Under Armour's Celebrity Endorsement Strategy: A Case Study Analysis

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Case Analysis
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Contents
Problem............................................................................................................................................3
Analysis of the Problem...................................................................................................................3
Potential solutions to the problem...................................................................................................3
Recommended Solution...................................................................................................................4
References........................................................................................................................................6
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Problem
The biggest concern for the company Under Armour is whether it should continue with celebrity
endorsements or not or it is beneficial for the company to keep paying the famous athletes.
Analysis of the Problem
The company Under Armour has secured its position in its country of origin but there is a need
for it to expand its operations to beat the competition. In the marketing campaign, ‘I will what I
want’, the company featured Misty Copeland, the ballerina soloist. This resulted in a 28%
increase in women’s sales and 42% increase in traffic to UA.com. It proved to be a winning
strategy for the company. However, celebrity endorsements also posed serious threats to the
brand of companies. The example of Nike can be referred to here. Tiger Woods was endorsed by
the company Nike and with his marital infidelities scandal in 2009, the company lost $1.4
million in profits and 136,000 customers (Referral Candy, 2018). Therefore, it can be stated that
with celebrities, there always comes risk. It is important for Under Armour to consider its
concerns of celebrity endorsements and analyze critically before making any further investments.
The endorsements of celebrities can be both in favor of or against the profits of the company. For
example, Michael Jordan, basketball player, endorsed the clothing brand ‘Hanes’ for over a
decade and Britney Spears, singer, was the face of Pepsi in the late ’90s. Both these endorsement
proved to be in favor of companies and they were able to air the quality and respectability of
brand. On the other hand, OJ Simpson, football player, endorsed ‘Hertz Rent-A-Car’ but was
accused of murder in the early 1990’s. This resulted in an impact on the brand image of the
company (Marketing School, 2012). Therefore, it is important to consider various factors that
may influence the decision of celebrity endorsement.
Potential solutions to the problem
Celebrity endorsement is a channel for communication of brand to potential customers and
stakeholders. Over the years, celebrity endorsements help companies in establishing a strong
brand identity or brand personality. They cannot replace the comprehensive brand building
process but it can only be used as additional support to the process of brand building. The issue
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involved in the case is whether the company Under Armour consider Celebrity endorsement as
an option for effective marketing strategies. The potential solutions for the problem can only be
identified after the evaluation of consequences and outcomes under both the circumstances.
The biggest logic behind considering celebrity endorsements is psychology. The celebrities are
recognized by the human brain exactly as it recognizes the people that a person already knows. If
a consumer happens to be a fan of the celebrity or identifies the face of celebrity as known, it
may place a higher value on the products endorsed by celebrities. This is because psychology is
built that they are receiving advice from a valued friend. Therefore, celebrity endorsements
increase the awareness, trust, and familiarity for the brand and its products and it influences the
decision-making of potential customers positively. Further, there is no doubt that celebrity
endorsement helps the company in standing out (Spalova & Bacikova, 2017).
The most common and obvious factor that hits the minds of marketing managers when thinking
about celebrity endorsements is that they are expensive and will they be able to generate enough
return than the money actually spent. Further, there are times when the celebrity is overexposed
such as Tiger Woods. He endorsed over ten brands at a time which ultimately led to a decrease in
his credibility. People started to feel that he will endorse anything to earn money (Hammad,
2014).
The biggest risk factor with celebrity endorsement is changing the image of a celebrity. The
company may face a loss of brand reputation if the celebrity makes any mistake. Further,
celebrities can also overshadow brands. Here, the focus of the customers is only on the celebrity
and not on products offered.
Recommended Solution
The company Under Armour is in need of increasing its brand awareness in the international
market. To target the customers in the international market and beat the competition, it is
important for the company to take the support of celebrity. The brand may not get enough
attention without a celebrity face. However, the risks of celebrity endorsements must be
minimized by the company. It must choose a celebrity with high-character and common moral
clauses must be incorporated into an endorsement contract to avoid any further risks (Comenos,
2018). Further, the company must choose a celebrity with whom the potential customers could
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connect more conveniently. Further, the company may be able to increase brand awareness using
a celebrity face but to survive the competition, it needs to provide them with good quality
products. Therefore, the company must also focus on the products offered.
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References
 Comenos, J., (2018). How to Choose the Right Celebrity Endorser for Your Brand.
[Online]. Adweek. Available at: https://www.adweek.com/brand-marketing/how-to-
choose-the-right-celebrity-endorser-for-your-brand/ [Accessed on 27 Feb 2019].
 Hammad, A. (2014). The Impact of Celebrity Advertisement and Endorsement on the
Buying Behaviour of Consumers, Brand Image and Brand Positioning of Coca Cola in
London, United Kingdom. Brand Image and Brand Positioning of Coca Cola in London,
United Kingdom.
 Marketing School, (2012). Celebrity Marketing. [Online]. Available at:
http://www.marketing-schools.org/types-of-marketing/celebrity-marketing.html
[Accessed on 27 Feb 2019].
 Referral Candy, (2018). 4 Ways How Under Armour Grew To Steal Adidas’ #2 Spot.
[Online]. Medium. Available at: https://medium.com/the-mission/4-ways-how-under-
armour-grew-to-steal-adidas-2-spot-5eed8ff07f45 [Accessed on 27 Feb 2019].
 Spalova, L., & Bacikova, Z. (2017). Celebrities In Social Advertisement: Psychosomatic
Perspective. Economic and Social Development: Book of Proceedings, 392-401.
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