Bus 304 - 02

PROFESSOR OMEARA

Murray White
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Table of Contents
I. Executive Summary. 2

II. Company Overview 2

lll.Market Situation 3
Industry Overview 3
Competitive Summary 4

IV. Marketing Strategy 7

SWOT Analysis.. 8
Statement of Opportunity 8

V. Implementation Plan.. 14
Action Calendar 15
Measurement & Control.15

VI. Bibliography. 16
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Executive Summary
As Under Armour has been experiencing exponential growth throughout prior years, we are
looking to continue this pattern as we introduce our new fitness center, The House. We believe
diving into the health, fitness recreation center industry will give our company an advantage
amongst our competitors in the sportswear industry as many of them do not offer their
customers a gym facility. Our mission is to make all athletes better, so we we want to provide
our customers not only with products, but also a service that will allow them to successfully do
so. To differentiate ourselves from other gyms, we are focusing primarily on athletes who are
highly motivated and want to become a member of a gym that will provide the necessities to get
to a productive, safe, and healthy lifestyle. In order to do so, the House accommodates to both
adults and children as we offer various intensive classes and amenities that will help prepare for
motivation, high performance, convenience, and self-confidence. The House will be a luxury
fitness center which will include top-notch health and fitness options such as, wellness support
classes, an interactive fitness center for kids, a body recovery center, an array of different
fitness classes for adults, and much more. An overall challenge that our company may face is
convincing our consumers to purchase an initial gym membership and raising awareness of our
new facilities. Under Armour will utilize strong advertising strategies, such as, designing
billboards, brochures, personal flyers, and social media to raise awareness of at least 50% of
Under Armours loyal customer base ages 20-45 of the opening of the new gyms by the end of
2017.

Company Overview
Under Armour (UA) was first established in 1996, when CEO, Kevin Plank, came up with a
revolutionary product that would affect football players performance on the field as well as
change peoples perspective of athletic sportswear. He designed the companys first product,
which was a shirt composed certain micro fibers that wicked moisture to keep athletes cool, dry
and light in the most brutally hot conditions and by the end of 1996 made $17,000, in sales.
Today, Under Armour creates the worlds most innovative apparel, footwear, and accessories
and has made revolutionary changes in athletics. The headquarters are located in Baltimore,
Maryland and currently holds almost 250 stores worldwide.

Line of Business:

Under Armours primary business is to create top quality branded performance footwear,
apparel, and accessories for all age groups. Under Armour develops unique, non-traditional
performance fabrics, setting themselves apart from other competing brands.
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Revenue Overview:

Under Armour has been a publicly

traded company for 10 years with
23 consecutive quarters of 20+%
net revenue growth. The
companys revenue has been
increasing immensely from $1.47
billion in 2011 to almost $4 billion
in 2015. As of now Under
Armours largest amount of
revenue streams from its North
American market. As seen on the
graph, the North American net
revenues accounts for 87%
($3,455,737) of Under Armours
revenues in 2015, which is why
we plan to primarily focus on this
region when expanding our
company

Market Situation
Industry Overview:

The sportswear industry, which

also includes accessories and
footwear, is composed of
numerous highly competitive
companies due to low entry barriers-- one of those companies being Under Armour. Under
Armour competes in the development, marketing, and distribution of branded athletic apparel,
footwear, and accessories for men, women, and youth, with more than two-thirds of their income
stemming from the apparel division. This company has been climbing its way to the top,
gathering nearly $4 million in revenue and is on track to reaching $20 billion in the year 2025,
according to Morgan Stanley analysts.6 It is also expected to become the third largest global
sportswear brand by the year 2030. Under Armour has continually worked hard to expand its
market in order to increase profit.
One strategy that contributed to their overall growth in this industry was diving into the
technology industry to advance the company amongst competitors and open up another
segment of revenues. The CEO of Under Armour, Kevin Plank, is steering the direction of the
company into the technology realm, investing $700 million into a project that allows application
users to book classes nearby or nationwide at over 55,000 gyms in 130 countries.
The sportswear apparel and footwear industry has been booming due to growing
demands for activewear, the sporty fashion for both the gym and the streets. It is now becoming
more common to wear athletic gear in casual settings, thus increasing activewear apparel to
16% and totaling $43.6 million in sales according to the NPD. In the past 7 years, sports apparel
and footwear sales have jumped 42% to $270 billion. Activewear sales exceeds that of the
apparel market as a whole.
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Competitive Overview:

As you can see from the chart, none of our current competitors have Fitness Centers. This
shows that Under Armour can gain a competitive advantage from entering the Fitness Center
market.

Industry of Opportunity- Health, Fitness Recreation Centers

The Health, Fitness Recreation Center Industry, can be defined as fitness/ recreational sport
facilities that feature exercise and other active physical fitness conditioning. The industry itself is
composed of 94,956 businesses both domestic and global, that primarily provide infrastructure
such as space, equipment, and training in exchange for a membership fee.This past year, the
industry accounted for earning about 30.1 billion (USD) in annual revenue, and currently is on
track to increasing those numbers by having a possible 2.6% and a revenue of about 34.2 from
now until 2021. With the industry growing each year as well as revenues steadily increasing;
providing a product or service within this market would be nothing but an advantage for Under
Armour going forward. By riding this so called gym wave business model, Under Armour can
create a new type of awareness to its customers and promote potential offerings.

Current Trends:

1. Difference in Price of Memberships: The most important and direct factor when it comes
to choosing a facility. The more traditional gyms or centers distinguish themselves at least in
part through price point. High-end clubs offer an almost spa-like atmosphere for top-dollar;
while low-end offerings have just the essentials.
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2. Unemployment Decreasing: With consumers having to return to work, and many

individuals struggling to allocate time toward fitness, industry operators have responded with
various establishment formats, particularly within urban areas, providing consumers with a
range of convenient options and access.
3. Providing Additional Services: Most commercial clubs or facilities provide additional
services to their members in order to gain brand loyalty and an overall positive customer
experiences. For example, the services of personal trainers, hygiene amenities (bathrooms,
showers, etc), meals and beverages, spa services and child care. All add up to creating a
convenience factor.
4. Fast/Pace Grueling Workouts: The concept of CrossFit training within the past 5-10 years
has been a huge trend and shift in the way people work out. According to LA Weekly, the
essence of CrossFit was born: high-intensity, full-body movements that obliterate the distinction
between weight training and cardio workouts, which leave you feeling stronger, quicker, more
agile and more fit than you ever dreamed possible.

Health and Recreation Fitness Centers:

In the Health and Fitness Centers, none of our competitors have a Child Fitness section in their
facilities, presenting Under Armour with another great opportunity for a competitive advantage.
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SWOT Analysis:

Growth Strategies:
(Market Development)
Expand Under Armour to international markets in efforts to increase international revenue.
(Product Development)
Revamp current athleisure fitness wear product lines to combat the casual clothing lines of
Nike & Lululemon.
(Market Penetration)
Focus on markets that rely heavily on the higher margin products lines (Stay Warm).
(Diversification)
Open fitness clubs and facilities in the United States that are single and family orientated

Statement of Opportunity:

As the leading marketing team for Under Armour, we plan to take the next step in the company's
future by completely turning around present marketing strategies, in order to take on an
additional market to increase overall revenue as well as bring forth a new set of valued products
and services to current and future customers. We plan on introducing UAs first line of multiply
purpose fitness clubs known as The House, to completely diversify the Under Armour brand
and proceed to carry out its mission of continuing to better athletes. This decision is inspired to
effectively balances the interests of the company, consumer and society. By pursuing the fitness
clubs and this new industry, it will give UA an upper hand on our competitors by exploiting a
market they have left relatively untouched.
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MARKETING STRATEGY

SMART Goals:

> We want to raise awareness to at least 50% of Under Armours loyal customer base
ages 20-45 of the opening of the new gyms by the end of 2017.
Place brochures on seats and tables at the the biggest sporting events in the
cities that have Under Armour gym in.
Billboards and posters will be placed in strategic locations around the city to
entice our exact target market.
> We want to open up at least 2,000 gym memberships across all locations in the first
year of operation.
Gain a solid and loyal customer base in order to build healthy relationships and
value throughout the company and society
> We hope to decrease child obesity in the states we implement The House gyms by
at least 1% after 1 year of operation.
Use the our promotions to get children into the Stay Active and Future Armour
facilities of The House

Societal Marketing Opportunity:

In todays society where more and more people are making fitness their last priority, there is
huge room for potential change. Obesity, whether it is regarding children or the everyday
person, has made an impact all over the United States. According the CDC (Center of Disease
Control), more than one-third of adults are obese and childhood obesity has more than doubled
in children and quadrupled in adolescents in the past 30 year.Through UA gyms array of
facilitative amenities, and resources within each gym not only can it serve as their one stop or
location to something beneficial. By creating a product and service that promotes a supportive
outlet for both types of consumers to be engaged in some form of physical activity, can create
an opportunity to reduce this societal issue.

To Make All Athletes Better Through Passion, Design And The Relentless Pursuit Of
Innovation

Under Armour is much more than just another clothing apparel company within a market.
Starting with a single idea, it continues to exceed the expectations of people as well as its
competitors by becoming one of the most successful upcoming companies in its industry.
Through their creative and innovative products, Under Armour has changed the way people
train, and look. Whether you are a professional, nonprofessional athlete, Under Armour has
made a sufficient within the fitness world.
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With having such steady overall success within the athletic wear market, in order to
maintain this progression, Under Armour needs to provide a new type of offering to its
customers. Even though coming up with the next big tangible product, has shown to be
successful in the past, by using the business model of creating products that include the newest
technology, design, and or the sponsorship of a professional athlete, the strategy becomes
repetitive. It is evidently important for Under Armour, to set themselves apart from the norm in
order to have edge and to change the perspective of others by marketing themselves to society
as company whose brand stands for purpose rather than just a business. While still making the
companys main focus, to be satisfying the needs of their customers, Under Armour should not
solely focus on the creation of products but to incorporate a new method to attract and keep its
customer loyalty. Under Armour, needs to expand by promoting their message of making all
athletes better, by providing a service to its customers that allows them to successful do so. The
next stage in the companys efforts to succeed overall is creating and producing personalized
gyms.

Product Overview:

The House

We Treat YOU like one of our OWN

With Under Armour expecting to expanding

within the gym market, it comes with certain
competition. There are two types of gyms
that fall within the market. The first would
include commercial gyms such as, 24- hour
Fitness, Gold's Gym, Bally Fitness, Crunch,
etc. And for the second, there gyms which
are referred to as performance gyms (gyms
that specify only using one method unit of
training). If you are a current athlete, or
once back in your prime, Under Armour
gyms are designed for everyone. Theyre
designed for the individuals regardless of
their age who, have the drive and passion
to make fitness be a part of their life, while
at the same time enjoying it. They are
designed
for the
that child
who
wants to
train and ultimately become a spitting image like their favorite
athlete. Each gym, not only includes particular aspects like
another commercial gyms, but more specifically provides the
resources for one to take the next step in the right direction to
live a productive, safe and beneficial healthy lifestyle. The
Primary purpose of every UA gym is to not only create fun
motivating environment, but to also promote safe fitness.
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Product Breakdown:

Adult Fitness Classes

Included with every House Membership, UA gyms provides an array of different fitness classes
(Spin, Yoga, Bikram Yoga, Pilates, Kick Boxing, etc), that are meant to suit the work out in
which one chooses to take part in.

Stay Active Center for Kids

Fun interactive group classes for children,
where they can mimic and train like their
favorite athletes.
*Classes include workouts based on the
training methods of Under Armour
professional athletes such as Stephen Curry,
Cam Newton, Tom Brady, Buster Posey, etc

Child Day Care

A safe, secure, and supervised environment
for children from the ages of 6 months to 11
years to participate in movement activities,
watch movies, draw, play with new friends
and more, all while being accompanied while
members can enjoy their work out.

UA Wellness Support Classes

Free of no charge, members can enjoy and
learn through UA support classes to help live
a healthier and safe fitness lifestyle.
*Classes include: General Health & Nutrition,
Strength and Conditioning
*Nutritionists and Trainers on site

Body Recovery Center

With purchase of I Will Membership, customers have access to UAs body recovery center and
choice of his or her own personal trainer. For members who are looking for a helping hand in
their work out, or a time to relax, this feature properly suitable.
*Center is fully staffed with Professional Trainers, fully certified Massage & Physical Therapists

Future Armour Program

For the more motivated child who has the urge to take his
or her game to the next level. Rather than participating in
the general fun group activities that are initially provided
with a general membership, The Future Armour program
promotes a more one-on-one style of training attention
where each
child learns what it means to properly train and work out
like their favorite athletes.
*Each Child is assigned with his or her own training coach
*Child must be 12 years old to join program
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Segmentation:
Demographically, the Houses target focus are young adults ranging from ages 22 to 44
years old who are either single or DINKs (dual income no kids). We are also targeting
young adults who may have a family of their own since we are offering remarkable drop
off training classes for their children while the parents can also have alone work out time.
We are focusing primarily on those in the middle to upper class with higher levels of
education because they are more likely willing to pay higher prices for gym
memberships.
Psychographically, we want to target individuals who are fitness minded or intrigued and
are looking for a high-performing fitness facility to be member of. These young
individuals live earnestly through a consistent work schedule and feel an important need
to incorporate fitness in their daily lives.

Targeting:
Differentiated marketing:
- One offer will target single/DINKs. This offer will exhibit the Miss the old you?
campaign making it very appealing to consumers who were once either physically
fit, ex-athletes, or currently trying to get back into their best shape
- The second offer will target families and will entice children into the campaign
making it appealing to consumers who need an option that incorporates the whole
family.
Primary Research: Our lead marketing team constructed a survey called, To gym or
not to gym, and was sent out to several of our loyal Under Armour customers. We
received back 41 responses from individuals ages 20-45 who fit under our targeted
audience:
- A gym that could train your kids while you work out, 96% of individuals with children
thought this was beneficial
- A workout facility with the best equipment and latest technology is important to 86%
of individuals
- Getting back into the best shape of their life was wished upon by 70% of individuals
- Sports athlete's influenced 71% of individuals to be more athletic/healthy
- Making time to get to the gym was either extremely/averagely important to 96% of
individuals
-
Promotion

Advertising:
Billboards/Posters: the billboards and posters will be placed in strategic locations
around the city to entice our exact target market.
Single/DINKS
- Financial District/Market Street: This strategic location ensures that our
ads are reaching the Middle and Upper class.
- Muni/BART stops: Bus stops and BART stations are ramid all over the
city, and have thousands of people walk by them daily.
Families
- On Muni/BART stops around Financial District/Market St.
- Around Elementary/Middle/High Schools: This location will entice children/
teens to want to be a part of the house, causing parents to pay for their
memberships.
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Mass Marketing
- Billboards around very commonly traveled highways such as the I 80 and
101 as well as and streets within the city to catch the attention of any
other prospecting customers

(checkout uathehouse.weebly.com for clear images)

Brochures: Brochures will be laid on every seat of the biggest sporting events in every city
that has an Under Armour gym in it
- Warriors Games
- Giants Games
- 49ers Games
Personal Flyers: Flyers can be seen at Professional Sporting Events, College Campuses,
Sport/ Fitness Magazines, and other Department Retailer Stores that carry Under Armour
Products.
Social Media: The House, can be specifically marketed and promoted to others through
every major social media (Facebook, Instagram, Snapchat, etc), by having customers share
their experience and support through our own customized Hashtag.
#ArmourUP

Public Relations:

One of our main promotion ideas is to use our Under Armours super star athletes to promote
our gyms in bulletin ads. The huge fan bases that athletes such as Cam Newton and Steph
Curry have will paint a positive picture and spark interest for the House.

Sales Promotion:

Because our company is focusing primary on a premium price strategy, we want to avoid
creating discount prices on our facilities in order to drive in our targeted audience. However,
when a consumer applies for their membership option of choice, they will receive a
complimentary gym bag and a HouseFitness assessment, which consists of an in-depth
physical fitness test, health screening, body composition index, and metabolic rate
measurement.
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Chain Ration Analysis:

324.93 million people x 12% x 26% x 18% = Approximately 1,824,806 people

Price:

As a company, we hope stand by our mission statement and make all athletes better through
passion, design, and the relentless pursuit of innovation and in order to do so, we hope to
provide our consumers and society with a top-notch facility filled with highly-motivated athletes.
The House will be a luxury fitness company, in which we will set our initial prices higher than our
competitors. With a premium price strategy, we want to be sure that our customers will be willing
to pay more for a fitness club where the finest personal trainers and cutting-edge classes
convene with state of the art amenities. After comparing prices with our competitors, we have
agreed upon a variety of membership options, but not limited to
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*All new memberships receive a complimentary gym bag and a HouseFitness

assessment, which consists of an in-depth physical fitness test, health screening, body
composition index, and metabolic rate measurement.

Place:

Under Armour will open three high intensive specialized gyms across the United States, one in
the east coast, west coast, and midwest so that we are able to test out how successful the
markets are in each region. These gyms will be known as The House.

The first gym will be placed in the heart of San Francisco, the second most densely populated
city in the United States with approximately 800,000 residents.14 According to the San
Francisco Business Times, a new study shows that people living in this popular city have the
highest quality of life compared to any other American city, attracting environmental and health
conscious people. Stephen Curry is an American, all star professional basketball player for the
Golden State Warriors and is also a major sponsor for Under Armour, therefore making San
Francisco and ideal city to open a gym.

The second gym will be placed in Baltimore, the largest city in Maryland and the 29th most
populous city in the country.15 Baltimore is an optimal place to open a gym because not only
does it have a high population density, but Under Armour's headquarters are located there as
well.

Lastly, the third gym will be located in Minneapolis, the 16th largest urban area in the United
States, accommodating 3.5 million residents.16 Nearly 83% of Minneapolitans are active every
single day and in 2014, the Census Bureau estimated 3.9% of Minneapolis commuted to work
riding bikes.17 Because this city is a very active and hearty bunch, it makes it the perfect city to
open a gym.

Implementation Calendar
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Measurement and Control

To measure the growth of the Under Armour brand with the implementation of our new
marketing plan we will monitor two fronts: price of share in the stock market & consumer
brand awareness
- The current market share for Under Armour is trading at $31.11 on the NYSE. Any
dramatic increase or decrease of this number in 2018 after the opening of the gyms will
be a great indication of consumers feelings towards our strategy.
- We will track consumer brand awareness by setting up a full-time team to track all
feedback about Under Armour on social media platforms. This will help us monitor our
brands growth, while gaining insights from customers feedback to adapt and change.
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