Reflective Quiz 10%

Discuss how Under Armour has been very successful in its use of athletes as endorsers for the company/brand. Evaluate the strategy used by Under Armour in selecting and signing athletes to endorsement deals. Why do you think the company has been able to compete so effectively against larger companies such as Nike and Adidas in signing athletes as endorsers? Support your argument with THREE (3) points.

Under Armour (UA) was founded in 1996 by Kevin Plank, a former University of Maryland football player, who began by selling compression shirts that could "wick" sweat away from the body to college sports teams out of the trunk of his car. Plank hated how the cotton T-shirts he wore under his shoulder pads and jersey became soaked with sweat as it was not only uncomfortable, but the extra weight hurt an athlete's performance. From the very beginning Under Armour's value proposition was based on selling athletic apparel that is functional and comfortable and enhances performance. However, the challenge facing Plank as an entrepreneur was how to build awareness of his innovative product and get athletes to wear it. As a former high school and college player, Plank had friends who were playing for more than a dozen National Football League (NFL) teams whom he would send shirts to wear as well as encourage them to get their teammates to do the same. As part of his grassroots approach he emphasized that if an Under Armour shirt helped them improve their performance even a little they would earn more money, thus positioning his pitch as a way to help the athletes rather than asking them to do him a favor.

Thus, even in the nascent stages of the company, Kevin Plank was learning how to negotiate with athletes to get them to endorse Under Armour products. Plank's first big break came in 1997 when the Miami Dolphins NFL team wore his product under their uniforms in a nationally televised game with the Under Armour logo visible on the neck of every shirt. The following year the football-oriented movie Any Given Sunday was being filmed in Baltimore where Under Armour is based. The producers of the movie were looking for a product that would represent the athletic nature of the movie and be comfortable to wear during filming. Under Armour agreed to provide products and its shirts were used throughout the filming and appeared in the movie itself, resulting in national exposure for the brand. A similar situation arose in 2003. This time it was sports cable giant ESPN that came calling, asking UA to be part of its new HBO series about football players called Playmakers. ESPN thought that since everyone in locker rooms seemed to be wearing Under Armour, it would be more realistic if the players in the movie were shown in UA clothing. UNDER ARMOUR PROTECTS ITS HOUSE BY SPENDING WISELY ON ENDORSERS Under Armour achieved great success and grew very quickly in its early years by forming a brand identity that was associated with the raw emotion and muscle-filled world of football and other predominantly male team sports. The company developed a unique brand identity through its television advertising campaign that began in 2003 and used the slogan "Protect This House." The commercials featured well-conditioned football players working out while wearing Under Armour, and ended with the players gathering in a huddle and shouting "We must protect this house!" as if their lives depended on it.

The iconic tagline became a symbol of what Under Armour stands for as a brand; and a few years ago the phrase "I will" was added to it as a call to action for athletes. Under Armour went public in 2005 and the stock price nearly doubled the first day it was traded. Since going public the company has averaged more than 25 percent annual growth and reached $4 billion in revenue in 2016, and expects to hit $7 billion by 2018. The keys to Under Armour's success have included quality products, strong branding and positioning, and an incredible roster of athletes as endorsers, a number of whom it signed for much less money than its major competitors such as Nike and adidas. Even with its incredible growth, Under Armour is still only about an eighth the size of Nike, which had sales over of over $30 billion in 2016 and less than a quarter the size of adidas whose global revenue was nearly $20 billion. Nike spends nearly $1 billion a year on endorsement deals while adidas recently announced that it planned to sign 500 athletes in North America alone to deals. Nike's endorsers include basketball legend Michael Jordan and NBA superstars LeBron James and Kevin Durant, golfers Tiger Woods and Rory McIlroy, and soccer star Cristiano Rinaldo. Adidas top endorsers include soccer star Lionel Messi and Derrick Rose who plays for the New York Knicks in the NBA. While Under Armour may not be able to spend as lavishly as its larger competitors on endorsement deals, most industry experts argue the company is spending its money more wisely. Under Armour's endorsers now include three of the best players and biggest stars in professional football, basketball, and baseball: Carolina Panthers quarterback Cam Newton, Golden State Warriors point guard Final PDF to printer 184 Chapter 6 Source, Message, and Channel Factors bel48147_ch06_182-219.indd 184 01/30/17 05:03 PM Stephen Curry, and Washington Nationals outfielder Bryce Harper. Newton is a former Heisman trophy winner who won the NFL's Most Valuable Player award in 2015 while leading his team to the Super Bowl.

Harper was the National League Rookie of the Year in 2012 and won the league's MVP award in 2015. Stephen Curry has been the key to Under Armour's newfound success in the basketball shoe market which is dominated by Nike. Under Armour approached Curry in 2013 when his contract with Nike was about to expire. Nike considered whether it was worth outbidding Under Armour for Curry and decided not to resign or offer him a coveted signature shoe line. Since signing with Under Armour, Curry has become one of the NBA's most prominent stars, winning the league's MVP award in both 2015 and 2016 while leading the Warriors to an NBA championship in 2015. Under Armour leveraged Curry's success by creating its first signature shoe, the UA Curry One, which is its best-selling shoe and has played a key role in helping the company reach nearly $800 million in footwear revenue. Under Armour's eye for talent goes beyond team sports. The company signed swimmer Michael Phelps, a Baltimore native, to an endorsement deal in 2010. Phelps is the most decorated Olympian of all time with 22 medals, including 18 gold. In 2013 Under Armour signed golfer Jordan Spieth, who was a relative unknown right after he turned professional, but by 2015 was the number 1 ranked golfer in the world after winning two major championships including the Masters and U.S. Open. Under Armour's roster of endorsers is not limited to male athletes. An important part of its growth strategy is to move beyond male-dominated sports such as football, baseball, and basketball and bring more women to the brand. Its roster of female athletes include skier Lindsey Vonn, a four-time Olympic gold medalist who has been with the company since 2006; up-and-coming tennis star Sloane Stephens; and Kelly O'Hara, who plays on the U.S. Women's National Soccer team that has won the FIFA World Cup and an Olympic gold medal. However, two of its most influential female endorsers are not athletes playing a professional sport, but rather a ballerina and a superstar model. The women are helping Under Armour in its efforts to position itself as a brand that can empower female athletes and compete against Lululemon and Nike in the fastgrowing athleisure segment of the apparel market.

In 2014 Under Armour signed ballerina Misty Copeland to an endorsement deal. She went on to become only the third African American female soloist in the history of the American Ballet Theater. The company also signed Gisele Bundchen, one of the world's highest-paid models and wife of New England Patriots star quarterback Tom Brady, who is also an Under Armour endorser. Both women were featured in the award-winning "I Will, I Want" women's campaign that was a viral sensation racking up over 4 million views in just one week and helped make women's apparel 30 percent of Under Armour's revenue. Under Armour recognizes that having the right athletes and other celebrities endorsing its products is a key success factor in the athletic shoe and apparel market. They not only help build the brand, but also are catalysts for sales. Kevin Plank notes that the success the company has had with Curry, Spieth, and Copeland has taught the company a valuable lesson regarding the need to think bigger, as all three have transcended their sports and become known by just their first names. In 2015 Under Armour overtook adidas, which also owns Reebok, to become the second most popular sportswear manufacturer in the United States and it has set its sights on the rest of the world. Watch out, Nike!

Sources: James Ellis and Dimitra Kessenides, "Under Armour's Most Valuable Players," Bloomberg Businessweek, February 14, 2016, pp. 20-21; Richard Feloni, "The Athlete Endorsements That Are Turning Under Armour into Nike's Strongest Competitor," Business Insider, June 16, 2015, www.businessinsider.com/the-athlete-endorse