Introduction
Kevin Plank, a former University of Maryland football player, founded Under Armour in his basement. Under Armour manufactures athletic gear and accessories, recognized for its performance fabrics: equipment designed to drain moisture away from the body, regulate body temperature and improve comfort regardless of weather or activity level. Under Armour collaborates extensively with collegiate and professional sports teams and players to boost its brand image; its primary competitors are Nike and Adidas (Subramanian & Gopalakrishna, 2010). The company had been increasing its revenues rapidly until the recess in 2008.
The Decline in Sales
The Under Armour brand is positioned as the best and highest quality possible. This reputation necessitates a higher price for each product, and the company has held its strategy for all of its products. Hence, they decided that Under Armour’s quality and innovative brand positioning would promote the running shoe line. However, in 2009, the sales of this line declined by 4.5 percent, and this result worsened in 2010 when the dropped was 16.6 percent (Subramanian & Gopalakrishna, 2010, p. 1). It is known that Nike, Adidas, and other brands dominate the running shoe market; these are the same rivals that Under Armour faces and effectively compete within all other sports apparel and gear industry areas (Subramanian & Gopalakrishna, 2010). Therefore, the company’s approach to this situation has several issues and benefits, which are discussed further.
Under Armor’s Approach Issues
The main problems that caused the sales decline were the initial decision to compete with Nike and Adidas in the shoe market, the logistics failure, and the discount for the last party of the footwear. As such, it was known to Under Armour that the shoe line is a high-risk investment since there are already dominant players, and the footwear does not reflect the company’s major category of products. Next, Under Armour had outsourced the manufacture of the shoes to China and had no way to cancel the production when the sales declined. Finally, after the line failure in 2009, the firm tried to sell the rest of the products at a discount (Subramanian & Gopalakrishna, 2010). Such a decision undermined the brand’s image of high-cost products and resulted in mistrust of the customers and lesser sales.
Under Armor’s Approach Benefits
Yet, there are proper steps that Under Armour made in the situation of reclining. As such, it replaced the head of the department that was responsible for the footwear line (Subramanian & Gopalakrishna, 2010). It could be considered a mindful option since the product failed for two consecutive years. The second wise decision was to reexamine the marketing strategy for this specific segment of Under Armour’s goods. These choices reduce the risks of further decline by accepting that the shoe project was not successful.
Proposed Strategy
Despite the fact that the company still has ambitions for a shoe line and is working on its reinvention, it is better to postpone this project. Under Armour should not have initially proposed lower prices for these products since it probably caused a further decline in sales. It would have been better if they changed their marketing strategy and, for example, contracted an influencer to promote their product. However, under the existing condition, the company should not pursue its efforts in footwear.
Conclusion
To conclude, Under Armour is a reputable company with a strong marketing strategy for its products that manage to compete with its large rivals. However, one attempt was not successful: the shoe line was sold insufficiently, and some companies’ decisions even worsened the situation. Thus, Under Armor should enhance its brand image further to renew customers’ trust and abandon the footwear initiative.
Reference
Subramanian, R., & Gopalakrishna, P. (2010). Case 4 Under Armour.