Exam Conditions and Academic Integrity

Autumn 2021 – Marketing Main Exam

STUDENT NUMBER: SURNAME: (FAMILY NAME) OTHER NAMES: This paper and the answers must be returned via Turnitin and not seen by another person.

Exam Conditions and Academic Integrity

In attempting this examination and submitting an answer file, candidates are undertaking that what is submitted is the candidate’s own work, based on their own research and written in their own words. Any resources used by the student to construct their exam response(s) must be appropriately referenced.

Students must not discuss the questions or possible answers with other persons during the examination window. Candidates who are found to have participated in any form of cooperation or collusion or any activity which could amount to academic misconduct in the answering of this examination will have their marks withdrawn and disciplinary action will be initiated on a complaint from the Examiner.

Exam answers must be submitted Turnitin. Vivas or other invigilated tasks may be used to verify student achievement of learning outcomes to ensure they have completed the work on their own and to assess their knowledge of the answers they have submitted.

Students must not post any requests for clarification on the Discussion Boards on Canvas or Microsoft Teams. Any requests for clarification should be directed by email to Sorush Sepehr on sorush.sepehr@uts.edu.au. Where clarification is required, it will be broadcast by email to all students in the exam group. Sorush Sepehr will be available during the first 2 hours of the examination time.

24738 Strategic International Marketing

Assessment Task 3: Final Exam (Individual)

Open-book, 24-hours, take-home exam

This exam is worth 40% of the subject marks

Instructions 

This examination is made available online at 9:30 am on 15 June 2021 and is an individual assessment task. 

Your completed answer file is due at 9:30 am on 16 June 2021 and must be submitted online via the Final Exam link Assignments folder on Canvas.

You need to read the case study first and answer all the questions

There are 7 questions. The contribution each question makes to the total examination mark is indicated in marks.

This examination is expected to take approximately 2 hours of working time. You are advised to allocate your time accordingly. Your answer file may be submitted at any time before the due time. Please allow time to complete the submission process. 

Please submit your file in Word format.

Word Limit 

There is a word limit for each question. In the case you use an external source (other than lecture and tutorial material) you must cite. Reference list is not included in the word count.

The most important thing is to answer the question in a succinct manner. This means that your answer can consist of a word count less than the imposed word limit.

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.

Top five most popular sports in India and America

India America

1 Cricket American football

2 Soccer Baseball

3 Field hockey Basketball

4 Badminton Ice hockey

5 Tennis Soccer

Questions

Based on the information provided in the case study, please complete the following sections of an international marketing plan for Under Armour to enter India. Please follow the instructions provided here, including the word limit.

1. A SWOT analysis (at least 3 items for each element – i.e. strength, weaknesses, opportunities and threats). Your SWOT analysis should also include a discussion of the results of the analysis. (Maximum 700 words) [8 marks]

2. Based on the findings of your SWOT analysis, establish a strategic focus for Under Armour in India. (Maximum 500 words) [5 marks]

3. Position Under Armour in the Indian market. Drawing a perceptual map or Strategy Canvas is optional (Maximum 500 words) [7 marks]

4. International market entry mode and distribution strategy (Maximum 500 words) [5 marks]

5. Communication strategy (Maximum 500 words) [5 marks]6. Product strategy (Maximum 500 words) [5 marks]

7. Pricing strategy (Maximum 500 words) [5 marks]

——– END OF EXAM——–

Answer (please write below the line)

Question #1: Under Armour’s SWOT Analysis

Strengths

Robust product portfolio

Global presence in the world’s major economies

Strong revenue growth profile

Multiple distribution networks

Positive market outlook in the United States business environment

Well-established and solid dealer community 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-recognized 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 itself as “underdog brand” while not depending on a single product and associated accessories. This extensive product line is globally present in world’s major economies (U.S. Europe, and China), with the firm targeting to augment its international shop-in-shops and stores. This guarantees continuous company growth and a growing sales ratio. The case also suggests that Under Armour boasts consistently gowning revenue streams, with the 2013-2015 revenues tripling, a trend that the firm expects to replicate in coming years. The revenue growth can be attributed to the effectiveness of Under Armour’s effectiveness in leveraging its creative strategy of utilizing multiple distribution networks in various markets, its solid dealer community within these distribution networks, and its positive outlook in the U.S. market.

Weaknesses

Despite the identified strengths, the case study alludes to the major weakness of this firm: dependence on one marketing strategy in multiple global markets (Asian and European markets), which are obviously culturally diverse. Failing to adjust its U.S. marketing strategy to customise it to the needs in these markets has made the marketing strategy ineffective, causing issues that can hurt its long-run sales. Additionally, depending on one marketing strategy in diverse markets limits the firm’s operating presence in international markets, besides constraining its degree of geographical diversification. This has caused this relatively new sports equipment enterprise to continue operating with limited presence and stores in few markets.

Opportunities

Under Armour must leverage its strengths to exploit market and growth opportunities to compete with giant brand such as Adidas and Nike. Targeting emerging and growing markets in the Asia-Pacific regions, particularly Indian markets present a real growth and expansion opportunity of this firm. With its huge population, massive population growth, expected growth in middle class and working-age population (64% by 2020), and robust economic growth rates, India will be a rewarding emerging Asia-Pacific market with vast opportunities. Additionally, Under Armour can exploit the women and kids market segments that remains untapped in active sportswear through adequate product innovation using its contemporary technologies and core competencies. Further, fitness influencers and enthusiasts are increasing daily, augmenting people’s states in fitness lifestyles. Lastly, the firm can leverage the growing popularity for mobile commerce and e-commerce to reach new unexplored global markets

Threats

Adidas, Nike, Puma and other sports equipment giants have high brand recall and recognition among global consumer bases. This means that the competition from them has caught up with some Under Armour’s core competencies, rendering them no longer specific to the firm and posing major a major threat to its international growth. The giants’ brand popularity also compounds Under Armour’s brand awareness constrictions, keeping its brand recall and recognition low. The outbreak of major global pandemics can lead to closure sporting activities, adversely affecting Under Armour’s global supply chain practices.

Question #2:

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 Under Armour’s strengths illustrates that while the firm has a strong product portfolio, its brand and product portfolio are only well-established and known in only major economies, especially China and the United States. Apparently, its rivals’ brands are recognized 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 threats’ analysis. So, as it plans to enter 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 encompasses Under Armour focus 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, cognizance, and recall among new Indian consumers by allowing Under Armour to leverage unexplored market advantages to maintain small but uniquely specific market positions. Besides augmenting brand awareness and recall, this strategic option would overcome the third weakness (narrow geographical diversification) while enabling this enterprise 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.

331470113665Under Armour 2018,

Under Armour has already positioned as a brand, every product of which does something for you, that is makes you feel better.

2.

3. Position Under Armour in the Indian market. Drawing a perceptual map or Strategy Canvas is optional (Maximum 500 words) [7 marks]

4. International market entry mode and distribution strategy (Maximum 500 words) [5 marks]

5. Communication strategy (Maximum 500 words) [5 marks]

6. Product strategy (Maximum 500 words) [5 marks]

7. Pricing strategy (Maximum 500 words) [5 marks]

Reference List

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.

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.

Under Armour 2018, Strategic communications and advertising planning assignment, Under Armour Situational Analysis, Under Armour.