Lululemon Case Write Up

[pic 1]

LULULEMON CASE WRITE UP

[pic 2][pic 3]

Executive Summary

Lululemon’s current product line has expanded from female yoga apparel to more athleisure apparel for both men and women. The market for athletic apparel is highly competitive. Lululemon are facing threats from many competitors in terms of product quality, price and marketing. It is the right time for Lululemon to make some changes. My suggestions are:

1. Gradually weaken its female focus brand image to attract more male customers.
2. Shorten its product cycle time to be more responsive to consumers’ needs and increase the product varieties. Introduce a less-expensive product line to give less wealthy customers some taste of their product quality and attract them to buy more high-end products once they get richer.
3. Advertise more aggressively and accurately via online media. Expand more aggressively in oversea markets.
4. Try to do some price matching with competitors. Offer some discounts or more benefits for consumers who paid for the premium.
5. Learn from Amway’s distribution mode and lay more emphasis on online sales.

Segmentation

Lululemon defined its target customer group are women between 18 and 34 years old who was fit, health-conscious, fashion-forward, and had high disposable income. It has also expanded into menswear. However, its brand image used to be too female focused, which confused many male consumers. In order to compete with Athleta, Lululemon’s rival, which focused solely on women, Lululemon should gradually weaken its female focus brand image to attract more male customers to seize a larger market share.

Product

Lululemon focused on yoga apparel initially. Over time, the company expanded the product line to include a variety of activewear for both men and women. I think Lululemon should keep developing athleisure apparel product line while keep producing high-quality yoga or other sportswear. Under Armour, Lululemon’s another rival, noticed that its “lifestyle” products have represented 90% of its business in 2017 and there is a notable shift from performance products to "lifestyle”. Many Lululemon consumers also complained about the lack of variety of its products, and I had the same feeling when I looked at their online shop. I believe that Lululemon should seek to shorten its product cycle time to be more responsive to consumers’ needs, developing new design while keeping the classic ones.

They can also consider introduce a less expensive product line to give more potential consumers a taste of how comfortable and high-quality their products are and foster these group of potential consumers into loyal consumers. Once they become wealthier, they may be more likely to purchase their high-end products.

Promotion

Lululemon heavily relied on grassroots/community-based marketing to build the brand. Its reusable bags which featured the company’s manifesto also created a fashion trend. Lululemon also used sponsorship of teams and events to raise its profile with male athletes. These are all good promotion approaches but have relatively unpredictable input-output return. By using word-of-mouth as promotion, if some consumers perceived Lululemon’s products as flawed such as “pilling”, it will have an extremely negative impact on their sales and brand image because the comments would spread fast among their current client base. As an alternative, they could consider investing more in accurate cyber marketing on some mainstream media websites to approach to a larger group of potential customers. Lululemon has a far less brand awareness outside US such as Asia market. They should consider advertising more aggressively in the oversea markets to tap into those potential high-growth markets.