Lululemon Marketing Analysis
Lululemon athletic a is an athletic wear store selling high quality performance wear mainly meant for women and was founded in 1998 by Dennis Chip Wilson in Vancouver, British Columbia. The primary focus is women leading healthy lifestyle and are determined to achieve it in a more comfortable but fashionable manner. Lululemon currently operates 45 stores in Canada and 70 in the US selling innovative and technical apparel products that provides performance, fit and comfort (Tucker Web). The company boasts of her ability to incorporate fashion and style in their products, which has ensured her strong brand recognition and high number of sales. The company’s concentration in Canada is much better especially brand awareness than in the US despite the fact that it has more stores in US than Canada.
According to Tucker, Lululemon identifies itself with a high quality as well as exclusive yoga and sporting apparel strictly meant for female (Web). It operates in numerous stores across North America, Australia and New Zealand where it offers women’s wear for yoga, dance, running and other sport events. Most of the company’s customers are high-income women that are insulated to prices and the downturn of the economy as was evident in 2008 when the sales grew despite economic challenges. It has more stores in U.S compared with Canada that contributed to the $452.9 million revenue and gross of $ 223. Lululemon intends to make her US brand as better as the Canadian one because US has more stores than in Canada. The company is putting a lot of effort boost her brand awareness in the US market (Tucker Web). The organization has successfully returned to the community that gives it support such as hosting free yoga events around town. The company focuses on high quality products, which attracts higher prices for her upper income women target. Lululemon ensures prestigious and exclusive products that act as fashion forward and shows a healthy, well off lifestyle. The expensive high-end workout apparel has seen it standing even amid recession in 2008 due to the current market perception of the brand.
Lululemon’s target market is 18-34 fit, health conscious and fashion forward, high-income females who are the company’s vital customers. The active young thinking woman who are appearance conscious, physically fit and well educated. Lululemon targets mostly the upper and middle class females residing in North America with the niche marketing strategy by pursuing a narrowly defined market segment. The niche market strategy has greatly contributed to the success of the company thus making it remain a primary market target. In the recent past, the company has been striving to gain reach the male workout market for some time (Tucker Web).
New male clothing brand with very high quality is another target market that the company looks forward to dominate. The males targeted are educated and physically active and appearance conscious aged between 16 and 45 living in North America. It is also targeting the pre-teen girls who may not be identified with the more mature females as well as more for more value proposition within all brands of the company. The target customer for Lululemon is very complex, active as well as health and is aimed at carrying out product expansion and matching the lifecycle and social status of those women.
Current Marketing Strategy
Acording to Ellis, Lululemon’s goal is to implement brand extension and reposition brand awareness that may result into 10% total growth as well 5% female growth within the next one year (Web). The strategy also involves holding a challenge in five Canadian cities and general 10% increase until 2025. The company has laid down various marketing strategies that may boost her sales and cover wider market. There are special marketing displays proposed by the management that helps in displaying products in stores for customers to distinguish between the products. Marketing displays however would however not apply to maternity clothing as while the Baby Belly Tank will be mixed with other active wear and loungewear products. The company uses strong pricing power as well as the strategy of getting product right and keeping it scarce.
According Ellis, Lululemon’s marketing strategy includes cupcakes, camp out, dances and running clubs, which are summed up as grassroots marketing that is very inexpensive (Web). The company is planning to enter new markets Hong Kong and UK with ambassadors who greatly support them. The ambassadors integrate with the local community as a way of expanding their market share. Additionally, the company encourages the utilization of social media as a means of interacting with the public.
According to Tucker, Lululemon has been building on brand recognition by letting the franchisee to take part of the cost (Web). The company also uses social media such as Facebook, twitter, YouTube to reach their market by posting pictures with short, catchy tag lines. The company further uses video demonstrations to launch new products as well as multifaceted social media campaign to educate the users on the usability of the product (Ellis Web). Moreover, Lululemon realizes the diversity of culture in different countries making her marketing messages vary between Canada, Asia and Australia. Generally, the grassroots marketing adopted by the company is deeply based on the customers’ desires since the company believes in being pulled into the market instead of being pushed (Malka Web).
Lululemon operates in a very profitable niche in the wider sportswear by offering services to customers that are more affluent and play a major role in her sustainability. The company United States sporting apparel provides the largest sportswear market representing almost 41% of the global sales then closely followed by the European Union market with about 38%.The company’s yoga wear has established itself as a prominent brand in the female sportswear market prompting them to charge maximum price for the products (Malka Web). Lululemon boasts as one of the most productive retailers in the sportswear market with several other opportunities of growth in various categories such as its recent expansion of merchandise for both men and youth.
However, it faces stiff competition from Gap Inc.’s Athleta brand as well as other businesses operating on yoga apparel. Moreover, it does not own patents in technology, fabric or even procedures they use in manufacturing hence exposing risk to their products. Competitors may decide to duplicate their products and technologies and just make away with it. The primary competitors of Lululemon are small businesses operating individual yoga wear stores as well as retailers situated in gyms and fitness places. This makes it harder to compete the company because of her many resources and popularity it enjoys amongst the yoga enthusiasts (Malka Web).
However, on a higher scale, the company faces stiff competition from the sport industry giants including Nike and Adidas that are incredibly larger than Lululemon. Nike and Adidas make huge sales and enjoy a wider presence both online and in their very own numerous stores (Ho Web). The company further faces risk of losing customers who may substitute their products with lower priced apparel because the Lululemon’s products are very expensive and only meant to serve the rich. It is also worth noting that the market that the company concentrates much on, North America does not have a larger capacity of expanding due to the company’s brand premium niche positioning.
Sporting apparel in US generated about $9.2 billion in 2009 although it went down the following year because of the economic downturn by almost 5%. It is apparent that yoga industry is really increasing in size as Americans spend more than $5.7 billion in it and the same growth is experienced in sport apparel, workout gear and leisure activities. It is incredible to see Lululemon outperforming competition and is considered as one of the top performing apparel industry stock due to their suppliers who are the main stakeholders (Ho Web).
Lululemon offers several products including jackets, hoodies, pants, shorts for sexes and bras, underwear and tank tops that are meant for women. According to Ekachakra, pants are provided either in regular or tall lengths and that they are pre-shrunk to make sure there is an initially quality fit (Web). Their products are believed to flatter women/s derriere that really appeals to women of all classes. Additionally, Lululemon boasts of its cutting edge and high quality fabrics that are integral in delivering maximum operation and body fit. It has greatly collaborated with some other leading suppliers that have aided it in developing trademarked fabrics that removes moisture from the body (Ekachakra Web).
According to Ekachakra, the uniqueness of the fabrics further facilitates drying process and protect against wind and rain (Web). The fabrics also have matte finish that enables it to be thicker compared to spandex hence assisting in avoiding unappealing shine. Additionally, the Lululemon products are flat seams, tear-out labels and thumbholes on their sleeves and pockets that are very helpful in keeping things such as audio players. Lululemon experiences expansion and growth aimed at offering products that are more appealing for men and youths. It also offers some fitness related accessories such as water bottle, yoga mats and DVDs that are characterized with the company’s high quality nature.
Ekachakra. Yoga Product Review: Lululemon Athletica – Worth the High Price? Yoga for Flowers 30 Aug. 2006. Web. 22 Nov. 2013. http://yogaisforlovers.wordpress.com/2006/08/30/yoga-product-review-lululemon-athletica-worth-the-high-price/
Ellis, Debra. Lululemon: Corporate Misstep or Targeted Marketing? Socialmediatoday 16 Nov. 2013. Web. 22 Nov. 2013. http://socialmediatoday.com/debraellis/1924476/lululemon-corporate-misstep-or-targeted-marketin
Ho, Solarina. Analysis-Lululemon seen Growing in Lucrative Niche Market. Reuters 2 Nov. 2010. Web. 22 Nov. 2013. http://www.reuters.com/article/2010/11/02/idUSN0116446120101102
Malka, Dean. Strategic Review of Lululemon Athletica SlideShare Inc 2 Jan. 2013. Web. 22 Nov. 2013. http://www.slideshare.net/deanmalka/strategic-review-of-lululemon-athletica
Tucker, Erika. Why is Lululemon so Successful? Global News 6 Dec. 2012. Web. 22 Nov. 2013. http://globalnews.ca/news/316659/why-is-lululemon-so-successful/