Great timing, persuasive marketing, and a little bit of luck were the key factors in Under Armour’s quick rise to prominence as a sports apparel brand. The business became well-known for its football apparel and revolutionized the college football landscape with its cutting-edge uniforms. Then it profited from chance endorsement agreements made with athletes just before they became well-known, particularly with PGA golfer Jordan Spieth and NBA superstar Stephen Curry.
According to Ad Age, the company’s market share is stagnating, and its North American revenue fell by 2% in the most recent quarter of the fiscal year. To reduce costs and kick-start a brand turnaround, Under Armour has gone through two rounds of layoffs, but the company’s problems may have less to do with its overhead and more to do with its lack of consumer appeal.
Football players, golfers, NBA fans, and consumers who engage in running and other active lifestyles are just a few of the consumer demographics that Under Armour has experienced rapid growth across. However, the seeds of this success may have also sown difficulties in forging a core customer base the business could rely on. Now, it appears that the brand is in a difficult situation as a result of the lack of a product specialization marketing strategy.
What are the benefits of product specialization?
The advantages of product specialization are listed below, along with a brief explanation of what each one means:
What is product specialization?
A marketing strategy called “product specialization” directs companies’ marketing or branding efforts toward a single product or product line. These marketing initiatives frequently concentrate on the advantages and excellence of the product that might draw potential customers. By using this strategy, businesses can focus on a particular market rather than the general public.
Some businesses that use product specialization gain a reputation as authorities in the niche they are targeting, making their products the norm for that niche.
How does a company use product specialization?
When a business uses product specialization, it goes through a process to assess the targeted market and its capacity to develop and market a product there. Here is a list of the steps a business typically takes to start product specialization:
1. Identify the vitality of a market and its consumers
Prior to developing a product, a market must be identified, and its consumers’ wants, needs, preferences, and purchasing behaviors must be assessed. Companies typically assess five factors about a market and a particular consumer group:
2. Evaluate the markets appeal and the companys capabilities
Businesses frequently assess the appeal of a market by determining its size, sales, and potential profitability. Assessing competitors, potential obstacles in relation to these competitors, and potential substitute products available in the market are all part of a more thorough analysis of a market. Identifying the company’s resources and general ability to operate in the market is one of the most crucial aspects of conducting market research. This entails analyzing business goals and constraints, such as available physical and financial resources.
3. Position the product or service
When a business uses positioning, it establishes brand recognition by emphasizing how its good or service differs from those of its rivals. Consumers may be able to relate to the product through this process or have the chance to contrast the business with its rivals. Companies often base this strategy on things such as:
Companies may decide to highlight one or more features when positioning their products. They often base their positioning selections on qualities like:
What is selective specialization?
When a business uses product specialization to address two or more markets, that practice is known as selective specialization. This indicates that a business has more than one particular customer, but its marketing initiatives still don’t aim at the general public.
Some businesses employ this strategy to diversify their product offerings while keeping their position in the targeted markets. For instance, a car manufacturer might begin providing a variety of hybrid or electric vehicles to appeal to a market that values the environment. If something negatively impacts sales in a different targeted market, this strategy might still enable businesses to turn a profit in a different market.
What are the benefits of selective specialization?
A few advantages of selective specialization are listed below:
PRODUCT SPECIALIZATION ORGANIZATIONAL STRCUTUUURE –
FAQ
What is an example of product specialization?
When a business sells specific products to numerous different types of potential customers, this is known as product specialization. In our illustration, if company X only manufactures a specific type of gadget, such as a toaster, that is used by all types of people, we can say that the company employs the product specialization strategy.
What is product specialization targeting strategy?
One of the numerous common target market strategies used by businesses is product specialization. It’s a strategy whereby the business incorporates product development into marketing. Benefits of the product are customized to meet the requirements of different target markets.
What is the difference between product specialisation and market specialization?
This preview displays pages 28 through 36 out of 36. Market Specialization The business focuses on meeting the needs of a specific customer group. Product SpecializationThe company produces a specific product that it sells to several different market segments.
What are the disadvantages of product specialization?
The main drawback of a product specialization strategy is that it puts you at high risk if you only have a small selection of products. Take a retail outlet that decides to sell only cheap shoes as an example. An important market shift could jeopardize the business’s sole source of income at any time.
