Under Armour has explored several segments as it has evolved as a company over the years. In the beginning stages of its existence, Under Armour used concentrate niche segmentation to target a more specific segment. They designed shirts for football players to wear that would wick away moisture. The initial goal was to market to those with the “tough-guy and football image” (Murray & Saghian, 2016).
As Under Armour grew, they were able to expand their business to a wider market of men. They made products that were not jus for football players, but the athletic male in general. The targeted men consisted of those looking for modern, and innovative apparel that still served a technical purpose (Murray & Saghian, 2016).
After succeeding in this market, Under Armour decided it was time to put more focus on another segment, and that was women’s apparel. Under Armour now uses a differentiated segmentation strategy. This means they target multiple segments in hopes of holding a large share of the market, in each segment (Kardes, Cronley, & Cline, 2012).
In Consumer Behavior, Kardes, Cronley, and Cline outline four things to consider when segmenting a market.
- Consumer preference heterogeneity: Firms should think about how differentiated preferences are inside the market. When there is more variability within a market, the firm can increase segmentation and increase potential profits
- Majority fallacy: Firms should think about pursuing smaller segments rather than the majority, or average segment. Smaller segments have less competition than the majority, and could prove more profitable, as a result.
- Sales-cost trade off: Firms must consider when the costs of additional segments begin to exceed the sales they bring in. With each new segment, there are new costs associated with equipment, labor, and resources to product the new product line.
- Cannibalization: when a firm targets to many segments, their products may begin to compete with each other.
Where does Under Armour go from here? I think an interesting market segment that Under Armour could explore would be athletes with disabilities. They could create clothes for athletes who may be paralyzed in parts of their bodies, or have had amputated limbs that result in regular clothes not fitting correctly. This would be a niche-segmented strategy that could set them apart from the competition. The idea that Under Armour wants to be inclusive off all types of athletes could resonate with the hearts of others outside the niche, but still inside other segments who have not purchased from Under Armour in the past.