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SUNWAY UNIVERSITY BUSINESS SCHOOL
FINAL EXAMINATION FOR THE BSc (HONS) BUSINESS STUDIES
ACADEMIC SESSION : AUGUST 2013 SEMESTER
SUBJECT
: MKT2044 ADVERTISING & PROMOTION
EXAMINATION
: DECEMBER 2013
TIME ALLOWED
: 3 HOURS + 10 MINUTES READING TIME
INSTRUCTIONS TO CANDIDATES
There are TWO (2) Sections–
Section A incorporates one compulsory case study with THREE (3) questions (60
marks)
and
Section B that consists of FOUR (4) questions – students are required to answer TWO
(2) out of the four questions (40 marks).
All answers must be written in the answer booklets provided using blue or black
INK (except for diagrams).
IMPORTANT NOTES TO CANDIDATES
Materials Allowed
Standard Items:
Special Items :
Pen, Pencil, Eraser or Correction Fluid, Ruler
Nil
It is your responsibility to ensure that you do not have in your possession any
unauthorised notes or any other means that would improperly help you in your work. If
you have any unauthorised materials with you, hand it to the invigilator BEFORE
reading any further.
DO NOT REMOVE THIS QUESTION PAPER FROM THE EXAMINATION HALL
[This paper contains SEVEN questions printed on FIVE pages, including cover page]
Sunway University Business School
MKT2044/December 2013 Examination
Section A: Case Study
Read the case study given below and answer ALL THREE (3) questions given at the end
of the case:
Under Armour (UA) was founded in 1996 by Kevin Plank, a former Maryland football player,
who began by selling compression clothing that could “wick” sweat away from the body to
college sports teams. In 1998, the football oriented movie “Any Given Sunday” was being
filmed and UA agreed to provide products. UA shirts were used throughout the filming and
appeared in the movie itself. At the same time UA also took a full page ad in a new
magazine, ESPN The Magazine. The product placement and ESPN The Magazine ad led to
increase in website traffic and sales, and helped jumped start the nascent company.
A similar situation arose in 2003 when ESPN asked UA to take part in their new HBO series
about football players called “Playmakers” where every player in the locker room wore UA
clothing. Co-incidentally a commercial called “We Must Protect This House” about “Big E”
Ogbogu, an NFL football star was released. The commercial immediately became
immensely popular and was even mentioned by Oprah Winfrey and David Lettermen in their
television shows. In 2005 UA went public and enjoyed a compound annual growth rate of 33
percent, with sales reaching $856 million in fiscal 2009.
UA Marketing and Branding
UA achieved success by focusing on niche markets that Nike, Adidas, and Rebook
overlooked in the sport garment market. UA became successful through strong product
positioning, quality products, and dynamic advertising. UA developed a unique brand identity
through its “Protect This House” TV advertising campaign featuring “Big E” Ogbogu shouting
“We must protect this house”. The tagline has become a symbol of what UA stands for as a
brand, and the company continues to use it in much of its advertising.
An important part of UA’s marketing strategy is selling its products to high-performing
athletes and teams on the collegiate and professional levels through collegiate
sponsorships, individual athlete agreements and direct sales of products to team equipment
managers and athletes. UA’s sports marketing program provides exposure to consumers
through a variety of media including television, magazines, the Internet and sponsorships.
Fans seeing the UA products live at sporting events established authenticity for UA
products.
UA Enters The Athletic Footwear Market
UA made a strategic decision to expand into the football cleat (shoes with studs/cleats)
market in 2006 when UA signed a six-year, $50 million deal with the NFL to become the
authorized supplier of cleats, allowing them to have their logo displayed on players’ shoes.
The NFL affiliation gave UA almost instant credibility among football fans - an estimated 120
million of whom watch an NFL game on an average weekend. It also gave them the
opportunity to use the NFL logo to promote their footwear, and lock-up advertising and
promotion commitments on the NFL Network, NFL.com and all of the networks that air NFL
football games.
In 2008 UA introduced its UA Performance Footwear line which included cross training
shoes and then its first line of running shoes the following year. It was supported by a multiplatform IMC campaign which included television ads across a variety of cable channels as
well as ads in a variety of running and fitness magazines including Runner’s World, Running,
Shape, Men’s Health and others. However, UA faced strong competition in the running shoe
market which is dominated by brands such as Nike, Adidas, Asics, New Balance and
Saucony and runners tend to be very loyal to specific brands of running shoes.
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Sunway University Business School
MKT2044/December 2013 Examination
By the end of 2010, UA held less than a 2 percent market share for the overall athletic shoe
market. However, athletic shoes accounted for nearly 16 percent of UA’s overall revenue in
2009, versus 12 percent in 2008, and showed the largest dollar increase of the UA’s growth
drivers. UA decided to look to new footwear categories for future growth. Of particular
interest was the basketball shoes market.
Under Amour Launches Basketball Shoes
UA decided to continue to pursue the athletic shoe market by launching a new line of
basketball shoes in late 2010 called Micro G which consisted of four models. Key features of
Micro G being lightweight and low to the ground compared to the traditional heavier, thicker
foam basketball shoes, while providing additional protection, cushioned comfort and security
for the foot. UA tested its basketball shoes with collegiate and top high school basketball
programs for three years and also did extensive product testing with consumers in
preparation for the launch.
An integral part of the IMC strategy for UA’s new Micro G line was to have an outstanding
high school All American NBA player Brandon Jennings wear the Micro G Black Ice and
serve as the endorser for the new shoe line. In September of 2008, UA signed Jennings to a
four year, $2 million endorsement deal to be the face of UA basketball and to showcase its
shoes and other products in the European League.
After playing one season in Italy, Jennings was the 10th pick in the 2009 NBA draft by the
Milwaukee Bucks and had a very good rookie season as an NBA player. He became the
youngest player in league history to score 50 or more points in a game and he helped lead
the Bucks to the Eastern Conference Playoffs in 2010. Jennings continued to play well
through the first two months of the 2010-11 season, until breaking his foot in mid-December
which sent him to the sidelines for the next four weeks.
UA ads featuring Jennings debuted on various cable channels including TNT, ESPN, and
NBA TV, as well as in sports publications such as ESPN The Magazine and other print ads.
UA also developed an online marketing campaign for the Micro G which included a presence
on Facebook, YouTube and Twitter as well as a blog site called The Diary of Brandon
Jennings. The new basketball shoes were also worn by a number of college basketball
teams including Maryland, Boston College, South Florida, Texas Tech and Auburn.
UA decided to roll out its new basketball shoes cautiously as Nike controls 95 percent of the
U.S. basketball shoe market through its various brands such as the signature Air Jordan,
Zoom Kobe and Converse lines where it has endorsement contracts with many of the top
NBA players including Kobe Bryant, Kevin Durant, LeBron James and numerous others. In
addition brands like Adidas and Reebok were sponsoring multimillion dollars endorsement
deals with top NBA players. Reebok recently signed a five year $25 million deals with
number one NBA pick John Wall due to their refocus on the basketball shoe market.
UA recognized that it had much at stake and hired Eugene McCarthy, who previously ran
the Jordan brand for Nike, as a senior vice president for footwear. Eugene McCarthy
described the launch of the Micro G basketball line as “a much-anticipated and significant
milestone for UA as we continue to elevate our presence in the sort of basketball from
grassroots to the elite level.” The key question on many observers’ mind, however, was
whether UA would be able to succeed in the basketball shoe and take market share away
from Nike. Failure could lead to questions as to whether the company could move beyond
apparel and be successful in the non-cleated athletic shoe market.
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(Source: Belch & Belch (2012), Advertising and Promotion, 9 ed., McGrawHill)
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Sunway University Business School
MKT2044/December 2013 Examination
Questions
1. Analyse and explain the factors that contributed to the key successes and
building of the Under Armour (UA) brand even though it was a relatively late
market entry player compared to major brands like Nike and Adidas.
(25 marks)
2. Why do you think UA decided to use a relatively new NBA player like Brandon
Jennings as their primary endorser instead of any of the other proven NBA stars
for its new basketball shoe line? Explain why you think it was either a good or
bad strategic decision and support your arguments by using evidence from the
case and reference to appropriate theory.
(25 marks)
3. UA is taking a risk by declaring its intention to enter the very competitive
basketball shoe market. Discuss the possible implications and outcomes.
(10 marks)
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Sunway University Business School
MKT2044/December 2013 Examination
SECTION B
Answer any TWO (2) questions.
All questions carry equal marks. This section is worth a total of 40 marks
_____________________________________________________________________
4. What are the common objectives of advertisements and why is persuasion an
important element in effective advertisements? (8 marks) ELM (Elaboration
likelihood model) focuses on the way consumers respond to persuasion. Describe
the difference between the central versus peripheral route to persuasion and how
would a marketer decide when each route would be most effective in getting
consumers to respond to an advertisement (12 marks)
5. Describe sales promotion in the context of the promotional mix and discuss the
role of sales promotion as part of the promotional mix? (8 marks) Discuss the
various factors that have led to companies shifting more of their marketing
budgets to sales promotion. What are the criticisms or dangers of over reliance on
sales promotion? (12 marks)
6. Discuss how teaser advertising might be used to introduce a new product or brand
or to reposition an existing brand. What factors should marketers take into
consideration when using a teaser campaign? On the other hand, to get attention,
an ad has to have stopping power. Describe how ads can accomplish this.
(11 marks)
At one time, Michael Jordan was the highest paid celebrity endorser for several
products. Why do advertisers use such celebrity endorsers? Describe briefly the
key dangers of using celebrity endorsers? (9 marks)
7. Transit advertising takes a variety of forms, and many advertisers may be
reluctant to use these media. Discuss some of the various forms of transit
advertising and their relative advantages and disadvantages. Give examples of
which products and/or services might effectively utilise this medium. (10 marks)
Advertising in movie theatres is on the increase after a decline in 90s. Discuss the
reasons why movie theatre advertising may be advantageous. Then explain why it
might not be as successful as anticipated. (10 marks)
~End of Paper~
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