Protecting The House Of Under Armour/ Stephen Curry: The Gift And The Curse

Progress Of Under Armour 

Under Armour is one of the well-established footwear companies alongside Nike and Addidas. Since Kevin Plank started the company, it has well thrived over the years. Various soccer, American football, and basketball clubs have received sponsorship from the company (Kraft & Lee, 2012). Additionally, the company has received endorsements from celebrities such as Stephen curry, a basketball star, Jordan Spieth, a golfer, and Misty Copeland, the ballet dancer. However, the federal investigation, which under Armour is currently facing, has contributed towards its deterioration in sales. In North America, its revenues have declined for the fifth concurrent quarter. North America is one of the biggest under Armour's market.

In late 2019, the company was found with corrupt practices in accounting and related activities. This prompted the federal authorities to investigate the company (Kraft & Lee, 2012). Initially, under Armour had robust profits with sportswear revenues growing at an incredible pace (Weedon, 2012). Additionally, leadership changes contributed to the downfall of the company's profit margins. The company announced that Kevin Plank, the chief executive officer, was being laid off by the start of 2020 January.

By creating high-tech performance, under Armour had established its brand, making an annual revenue if $5 billion (Miloch, Lee, Kraft, & Ratten, 2012). The items they manufactured had a good impact on athletes, such as regulating body temperature during workouts or competitions. This increased the chances of players buying items from them over their rivals. However, the past two years have been awkward moments for the company as they have struggled to find foot to their rivals Adidas and Nike.

What Accounts For The Brand’s Performance? 

There are specific reasons, which accounted for under Armour's bad performance in the sportswear market. First, a change of manager contributed to their decreased sales. As of January 1 st , Mr. Patrick Frisk took over the company and assured individuals of the losses, which were being made by the company, and how they will be rectified. Secondly, Addidas and Nike incorporated new technology traits in the footwear industry (Miloch, Lee, Kraft, & Ratten, 2012). As such, they used athleisure wear, which athletes highly embraced, turning their focus away from Under Armour. Thirdly, retailers such as sports authority, sport chalet, and Gander Mountain filed for bankruptcy of the company. This made under Armour to move to cheaper places to sell their wares, which instigated a drop in the prices and revenues (Chen et al., 2013).

Shows And Movies, Which Would Benefit From The Brand 

Under Armour being an established brand, it can benefit highly from sports-related shows and movies. First, the NBA on TNT is one of the biggest basketball show, Under Armour should target to gain more sales. The shows feature some of the prominent basket players such as Shaq O'Neal, Kenny Smith, and Charles Barkley, among others. Using the platform well, the under Armour managers can ensure maximum television promotion since this is one of the most-watched shows by individuals.

Initially, under Armour has only relied on basketball-related materials for the promotion of its services and goods. As such, one would hear less about other sports such as American football, soccer, and other sports. Under Armour can significantly benefit from sports such as soccer, where prominence has taken over the entire world. The premier league show is one blatant shows, which under Armour can use to develop its market growth (Chen et al., 2013). Other shows include Monday night raw, slam-dunk and sports center, among others. Ideally, under Armour should look at exploring more sports, which can help it grow in terms of marketing.

Aside from television shows, under Armour should increase its intent on movies. For instance, the high flying movie was a sports film, which talked about a coach and a player whose careers were at stake. In the film, under Armour would have stood as the main sponsors for the teams involved. This promotional strategy in these cases is advertisements. The company shows its main links through shows and movies for individuals to get the awareness of their products. In marketing strategy, a bridge is created between the consumer and the product. Majorly, the marketer communicates to the client using four P's, product, price, promotion, and place.

Besides benefits from the brand, also television shows will hugely benefit from under Armour partnership. First, under Armour focuses on creating game-changing technologies and ensuring innovations in sports and star partners. Additionally, it is mandated at ensuring sponsors and performances of teams are well recognized. For instance, it was chosen by the warner brothers to produce sports outfits for their movies The Replacements (2000) and Given Sunday (1999). This helped them sign a contract with the major league baseball, national football league, and national hockey league and provided attires for the United States archery team during the Olympics. Also, associations with football clubs like Tottenham Hotspur, Welsh rugby union, and Wimbledon champion Andy Murray contributed towards its early success. Under Armour became prominent in the United Kingdom hugely (Flynn, 2015). Other football clubs such as Aston Villa and Southampton signed contracts with the company for their prosperity. Substantially, partnering with the prominent brand increases revenues for both under Armour and Partner Company. It also increases the prominence of the brand and the company. Successful sponsorships have credibility anchors based on sports (Flynn, 2015). As such, it is vital to embrace brands as well as brands to embrace the sports sponsorships.

Between television shows or movies and sports brands, the main marketing technique used is advertisements. Through innovations, sports lead to numerous developments in media and broadcasting. Brands are mainly attaching themselves to sports content if the links to a digital audience are made of men and women between 18 and 34 years (Chen et al., 2013). Brands attach themselves to current and entertain issues. As such, television shows will see the need for developing a partnership with the brand and product for maximum revenues. Advertising influences up to 90 percent of the decisions which consumers make. If under Armour increases its number of television shows they feature, means that it will reach a great number of audiences. Secondly, it will be able to gain specific target audiences. As such, they will embrace their direct to consumer strategy easily. Thirdly, through advertisements, a captive audience will be assembled. Lastly, a different level of trustworthiness will be developed. Compared to other ads and commercials, advertising through television is expensive. However, it is the most influential since consumers have trust in such mediums. For instance, the television show can explain a product, its advantages, and demonstrate its ownership. That way, individuals can gain trust in the product, hence buy in plenty.

Performance Of Signature Shoe For Under Armour: Stephen Curry 

Types Of Marketing Strategy Used By Under Armour 

One of the marketing strategies, Under Armour, incorporates direct to consumer strategy. This is a marketing strategy, which involves companies promoting and selling their products directly to their clients. As such, they avoid any intermediaries involved during marketing. Intermediaries include television commercials, public displays, and radio advertisements, among others. This strategy has changed the business landscape in the current generation.

Direct to consumer is a strategy, which allows retailers to collect data from their consumers and adequately analyze it. Primarily, the suppliers collect data from the beginning of the sales to the end. It does not require intermediary involvement throughout the entire process. In most cases, direct to consumer strategy is implemented by online stores. Direct to the consumer has been disruptive by the way it deals with goods and services. Several industries have adopted this marketing strategy to grow their roots.

Aside from direct to customer method, under Armour incorporates market segmentation. This is the process in which a market of potential clients is divided into groups and segments regarding the characteristics. The created segments are comprised of consumers who will react equally to marketing techniques as they share traits in locations, interests, and needs, among others. This technique can be compared to target marketing. In this case, under Armour identifies a specific group of individuals who will be interested in their products. The group is divided into different segments depending on the products they consume (McCullough & Melton, 2017). For instance, groups can be divided into individuals who use shoes or those who want jackets or any other commodity. This marketing strategy contributes to the direct to consumer sales technique, which Under Armour incorporates. This strategy has remained consistent despite the issues, which the company is facing.

Ways The Strategy Has Remain Constant Or Adapted Over Time 

Over time, the direct to customer marketing strategy has failed. The brand's direct rental channel has been hindered. Towards the end of 2018, under Armour produced a five years deal where it stated that direct-to-customer strategy would be one of the most extensive and long-term opportunities for its growth. This partnership was to facilitate the footwear and women's clothing too. To be that productive, under Armour decided on investing more in premium stores, which have full price products (McCullough, & Melton, 2017). Additionally, they decided to work on exclusive products drops both in-stores and online and ensure they invest in personalization, for example, profiles related to shopping data and their fitness applications.

In the first quarter of 2018, the strategy was fast growing. The revenues shoot up by 17 percent compared to the previous year. This was one of the record sales, which direct to consumer business had ever experienced. However, in the past quarters, there has been a tremendous drop in sales by under Armour. For instance, at the beginning of 2019, it was recorded that a decline in sales by 6 percent was evident while wholesales increased by 5 percent. Compared to 30 percent accountability by direct to consumer sales, there has been a drop by 27 percent at the current market. Moreover, the decline was unexpected. The current managing director, Patrick Frisk, projected a loss in the first quarter of 2019. Additionally, he mentioned that there would a slowdown in sales since under Armour reduced their selling. The company also lowered its promotional days to three to have its products on discounted prices both online and in their stores (Mahdi, Abbas, Mazar, & George, 2015).

Currently, shoppers have moved towards the athleisure or athletic wear. Under Armour, on the other hand, has retained its technical fitness gear, which has significantly been marketed over the years and brought sales to the company (Flynn, 2015). Also, Under Armour has tried cutting the discounts, which are offered by their websites and steer shoppers towards getting full-price stores. By this, they are trying to improve the deteriorating margins, which they have experienced lately.

According to the senior analyst, Kanter, she mentioned that under Armour is capable of getting more opportunities from personalized assortments to form brands in the local market. This includes using data collected from the direct to customer sales and creating special sections within their stores to products, which are mostly purchased.

The report generated by under Armour mentioned how the investors towards the end f 2018 made revenues by uniting stress, sites, fitness applications, and social media. This mainly purposed at creating greater customer profiles, which will help in personalization efforts. Over the past five years, under Armour has developed a suite of health and fitness applications. Such include Map My Fitness, which tracks runs, Endomondo, which helps in personalized training and nutritional app to guide on foods that can be taken after specific training and physical activities (Mahdi, Abbas, Mazar, & George, 2015). Such are some of the components, which might lure their customers and make them interested in purchasing material from them.

However, despite efforts put in place by Under Armour to boost its direct to customer sales, Nike has been at the forefront in making indescribable products available in family applications. This improves the engagement of customers to Nike than to under Armour making its profit margins fall (Muda, Musa, & Putit, 2017). As such, it is vital for under Armour to seek new ways in which they can market their products if they want to outdo their counterparts. Additionally, it risks losing its clients to more athleisure intended brands such as lululemon.

What Has Worked Well? What Are Potential Points Of Improvement? Any Strategic Changes? 

Despite the problems, which under Armour has faced, there are some positives and strategies, which have worked well. First, international strength boosted its growth in the wholesale business. Its inventory went down by 24 percent, which is a trend in stark contrast to other years (McCullough, & Melton, 2017). As such, under Armour was one of the brands, which projected success in its performance sector of shoes. It had its revenue rise to up to 8 percent more than of its counterparts.

However, the company's headwinds retain its substantiality. The company has remained committed to its performance, which has paid it immensely for five years. Yet, in the women's business, the company is set to experience losses in the next five years if it relies on its performance. Currently, sports athleisure are the forms, which Nike and Addidas have implemented (Muda, Musa, & Putit, 2017).

According to indicators, there are stormy clouds, which are approaching. As such, under Armour should change both its marketing strategy and line of goods to cope up with the market. Its international policy has become obsolete, which accounts for the drop in revenue. The under Armour stores are poorly placed within the city. For instance, they are opposite each other. The managers should consider this a loophole and strategize their locations and diversify in other cities and nations. Their location strategy creates inventory challenges, which could be a contributor to their decline in sales (McCullough, & Melton, 2017).

Lastly, the organization has worked its way to become a brand rather than a sales-driven company. This diverts their attention from revenue-driven at the outlay of margin and brand health (Mahdi, Abbas, Mazar, & George, 2015). As such, Nike has better marketing chops, which Under Armour lacks. This makes the company lag behind in terms of marketing strategies and generating revenues.

Under Armour has developed a strategic plan which should enable it to prosper in the coming years. First, it has centered on developing an innovative athletic performance experience and products (McCullough & Melton, 2017). Secondly, the company has a strategic plan to become consumer-centric. They will ensure this by harnessing data science and analytics along with the world's largest digitally associated with health and fitness. Also, aimed at long-term opportunities, the company wants to elevate its investment. Digital engagement and conversion are one of their plans, as they wish to maintain retail excellence. Lastly, the company wants to ensure they deliver balanced, cost-efficient, sustainable earnings, and investment in strategic growth, which will drive consistent shareholder return (Flynn, 2015).

Benefits Of Having Product Line Attached To A Superstar And Their Career. Possible Pitfalls 

Advantages Of Celebrity Endorsements 

Celebrities are essential people who can help in the growth of a brand. They help in building brand equity. When Nike wanted to expand its market, it sponsored track athletes and tennis games (Raluca, 2012). After, it decided on the best athletes and tennis players who can help it grow. They also identified Michael Jordan as their product ambassador. Since he was prominent, the established his brand as well as the company. Secondly, celebrity endorsements are vital as they help people master adverts (Raluca, 2012). According to research, prominent people in advertisements have offered a way in which individuals can recall an advert since one of their favorite character's features. Using celebrities makes a brand stand out among others.

Celebrity endorsement also develops credibility. Their fans generally trust favorite celebrities. Using a specific product will show the worth of the product hence build trust in a certain brand (Raluca, 2012). Attaching their name to a product reassures customers about the legitimacy of the product as well. Choosing the right celebrity for a brand ensures new markets are in place. For instance, using Stephen Curry, as the ambassador will ensure under Armour can establish its market in different locations.

Pitfall Of Celebrity Endorsement 

First, the celebrity's image is subject to change. Choosing a celebrity will mean that everything with them is linked t the brand. This means a portion of their fan base would start loving the brand, which is supported by the celebrity. However, if scandals arise, it will ruin the reputation of one's brand. In 2009, tiger woods were linked t rumors about his infidelity. Most brands dropped him as sponsors to avid their names from being tarnished.

Secondly, a superstar might overshadow the brand. It is advisable to choose a celebrity correctly for a specific brand. Selecting a very prominent celebrity for an upcoming brand would cut out the brand recognition in the consumer's mind (Zipporah & Mberia, 2014). Also, it could be a problem if other brands have endorsed the celebrity.

Lastly, securing superstars is expensive. One will be required to shell out a considerable amount of money. For instance, Beyoncé signed for Pepsi, a contract that was worth $50million a year (Zipporah & Mberia, 2014). Only well-established companies can afford this. Otherwise, it is vital to assess the consumer interested and hire a star equivalent to the revenue of the company.

References 

Chen, A. C. H., Chang, R. Y. H., Besherat, A., & Baack, D. W. (2013). Who benefits from multiple brand celebrity endorsements? An experimental investigation.  Psychology & Marketing ,  30 (10), 850-860.

Flynn, P. (2015). Nike Marketing Strategy: A Company to Imitate.

Kraft, P., & Lee, J. W. (2009). Protecting the house of Under Armour.  Sport Marketing Quarterly ,  18 (2), 112.

Mahdi, H. A. A., Abbas, M., Mazar, T. I., & George, S. (2015). A Comparative Analysis of Strategies and Business Models of Nike, Inc. and Adidas Group with special reference to Competitive Advantage in the context of a Dynamic and Competitive Environment.  International Journal of Business Management and Economic Research ,  6 (3), 167-177.

Miloch, K. S., Lee, J., Kraft, P. M., & Ratten, V. (2012). Click clack: examining the strategic and entrepreneurial brand vision of Under Armour.  International Journal of Entrepreneurial Venturing ,  4 (1), 42-57.

McCullough, B. P., & Melton, E. N. (2017). The benefits of becoming a green company: A corporate marketing approach.  Journal of Contemporary Athletics ,  11 (1).

Muda, M., Musa, R., & Putit, L. (2017). Celebrity endorsement in advertising: A double-edged sword.  Journal of Asian Behavioural Studies ,  2 (3), 21-32.

Raluca, C. A. (2012). Celebrity endorsement strategy.  Annals of the „Constantin Brâncuşi” University of Târgu Jiu, Economy Series , (3), 75-79.

Weedon, G. (2012). “I Will. Protect this House:” Under Armour, Corporate Nationalism and Post-9/11 Cultural Politics.  Sociology of Sport Journal ,  29 (3), 265-282.

Zipporah, M. M., & Mberia, H. K. (2014). The effects of celebrity endorsement in advertisements.  International Journal of Academic Research in Economics and Management Sciences ,  3 (5), 178.