Assignment Task

Case Study: Under Armour to India

Introduction

This case focuses on Under Armour’s market expansion to India. Under Armour is a relatively young American sportswear company that has already performed remarkably well in the US. After entering countries in Europe, Latin America, and the Asia Pacific, Under Armour is currently exploring other countries where it can further expand their sales. Among these new candidates, the Indian market is of particular interest.

Between 2013 and 2015, Under Armour’s international sales more than tripled. By the end of 2018, Under Armour targets to have more than 800 stores and more than 2000 shop-in-shops internationally. Also, by 2018, the e-commerce department had set the goal to add 6 platforms to the 24 platforms they had in 2017. 

Within groups of athletes, Under Armour primarily targets the athletes that started out as unknowns or underdogs. One of Under Armour’s marketing executives explains that Under Armour considers itself an “underdog brand.” This marketing strategy differs from the strategy of Nike and Adidas, who target and fight for the top athletes who are already famous and playing on the highest level.

Under Armour’s International Marketing Strategy

For the international marketing and distribution strategy, Under Armour does not show a consistent approach. On the one hand, they willingly adapt their distribution channels to the needs of the countries and regions they enter. On the other hand, Under Armour has more or less copied the successful domestic marketing and advertising strategy into their international marketing plans. Also, until now, Under Armour’s focus has been sports that are popular in the USA and Western Europe like American football, basketball, golf, and soccer.

Similar to the US market, Under Armour relies on the strategy of providing and selling their products to sports clubs and teams in Europe. However, the managers have noticed that in Europe, there is a different sensibility than in the US market. Therefore, Under Armour’s strategy cannot just be about marketing its US products in Europe, but they have to adjust. Also, the fact that Under Armour does not have a brand house store in Europe can hurt the sales in the long run.

In the Asia Pacific, Under Armour operates in China, Japan, Korea, Australia, New Zealand, Taiwan, and Hong Kong. China has been the most important market in the Asia Pacific region. In promoting their goods there, Under Armour has the advantage that one of their domestic market favourite sports, basketball, is also a huge sport in China. However, Under Armour is noticing price issues in the Asia Pacific market, especially in the footwear department. The higher-than-average price that Under Armour is charging for their shoes (even higher than an average Nike shoe, which is seen as a high-end brand) is driving customers away.

By evaluating the international marketing and distribution strategy, it is noticeable that Under Armour has used a similar strategy each time they enter a new market. The analysis of the applied strategy in Europe and Asia shows that using the same marketing strategy was not the right choice for Europe and copying the pricing strategy for shoes caused issues in the Asia Pacific market.

Target market: India

India is the second most populous country in the world after China. India is set to become the world’s youngest country, with 64% of its population in the working-age group by 2020. The economy has seen significant and consistent growth since the early 1990s. The biggest industry in India is retail, which makes up for almost 25% of the nation’s GDP. 

Indian consumers are becoming more and more health conscious. They are turning to sports to foster a healthier lifestyle. A growing group of people of all ages are not seeing sports merely as an activity, but as a lifestyle. They prefer branded sportswear and do not mind paying extra for these products. It is estimated that in 2015, the Indian sportswear market was worth nearly $1 billion and is growing 13% annually.

In 2017, 80% of the sportswear market was controlled by the four big players in the global sportswear market (Nike, Adidas, Reebok, and Puma). The other 20% is divided among local retailers and emerging players. Only Adidas has managed to get an agreement with the government for their own stores, the rest of Under Armour’s competition is heavily dependent on franchising partners.

In comparison with Under Armour’s country of origin, India has less well-known athletes, and almost none of them have the superstar status the famous athletes in the USA or Europe have. The influential people in India who drive the sportswear market are the Indian pop culture icons: the Bollywood stars.

India has a big population, strong economic growth rates, and a vast growing middle class. Nevertheless, the differences in macro-environmental factors in India may push Ander Armour to reconsider their entry mode and strategies in India

Questions

1. Conduct a SWOT analysis for Under Armor in India. Your analysis should include at least 3 items for each element – i.e. strength, weaknesses, opportunities and threats. You should also include a discussion of the results of the analysis in addition to the matrix. (Maximum 500 words) 

2. Adopting a target marketing approach:

2.1. Segment the Indian market for Under Armour. (Maximum 500 words) 

2.2. Select one target market segment. (Maximum 500 words) 

2.3. Position the brand in the target market. Drawing a perceptual map is optional. (Maximum 500 words)

3. Explain how Under Armour can use semantic network theory when entering the Indian Market. (Maximum 350 words)

4. Explain which approach to international marketing should be used by Under Armor when entering Indian market. You need to justify your answer using the case study and marketing theories and concepts. (Maximum 350 words) 
 

Note – These questions assess your understanding of marketing concepts and how you can apply them in a real-world situation. Therefore, the assessment of your answer is based on your use of these concepts and your reasonings, rather than the accuracy of the hypothetical data and estimations that you may use in answering the questions.

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