Protecting the house of Under Armour.
Kraft, Patrick ; Lee, Jason W.
Building the House
"We're not taking this lying down ... It's a
war," warns Ken Barker, director of apparel at Adidas America
(Salter, 2005, p. 70). Baker's statement is in reference to the
rapid success in the apparel market by a young and up-and-coming Under
Armour brand. The Under Armour brand dominates the performance apparel
category so much (with around 75% market share) that the name has become
synonymous with the product (Salter, 2005). The consistent growth of
total revenue from $115.4 million in 2003 to $607.7 million in 2007
indicates the rapid success that Under Armour has experienced (Think
Equity Partners, 2007).
The Under Armour Company was created by Kevin Plank, a former
collegiate football player who felt he and his teammates' needs
were not being met when it came to performance wear. Plank has taken a
unique T-shirt company and turned it into a market share leader, and in
the process he brought a fledgling and obscure market category into the
forefront of the consumers' minds.
Founder Kevin Plank's passion for success could be seen from
his football days where he came in as a walk-on fullback for the
University of Maryland, and through hard work and determination, he left
as a full scholarship athlete and captain of special teams. This same
will and determination, coupled with Plank's work ethic, has served
as the backbone of Under Armour during its rise to becoming one of the
most successful apparel companies of all time. The mission of Under
Armour is to make technically advanced products that are engineered with
superior fabric construction, to provide proven innovation available to
the masses--aimed at making athletes perform better (UnderArmour.com,
2008).
The modest beginnings of this young market leader were formed out
of Plank's grandmother's townhouse in Washington D.C. It was
here where Plank, along with his good friend and former Maryland
lacrosse player Kip Fulks, who eventually become the company's Vice
President of Production, started the company with $20,000 of their own
money, $40,000 from credit and $250,000 from a small business loan
("Under Armour performance apparel," 2004). By the end of the
company's first year, 500 Under Armour HeatGear (sweat-resistant)
shirts had been sold in various styles, amounting to about $17,000 in
sales.
The Uncomfortable Cotton
During Plank's playing days at the University of Maryland, he
felt that his team's workout gear could be improved. Plank realized
that the cotton garments that were being used by the UM athletic
department in all sports were not properly wicking sweat off the
athlete's body, causing the material to become heavy with
perspiration. Plank was frustrated with having to continually change his
cotton T-shirt during games and practice, and wondered why no one had
created a much needed alternative (Thomaselli, 2001). Plank believed
that the associated feeling of heaviness the athlete was feeling was
having a significant negative psychological effect on athletes. Plank
felt that if athletes could feel lighter and more comfortable it would
ultimately lead to better performance.
Plank's initial plan was to produce a product that would help
improve performance by regulating athletes' body temperature,
allowing them to keep cool, dry, and light. The initial concept was
simple: create a T-shirt that would be affordable, featherweight,
moisture-wicking, helpful to every individual athlete's body type
and training environment, and would fit skin tight so it would lie flat
under straps and pads (Shannon, 2003).
Letting the Product Develop the Brand
At its genesis, Under Armour was posed with the challenges that may
face any new company in a crowded marketplace; how can it successfully
develop its brand, create a buzz, and grow awareness in a power-brand
dominated market. The power brands of Nike, Adidas, Russell, and
Champion all were active in the market place at the time of Under
Armour's entry into the active wear category. In 2000, as Under
Amour was just trying to enter the market, Nike owned 21% of the
athletic apparel market, including 32.5% of the shirt/miscellaneous tops
market. Nike also ranked first in market share revenue among men (23.7%)
and women (19.0%). Adidas was second in the market with a market share
of 13%. Adidas was the leader in athletic apparel for boys (18.6%) and
girls (17.1%) at that time ("Athletic apparel market ... strong
showing," 2000).
Another challenge for Under Armour was the fact that they had a
minimal marketing budget. Lacking financial resources, it became
essential for Under Armour to generate unique means for allowing its
product to hit the marketplace, and ultimately grow in visibility. To do
this, Under Armour employed various marketing initiatives aimed at
developing its corporate brand image and reaching its target audiences.
With the lack of financial resources of its competitors, Under Armour
needed to create inexpensive marketing strategies that not only aligned
with the organization's overall brand strategy but also would help
it rise above the clutter in the market.
UA decided to employ marketing initiatives including
* athlete endorsement and product seeding;
* word of mouth marketing;
* popular culture; and
* product placement.
Athlete Endorsement
Believing in his product, Plank felt that the Under Armour
merchandise could be utilized as marketing agents themselves. To do this
he needed to get his new style of performance T-shirts in the hands of
the athletes that the product was meant for. These athletes could
leverage their public exposure by promoting the product directly to the
consumer (McCracken, 1989). The powerful motivation to purchase a
product via attractive spokespeople convinces marketers to leverage the
use of celebrity in product endorsement (Roger, Woonbong, Gabriel, &
Sonali, 2008).
Plank decided he needed to reach prospective consumers, so he
filled his Ford Explorer with UA product and traveled to every Atlantic
Coast Conference school to pitch his new product. Plank's first
major contract was with Georgia Tech University (Under Armour ...
history, 2003), that was shortly followed by a contract with the
Pac-10's Arizona State University.
In today's marketplace, athlete endorsers are used to
accomplish several objectives, including
* capture the attention of consumers;
* strengthen recall of the brand name;
* reinforce the image of the product;
* give the message credibility;
* increase product attractiveness;
* increase liking and recall of the ad; and
* increase the likelihood of purchase
(Burnett, Menon, & Smart, 1993; Martin, 1996; Thwaites, 1995).
Some industry advisors question the future success of athlete
endorsement due to the questionable actions of some athletes, and the
financial investment required to be successful (Bernstein, 1998;
Broughton, Lee, & Nethery, 1999; Lane, 1996; Mahony & Howard,
2001). To be effective when utilizing athlete endorsers, it is important
that the athlete connects with the product and the consumer in a way
that aligns itself with the organization's strategic plan (Douglas
& Isherwood, 1979; McCracken, 1986, 1989; Peetz, Parks, &
Spencer, 2001; Solomon, 1983). The utilization of athlete endorsers is a
successful method of marketing because of the desire of young athletes
to play sports and act as the professionals act (Stone, Joseph, &
Joe, 2003). Shank (1999) has noted that athlete endorsement is
successful because of two main factors, credibility and attractiveness.
Initially, Plank was able to recruit some friends who were playing
football in college as well as in the NFL to use his product free of
cost (Salter, 2005). These athletes became, in essence, walking
billboards and increased the word of mouth marketing in the marketplace.
Word of Mouth
Word of mouth marketing is defined as the number of people the
consumer engages in conversation about the brand (O'Brien, 1971).
Word of mouth marketing is one of most impactful methods of marketing,
influencing awareness, expectations, perceptions, attitudes, behavioral
intentions, and actual purchase (Ha, 2004; Reichheld & Schefter,
2000; Roman & Cuestas, 2008; Ward & Lee, 2000). Past research
revealed that word of mouth marketing has more potential impact upon
customers' valuation and the final purchase of products/services
than other channels (Arndt, 1967; Brown & Reingen, 1987; Engel,
Kegerreis, & Blackwell, 1969; Feldman & Spencer, 1965; Katz
& Lazarsfeld, 1955; Reingen & Kernan, 1986; Richins, 1983).
Arndt (1967) explains that word of mouth marketing has become an
emerging force in the marketplace. As the word of mouth for the growing
product line of Under Armour started to stretch past the locker room,
the message was soon received by friends of friends and then their
friends and so on. Under Armour's brand visibility started to
spread as more and more collegiate athletic trainers and athletes
started actively seeking out the product. Soon demand mushroomed
(Mullins, 2007). This word of mouth buzz was perfectly aligned with the
marketing strategy put in place by Plank and his staff. In a recent
interview, Steve Battista, Under Armour's Vice President of
Branding, stated, "Two things we can guarantee with every (new
product) launch is that we will deliver great innovation with the
product and that the brand will deliver entirely new energy and buzz
into whatever category it enters" (Mullman, 2009, p. 16).
Infusion of Pop Culture and Buzz Marketing
Kerner and Pressman (2007) stated, "Buzzworthy products almost
always cut through the clutter" (p. 81). "Cool cuts through,
it's the ultimate point of difference" (Kerner & Pressman,
2007, p. xi). When brands are able to evoke the energy and emotion of
what is cool at the moment, they are more likely to stand out in
today's cluttered marketplace. The look and appeal of Under Armour
was ideal as it was the marriage of the intense, hard core athletic gear
that could help with performance coupled with a hip, fresh look that
would be able to appeal to consumers. To differentiate its product line
from its competitors Under Armour leveraged its sophisticated design
software, new manufacturing techniques, the latest in material
engineering, and robust information technology systems to produce
virtually everything it makes (Mehta, 2009). Plank has said,
"We're willing to look at wild, out-there ideas if they can
make our products perform better" (p. 29).
Removed only a few years from when Kevin Plank first loaded up his
Ford Explorer in route to the Atlantic Coast Conference schools, Under
Armour capitalized on athlete endorsement as a method of free
advertising. Plank stated in an interview with Ad Age, "We knew
players would get injured [and remove their jersey], or do postgame
interviews in their [Under Armour] T-shirt, or maybe a pregame workout.
We knew it would be seen" (Thomaselli, 2001, p. 10). Under Armour
was worn by athletes in interviews and was visible in other
athlete-featured articles involving working out, conditioning, or even
their home life. Under Armour gear was also worn by celebrities working
out, walking around town, and in magazines. With the impact that media
has on society, popular culture can create fashion trends and icons of
individuals in a very short period of time (Kenyon, Woods, &
Parsons, 2008). Today the impact of the consumers' culture can form
the basis of their social reality (Lau, Chiu, & Lee, 2001). The use
of TV personalities and media exposure helps extend the cultural value
of the brand to those not rooted within a singular personal community
(Kenyon et al., 2008).
In growing as a pop culture icon, it is important for Under Armour
to understand that every individual's vision and interpretation of
what is popular can differ and change over time (Warner, 1990). Pop
culture can be a double-edged sword. The brand does not want to turn the
consumer off by having an influx of pop culture references, which can
impact the organic credibility that has been developed (Friedman, 1985).
Product Placement
With a marketing budget that was a fraction of that of its main
competitors, Under Armour looked to leverage any opportunities it could
to grow its brand awareness to its target market (Thomaselli, 2001).
With the increase in non-traditional media, such as video games and
Tivo, traditional 30-second TV inventory was not as effective as it has
been in the past ("IMG revolutionizes ... Tivo," 2007).
Product (or brand) placement has grown significantly over the past
decade; marketers now frequently use placements as the basis for
multimillion dollar advertising and promotional campaigns (Karrh, Mcee,
& Pardun, 2003). In today's overcrowded marketplace, creative
advertising campaigns include multiple marketing methods, proving more
effective than traditional advertising methods (Balasubramanian, 1994).
People are not sitting through commercials like they used to.
Advertisers have had to be creative in the way they communicate with
their consumers and how they position their brand. Now more than ever,
involvement around the action of the game, in-field signage, or computer
enhanced signage has become very valuable. The advertiser must make sure
that their brand image can be seen while the game is in play. According
to Robert Birge, CMO of IMG Worldwide, "We're taking event
properties into the digital space. Not just broadband--we are a big
producer of mobile content" ("IMG revolutionizes ...
Tivo," 2007).
Under Armour has infused their products and their brand image in
various visual media forms, including over a dozen popular television
shows and numerous motion pictures (see Tables 1 and 2). The utilization
of the marketing technique of product placement in television, movies,
and video games has allowed Under Armour to promote the benefits of its
product line to a larger audience (Mark, 2000). In 1998, Warner Brothers
studio was working on two football movies (Any Given Sunday and The
Replacements) and was searching for an outfitter that would provide a
level of authenticity for their actors (Under Armour ... history, 2003).
Shortly thereafter, ESPN struck a deal with Under Armour to use product
in their pseudo-reality show, Playmakers, which featured the lives of
players, coaches, and families of a fictional professional football team
(Dash, 2003). Production companies, television networks, and movie
studios started seeking out the Under Armour brand even more.
Under Armour has recently ventured into the gaming world as well.
Advertising and marketing executives are starting to acknowledge the
benefits to their brand development when including their brands in video
games (Nelson, 2002). In 2005 Under Armour partnered with Ubisoft
Entertainment and EA Sports to outfit characters in their video games
(Logan, 2005). This provides another outlet for brand development.
Further Brand Activation
Strategy alone does not allow a brand to develop and grow; it takes
the proper execution of the strategy (Berry, 1999). The early strategy
enacted by Kevin Plank allowed the Under Armour brand to be developed
through marketing efforts such as athlete endorsement and product
seeding, word of mouth marketing, popular culture, and product
placement. Under Armour's success has materialized in continued
market share growth, expanded industry stature and revenue, the
utilization of more traditional marketing methods such as television
advertisement during sporting events like the Super Bowl or on networks
like the NFL Network, team sponsorship deals (e.g., in-field signage,
promotional elements), licensing deals with Major League Baseball and
the National Hockey League, as well as title sponsorships for events
(e.g., Under Armour High School All-America and Under Armour Senior Bowl
football games) or organizational national championships (e.g. Under
Armour College Bass National Championship [for the Bass Angler's
Sportsman Society (B.A.S.S.)]) (Thomaselli, 2001).
Values are the ideals, principles, and philosophy at the center of
the Under Armour organization (Berry, 1999). Such core components are at
Under Armour's heart and soul; where founder Kevin Plank has not
deviated from his original concept of developing a product that would
help make all athletes, amateur to professional, feel good about
themselves when being active. This speaks to Plank's values, as
well as the values that have been passed down and instilled in his
company to his employees, sponsored athletes, and most importantly--the
consumers.
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Table 1. Movie examples in which Under Armour has a
prominent role:
* Bad News Bears (2005 updated version)
* Gridiron Gang
* Fantastic Four
* Friday Night Lights
* Dodgeball
* Game Plan
* I Now Pronounce you Chuck & Larry
* Million Dollar Baby
* Mr. 3000
(Brand cameo, 2007, 2009)
Table 2. Television program examples in which Under
Armour has a prominent role:
* Amazing Race
* The Apprentice
* Clubhouse
* Friday Night Lights
* MTV's The Inferno
* Playmakers
* Real World Road Rules Challenge
* Two-A-Days
* Today Show (Matt Lauer segment in
Antarctica)
* The Wire
(Brand cameo, 2007, 2009)