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Global Marketing

Underarmour Domestic Forecast Loss As Global Expansion Costs Weigh

Under Armour has remained stagnant in their global strategy presence. They are spending more and more to establish themselves a global dominant compared to Nike and adidas but the money has not helped their cause. As their domestic market growth cools down, their international presence seems to do the same. Under Armour is choosing to target China as their main got o for international presence. Domestically, UA has intense competition with Nike and Adidas and what also doesn’t help is the bankruptcies from the smaller sporting goods stores that reduce UA’s sales. In order to win and captive more of an audience, UA is preparing to utilize celebrity branding like Dwayne “the rock” Johnson. These efforts are to create more of a brand image. The CEO wants to create UA as a quite company but a loud brand that everyone can relate to and recognize. Under Armour’s international sales rose 27 percent in the three months ended March 31, making up for flat sales at the North America division that is responsible for 73 percent of overall revenue. Under Armour’s loss widened to $30.2 million in the first quarter, hurt largely by restructuring costs.

Unlike many competitors, UA has barely improved its international reach in recent years. While Nike and Adidas look for a balance between their domestic and international businesses, Under Armour has focused on its North American business to try to gain significant market share. This strategy worked for the company early on, but the company's reliance on the North America market has been an issue of late as the North American apparel market hit a slump. UA is fully dependent on their international sales but even their international sales has taken a minor hit as well due to the rise of competition and also the loss of sporting goods stores that housed most of UA’s supply chain. However, Under Armour's international revenues have seen a consistent rise over the last few quarters. In Q3 2017, the company recorded an impressive 35% year-on-year increase in revenues from outside the U.S.

Specifically, in China, UA is seeing a lot of this overall growth. As recognized by both Nike and Adidas, Greater China is expected to be a heavy growth market for sports apparel companies. Under Armour believes that the Chinese market could hold the potential to become a billion dollar plus market. UA has to strategically figure out a way to gain more new consumers and maintain their current consumers buy tapping into the Chinese market. They have to differentiate themselves from the other competitors. They can only use the endorsements of celebrities so many times. There has to be other ways of gaining more of an audience. In keeping up with its strategy to target emerging economies, the company debuted in India by launching its brand on Amazon Fashion earlier this year. At present, through its dedicated Amazon store, Under Armour sells more than 330 styles of clothing and footwear in the country. Like China, sportswear is a high growth market in India.

UA needs to really push its presence significantly outside the U.S. and Canada in the coming years. Entering new markets and expanding existing ones will not only enable the company to benefit from overall growth in these markets but will also help in diversifying its concentration and risk significantly. This will allow UA to surpass Nike and Adidas domestically and also internationally.

https://www.reuters.com/article/us-apple-stock/apple-and-buffett-saw-value-and-acted-idUSKBN1I70DW

https://www.forbes.com/sites/greatspeculations/2017/12/01/a-look-at-under-armours-international-presence/#21a1d069744c

https://www.nasdaq.com/article/what-under-armour-will-focus-on-going-forward-international-business-part-2-cm876597

Categories
Global Marketing

Subway Continues Restaurant Closures; Focuses Attention Toward Global Expansion

Subway, the largest sandwich chain across the United States is reportedly closing numerous locations domestically due to upcoming and already established gourmet fast-food chains. It’s reported that they are closing up to 500 stores in 2018 after 800 restaurants closing back in 2017. Their main focus is to research and discover the underperforming subway stores in certain locations, close those locations in order to fully focus on the stores that are performing very well. The focus will drive more traffic to these stores. Subway will continue to pride itself on market share and looking to maintain and retain its current loyal fanbase. Their focus is their current consumers rather than new consumers. The issue is the quick service sandwich shops like Jersey Mikes and Jimmy Johns that are taking over the market with their fast sandwich making skills and fast delivery. The pressure is increasingly tremendous due to the rise of up and coming sandwich shops. Together, those shops combined brought in over $4 billion. Sandwich chains in the United States account for over $30 billion of annual consumer purchases; Subway accounts for nearly 35% of those sales, with nearly 26,000 U.S. locations. Subway is reducing its restaurant numbers in order to create and revamp their stores to be nicer, more appealing, and more innovative to compete with local competitors. Subway wants to have a smaller store count but have better quality.

Younger consumers crave better quality and will pay at a premium price if it means quality meats, toppings and breads. These people choose to pay more for quality food and faster service. Why go to an actual store when you can have it delivered at rapid fast speed? There’s an issue with Subway’s growth over the years. Subway is a franchisor of restaurants, with no stores owned or operated by the company. Aggressive franchise development created an oversupply of restaurants that cannibalized sales when proximity was too close. Innovation has been Subways weakness over the years but they have strategized to create the Subway app and more item implementations.

Subway is finding addition through subtraction. Subway is focusing on more of a store restructuring in order to maintain consumers. Subways is focusing more on global growth opportunity and why it is a smart decision as it continues to manage strong supply chain and operational strengths. Subway officially became the largest global fast food chain in 2010 with 33,749 worldwide restaurants. Its proven that it is over a thousand more than McDonald's. At this rate, it will continue to expand globally surpass Mc Donald’s as the number one fast food chain across the world. There is a process of localization and standardization when Subway is across the globe. Subway changes its menu based on where they are located in the world. Domestically, they are taking a huge hit but globally remain ahead of everyone else. In order to maintain domestic success, subway needs to recreate they brand image and draw in new consumers and still cater to their older generation.

https://www.forbes.com/sites/darrentristano/2018/05/01/subway-continues-restaurant-closures-turns-attention-toward-market-share-and-global-expansion/#c7c5d8134f4d

http://fortune.com/2018/04/25/subway-stores-closing/

https://www.qsrmagazine.com/marketing-promotions/how-subway-went-global

Categories
Global Marketing

International Expansion Across China for Wetzel’s Pretzels

Wetzel’s Pretzels announced that it will soon be offering its iconic and special scratch-made pretzels, Bitz, Wetzel Dogs, and lemonade in China. Wetzel’s Pretzels will be focusing on its growth mostly in Shanghai, Beijing, and then South China.

 

Due to China having high-traffic venues and a growing middle class with passion and interest for foreign brands, Wetzel’s Pretzels seems to believe China is in need for this new fresh product. “Wetzel’s Pretzels provides a fresh product that I believe will be appreciated and embraced by the local community,” said Will Zhu, Wetzel’s Pretzels expansion leader. “Additionally, the brand’s operations are simple and streamlined, enabling our team to provide the fantastic experience to our guests which Wetzel’s has become synonymous with.”

 

Is this a good idea? Well it could be good if it works, but very bad if it fails. There are many things to consider in the strategy of the company. Things to be considered include the reasons to go global and homework needed to be done before deciding to officially go global. Why go global? What should be looked at when considering going global?

 

Reasons to go global:

  1. Diversify your consumer base and your market
  2. Prolong the sales life of the products currently being sold
  3. Reduce the dependence the company has in its current market if taking globalization in a large level
  4. Consider the fluctuations between seasons
  5. Learn to compete the business and grow the business

 

When considering going global, homework needs to be done. Questions needed to be asked are questions such as:

  • Are people interested in your product?
  • Do people want to buy your product?
  • Are there cultural differences between your current market and future market?
  • Are you targeting the right crowd?
  • Will this new adventure lead to increasing sales?

 

One of the things that Wetzel’s Pretzels did to take a look at their target market was do surveys of their consumer types. They surveyed to see their gender, ethnicity, age, and reason for buying from Wetzel’s Pretzels. When this was done, Wetzel’s Pretzels looked at this data and made their decision from there. Along with this, Wetzel’s Pretzels plans to keep its signature offerings while adding custom offerings in order to satisfy the local flavor of consumers in that area. They have chosen to do some research and development and see what types of tastes the Chinese like, in China overall and in each specific city in China as well.

Is this enough? Due to sales being high by the end of 2017, does that make it a good idea to expand globally?

 

References:

https://globenewswire.com/news-release/2018/04/27/1489297/0/en/Wetzel-s-Pretzels-Announces-International-Expansion-Across-China.html

https://missouribusiness.net/article/reasons-to-go-global/

 

 

 

Categories
Global Marketing

The WWE, Next Stop: The World!

The World Wrestling Entertainment, known for professional wrestling, has been pleasuring and entertaining audiences across the United States for decades. It’s one of the most popular and most lucrative entertainment sport companies across the United States. Even though the WWE shows are not legitimate contests, it’s purely entertainment based that is scripted, storyline based, and choreographed. It still captivated audiences when their favorite wrestlers battle head to head for title matches.

The WWE dominated their domestic market but for years they were itching at the fact of expanding globally and how their marketing tactics would support their move. The WWE posted about $800 million in revenue which was the highest recorded revenue in the franchise’s history. Their video and TV views reached 20 billion viewers and subscribers. Also, WWE beat our Marvel and Star Wars for the top selling action figure property (toys) in the United States. With all this being said, their brand recognition is bound to expand globally and touch base on the international market.

Attempts of expanding internationally have been in the works for the WWE. The WWE shows and their streaming platform for the WWE network reaches more than 180 countries. In order to build and cultivate a thriving fanbase, you must predict what the audiences needs and wants. The vison has to be accurate. The WWE Co-President explained how there are limits to expanding globally. The issue that the Co-President explains is that “it’s only in English” but if they localize the network, you can drive another layer of growth. Out of the WWE’s network 1.4 million subscribers, 1 million are local US but when it comes to total video consumption including YouTube, 70% comes from overseas. This explains that there is high demand for the product. WWE wants to expand globally not just via internet and media, they want to host live events and matches which is their core competency.

Their key to their growth strategy is to create some sort of live events to establish more of their presence. In order to do this permanently they must host live events internationally for specific occasions.  The WWE host events in the United Kingdom, Ireland, Mexico, Canada, and also Japan. Judging by the roaring success of the audience’s response, the WWE needed to establish themselves globally in these markets. For the first time, Royal Rumble will be arriving in Saudi Arabia this Spring. One of the important aspects of expanding internationally is making sure the wrestlers in the ring reflect the people in the crowd. The WWE has had no issues with diverse and international contestants and athletes. This is why it’s so important to capture the international market. Most people in the world can recognize a wrestling ring, that is why localization and telling a universal story to a universal audience.

https://www.fastcompany.com/40555389/the-wwe-is-at-the-top-of-its-game-in-the-u-s-next-stop-the-world

https://www.sportskeeda.com/wwe/wwe-news-triple-h-reveals-plans-to-make-nxt-a-global-territorial-system

Categories
Global Marketing

Domino’s Pizza

Domino’s Pizza started off by its innovating home delivery service that people in the United States loved. In order to grow its brand, Domino's turned to international markets. Domino’s kept many things the same as they did in the United States with a few different touches.

Domino’s Pizza decided to stick to its traditional business model of pizza delivery and take-out orders throughout all of its stores worldwide. This is what Domino’s prevailed at and gave them a leading position in the market. However, when Domino’s went international and focused more on research and development, they realized that each country and culture perceives pizza in a different light. Does everyone perceive pizza to be quick and easy? Some countries and cultures believe it to be more as a fast food convenient place, some believe it to be more upscale, and some people believe it to be an occasional holiday outing. Due to this, Domino’s now has more tables available at their stores; however, the luxury of having servers serve and clean up afterwards is not the case. People are required to serve themselves and clean up afterwards.

Domino’s adapts and adjusts their products in the various markets it operates in. As mentioned, Domino’s has added more tables into their stores to please the needs and wants of consumers in other countries. They also adapted to certain taste preferences that people in different countries prefer. By adapting to consumer preferences, Domino's is able to provide consumers in each country the pizza and experience they want. For example, take a look at the marketing mix of India compared to the US. In India, there are about 3 or 4 different toppings that are available solely in Domino’s stores in India to fit their taste preferences. Since the majority of people in India are Hindu, a majority of the pizzas offered at Domino's in India are vegetarian. They also offer oregano spice mix packets rather than Parmesan cheese packets in order to attract the Indian culture. Also, the marketing and advertising in India is different as pizza in India is not viewed as daily fast food, but rather more of a once a week, special meal. Also, the Domino’s stores in India are located in highly populated areas such as shopping malls to create more buzz and attraction while in the United States, Domino’s stores are not in highly populated areas. While in the United States deliveries are made by car, in India, Domino’s, uses mopeds for delivery. In the streets of India, there is lots of traffic and to complete a quicker delivery, mopeds seemed to be the better option for Domino's.

   

 

 

 

 

 

 

 

 

 

 

 

 

References:

https://www.forbes.com/sites/dalebuss/2013/03/09/dominos-global-growth-feeds-pizza-chains-growing-success/

https://www.marketing91.com/marketing-strategy-of-dominos/

 

Categories
Global Marketing

Red Bull Gives You Wings

When thinking of companies who successfully achieve a global marketing strategy, Red Bull comes to mind. It is unbeatable. It is extreme. It is tactical. It is global. Red Bull’s brand is what makes the company great.

In 2015, Red Bull was the market leader with over 43% market share and is still continuing to grow strong. Red Bull had the first mover advantage and created the energy drink market. They targeted specifically males between the ages of 18-35 years old at many different hangout spots such as college parties, sports venues, libraries, college campuses, coffee shops, bars, etc.  They advertised their products through positive word of mouth essentially for free. Till this day, they still continue to go towards that target audience, however, it has begun to include females between those age groups as well. You can see the Red Bull car driving around and have evolved to music festivals all over the world, concerts, and major sports events globally, and they are sold pretty much everywhere.

Red Bull’s tagline, “Red Bull gives you wings”, captures their audience and it applies to people all over the world. Everyone needs energy to focus or do whatever they please and Red Bull accurately describes this. “Red Bull gives you wings” entices Red Bull’s audience and works for everyone around the world. Red Bull’s entire value is to “give wings to people and ideas.” Everything Red Bull makes and does simply revolves around this idea of giving wings and freedom and energy and life. This upbeat enthusiasm usually involves extreme sports, music, dance, art, festivals, clubs, etc.

As previously mentioned, Red Bull evolved in producing content that their audience enjoys. They publish large amounts of new and upcoming material on their website, produce a magazine called the Red Bulletin, they continuously post videos based on energy and “awe” moments, and sell their products and vision by doing publicity stunts, creating events (such as Red Bull Crashed Ice or Red Bull Queen of the Bay), and large amounts of sponsorships worldwide.

Coachella is Red Bull’s biggest event coming up this month on the dates of April 13-15 and April 20-22 with major world wide known artists headlining such as Beyonce, The Weeknd, Eminem, Cardi B, Migos, etc. Red Bull has constantly been posting Coachella material along with the hash tag Coachella x Red Bull (#CoachellaxRedBull ). They even sold tickets on their page which most companies were not able to do and did not have the authority to do.

References:

https://coschedule.com/blog/red-bull-marketing-strategy/

https://artplusmarketing.com/red-bull-stomps-all-over-global-marketing-7642c2647401

Categories
Global Marketing

Formula 1 Unleashes New Global Strategy

The goal of this new campaign is to expand and create more awareness of the brand. The aim is to challenge the sport’s perception by showing through the eyes of the fans the true reality and extreme experience of what F1 racing feels like. This is all to create more of brand identity among existing fans and consumers and to reach out to potential fans.

F1 released a new 60 second advertising film that emphasizes and shines upon the industries innovation, performance, endurance, and elemental nature. The film places the fans right front and center and in the heart of the action, spike their adrenalin as they are the ones behind the wheel. What make Formula 1 unique in its industry is that the products are engineered by pure insanity and the juxtaposition of two opposing forces.

The marketing tagline of this new campaign is ‘Engineered Insanity’. The marketing reaches out to all aspects of media. This includes posters in airports and city buildings with murals all across the city walls. The campaign will roll out across all grand prix destinations in China, France, Germany, and the USA. It’ll run on most digital and social platforms.

The goal and result of the film campaign is to track engagement, views, outreach, and sharing and reposting for the short run. The long-term aspect is to measure against its core brand statements like interest, knowledge and deeper understandings of F1 as a dominant sport. The long-term strategy is to shift brand perception to build a new identity centering around its loyal fan base. The campaign switches the focus away from the echo chamber and focuses on why fans love the sport.

This campaign exemplifies a ‘fan first’ engagement where it gains so much momentum as it rolls out globally. The visual language will be placed in the hands of the public who will post about their experiences online via GIFs and interactive Instagram stories. It’s all about the fan experiences. At the races, there will be more fan-based interactions that will engagement more participation and create more brand awareness. Also, for the fans enjoyment around the world, Formula 1 created their own F1 TV so that everyone may see live races and events that are ad free and love streamed. This content will be film directly from the drivers cock pit point of view to give the viewer and better, more dynamic and exhilarating feel watching the races.

https://www.formula1.com/en/latest/headlines/2018/3/formula-1-unleashes-global-marketing-campaign-.html

https://www.marketingweek.com/2018/03/16/formula-one-unveils-first-global-marketing-campaign/

Categories
Global Marketing

New Creative Director Changes Burberry

Burberry has been a brand well known around the world as a high end designer brand. For the past 17 years, Christopher Bailey had been the creative director. However, effective March 31, 2018, Bailey will no longer be the creative director. Burberry took this as a window for more opportunity to improve their megabrand globally and restructure their strategy and target market. With this being said, Burberry’s chief executive, Marco Gobetti, hired a new creative director named Riccardo Tisci who was known for “resurrecting” the brand Givenchy. His creative vision will reposition Burberry’s brand image and position it to be complete luxury.

Burberry has previously been known as a luxury brand more for the older generation. Its products were mostly more conservative and more classic and basic. The pattern was the same with not many changes. With Tisci joining the team, Burberry is planning to change their global strategy as a whole. They want to change designs to be more contemporary and implement his skill sets to blend streetwear with high luxury fashion, which is what he is known for.

Gobetti and Tisci have a three year plan to elevate the Burberry brand and change their strategy to position Burberry tightly in the luxury category competing with the biggest brand names. The strategy includes uplifting the leather goods that Burberry uses, to create new collections that are fresh and appealing to a wider market, tighten their relationship with their distribution channels, make their stores more appealing to walk in to and catch your eye, and to better communicate with the public about their products and create a newness that grasps the attention. They want consumers to think “I have got to have this.” The whole product and customer experience has to be improved upon and updated.

Burberry has already started to take measures to redesign their products by incorporating streetwear to their Spring/Summer 2018 collection by partnering up with skater-inspired label Gosha Rubchinskiy. This will be the start of Tisci’s project at Burberry. Adding the streetwear high-end designs will likely boost global sales by about 5% this year which is a dramatic need to Burberry. Also, Tisci has a large following base and many connections with celebrities such as the Kardashians who can help create an increasing want and need for the brand.

Burberry is following the footsteps that Gucci took when redesigning their brand. They hope that by following Gucci’s footsteps, they will be able to get a similar reaction that Gucci received and to do so, they will be launching new campaigns and collections to showcase their new moves. They plan to reach a wider consumer base network and redesign the store layout.

 

References:

https://www.businessoffashion.com/articles/news-analysis/riccardo-tisci-is-the-new-creative-director-of-burberry

https://www.retaildive.com/news/burberry-taps-designer-riccardo-tisci-to-replace-christopher-bailey/518270/