Under Armour’s Willful Digital Moves – what segmentation strategies were implemented?
“Market segmentation is the process of dividing the large and diverse mass market into subsets of consumers who share common needs, characteristics, or behaviors, and then targeting one or more of those segments with a distinct marketing mix. By identifying groups of highly similar consumers, a marketer can develop products and services specifically tailored to that group’s needs that also closely match the capabilities of the organization, thus maximizing the chances of profit and success (Kardes, F., N.D.).”
Created in 1996, Under Armour, which first created breathable, wicking materials to replace sweaty cotton found in the shirts worn under football pads, was a brand built on a tough-guy and football image (Mashewari, S., 2014). They worked primarily with Nike and Adidas. Their market segmentation AKA demographic was athletic men and then it came to include women as well. With women’s apparel this appealed to the female market segment such as professional ballerina’s (Facebook Studio, 2016).
Four to five key points to remember when
implementing segmentation strategies
Things to take into consideration regarding segmentation strategies are:
1. Aggregation Strategy – Market aggregation is the opposite of market segmentationor a single-product This is known as a one-size-fits-all strategy in which individual differences among consumers are ignored (Kardes, F., N.D.).
2. Consumer Preference Heterogeneity – Taking into consideration how market segmentation is the extent to which tastes and preferences differ among consumers. Formally, this assumption is called consumer preference heterogeneity (Kardes, F. N.D.).
3. Majority Fallacy – Because it is logical to assume that size of the potential market segment is positively correlated to profit, it is often easy for a company to focus exclusively on large average segments, where the majority of customer preferences lie, and neglect smaller, less typical segments. Majority Fallacy is that tendency (Kardes, F., N.D.).
4. Sales-Cost Trade off – Another influence on segmentation strategy is the sales-cost trade-off. This trade-off recognizes that, 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, F., N.D.).
5. Cannibalization – This risk influences market segmentation decisions. 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, F., N.D.).
New market identified and how
to reach segmented market
A fairly new item on the market, at least to me are electronic kettles. They can be plugged in and are convenient because this type of kettle stays hot and you don’t have to reheat it over and over. It is a fast heating electric glass and steel kettle for quickly and conveniently boiling water. You can make a variety of teas and instant soups all while avoiding the hassle of damaging the stove with spills. Also, the glass is heat safe and the kettle detaches for cord free serving. Safety features include auto-shutoff, blue operational lights and boil dry protection which is important (Amazon, N.D.).
My segmented market would be men and women between the ages of 18 and 75 across the U.S. who love organic teas. The main focus would primarily be women between the age of 50 and 75 as they are known to be home more and/or are most likely to have company over such as friends and family.
In order to reach this segment, the online world is the approach as well as local stores such as Target and Walmart. We want to be sure the advertising is strong and detailed and the product is positioned correctly (Kardes, F., N.D.). According to positioning experts Al Reis and Jack Trout from Dove soap, the “position” of a product is the place the product occupies in the customers’ minds, relative to the competitor’s products.
What’s important about this definition is:
1. A firm must always position in terms of the competition
2. Positioning is not something a marketer does to a product, it’s actually something that happens in the mind of the prospect as a result of the brand messages and communication that the marketer provides.
3. Pursuing a “doing the opposite” positioning strategy is also an option for a follower brand. When taking this approach, a brand positions itself opposite the leader (Kardes, F., N.D.).
Take, for example, the battle between Mercedes-Benz and BMW. For many years, Mercedes-Benz was the most famous luxury car in the world. BMW decided to take an opposite strategy. While Mercedes was known for comfort and luxuriant roominess, BMW focused on nimble performance (Kardes, F., N.D.). In this case for the kettle, the chosen brand is very simple to use and having a big name brand would not matter as long as the functionality does what it says.
Amazon Prime (N.D.). Amazon Basics, Electric Glass and Steel Kettle. Amazon.com. Retrieved from https://www.amazon.com/gp/product/B07JZQ1MXT/ref=ppx_yo_dt_b_asin_image_o00_s00?ie=UTF8&psc=1.
“I Will What I Want,” Facebook-Studio, https://www.facebook-studio.com/gallery/submission/i-will-what-i-want (accessed May 2, 2016).
Kardes, F. Consumer Behavior, 2e. [MBS Direct]. Retrieved from https://mbsdirect.vitalsource.com/#/books/9781305161689/.
Sapna Maheshwari, “Why Under Armour Made That Mesmerizing Ad with Ballerina Misty Copeland,” BuzzFeed News, July 31, 2014,
http://www.buzzfeed.com/sapna/under-armours-powerful-new-misty-copeland-ad-kicks-off-recor#.ookjnO1r9 (accessed May 2, 2016).