Question

► Market penetration • Increasing range of styles & colors in its original apparel line Boosted spending on advertisement and endorsements by 35% Added It's own “Direct to Consumer” distribution channels: own retail stores & sales websites (30%) ► Market development Stepped up marketing to women consumers : 15M Opened international brand stores: China ► Product Development Added innovative athletic shoes (Armour speedForm) А z > Diversification Acquired digital personal health & fitness tracking Apps: MapMyFitness, MyFitnessPal, Endomondo o May consider non-performance leisure wear o May get into the market of fitness equipment or food Strat ts mult aptam ampai NDER ART

explain how under armour applied the internet to support the growth strategies (market penetration, product development, market development, and diversification)

explain each point

Answer 1

Market penetration

In 2019 and 2020, Under Armour started to shift from its traditional marketing style and also increased their marketing budget to 12% of the revenue, or $650M for 2020

Now the company has started to focus more on content creation, website redesign, and investing in CRM. It would ensure that their marketing budget is spent in the right way.

They have also increased channels for sale. For example, now one can shop items from their Instagram's post directly

The digital strategy is also used to personalize marketing with the help of CRM. It helps in building engagement, frequency of the customers.

Market development

Under Armour's use of data and Business Intelligence has helped them reach across the geographies. Following the path, of Nike and other apparel stores, they have also outsourced manufacturing to Asia. This, along with the brand presence on social media, website, etc has helped them improve revenue by 45%. With its channels of direct to consumer and wholesale, China has been the biggest contributor.

This expansion is attributed to the usage of data and connection worldwide through digital technology.

They have also dived into women's business and understanding their performance and fitness needs. They are using connected fitness for it.

Product development

Under Armour is also using IoT to fuel this growth. They are now selling 3D printed midsoles that can be made on order and shipped within 2 days. Now, these shoes can be produced at 2400 per hour rate, the cost has come down considerably.

Although products in the market include shoes, T-shirts, jackets, shirts, caps, gloves, etc. The innovation that they have brought is unparalleled. For example, Speedform shoe has no insole and little stitching, which is their fastest-growing product.

Also, they have launched connected running shoes that have a Bluetooth module, gyroscope, accelerator.

Thus, it can be seen that not only in marketing and sales, but they are also using technology and the internet for product development.

Diversification

UA is diversifying by acquiring different businesses like MyFitnessPal and others. It has also collaborated with IBM for AI in fitness and tracking sleep patterns.

This shows their strategy to move more into the fitness and technology segment.

As of now, it is using these acquisitions to produce better products. For example, they connect these apps to shoes to bring IoT data for future manufacturing.

Thus, these apps are collecting data that is processed through the SAP system and insights are used in future manufacturing.

Thus, they have plans to diversify in female apparel, connected fitness, direct to consumer, and internationally too.