Analysis Of Under Armour’s Marketing Strategies And Consumer Behavior Theories In An Essay.

Under Armour is a company that is based in America with its headquarters in Baltimore, Maryland. Under Armour also have various other offices in areas like Houston, Texas, Denver, Colorado and New York. The international headquarters for the company is in Panama city, Panama.The company was founded in the year 1996 by a man named Kevin Plank.Kevin Plank formed the company when he was at age 23. Plank is the former captain of University of Maryland Football team. Plank formed the company out of realizing the need of the consumer first hand when he was a player at the university football team The company is global in scope with its products sold in all countries in the world. The company deals in products such as foot-ware, sports and casual apparel and other sporting equipment and accessories. The company started manufacturing foot-ware in the year 2006. The company recorded revenue amounting to $3.96 billion in the financial year ending 2015. The operating income of the company in the same year was US$408.547 million while the net income amounted to US $232.573 million. The total assets of the company at the end of the 2015 financial year were US$2.869billion ("Under Armour - Sportswear, Sport Shoes, & Accessories | UK" 2017). The growth of the company is pinned around the research on customer needs. The companies` marketing strategies are based on innovation and making products to fulfill the needs of consumers rather than to produce and then start creating demand (Bianchi and Birtwistle 2011). This report discusses the marketing strategies and tactics used by Under Armour and comparing these strategies with the consumer behavior theories. This will help to identify how the theories of consumer behavior are practically applied in an organization context. The first section of the report contains an in-depth SWOT analysis. The analysis looks at the internal factors that impact on the company both positively and negatively.

An environmental analysis of the company is done in order to identify internal factors that affect the operations of the company. The analysis is done using the SWOT analysis technique. This section discusses the strengths, weaknesses, opportunities and threats that the company is exposed to. The identification of these specific factors is very important for decision making by the management of the company and other stakeholders.

The global presence of the company is a major strength for Under Armour brand. The company has operations in every continent. Its operations do not depend on a single region hence minimizing the business risk. The company has a strong presence in Asia, South America, USA and Europe, these regions represent the major buyers of Under Armour products.

Strengths

The company was the first company to produce moisture- wicking T-shirts using synthetic fiber. The company has since the established itself as innovative and consumer-driven. The high level of innovation has been very fundamental in the growth of the company over the years.

Another strength of Under Armour is that the company has a strong brand name. This resulted from the company building a reputation among customers as high quality and low-cost manufacturer of sportswear and equipment.

The growing product portfolio of Under Armour is also a major strength of the company. Expansion in the product line of the company means that the company is able to compete effectively in the market with rivals such as Nike which have a large product portfolio. The increase in the products under UA brand has resulted in increased revenues for the company.

Despite the presence in many parts of the world, the company has not established itself in some areas. Statistics from the year 2013 show that around 90% of the companies` revenues came from North America sales (Cheverton and Velde 2011). The companies` supply chain may, therefore, be easily disturbed. The company has not invested enough in personal fitness devices hence the rivals are ahead in this aspect.

Business cycles affect the company. The financial crisis of the year 2008 hit the company hard with the revenues of the company reducing drastically.

The company has a big opportunity to invest in personal fitness devices. There is increasing demand for this equipment and therefore by investing in this area, the company is sure to take a substantial percentage of market share from competitors as well as increase the revenues of the company.

The company also has an opportunity to invest and focus its marketing on developing countries. These countries include countries like India, Brazil, South Africa, Indonesia and some parts of Middle East. Research has shown that the demand for sportswear and equipment is increasing in these countries due to increasing popularity of professional sports (Dahl 2013).

The company also has an opportunity to expand direct sales to consumers. This will be achieved by adjusting the supply chain of the company in order to open shops where individual consumers can buy all the products under the Under Armour brand.

Given that the majority of the sales of the company is to men of between age 21 and 34, there is a big opportunity in the women and children segment. Investing and focusing marketing efforts on products designed for children and women will help to expand the market share of the company.

Weaknesses

Competition is the major threat to Under Armour. The main competitors of the company are Nike, Adidas, and Puma. Nike, for example, has a dominant global presence and huge financial resources. The brand name of the Nike itself is so big and it is, therefore, able to attract customers from far and wide. Therefore, Nike and Adidas threaten the small market share that Under Armour has in the sportswear and equipment market. Another threat for the company is that the endorsement strategy of the company is not effective. This is because the company over-relies on upcoming athletes and sports persons for endorsement. This strategy does not always work and this leaves the company seeking many other endorsements which do not contribute positively to the business of the company (Fisher 2013).

The analysis of the marketing strategies that Under Armour applies helps in determining the factors behind the company’s success in this very competitive industry. This section of the report analyzes the consumer behavior theories and compares how these theories have been applied by Under Armour in their marketing. The first theory discussed is the Maslow`s Hierarchy of needs theory. This theory was developed by Abraham Maslow in the year 1943. The theory was aimed at explaining the psychology behind the thinking and actions of human beings. Maslow ranked the human needs into five categories. The needs identified by Maslow are arranged in a pyramid with the largest and most fundamental needs at the bottom and the less fundamental at the top of the pyramid. The four basic and most fundamental needs identified in Maslow`s theory were described as deficiency needs.

 Psychological needs are the physical material things that an individual requires in order to survive. A human being cannot function without these needs. The physiological needs are the most important and fundamental of all the other needs in the hierarchy (Harris and Dennis 2011). These needs include Air, Water, and food. Clothing and shelter are also vital for human survival. Under Armour produces products dealing with sportswear and equipment. This, therefore, means that the products of the company do not fall into this category of needs according to Abraham Maslow`.

These needs come after the fulfillment of physiological needs. Once an individual has fulfilled all physiological needs, there is need for safety. A person needs protection from enemies who may include; animals, fellow human beings, war, natural disaster and other hazards that may exist in the environment. Economic and social safety is also important for human beings. In the case of inflation or economic crisis, an individual may need protection from the negative consequences arising as a result of this occurrence. The safety and security needs according to Maslow theory include; personal security, financial security, Health and well-being and safety against accidents and other negative events (Jacob et al. 2011). Under Armour product portfolio has applied this aspect of Maslow theory in its marketing. The company produces clothing and footwear which are used for sporting purposes. In its advertisements and promotional messages, Under Armour portrays its product as guaranteeing the safety of users or consumers. For example, in its marketing of footwear, the company advertises the shoes as being very comfortable, light, and safe due to a combination of superior design and quality of raw materials. The aspect of safety is highly valued especially in professional sports like football. This is because the kind of footwear that a footballer wears determines how safe the player will be when running and trying to control the ball. The company manufacturing the product therefore has to assure consumers that the product can be used safely. Most athletes work very hard to avoid injuries because they have a very negative impact on their careers. Under Armour has identified the need for safety in sports as being fundamental and therefore designs and markets its products as those that offer increased security for the consumer.

Opportunities

The need for social belonging is in the third level in the hierarchy. This need is interpersonal and it involves the feeling of belongingness in an individual. Maslow argues that this need is strong in childhood and reduces in significance as a person becomes of age. Some of the factors that contribute to a feeling of being socially neglected include; Hospitalism, shunning and ostracism. This need can affect an individual psychology and self-esteem (Makhitha 2015). Every human being needs to feel a need of belonging to either a particular group or class of people. Human beings need to be loved and love.

Under Armour applies the aspect of social belonging in its marketing. This happens when the company advertises its products as being of high quality and luxurious. This message sinks into the mind of a potential consumer and they develop the need and desire to belong to the class of people who consume the products of Under Armour. An example of how social belonging need affects the marketing of Under Armour is when Steve Curry endorses the company and its products, consumers may feel the desire and the need to be associated by Steve Curry who is a professional basketball player. The need to belong to the same class as Steve may influence a customer to buy the companies` products.

According to Abraham Maslow, all human beings need to feel respected and important. This is what constitutes the self-esteem needs. People engage in many activities like sports, hobbies, and debates in order to fulfill their self-esteem needs. Engaging in these activities give individuals the feeling of being important or appreciated (Mandel et al. 2017). This helps to prevent the problems that come with low self-esteem and inferiority complex. Maslow divides this need into two; the lower version of self-esteem and the higher version of self-esteem. The lower version is the need to be respected by other people, such as fame, prestige and attention. The higher version refers to an individual's need for self-respect and love. An analysis of the marketing plan and strategies of Under Armour reveal that the need for esteem is applied in its marketing. This is because the company targets high-profile athletes who have been successful in their sporting activities. A person wearing Under Armour branded products gets a lot of recognition and attention from people. This is because the company has a strong and good brand name which helps the customers and the entire public to identify positively with the brand (Martins, Yusuf and Swanson 2012). Since the products of Under Armour are luxurious and of high quality, a person who is seen wearing the products of the company will be viewed as being successful and stylish

Threats

All human beings have desires and dreams that they want to achieve during their lifetime. Self-actualization refers to the realization of one’s` potential. Consumers also have the need for self-actualization (Ostergaard and Bode 2016). Under Armour applied this theory in the market to help improve its sales and revenue. Since most of the consumers of the companies` products are upcoming and established sports personalities, there is a lot of desire for these athletes and sportsmen to achieve their full potential in the sport they are engaged in. The need for self-actualization is especially higher among sports personalities due to the influence of successful athletes seen on Television (Oyserman 2009). The company, therefore, capitalizes on the need for self-actualization and makes customers want to use its products in order to succeed like the sports celebrities who are famous and successful. This strategy works mainly through the endorsement of the company by popular athletes like Steve Curry and Christiano Ronaldo.

The theories of exposure explain how the exposure or availability of information on social, political, and economic aspects influences the behavior of consumers. This theory has been developed recently and it evaluates ways in which exposure to information, events and situations especially through social media shapes the behavior of individual customers when deciding on what to buy.

The theory argues that the information obtained by consumers on a product or a company on social media shapes the perception of the consumer about that product (Sethna 2016). The social media has been essential in modern day marketing. Social media marketing has brought about many advantages to the marketers such as easy target marketing and increasing efficiency in organizations by reducing marketing cost (Reny 2015). For example, if a product is publicized negatively on the social media platform like facebook, most of the existing or prospective customer will develop a poor or negative attitude towards the product or the company itself. Therefore, social media use can have either a very positive impact on a brand or can ruin a particular brand completely. Under Armour has extensively applied this theory in its marketing. The company has social media platforms which it uses to communicate to the existing pool of customers as well as new ones. Under Armour mainly uses Twitter to communicate directly to its customers. The company also uses Facebook to interact with its large pool of customers globally. Competitions are designed by the company on facebook to promote the courses of the company as well as its athletes (Siji 2015).The company has put social media to good use with all its products being advertised through social media alongside other advertising methods. Since the majority of Under Armour customers are youth, it means that most of the customers use either one or more than one social media platform (Wells and Foxall 2012). It, therefore, means that the company has a very good opportunity to market and grow its brand value by carrying out aggressive social media advertising. The company also uses videos to market its products. It has more than 100 videos on Youtube with combined views exceeding 2.4 million. Under Armour uses twitter to popularize the athletes that its sponsors. Another way in which under Armour uses social media is by using the social accounts of athletes under its sponsorship to promote the activities, products and brand of the company.

Analysis Of Under Armour Marketing And Its Relation To Consumer Behavior Theories

To achieve its marketing and overall company objectives, Under Armour should apply the following strategies in its marketing;

The company should expand its retail outlets. This will help the company to reach more potential customers.

Under Armour should sponsor more famous and successful employees as opposed to continued reliance on upcoming athletes. This will helps the company to become more popular globally and compete with the likes of Nike and Adidas.

The company should expand its product portfolio. This will happen through research and development. It will help in increasing the visibility of the companies` brand in all sporting activities hence growing the brand value and revenues of the company.

There is still an opportunity to increase the sales of the company through social media marketing. The company should make efforts to expand its social media followership and become a household name just like coca cola did in the soft drink industry. Strong social media presence will ensure effective communication between the company and the customers (Xiao, Ford and Kim 2011).

Conclusion

Under Armour has a very strong brand name and has managed to become successful despite the stiff competition it faces from rivals such as Nike. The company has a concrete marketing plan that optimizes the core competencies and competitive advantages of the company to gain an edge over rivals. The use of consumer behavior theories has helped the company to understand how consumers behave and therefore design strategies that will help influence consumers to buy products of the company. This report uses Maslow needs theory and the theories of exposure to evaluate how the customer behavior theories are applied in organizations.

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