STRATEGIC INTERNATIONAL MARKETING MAIN EXAM
STRATEGIC INTERNATIONAL MARKETING MAIN EXAM
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Question #1: Under Armour’s SWOT Analysis
Strengths
Robust product portfolio.
Global presence in major economies.
Strong revenue growth profile.
Multiple distribution networks.
Positive market outlook in the U.S. business environment. Weaknesses
Limited presence in global operations.
Dependence on similar marketing strategy in culturally diverse markets.
Narrow geographical diversification.
Opportunities
Emerging and growing Asia-Pacific markets.
Growing popularity of fitness-oriented lifestyles.
Product innovation to tap into women’s and kids’ market segments.
Growing e-commerce and mobile commerce popularity. Threats
Impact of global pandemics on sporting activities.
Competitive pressures from well-recognised rival corporations.
Brand awareness constraints.
SWOT Analysis Discussion
Strengths
As the case study reveals, Under Armour’s product portfolio has continued to strengthen its market stance by trading “underdog brand” while not depending on a single product. This extensive product line is globally present in the world’s major economies (the U.S., Europe, and China), with the firm targeting to augment its international stores. This guarantees continuous company sales ratio growth. The case also suggests that Under Armour boasts consistently growing revenue streams. The 2013-2015 revenues tripled; the enterprise expects to replicate such, moving forward. The revenue growth can be attributed to the firm’s effectiveness in leveraging multiple distribution networks in various markets and its positive U.S. market outlook.
Weaknesses
Amidst these strengths, the case study alludes to this firm’s major weakness: dependence on one marketing strategy in multiple and culturally diverse global markets (Asian and European markets). Failing to adjust and customise its U.S. marketing strategy to the needs in these markets has made the marketing strategy ineffective, causing issues that can hurt the firm’s long-run sales. Additionally, this strategy dependency limits the firm’s operational presence in international markets and constrains its geographical diversification extents. This has limited the enterprise’s presence and stores to few markets.
Opportunities
Under Armour must leverage its strengths to exploit market and growth opportunities to compete effectively. Targeting emerging Asia-Pacific markets, particularly Indian markets, offers a real expansion opportunity. With its huge population, massive population growth, expected growth in the working-age population (64% by 2020), and robust economic growth rates, India will be a rewarding emerging Asia-Pacific market. Additionally, Under Armour can use adequate product innovation via its core competencies and technologies to exploit the women and kids market segments that remain untapped in active sportswear. Fitness enthusiasts are increasing daily, augmenting people’s tastes in fitness lifestyles. Lastly, leveraging the growing popularity of mobile commerce and e-commerce can help this firm reach unexplored global markets.
Threats
Adidas, Nike, and other sports equipment giants have high brand recall and recognition among global consumer bases. So, the competition from them has caught up with some of Under Armour’s core competencies, posing major threats to its international growth. The giants’ brand popularity also compounds Under Armour’s brand awareness constrictions, keeping its brand recall and recognition low. Outbreaks of major global pandemics can lead to sporting activity closures, adversely affecting Under Armour’s global supply chains.
Question #2: Under Armour’s Strategic Focus
The outcomes of the SWOT analysis have evinced that the strategic focus for Under Armour in India is on augmenting brand awareness and popularity to accelerate international business growth. The analysis of this firm’s strengths illustrates that while it has a strong product portfolio, its brand and product portfolio are only well-established and known in major economies, especially China and the United States. Apparently, its rivals’ brands are recognised globally in major and emerging economies. This implies that Under Armour’s brand awareness, recall, and recognition are overly constrained among global customer bases compared to its rivals’, as observed under the threats’ analysis. So, as it plans to enter into the Indian market, its strategic focus should be on ensuring that its target customers’ brand awareness, recall, and recognition are augmented to spur the firm’s growth in this Asia-Pacific market.
The strategic option for realising this strategic focus entails incorporating niche marketing in India into its underdog brand strategy that targets non-famous athletes. Niche marketing would encompass Under Armour focusing on the Indian market as a distinct geographical area to establish growth, market, and business expansion advantages unmatchable by Adidas, Puma, Reebok and other sports equipment rivals within this dynamic business environment, as Dalgic and Leeuw (2015) suggest. Niche marketing would enhance brand awareness, cognisance, and recall among new Indian consumers by allowing Under Armour to leverage unexplored market advantages that help maintain small but uniquely specific market positions. Besides augmenting brand awareness and recall, this strategic option would overcome the enterprise’s third weakness (narrow geographical diversification) while enabling Under Armour to customise its offerings to exclusively serve select client groups in the target Indian market, as Akbar et al. (2017) advocate.
Question #3: Positioning Under Armour in India
The perceptual map below illustrates the current Under Armour market position compared to its primary rivals in all markets globally.
Some elements of this perceptual map have been derived from Under Armour (2018). As the case study indicates, adopting the U.S. pricing strategy in the Asia Pacific market is causing issues for Under Armour. As this perceptual map shows, pricing issues could be the cause of cost polarisation. With the higher-than-average prices that this firm charges for its footwear in Asia Pacific markets driving away clients, it means that Under Armour cannot adopt the same strategy in India because it would bring about the same pricing issues.
So, the most appropriate strategy for positioning itself successfully in India is positioning by price. Positioning based on price would entail Under Armour associating its brand with competitive pricing in its strategic option of niche marketing in India (Dhillon 2020; Haglund and Nygren 2017). Positioning by product price would not only help solve pricing issues encountered in Asia-Pacific markets within the Indian market context but also enable Under Armour to reshape its value proposition to accommodate price-sensitive buyers rather than drive them away, as already witnessed in these Asian business environments. Being the only brand option in certain price ranges will make the firm establish its market position strongly amidst competing giants like Adidas and Nike. Moreover, positioning by price will enhance Under Armour’s capacity to identify new market gaps at specific price points and leverage these gaps for new, competitive, and profitable niche options within the Indian market.
Question #4: Market Entry Mode and Distribution Strategy
Under Armour needs to select a market entry mode that aligns with its business model, is cost-effective, and establishes the firm as unique in the eyes of targeted Indian purchasers. The case study establishes that only Adidas, one of the corporation’s major competitors, utilises some sort of direct foreign investment (FDI) through government agreements that allow it to establish its own stores in international markets. The other rivals use franchising options. Under Armour needs a market entry that is consistent with its aim of reducing the higher-than-average prices (to realise positioning by price), limits the scale of resources involved in entering the Indian market, and is exceptional from what the rivals are adopting.
In that case, the international market entry mode that best befits Under Armour’s brand internationalisation into the Indian market is partnering. The first rationale for advocating this entry mode is that many Asia Pacific markets are often open, more welcoming, and highly responsive to partnerships as an international market entry strategy (Harrison and Norris 2019). The second rationale is that partnering is almost essential when venturing into any new foreign market. Additionally, partnering would work best for Under Armour because it can offer peculiar co-marketing options with already well-established and popular brands, including some rival brands. Lastly, partnering would be a particularly useful entry strategy for Under Armour owing to the substantial cultural, social, and business differences between the U.S. and India. Here, local Indian partners would bring domestic market knowledge, networks, contacts, and loyal customers to this enterprise, facilitating its international growth.
The distribution strategies that would align with Under Armour’s niche marketing, its price-centred positioning, its partnering entry strategy, and its focus on e-commerce goals of creating six additional e-commerce platforms by 2017 are direct distribution and exclusive distribution. Direct distribution would work well when Under Armour’s e-commerce platforms have been established, allowing it to sell its offerings online via its e-commerce websites. Exclusive distribution would be appropriate because it will allow the firm to team up with its retail partners in India to sell through their branded stores (Opris et al. 2015).
Question #5: Communication Strategy
The communication strategy that Under Armour needs to adopt in its international business in India is a dual adaptation communication or product-communication adaptation strategy. This communication strategy involves adapting both Under Armour’s products and communications to align with the client needs in India. The dual adaptation communication strategy takes into account the cultural, physical environment, and competitive differences between the U.S. and India when communicating the firm’s product to the target audience (Green and Keegan 2018).
The strategy’s product adaptation element involves adapting Under Armour’s offerings to offer functions and benefits in India that are noticeably different from those in the United States market. The communications adaptation element of the strategy involves adapting advertising to ensure it complies with the Indian government’s regulations and restrictions for product promotion. The differences between the home market (U.S.) and the foreign market (India) drives Under Armour to customise its advertising campaigns to market the same products overseas effectively while maintaining its manufacturing economies of scale. This way, its brand is carried aboard successfully, and its footwear and other sporting equipment get adapted to the local Indian markets. Open and honest communication between the parent firm in the U.S. and overseas operational units in India must be maintained throughout the internationalisation process (Harrison and Norris 2019).
Question #6: Product Strategy
The product strategy delineates the enterprise’s planned or strategic vision for its product offerings. So, it constitutes a high-level plan that describes what Under Armour hopes to accomplish with its product offerings, together with the actions necessary for executing this plan (Kolko 2014). The product strategy provides details relating to where the product offerings are destined, how the company will get them to that destination, and the reasons the company believes these product offerings will succeed. In that case, the product strategy would enable Under Armour to focus on its specific target market in India and the sets of features unique to this market.
As the corporation enters into the Indian market, its product strategy will be as follows:
Target Customers: Indian less well-known athletes who have not attained superstar status. This market is lucrative because it is fast-growing due to strong economic growth rates, a big population, a vast growing middle class, and the supportive presence of Bollywood stars.
Product Offerings: Sporting footwear, athletic cups, chin straps, sportswear, and other sporting equipment. Clients will perceive these products as affordable and without quality compromises compared to rival products because of Under Armour’s competitive pricing strategy.
Value Proposition: Under Armour is positioned as a brand that loves athletes, stays true and fearless to creating equality for them, and does something that makes them feel better.
Product Pricing: Competitive pricing strategy.
Product Distribution: Direct (e-commerce websites) and exclusive distribution (retail branded store) strategies.
Question #7: Pricing Strategy
In India, Under Armour will utilise the competitive pricing strategy. This strategy will entail the enterprise analysing, modifying, evaluating, and setting the final prices of its product offerings in India against the prices that Adidas, Nike, Reebok, and Puma charge for their product offerings (Stamate 2014). Competitive pricing will be instrumental in driving Under Armour’s e-commerce business practices, as pricing and price comparison play a decisive role in clients’ online purchasing decisions. Since higher prices have been driving the firm’s Asia Pacific clients away, as observed in the case, a high-price competitive pricing strategy will be unsuitable. Again, setting prices too low can culminate in an unprecedented loss of profit margins in the target Asia Pacific market, implying that a low-price competitive pricing strategy would also be inappropriate.
So, Under Armour needs a matched-price competitive pricing strategy when entering the Indian business environment. This pricing strategy encompasses Under Armour setting product offerings’ prices in a way that relatively matches competitors’ prices for product offerings with closely similar features (Bhattacharya 2019). The matched-price competitive pricing strategy would provide a differentiation avenue for this company as the focus would now shift from prices to offering unique buying experiences and product quality. Indian clients will be inclined to buy Under Armour’s product if prices are the same as those of competing firms, but its quality is better. Using a competitive pricing strategy will bring about other benefits, including improved pricing efficiency, profit margin betterment, dynamic pricing, and market loss prevention.
Reference List
Akbar, F, Omar, A, and Wadood, F 2017, ‘The niche marketing strategy constructs (Elements) and its characteristics – A review of the relevant literature,’ Galore International Journal Of Applied Sciences & Humanities, vol. 1, no. 1, pp.73-80.
Bhattacharya, J 2019, The competitive pricing strategy guide (Covers B2B and B2C businesses), Boulevard, LA, Single Grain, https://www.singlegrain.com/marketing-strategy/competitive-pricing-strategies-b2c-b2b/ (Accessed June 15, 2021).
Dalgic, T, and Leeuw, M 2015, ‘Niche marketing revisited: theoretical and practical issues,’ In Proceedings of the 1993 Academy of Marketing Science (AMS) Annual Conference (pp. 137-145). Springer, Cham, doi: 10.1007/978-3-319-13159-7_32.
Dhillon, MJ 2020, ‘Managing brands in tough times: A review of literature for future marketing,’ Samvakti Journal of Research in Business Management vol. 1, issue 1. pp. 19-37.
Green, MC, and Keegan, WJ, 2018, Global marketing. Pearson Education Limited.
Haglund, M, and Nygren, V 2017, ‘Developing a brand strategy aligned with the business strategy,’ (Master’s Thesis Chalmers University of Science and Technology).
Harrison S, and Norris, D 2019, Guidebook for doing business in the Asia Pacific: A Resource for indigenous businesses, Asia Pacific Foundation of Canada.
Kolko, J 2014, Well-designed: how to use empathy to create products people love, Harvard Business Press.
Opris, MA, Bratucu, G, and Palade, A 2015, ‘Distribution policies and strategies for sustainable textile products,’ Bulletin of the Transilvania University of Brasov. Economic Sciences. Series vol. 8, no. 1, pp.65-70.
Stamate, V 2014, ‘Price strategies as a determinant of performance on Romanian companies in export markets,’ (Doctoral Dissertation, University of Lisbon, ISCTE Business School).
Under Armour 2018, Strategic communications and advertising planning assignment, Under Armour Situational Analysis, Under Armour.
