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In the case study article Under Armour’s Willful Digital Moves, we can find a variety of market segments. In the beginning, the company sold breathable, wicking materials to replace sweaty cotton in the shirts worn by tough-guy football players under their pads (Murray & Saghian, 2016, p.1). Later, Under Armour experienced a big jump in its global business. In 2013, it expanded to shorts, shoes and hats in the men’s athletic-wear market competing with NIKE and Adidas. They target men delivering apparel that is innovative and modern (Murray & Saghian, 2016, p.1). But, Under Armour has more ambitions as a company. Its goal is to surpass competitors, and the next step was to target female athletes. Its closest competitor Adidas had failed in its marketing campaign to women, but Under Armour had trust in itself. In 2014, the Under Armour campaign, “I will What I Want,” was a success and become viral. Under Armour entered this segment too, but is still working to keep the viral momentum. Now, Under Armour surpasses Adidas, it has moved from the number-three spot in the U.S. sportswear market to the number-two spot (Murray & Saghian, 2016, p.3). So, in the article we noticed that Under Armour initially marketed to male football players, then men in the athletic-wear market, and finally, to women athletes. Under Armour would like to broaden and grow in their segments like NIKE has, but they know it will not be as easy since NIKE has high brand awareness.
The segmentation strategy used by Under Armour was differentiated. Specifically, they used niche segmentation to target women athletes. A differentiated segmentation is when a firm targets several market segments with the goal of having a strong position and share of the market in each segment. A special form of differentiated segmentation, called niche segmentation, is where a brand attempts to capture a large share of a smaller niche market segment (Murray & Saghian, 2016, p.43). Under Armour uses all the media available to reach their target segments. It means they did a marketing campaign that ran on a multichannel platform with social and core. For the famous campaign “I Will What I Want,” they contracted ballet dancer Misty Copeland. The ad ran on television, print, and the digital space (Murray & Saghian, 2016, p.2). The second phase of the campaign was with the model Gisel Bundchen. The campaign worked and was a success. I believe the secret is the inspiring message that women can do whatever they propose if they are determined and focus to achieve their goals. No matter what others say, if you want, you can do it. Celebrities are often contracted as a strategy but it is necessary to realize that they will not always guarantee a success or return more than what was invested in the campaign. Under Armour seems to realize that, and it has been cautious, since image celebrities could change overnight and damage the company reputation and sales. Word-of-mouth is so important to value because it becomes viral. In this time of technology, the video advertisements, mobile applications, and others related are taken into account with care by Under Armour. They have been a success on television and online.
The four key points to remember or to take into account when implementing segmentation strategies are as follows: Consumer Preference Heterogeneity, the Majority Fallacy, the Sales-Cost Trade Off, and the Potential for Cannibalization (Kardes, Cronley & Cline, 2015, p.43).
Consumer Preference Heterogeneity is when the extent to which tastes and preferences differ among consumers (Kardes, Cronley & Cline, 2015, p.44). Then Majority Fallacy is when pursuing the majority segment is considered a “fallacy” because the largest segment, where competition tends to be most intense, is not always the most profitable (Kardes, Cronley & Cline, 2015, p.44). The Sales-Cost Trade-Off means as market segmentation increases, sales increase because a firm’s offerings align more closely to consumers’ preferences. But at the same time, costs also increase because a multi-product strategy costs more to implement than a one-product strategy (Kardes, Cronley & Cline, 2015, p.44). And finally, Cannibalization occurs when products offered by the same firm are so similar that they compete among themselves, thus creating a case of over- segmentation (Kardes, Cronley & Cline, 2015, p.44).
Other:
About the topic of Segmentation
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A new market segment, that I have noticed at least, in my city and cities close to my county are the food delivery and grocery delivery to the homes of busy working professionals. A long time ago, I wondered why there were not more of these services, at least in the area of Texas where I live if supermarkets are always full of these people. When I traveled last year to a country of South America, many grocery stores offered that service with low cost. So, if they could do it over there, why couldn’t we? In my area, it was rare to find even though I believe most people can afford that service and would like to use it. Now, Amazon offers grocery delivery to my area at whatever day and hour is more convenient for me. And since they bought Whole Foods, I can even buy organic food for delivery. Also, Doordash and other companies are offering food delivery from a variety of restaurants. Now, Walmart announced that they will deliver grocery to my area without fees or obligatory monthly subscription. It sounds tempting Walmart proposes this option since Amazon charges you for delivery and taxes for the food, and an obligatory subscription. Also, Walmart has a food area, so you can order prepared food too. You can find products at good prices, but the problem is that the products from Walmart are not as well-known for being of good quality. So, quality, fair price and no subscription need to be considered. I believe much could be done about this type of service.
I live in Dallas and I believe many people will find it use useful, and will use the services. But, I believe the market segment is mostly working professionals, especially those with families that do not have much time for going to the grocery or cooking but still want to eat healthy food. My campaign name will be “My Time, Your Time.” The audience is working professionals, young couples or couples with/without kids, educated, college degree, middle to upper income, living in the area of North Dallas. They are people that are too busy that need grocery or food brought to their homes. The deliver option saves customers’ time, and provides a service that generates extra earnings for the grocery stores. It promotes more jobs for the delivery workers so everybody wins.
To create a segmentation strategy, I need to know and clarify my target for my product or service that I plan to offer. It is necessary to do research. If we pretend to have success just by entering our product or service in the market, we are likely to fail. So, to satisfy customers’ needs and wants we segment by common characteristics. To know the demographics characteristics, the geographic base, the psychographic and behavioral base aspects of my target are essential. For example, Prizm from Claritas helps for demographics segmentation, and to take batteries of questions called AIO inventories and VALS help for knowing the psychographics. Having information of my target helps to produce a product or service appealing to the segment I am interested in. In addition, it is necessary to consider the four key points mentioned earlier that are Consumer Preference Heterogeneity, the Majority Fallacy, the Sales-Cost Trade-Off, and the Potential for Cannibalization. After this, I will think about positioning which is the process of communicating with our target market(s) through the use of marketing mix variables to help consumers differentiate a company’s product from others and perceive how that product best satisfies their needs (Kardes, Cronley & Cline, 2015, p.63). For example, the price of my product needs to be in accordance with the spending ability of my target segment. Probably, if my competitor sells the same product for less and even better quality, there is a smaller chance that my segment accepts my product. Now, there are several strategies for positioning. The most recommended depends on the characteristics of the product, market segmentation bases used, the competition, and the type of mental associations companies want their consumers to form (Kardes, Cronley & Cline, 2015, p.63). To be able to measure how consumers perceive a brand and make strategies, the use of perceptual mapping is a good tool.
References
Kardes, F. R., Cronley, M. L. & Cline, T. W. (2015). Consumer Behavior. 2nd ed. Stamford, CT: Cengage Learning.
Murray, M., & Saghian, M. (2016).Under Armour’s Willfull Digital Moves. Charlottsville, VA. Darden Business Publishing. University of Virginia. PDF Document.
Murray, Meghan (2016). Under Armour’s viral campaign for the female market proved awinning strategy. The Washington Post. Retrieved from:
EK Marketing Blog by Ericka Koehler 