Thursday, January 6, 2011

Branding:Under Armour's Kevin Plank: Creating 'the Biggest, Baddest Brand on the Planet'

Kevin Plank admittedly perspired a lot back in the early 1990s when he was a special teams player on the University of Maryland football team. After finishing his football career, Plank decided to find a solution to the problem. He spent the next several months going back and forth between his final classes as an undergraduate and a nearby tailor shop, where Plank tested fabrics for their sturdiness, water repellent qualities and comfort.

The result was the first form-fitting, moisture wicking Under Armour shirts -- the iconic product of what is now, a little more than a decade later, a billion dollar company. Under Armour still sells those shirts, but it has expanded into many corners of the athletic/casual wear market, from compression shorts to sports bras, innovative mouth guards and basketball shoes. During a recent Wharton Leadership Lecture, Plank, the company's founder and CEO, said he was proud of what he and Under Armour have accomplished in such a short span, and predicted significant growth for the company in the future.

"Great companies have to manage the cadence of what they do. "Chapter One" [of a business's growth trajectory] has to relate right to Chapter Two and Chapter Three and Chapter Four," Plank noted. "Every great brand is like a great story. Every commercial we run, every product we make, is like a chapter in that book. If we don't manage the cadence, though, we will get too far ahead of ourselves."

Becoming an entrepreneur was not a given for Plank. He acknowledged being a mediocre student during high school in Maryland, and went to a prep school for a fifth year of high school instruction before enrolling at the University of Maryland and making the football team as a walk-on. Plank's father was a real estate developer and his mother served as mayor of Kensington, Md., for 13 years before working in the Ronald Reagan and George H.W. Bush administrations.

But the mission of creating a no-drip T-shirt inspired Plank and, after college, he set up shop at his grandmother's townhouse in Washington D.C. Thirteen of Plank's high school teammates and a dozen more of his college buddies had become professional football players, so he started sending them sample shirts. He made the rounds calling on athletic equipment managers at different colleges and relying on $16,000 in savings to tide him over while pursuing his dream. "I was always ... naïve enough to not know what I could not accomplish," Plank said. "If I had been out in the industry instead of being a college kid who had an idea for another T-shirt, I would have been too scared to do anything. I was just looking at how to [make] the best T-shirt, so I almost willed it to happen."

A former teammate, Jim Druckenmiller, became a back-up quarterback for the San Francisco 49ers and talked up 'Plank's shirts to teammates. Soon the quarterback across the Bay, Jeff George of the Oakland Raiders, was on the cover of USA Today wearing an Under Armour shirt. Plank thought that was his big break, but he only received three phone calls that day -- one from his mother, asking him to come home and clean out his childhood bedroom. Plank said the experience made him realize that every day was a new one -- one which required real work.
Under Armour started slowly. In 1996, Plank accrued $17,000 in sales, and had to tap into credit cards to get by. The next year, sales increased to $110,000. In 2009, a few years after the company's initial public offering, sales hit $1 billion, and the brand is now a household name, especially among those consumers Plank covets -- the youngest ones.
"Organic growth is happening everywhere, no matter what," Plank noted. "Our object cannot be to try to convince 25-year-olds to change brands, though that is always something good. But now 8-, 9- and 10-year-olds have a relationship with Under Armour [and say] it is their brand. I tell them that their great-great grandfather [bought products from] the guys from Germany [Adidas] and their grandfather grew up with the guys from Oregon [Nike]. But you will grow up with Under Armour."

Accordingly, Plank has gone after young athletes to become the faces of Under Armour because they have great potential for marketing into the future. The athlete he believes best represents the company may be NBA point guard Brandon Jennings, who is in his second year playing for the Milwaukee Bucks. Jennings bypassed college ball and instead played professionally in Italy before being drafted by the Bucks. Though he only averaged 15.5 points per game in his rookie season, Jennings is flashy and personable, Plank noted. He blogs on the Under Armour website and attends a lot of kid-oriented events and special equipment sales in malls. He uses Twitter and Facebook, connecting with young people daily, sometimes hourly, with the Under Armour brand name never far away.

"We want to be a legitimate number two [after Nike] in the basketball market, and that may take time," Plank said. Under Armour did not produce any kind of footwear until introducing football cleats in 2006. Running shoes came in 2009, and only this year did the company start selling basketball shoes. "We need 5% or 6% [of the market] to start attracting the best young talent. It is a $1.3 billion market just in the United States, so that would be big."

Passion, Vision and People
Ubiquitous in Plank's talk and accompanying Power Points were the words "Passion," "Vision" and "People," a set of principles for success in business that he learned from a Chinese businessman whom he met early in his quest to spread Under Armour globally. "My passion is to build the biggest, baddest brand on the planet," Plank said. "My vision is that I want to stay focused.... We want to make sure there is nothing that prevents us from doing what we want to do with our brand. Finally, we want to have the best type of people -- team, team, team. I can't underscore that need [enough]." Plank also abides by what he called "four pillars of greatness": "Build a great product." "Tell a great story." "Service the business." "Build a great team."

The 38 year-old Plank likes his team young. He said the average age of his more than 3,000 employees, about half of whom work in the company's Baltimore headquarters and the rest at regional offices around the world, is 32, "and we want to keep [the work environment] young and fresh." Under Armour's advertisements, in addition to spotlighting Jennings, tend to include other young athletes in action -- competing in extreme sports "X Games" events, snowboarding, soccer, wall-climbing, ultimate fighting and beach volleyball.

The latest athlete signed to an endorsement deal, however, falls at the high end of the Under Armour employee age range -- 33 year-old New England Patriots quarterback Tom Brady. But Plank noted that Brady epitomizes another aspect of Under Armour -- the company's against-the-odds aura. Upon entering the NFL, Brady was a low draft choice -- picked in the sixth round and 199th overall -- who became a standout quarterback, winning three Super Bowls and marrying Brazilian model Gisele Bündchen. "Unfortunately, we don't have Gisele," Plank kidded. "But Tom signed with us not because we had the biggest check, which we didn't, but because we had the same, right-minded values."

For the moment, Plank is not anxious to move Under Armour into the leisure wear market. Instead, he plans to solidify the company's growth in the women's sports apparel market, which he said now accounts for about 30% of sales. He is also looking to create more of a presence for the brand in Europe and Asia -- an effort that will take time because the company has to break into the soccer and, to a lesser extent, basketball markets.
Under Armour's advertising makes full use of two of Plank's favorite slogans -- often together: "We must protect this house" and "We will." According to Plank, both are necessary strategies to build a viable company. "Under Armour begins with a vision that we are making athletes better," and every product, Plank noted, can't just be fashionable: It also must enhance the athletic experience. The company's mouth guards, for instance, have back-bites that level the head and improve posture. "You do something so you can get a quick buck and that may look good on the revenue chart, but only for a little while. What you do must protect your brand or you will ultimately fail. If you slap a logo on it, it might sell right away, but the brands that will endure are the ones that respect the consumer."

The "we will" slogan is important as well, Plank added."Nothing is really God-given. You have to embrace the things you feel are important and work hard -- will it to happen. ""What I do know is that we have not yet built our defining product at Under Armour. We are not living in the past. Our larger competitors are 20 times our size. There is running room all over."

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