EXPANSION PLAN FOR THE UNDER ARMOUR BRAND IN SPAIN
Practical case
Introduction
The company Under Armour, headquartered in Baltimore (Maryland, USA), is an American sportswear company which has seen exponential growth in recent years, particularly in its country of origin. Founded in 1990 by Kevin Plank, the company's numbers have experienced constant growth ever since, until truly taking off in recent years.
UA has now overtaken Adidas in the North American market (you can see more information in the website of WSJ) and it is easy to understand that one of the main challenges the company now faces is its potential internationalization and market penetration in different parts of the world.
As we noted during the unit on market research and as discussed previously, this scenario presents several challenges for the company at the international level. With regards to the Spanish market, progress in market penetration and market share must first be preceded by an opportunity for the brand to increase its recognition within our country given that brand awareness is currently at extremely low levels (1% according to the latest survey data available). In addition, forecasts from official institutions and consulting agencies regarding the Spanish economy over the years to come indicate that ongoing growth is to be expected and should result in a 10% increase in GDP from 2014 to 2019 and a 17% decrease in unemployment from its current rate of almost 25%. As for sportswear, athletic footwear and accessories, global figures recovered during 2015 and are expected to experience regular ongoing growth over the upcoming years at a rate of 3% each year, reaching 5.1 billion dollars in 2019.
As for the market shares of the leading clothing brands in our country, Nike (most notably as sponsor of FC Barcelona and Atlético de Madrid), is also dominating the market with a market share calculated at around 12%, followed by Adidas - which sponsors Real Madrid - with 9% and Puma coming in third place with a 3% market share.
Other important trends in Spain's sports market worth reviewing and discussing include, in particular, the frenzy for running and disciplines such as CrossFit in the country - areas where the UA brand is particularly comfortable given its positioning and product lines-, the ongoing trend of including women in sports, and the strategy - which has become a trend worldwide - used by general clothing brands to include athletic wear by incorporating related product lines (Oysho, Desigual, Zara, Mango, etc.).
Project objectives
Under Armour's objectives and strategies in Spain must therefore involve a campaign capable of progressively introducing the brand in the country and from there continuing to increase its sales until it has reached levels similar to those of Puma (currently number three in the market) by the end of 2018.
The most relevant information about the strategies projected by UA for this progress are:
- There are two specific segments of the population and potential product lines which UA seeks to focus on in particular to the extent that they will become the crux of the campaign: the female and youth markets, two areas where the brand has caught a glimpse of great opportunities for market penetration under the current market conditions.
- Although Under Armour's global positioning tends to identify with a younger market, the fact is that in Spain, to date, the most common consumers of the brand are older than 30, a variable which must be kept in mind when designing plans, strategies and actions.
- UA seeks to give its campaign an urban feel, appealing in particular to large Spanish cities such as Madrid, Barcelona, Seville, Bilbao, Zaragoza and Valencia.
- The marketing budget for actions, sponsorships and activation related to this campaign will be 2 million euros in 2016, 3 million in 2017, and 4 million in 2018.
Sports Sponsorship and Marketing Plan
Using the information we already have, Under Armour has asked us to design and carry out the sports sponsorship and marketing campaign needed to introduce the brand in Spain and progressively increase its sales.
In order to do so we will need to perform the following actions using a coordinated approach geared toward the proposed objectives. These actions will make up the various phases of UA's marketing plan in Spain:
- Comparative analysis (Benchmarking) of clothing brands related to sports in Spain through marketing campaigns over various channels and international, national or local sponsorship plans, whether with athletes, competitions or sporting events.
- Define the campaign: which will be reflected in the campaign's vision, strategies, content and final artwork proposed and which must be based on prior research, including benchmarking and market analysis of the sportswear industry as well as any other information discovered during the research stage.
- Detect opportunities related to sports or the sportswear market which may arise during the research stage.
- Manage the budget which will be divided into the different activation plans and marketing and communication channels to be used throughout the entire campaign.
- Marketing plan and media plan, defining the strategy to be used in the different channels and communication media as well as the schedule of actions for said plan.
- Plan for creating points of sale throughout Spanish territory, taking into account the different possibilities available within the Spanish market, as well as locating target audiences and potential competitors.
- Public relations activities and special events related to the sponsorship plan, indicating their objectives and how they fit in with the rest of the campaign.
- Online marketing strategies, indicating any tools, channels, schedule and strategies developed and implemented using the internet.
- Corporate Social Responsibility (CSR) Plan, which will allow for reinforcing the sponsorship plan's activities as a whole.
Completing the Project and deliverables
The project will be completed in groups (groups determined by the course academic director) which will work on the different instructional units via the course platform.
The project will allow for evaluation of instructional unitsby submitting the following materials:
- Printed final report, which shall include the different aspects listed in this document as well as the sources of information used and final conclusions.
- Presentation of the campaign which, as was mentioned previously, will take place via virtual seminar on Moodle whenever possible.
- Final artwork, designs or any physical or online promotional elements included in the marketing and sponsorship plan designed and completed as part of the project.