Lululemon Case Study

Lululemon Case Study 1. Problem Definition/Decision facing the Company: The main problem or decision facing the firm (that needs to be resolved). Growth rate affected by the competition. Lululemon should expand their target market (new marketing campaign) Expand demographics They basically couldn’t keep up with their competitors.They feared fashion cautious women would grow tired of the Lululemon look, and would look to find a new form of casual wear. Also they believed men would be hesitant to join the brand down the line because of its strong ties to women and the yoga lifestyle. Lululemon started off as one of the first athletic wear brands that focused on fitness instructors more specifically “yogi’s”. Now there are many companies like Athleta and Under Armour that have came in as strong competitors with better discounts and benefits. Lululemon needs to discover a new way to stay ahead of their competitors and the market that is constantly growing. 2. Core Value/ Positioning Strategy: Positioning strategy of any firm is the place that the firm occupies in the minds of their customers relative to their competitors and is closely tied to the core value of that firm. Promoting a healthier lifestyle while being fashionable. Mission: “Creating components for people to live longer, healthier, more fun lives” Vision: “Elevating the world from mediocrity to greatness” 3. Target Market: Identify the primary target market for the firm. Women between the age of 18-34 years old, who were fit, health conscious, fashion forward and had high disposable income. In the case study it mentions that Lululemon has a persona that they cater to, “Ocean is a 32-year- old professional woman who is single and earns $100,000 per year. Wilson described Ocean as “engaged, has her own condo, is traveling, fashionable, has an hour and a half to work out a day.” Ocean was intended to be aspirational for younger women and nostalgic for older women.” Also a persona for men ““Duke” persona. Duke is 35 years old and makes more money than Ocean. He was described as an “‘athletic opportunist’ who enjoys surfing in the summer and snowboarding in the winter,” and he is willing to pay for quality.”” 4. Competition: List the major and closest competitors in the market. Kit and Ace Under Armour Gap Athleta- pricing, size range, discounts, 5. Analyze the 4 P’s of the firm- Product/service- Yoga Apparel ($98 vs $79) Price- Premium Pricing Strategy Lululemon is okay with pricing their products higher than the competitors. They want to be perceived as high value. Prestige pricing. Limited amount of products to urge customers to purchase. Promotion- They will have professional yoga instructors teaching yoga classes at the stores, gave 15% off to customers in exchange for feedback, and using reusable bags to promote healthy lifestyle. Lululemon used sponsorship of teams and events to raise its profile with male athletes. YouTube advertising videos. 2012 Olympic Men’s Volleyball Team,as well as the shorts and shirts for the 2013 Wall Street Decathlon. Place- North America (America and Canada), Australia, and Japan (channel of distribution --->) Company owned stores and direct to consumers. 6. SWOT analysis: Strengths- Has a supportive following, Customers are willing to pay for premium pricing, Invested into employees (workshops and classes), high sales revenue compared to other small retailers. Grassroot marketing. Low inventory. Patent on clothing design Weaknesses- Quality of clothing has lessened, Store Managers have full control when running the specific store, controversial CEO. viewed as just as just as a yoga brand. Lack of discounts Opportunities- Utilizing advance technology and implementing it into the clothing. Expanding and perfecting the Male market . expanding product line. International expansion. New AD campaigns. Social media presence Threats- Athleisure market is increasing. Competitors have good quality for a less expensive price. CEO image. Declining growth. International regulations 7. Analysis: This will contain your answers to the questions given for each case study (The questions are provided in the syllabus next to each case study). ● Wilson has strong opinions about the target audience and Lulu’s mission and vision. Based on your own analysis of how Lululemon presents its brand (e.g., its retail experience, promotion plan and messaging, products), how do you believe Lulu is positioned. Write a positioning statement. ○ Target Audience: high disposable income, like to work out, 18-34 ○ Frame of reference: Active wear (pants, hoodies, shirts, shorts) ○ Points of difference: Quality, high pricing ○ Reasons to believe : Patents they have in each product Yes Lululemon has the right position ● What threats do Under Armor and Athleta pose for Lululemon, given their efforts in capturing the woman’s market? ○ Under Armour has endorsements from popular athletes (Brand recognition) ○ Under Armour has a big distribution channel ○ Both has lower pricing ○ Casual with promotion ● What is the most viable growth plan for Lululemon? ○ Expanding Brand (Product innovation, target market expansion) ○ ○ New Marketing campaign for males Collaboration with high end brands 8. Recommendations: Make recommendations as to how the problem you identified at the beginning should be resolved. Back it up with logical explanations and factual evidence rather than hearsay. Lower the pricing or find a way to create better quality items. (No more sheer leggings if the consumers are paying $98+). Make sure whoever is in charge isn’t making controversial statements that can cause sales to decrease. Keep a great working relationships among people in the company, and venture into more casual wear instead of just athleisure wear. They can incorporate they same patents and tchnology they hold and put it into a new comfortable stylish jean that enhances shape like their yoga pants do.