UA enters into sponsorships agreements where UA agrees to supply college and
professional sport teams with workout gear, game day equipment and ancillary clothing and
accessories. This market has a two-fold purpose – the actual sale of products to the teams and
the marketing benefits realized from being seen by large audiences.
Benefit segmentation
“Benefit Segmentation is a type of marketing strategy that focuses on the benefits
consumers receive as the result of purchasing the goods and services from a given company.”
(Conjecture Corporation). UA has, through its extensive marketing, been able to show
consumers the benefits of buying their products.
The first and most important consumer benefit is product performance. UA was able to
bring a moisture wicking fabric to market to replace the cotton and polyester materials that were
common in those days. In the footwear market, UA is changing the way the products are
designed in order to give the athletes the best chance of performing at a high level. In a similar
fashion to the moisture wicking fabric that UA pioneered, the Speedform Appolo line of running
shoes was designed in a sports bra facility, the thought being that your feet should be supported
and the shoe should become an integral part of the foot rather than just a foot holder. (Under
Armour Inc.). Athletes that are highly competitive want every advantage they can get – they see
the benefits of a well-designed shoe that allows them to train harder and perform at a higher
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level. Under Armour gives athletes the feeling that they can reach their potential with UA
products.
Style is another consumer benefit. Bold colors, innovative textures and aggressive
styling give the product a unique appeal and stand out among the others in the market. The style
of the product is important to both male and female consumers but UA has taken the design of
women’s clothing one step further in their latest designs. Instead of the “shrink it and pink it”
(approach to designing women’s products, UA hired women designers and enlisted the help of
major female athletes like Olympic skiing Champion Lindsey Vonn and renowned ballerina
Misty Copeland to consult and develop products that meet needs of the athlete while appealing to
women (Olson).
UA appeals to certain lifestyles as well, UA advertisements show hardcore athletes
working out, sweating and struggling to create a positive schema that associates mental and
physical toughness, teamwork and a sense of accomplishments with the UA product. They have
positioned UA as the exemplar of the market; this is reinforced by a statement that is part of the
company’s Brand Values “…every product we build must be better than what’s currently
available on the market - best in class…” (Under Armour, 2014). When consumers feel they are
buying the “Best in Class”, it gives them status among their peers as someone who “goes all out”
to obtain their goals.
UA’s marketing campaigns have always embraced a “team” lifestyle. In similar fashion
to the brotherhood or sisterhood feeling common in the military, the “team above all else” theme
allows consumers to feel like they are part of a family, a family of dedicated athletes who
understand the struggles involved in performing at a high level. This creates an intense brand
loyalty for the product.
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New Target Market
After careful consideration, it would be of great benefit to UA to expand its market to
less of an extreme athlete and more of a consumer who exercises causally or even more of the
everyday consumer in the market for shoes. In order to zero in on this new target market, my
team members and I explored many potential factors causing a market gap between UA and
other competitors. In fact, Nike controlled more than half of the market share of the shoe
industry, while UA only controlled 2.33% last year (Germano, 2014). Using our findings from
research and after conducting a focus group regarding this issue, we have developed an expanded
target market to fight to bridge that gap.
A factor causing the huge shoe market gap between Nike and UA is that it hasn’t made a
name for itself in the shoe industry compared to its major competitor, Nike. UA CEO Kevin
Plank stated in an article from NASDAQ.com that “The most difficult thing about the footwear
business is the long lead time, the long time it takes to get people on board...” (Germano,
2014,para.5). That really is a huge factor to the success of UA’s shoe segment. As discussed in
the focus group held by my team members and myself, several of the participants felt that Nike is
more of a household name and is trusted, tried and true, or more so than Under Armour. This
issue helped us to identify a potential new target market. It sparked an idea that unless they are a
devoted athlete or exercise avidly, a consumer may not think about purchasing an UA shoe over
Nike due to the fact that Nike has been the industry standard for many years. If UA can obtain
the level of consumer reach that Nike possesses and market to a less athletic consumer base, they
will be able to control a larger piece of the market share for shoes.
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Focus Group
In order to gain a better understanding of our existing target market and to identify our
new target market, we held a focus group on Wednesday, April 30th, 2014, consisting of seven
students from Towson University. We picked our participants based on age, gender, and physical
style. Our participants ranged from ages 19 to 22 and all were Towson University Students. We
had three females and four males. Out of the seven participants, three participants were wearing
running shoes (2 Nike, 1 Adidas) and the rest were wearing casual shoes. It was also important to
note that one of our participants was a football player for Towson University.
We conducted our focus group in a dual-moderator format. This style consists of two
moderators: One to ask the questions and to keep the conversations going and another to ensure
that all of the necessary topics are being covered. When the participants were all present, we
explained what the focus group was being held for and why we were conducting it. To start the
discussion, we began with an open ended question regarding what companies come to mind
when thinking about athletic footwear. This question sparked the conversation almost instantly
and encouraged the participants to discuss what is popular in athletic footwear as of late. As you
can see in Appendix A, in order to keep the conversation flowing naturally and to keep the
discussion on track, we asked additional questions pertaining to our topic. In other cases, the
discussion flowed naturally and on topic, without any interference from our moderators. There
was a good mix of viewpoints on the topic, which encouraged the participants to express their
viewpoints more so. In fact, one of the participants plays on the football team, here in Towson,
and falls in the category of our existing target market of extremely athletic consumers and
offered some interesting viewpoints. In the end, we were able to obtain the necessary information
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from this discussion to make the decision to expand our market to not only the hardcore athlete,
but to the everyday consumer in the market for shoes as well.
Analysis of the Chosen Segment Market
The great part of choosing the segment of ages 15-26 is that even though it is very broad,
they all have one thing in common. They are a young group of people who still have a lot of
energy and are likely to need a good pair of sneakers. People in high school all the way to people
in the real world with full-time jobs, do a lot of walking around, which means they will need
sneakers! This age group is likely to do a lot of physical activity, even if it is not always
voluntary. In our focus group of ages 19-22, the 7 college students used the Towson fitness
center an average of 3 days a week.
Let’s start with high school students. The typical day can consist of going to school and
then going directly to after school activities. Research shows that 55.5% of high school students
participate in sports teams (Howard, 2011). High school sports teams practice multiple times a
week. They practice in the school’s gym and do exercises outside. Many other students may be
members of a gym or run outside. Others may just enjoy walking around the neighborhood. After
all, before getting your license it is not as easy to travel from place to place without having to
walk.
Moving on to college students, whether you go to a big school or a small school, you will
most definitely be doing a lot of walking around. Most colleges will also have a fitness center.
Physically activity will definitely be a likely activity for the average college student whether it is
voluntary or not. The people in our focus group were all college students. They all agreed that
they definitely spend a lot of time walking to and from class. The furthest walk to class was
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about 17 minutes. 5 out of 7 students took full advantage of the campus gym. 2 students were
members of the football and lacrosse teams, so they did even more physical activity than just
working out on their own time. They said they get a new pair of sneakers about every 6 months.
Lastly, once you graduate college it will be time to move into the real world and get a
new job. Many people are lucky and can drive every day to their jobs. Others, however, may
work in big cities. This requires a lot of walking from block to block. Also, it is recommended
that adults get at least 2 and a half hours of physical activity each week (CDC 2014). Clearly this
age group will be very busy with their everyday schedule, but maybe if they bought a new, nice
pair of tennis shoes, they’ll be motivated to get some use out of them!
The age group of 15-26 will definitely be participating in some form of physical activity.
This means they will definitely need a pair of sneakers. Some may spend more than others. Our
focus group said they would spend an average of $70-100 on their sneakers. There will be people
going to the gym, playing sports, or even walking around the mall. The ones whose activity level
is on the higher side may even get multiple pairs of sneakers per year, such as runners or sports
players.
Another thing this age group has in common is that they are young, and young people
always want what is new and fashionable. No one wants a boring dull pair of sneakers. It is very
common for people to wear their sneakers throughout the whole day. If this is the case, we would
want a pair that is trendy and that we will enjoy wearing. In our focus group, we also discussed
how important the design of their shoes is. All 3 girls and 2 of the boys agreed that the style of
their shoes was important. If they were to spend a big chunk of money on shoes, they would like
it to stand out. This applies to the whole age group. We are in a generation where the next big
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thing matters. If one person sees someone wearing a cool pair of sneakers that they like, they will
most likely go out and get them, and so on.
Decision Making
Product decision-making may be influenced by what their peers are purchasing and if the
marketing techniques we decide to use are effective. A person in the chosen segment of people
aged 15-26 chose to purchase products that tend to be trendy and affordable. Considering this
age group is high school and college students, they do not exactly have a lot of money to spend
on a pair of tennis shoes if they are not athletic in the sense of playing a sport every day. Under
Armour shoes need to be marketed as comfortable, affordable, and practical so the everyday
person interacts with the product more than they do now. After looking on the Under Armour
website the typical running shoes costs about the same as Nike ranging from $49.99-$99.99,
depending on the style of course ("Under armour footwear," 2014). Any individual in the
targeted age group would pay more attention to Under Armour if it was more heard about. A lot
of students tend to follow “what is cool” to fit in with their peers. Those who go to the gym,
follow sports teams, walk around campus, and are on a budget may consider Under Armour if
they are already purchasing Nike. Considering there is no major price difference it should not be
difficult to market to this group and successfully have more buyers. If the everyday person were
to wear Under Armour shoes in a commercial versus cleats or intense sport shoes, it would be
better known to the audience that Under Armour sells everyday tennis shoes that are
comfortable, and fashion forward to keep up with trends. The awareness of availability of the
product plays a major role in how successful the company is with sales.
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Target Market
One aspect when you think of Under Armour (UA) shoes is that we are more for the
hardcore athlete. We want people to think that you don’t have to be a hardcore athlete to wear
our shoes. We want people that are going to be doing any type of physical activity, fitness, or
sports to want to wear our shoes while doing them. If you are working out or just playing some
sports with friends we want you to think of our shoes as the first pair of shoes that you would put
on when it comes to doing such that.
One way that we can target this is through our commercials and advertising that we
present. When we present commercials and advertisements for our shoes we won’t just show the
hardcore athlete anymore. We will target more towards the casual runner for buying our running
shoes or the person that is just casually playing sports just for fun. This will show that our shoes
are for everybody that is involved in some sort of physical fitness in one type of way or the other.
Having regular everyday people that are involved in physical fitness shown in our shoes will
make other people feel more comfortable buying and wearing our shoes also. This will help
show that anybody who wants to wear our shoe can and will. We want everybody to wear our
shoes.
Another way we can target the market is through having our shoes be trendier than our
competition so that not just athletes want to wear them but the everyday person will want to wear
them. We will have a place on our website that you can customize your own shoe. You will be
able to pick whatever colors you want to for your shoe. This will help with making our shoes
more trendy compared to our competition. We will also advertise our shoes as being trendier by
advertising such as “back to school” shoes and kickoff the summer with our bright new color
ways which you can choose yourself. This will show that our shoes are not just for athletes but
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also for the everyday person, that you can wear them just for leisure activities. Making people
feel like they don’t have to wear our shoes just for physical activities will be a huge advantage on
our part vs. our competition in our market.
After all this is done this should help us expand our target market and make our shoes
better known to the average consumer. Having our shoe stick out more and be better known vs.
our competition will just help us in the end result. We want all types of people to wear our shoes
and not just hardcore athletes. That is one of our main goals.
Recommendations for Changes in Strategy
Under Armour Inc. has established its position in the sports apparel market by
emphasizing innovation and performance. Reaching out to the top professional athletes and
associating their equipment with the highest level of athleticism. This was achieved through high
profile individual sponsorships such as Olympic swimmer Michael Phelps and quarterback of the
New England Patriots, Tom Brady, just to name a few. As a result, Under Armour Inc. has been
“capturing the imaginations of young kids” who idolize these iconic athletes and want to have
the performance gear to be just like their role models (Depillis, 2014). However, Under Armour
Inc. has not had the same success in their line of running shoes as they have with their shirts,
shorts, and football equipment. In order to increase their shoe sales, Under Armour needs to
change their product positioning by: appealing to less extreme athletes, changing the perception
that Under Armour shoes can be multi-functional, not just for athletic competition, and to have
celebrity endorsers that will market the shoes to be just as stylish as they are efficient.
The majority of college students do not play on their schools varsity sports team and less
than two percent of student athletes will go on to play professionally. On the other hand, there
are over 7.7 million high school athletes in the United States which is an all-time high (Burton,
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2014). This generates an immense number of young people who are physically active but not at
the highest level of intensity. This is the segment of the market we aim to capture by revamping
Under Armour’s marketing strategy to catch the attention of the everyday exerciser. Under
Armour can accomplish this by reducing the hardcore veneer that surrounds its products. The
extreme athlete is a niche market that is intimating to the everyday consumer; and Under Armour
is scaring away consumers because their products are perceived as exclusive to the biggest and
best athletes. Our recommendation is to market the line of shoes in a way that encourages
consumers who partake in some physical activity to purchase Under Armour because they are
sportspersons as well and they deserve to have the best quality gear that peak athletes use.
Activities in Which Athletic Apparel is Worn
???
(Figure 1) (Washington, 2013).
Under Armour currently aims to provide the most innovative apparel to the best athletes.
However, as stated above, the number of average everyday people who enjoy fitness vastly
outnumbers the amount of professional and collegiate varsity athletes. From 2012 to 2013 Under
Armour’s share in the athletic shoe market in the United States rose from an abysmal 1.3 to 2
percent. (Cheng, 2013). Clearly, something needs to change in order to increase sales for a
company that has a very loyal customer base. In order to boost shoe sales it would be wise for
Under Armour to move from the emphasis on athletic performance to the multi-functionality of
its footwear products. In addition to being equipped for high athletic training Under Armour
shoes should be highlighted for their style, comfort, and versatility. As shown in Figure 1, only
37 percent of people exclusively wear athletic appear while exercising whereas 93 percent of
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people wear athletic wear for everyday activities such as shopping, running errands, or when
they are out to eat. (Washington, 2013). With this statistic in mind, Under Armour should aim to
have their shoes perceived as a fashionable footwear option that is not limited to exercising but
can be worn at all times. Under Armour shoes should be worn by all physically fit young people
as a stylish way to exemplify their healthy lifestyles. The 15-26 year old segment we are
targeting is part of a self-image obsessed demographic and it is of the utmost importance for
them to look their best and fit in with others. By changing the brand perception of Under Armour
shoes as a trendy option for the average athlete we can attract a segment that was previously
intimidated by the brand’s extreme athlete façade.
Under Armour running shoes are just as aesthetically pleasing to look at if not more than
its competitors whilst being superior in sustainability and performance. Our focus group revealed
that young people will not even try on a pair of shoes if they do not like its appearance. This is an
indication that Under Armour should shift its focus towards promoting the aesthetics of its shoes
to the same degree that they stress performance and comfort. Our recommendation is to revamp
Under Armour’s media campaign by shifting endorsements from professional athletes to
celebrities who are physically fit such as Mark Wahlberg or Channing Tatum. Through this
approach, our target audience will view Under Armour shoes as a fashionable brand that is not
limited to sports but one that can be worn by people of all levels of athleticism. The younger
demographic is very impressionable and by expanding the types of celebrity endorsers Under
Armour has the wider the consumer reach will be. In addition, having a greater emphasis on
trendiness will appeal to the female population which currently only accounts for one-third of
Under Armour’s sales. Under Armour is already making strides towards this strategy of infusing
style with performance by hiring ballerina Misty Copeland as an endorser with hopes to attract
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more female customers. (Depillis, 2014). This tactic is a step in the right direction, but Copeland
still falls under the category of extreme athlete and more relatable endorsers are needed in the
future to connect with our target audience of ordinary athletes.
Appendix A
Summary of Focus Group Discussion
What top 3 brands do you think of when buying tennis shoes?
1) Nike
2) Adidas
3) New Balance
What qualities do you look for when buying running shoes?
Comfort, long lasting, appearance, relatively affordable price
How important is custom design and unique color to you?
Don’t usually customly design shoes, but I do like to have a unique running shoe that can stand out
What is your budget while shopping for tennis shoes? $70-$100
Rank:
- Price 2
- Design 4
- Comfort 1
- Appearance 3
- Purpose (running/walking) 5
How many pairs of tennis shoes do you own?
1 that I always wear, 1 extra pair
What comes to mind when you think of Under Armor?
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good quality, sports gear
What products from Under Armor do you typically purchase?
pants, tank tops, sports bra
Do you own any Under Armor shoes? No? What brand do you have?
No- I have Nike
Do you play any sports/ are you physically active at the gym, or run frequently?
Run frequently at the gym
If Under Armor shoes were better promoted would it influence your opinion?
It might, Nike is very well advertised and very well known. When people come into a shoe store they
may gravitate towards Nike shoes because they trust the brand and know it is reliable.
What athletes, if any, do you associate with UA shoes?
Ray Lewis/ ravens
How good do you think the UA shoes are? ______ Is that based on your impressions of
other
UA items?
If comparable to other UA products, they are probably a reliable and high quality shoe
What, if anything, do you find unappealing about Under Armour?
Never really found it unappealing, but I think they can do a better job advertising their other
products, specifically sneakers.
How important are trends to you in the category of running shoes? What types of trends do
you notice?
Trends are not too important to me; I typically buy what I like at the time. However, a trend that I
remember is when everyone was buying Nike customized shoes from their website. They came in all
designs and colors.
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References
Burton, A. (2014, April 26). NCAA College Athletics Statistics. Retrieved May 6, 2014, from
Statistic Brain: http://www.statisticbrain.com/ncaa-college-athletics-statistics/
Cheng, A. (2013, April 19). Under Armour sets global ambitions. Retrieved May 5, 2014, from
Market Watch: http://www.marketwatch.com/story/under-armour-sets-global-ambitions
2013-04-19
Depillis, L. (2014, February 7). Five smart things Under Armour did to take on the sports retail
giants. The Washington Post.
Germano, S. (2014, April 24).Under Armour CEO Takes Aim at Running Market to Fill
Footwear Gap. Retrieved May 5, 2014, from NASDAQ:
http://www.nasdaq.com/article/under-armour-ceo-takes-aim-at-running-market-to-fill
footwear-gap-20140424-01770
Under armour footwear. (2014). Retrieved from
http://www.underarmour.com/shop/us/en/footwear
Washington, J. (2013, January 18). Athletic Apparel: A Robust Market. Retrieved May 3, 2014,
from Cotton Incorporated: http://www.cottoninc.com/corporate/Market
Data/SupplyChainInsights/Athletic-Apparel-A-Robust-Market/
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