Foreign Markets

Here is an article from Motley Fool about NIKE's big jump into the Chinese market. This may represent opportunities lost for UA. It also may be a signal that in order for UA to compete with NIKE they will have to start putting more concentrations into foreign markets. It is possible for UA to extend their first mover advantages in the compression sportswear into these new markets.
http://www.fool.com/investing/international/2009/10/09/nike-jumps-into-china-with-both-feet.aspx

UA President Address Current Economic Conditions

Below is a link to a recent article about the President of Under Armour, David McCreight, addressing the economic downtown and how Under Armour plans to continue growing, expanding, and hiring as needed. Although, currently the company has been concentrating on controlling costs.
http://www.baltimoresun.com/business/bal-bz.underarmour13oct14,0,4934973.story

Product Placement: Another Facet to the Marketing Strategy

Under Armour has used product placements as a main market strategy to increase consumer awareness. Any Given Sunday was Under Armour’s first break at product placement in a blockbuster movie. In 1998, Plank sent a sample of Under Armour to the movie’s casting director and received the contract. The company used this as a jumping board and has since appeared in such movies as The Replacements, The Gridiron Gang, and Dodgeball. Under Armour did not stop there and dove into the cable television network and video games. In the first half of 2008 Under Armour had more than 3000 occurrences on cable television. Under Armour can be seen most notably in HBO’s The Wire and MTV’s Real World Road Rules Challenge. Video games that include Under Armour products include Tom Clancy’s Ghost Recon 2 and Tiger Woods PGA Tour 2006. These product placements reach multiple types of consumers ranging from adults to children. The strategic use of the product placements shows Under Armour products being used in a variety of different situations and scenarios. Under Armour finds this strategy important enough to have a member of the marketing team that works full-time in Los Angeles pursuing these product placements.

Sponsorships important to Under Armour

Part of Under Armour's marketing strategy is strategic sponsorships. Sponsorships, whether sports-oriented or charitable, show Under Armour’s dedication to community involvement. Under Armour sponsors events across the sports spectrum from football to running to lacrosse. Event sponsorships include ESPY Awards Show, Winter X Games, 2009 NFL Scouting Combine, College Football All Star Challenge, Baltimore Marathon, and All-American Lacrosse Classic. Under Armour created the “Power in Pink” campaign to raise funds for breast cancer research. They also sponsor several other community organizations including: The Ronald McDonald House, The V Foundation, Conservation Fund, The Rock Foundation, Boomer Esiason Foundation, and Living Classrooms Foundation. These sponsorships increase brand awareness while enhancing brand equity and help maintain a high quality brand image. The exposure received by sponsorships and product placements has been irreplaceable for the directly related growth that has been seen by Under Armour in the past 13 years. See the link below to be directed to UA's web page dedicated to sponsorships: http://www.uabiz.com/company/community_sponsorships.cfm

October 16 Stock Price Comparisons

UA closed out at $29.95 Friday, down .33. 52-week range is $11.94 to $31.24. NIKE closed at $65.10.

Interesting Story

Under Armour sponsors many different events, but their most know is the Baltimore Marathon. The link below is a story from the Baltimore Sun about a "shadow" run that is taking place in Iraq. Not really much about Under Armour, but definitely creates good PR for just being associated with the race.
http://www.baltimoresun.com/sports/outdoors/baltimore-marathon/bal-marathon09oct09,0,6026230.story

Outsourcing
Most all of Under Armour’s products are manufactured by unaffiliated manufacturers. They have 23 primary manufacturers located in several different countries. These manufacturers are required to adhere to Under Armour’s strict code of conduct for suppliers that can be found on their website http://www.uabiz.com/corpResponsibility.cfm. The code of conduct details Under Armour’s expectations and requirements of firms employed to manufacture their products and includes policies on forced labor, child labor, harassment and abuse, discrimination, health and safety, hours of work, wages and benefits, overtime compensation, environment, and legal and ethical business practices. Under Armour also allows third-party licensees to purchase the rights to use the logo and distribute products under the brand image. The product, marketing, and sales teams work with these licensees in order to ensure that the brand image is upheld in their products.
Vertical Integration
Under Armour packages and distributes the majority of their products through two distribution centers in Maryland. They also operate an online retail store with a wide offering of their products. Control over the distribution centers is an example of backward vertical integration and allows Under Armour to directly effect customer satisfaction in making sure that the products are of quality and that they are packaged with care. This also helps UA operate their online store. The online store is an example of forward vertical integration. This creates a one-on-one relationship with the customer and can be used to strengthen brand allegiance as well as brand image. The online store also creates a better market visibility especially since their major competitors also operate online stores.

Both outsourcing and vertical integration have been used strategically by Under Armour to cut costs and create better market visisbility.

Transformation

Under Armour initially started out with a focused differentiation strategy. Their focus was on their innovation of the perspiration wicking performance wear. It all started with a t-shirt; one that could be worn under football pads and not get heavy with sweat. Kevin Plank, the originator and CEO, himself was a football player and could identify with these needs. He began marketing to collegiate teams across the country. The shirt worked and founds its niche, so it sold. They then decided to make other performance wear: some for when your hot, some for cold, and some for any weather. As they grew, the performance wear industry saw new entrants. More established companies as adidas and NIKE began producing their own lines of performance wear to directly compete with Under Armour. At this point Under Armour could see that their hold in the niche market would likely disintegrate if they did not broaden their focus and make a bigger name for themselves. This approximately the point where Under Armour switched more to a broad differentiation strategy. One of the key factors in determining this is most like their strategy were two factors: charging a premium price and stressing constant innovation. Because of the companies constant innovation and products that work customers are willing to pay the higher price. Under Armour has created a brand image that is very important to the maintenance of this strategy and their continued growth. They are still fairly small-time in comparison to the industry leaders (NIKE, adidas).