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Running Head: LULULEMON: SIZING UP TO REGAIN CONFIDENCE

Lululemon: Sizing Up to Regain Confidence

Sarah Mae Ettinger

Washington University in St. Louis

Fashion Design

1

LULULEMON: SIZING UP TO REGAIN CONFIDENCE 2

Lululemon Athletica, Inc.Strengths Weaknesses

• Premium luxury active lifestyle brand• Innovative Design Process (e.g.

technically advanced fabrics and feedback-based designs)

• Vertical retail strategy with consistent low inventory base, (Lululemon Athleti-ca, Inc., 2014)

• Selective outside retailers position Lu-lulemon as a high status company

• Reliance on third-party suppliers to provide fab-rics could affect supply chain and production

• Potential for continuous growth could increase complexity of business and harm brand image and financial performance

• Recent adverse publicity associated with product and store design (O’Connor, 2013)

• Manufacturing technology and fabrics are not patented and could be copied by competitors

Opportunities Threats • Baby boomer generation’s focus on

longevity will increase demand for athletic wear

• Transition of activewear apparel into the ready-to-wear industry will allow for expansion of product lines (Sher-man, 2014)

• Fluctuating costs of raw materials could increase cost of goods sold (Lululemon Athletica, Inc. 2014)

• Increasing labor costs in China could increase cost of production

• Companies that do not traditionally produce athletic wear are creating similar products at lower prices

• Women’s weight in the US has steadily in-creased since the 1990s, limiting Lululemon’s consumers (Appendix A)

Under Armour, Inc.Strengths Weaknesses

• Innovative fabrics (ex: HeatGear)• Acquisition of MapMy Fitness, Inc. will grow brand

awareness (Under Armour, Inc. 2014)• Strong marketing strategies that target high-

performance and high- visibility athletes (e.g. “Womanfiesto,” featuring Giesele Buduchen) (O’Connor, 2014)

• Unstable and inconsistent inventory levels (inventory to current quarter sales put UA at 109%, (Henage, 2014))

• Company’s ability to effectively manage growth and more complex global business

Opportunities Threats • Baby boomer generation’s focus on longevity will

increase demand for athletic wear• Transition of activewear apparel into the ready-to-wear

industry will expand product lines (Sherman, 2014)• Women’s weight in the US has steadily increased since

the 1990s, allowing Under Armour a larger clientele base since it offers extended sizes (Appendix A)

• Labor disruptions may slow material sourcing and product distribution

• Non-traditional athletic wear companies are breaking into the industry (e.g. H&M, Forever21)

• Sponsorships and designations of official suppliers may become more expensive


Marketing PlanMarket Analysis Since Lululemon’s inception in 1998, women’s weight in America has been steadily

increasing (Appendix A). Companies such as Under Armour and Athleta have adapted their

clothing to fit the needs of this new consumer by creating special and extended sizes. Lululemon,

however, has made it clear to their investors and shoppers that they will continue to promote a

“skinny lifestyle,” and only carry through size 12. According to a survey conducted by Gallup,

the average American woman today weighs 17 pounds above what she considers to be ideal (Ap-

pendix B). Under Armor and Athleta have created active campaigns to combat body image issues

and empower women with slogans such as, “Womanifesto” and “Power to the She,” respectively

(O’Connor). Although the public has urged Lululemon to adopt such ideas, they continue to shun

Athleta, Inc.Strengths Weaknesses

• Association with parent company (Gap, Inc.) allows for greater resource availability and joint distribution and production with other subbrands

• Other brands of Gap, Inc. support and produce extended sizes (e.g. Old Navy)

• “Power to the She” campaign promotes female empowering message, heightening company’s appeal to female athletes (Gap, Inc., 2014)

• As part of Gap, Inc., Athleta is associated with any negative publicity the parent company experiences

• Change in Gap, Inc. CEO after 7 years could affect public sentiment toward Athleta and affect profit margins (Gensler, 2014)

Opportunities Threats • Baby boomer generation’s focus on longevity

will increase demand for athletic wear • Transition of activewear apparel into the ready-

to-wear industry will allow for expansion of product lines (Sherman, 2014)

• Women’s weight in the US has steadily increased since the 1990s, which allows Athleta a larger clientele base since it offers extended sizes (Appendix A)

• Labor disruptions at ports of manufacturers may slow down material sourcing and product distribution (Gap, Inc., 2014)

• Non-traditional athletic wear companies are breaking into the industry (e.g. H&M, Forever21)


larger sized women from their stores and actively ignore the 14 billion dollar plus-sized industry.

Lululemon needs to reinforce the confidence of their current customer, as well as a new, larger

customer, by creating garments that make women feel and look their best regardless of size.

Marketing StrategySocial Media: Facebook.

Social Media: Women’s Health Online Resources.

Print Advertising: Martha Stewart Magazine.

Celebrity Endorsement: Christina Hendricks.

Community Involvement: Yoga in the Park.

Community Involvement: Special Child Campaign.

• Effective targeting tools allows demographic, social and personal segmentation

• Ability to reach millions of individuals in a matter of minutes and gage reaction

to new product through “likes” and website-tag tracking

• Visually associates the brand with an active and “healthy lifestyle,” important to the

Lululemon customer

• Consumer demographics align closely with the Lululemon target customer: female,

affluent and active, with a median age of 49 (helping to target an older generation)

• Ms. Hendricks is an active yogi with an extremely body positive attitude and reflects

the body type of the “new customer” Lululemon wants to attract

• She gives the brand credibility by promoting self-confidence and body equality, which

customers will come to associate with the Lululemon name

• By engaging with Yoga for the Special Child, a therapeutic yoga program that helps

special needs children, Lululemon can actively give back to the community, while

reinforcing their positive public image (Yoga for the Special Child, 2014)

• Promotional yoga sessions in public parks reinforce the grassroots marketing

technique the brand was founded on by directly engaging with the consumer in a

public setting


New Retailer Opportunities

Nordstrom

Net-a-Porter.com

Sportluxe.com

• Nordstrom’s unparalleled customer service will abolish any anxiety larger customers

may have previously experienced shopping exclusively at Lululemon stores (Bhasin)

• The department store already sells extended sizes in a variety of apparel areas,

guaranteeing the presence of larger customers.

• The high-end website will sell Lululemon among top-tier athletic brands on the

market, associating the brand with high quality and high price

• The database does not sell Athleta or Under Armour, allowing Lululemon to differentiate

itself from main competition

• Australian website that promotes healthy living, high end sportswear and body equality

among all women

• By using a foreign company to promote Lululemon’s products, the brand will be able to

expand their name internationally

Page 1 of 2

Aug Sept Oct Nov Dec Jan TotalSocial Media Advertising Facebook 1,000 3,675 3,500 6,000 4,500 3,775 22,450Twitter 7,225 7,000 8,000 12,000 10,000 8,000 52,225Women's Health Magazine Online Video 30,130 30,130Women's Health Magazine Online Mobile Banner 25,000 25,000 50,000 Social Media Total 33,225 10,675 36500 18,000 44,630 11775 154,805

Print Advertising Yoga Journal Print (50 words and logo) 2,225 2,225 2,225 6,675Martha Stewart Magazine 188,580 188,580Print Total 2,225 0 2,225 188,580 2,225 0 195,225

Endorsements Christina Hendricks 50,000 100,000 100,000 150,000 50,000 50,000 500,000Endorsements Total 50,000 100,000 100,000 150,000 50,000 50,000 500,000

Community Involvement Advertising Yoga in the Park (Ex: Bryant Park, NYC) 24,970 25,000 50,000Yoga for the Special Child Campaign 99,970 99,970Community Involvement Total 24,970 25,000 0 0 0 99,970 149,970Total Marketing Budget 110,420 135,675 138,725 356,580 96,855 161,745 1,000,000

Lululemon Marketing Budget Plan

Table 1. Lululemon Marketing Budget August-January


Lululemon Fall 2015 Collection

The Fall 2015 Lululemon Collection is designed to make women look as good as they feel when being active. The ruching technique is used to create

the illusion of a slimmer figure, especially in areas where women naturally retain weight. This technique will appeal to all sizes because everyone wants to

emulate their ideal body image.


WHITESKY

SEAFOAM

BLACK CRATER

GOLDENROD

Lululemon Fall 2015: Delivery 1


WHITE

PERIWINKLE

BLACK HUBBLE

GOLDENROD

SLATE



WHITE

PUMPKIN

BLACK APOCALYPSE

CRANBERRY

SLATE



1

why we made this.

1 You are already confident in your own skin, but sometimes

everyone needs extra support.

2. The design of this garment is meant to slim and shape womens’ bodies in a natural and comfortable way for all sizes and shapes.

3. The ruching technique is both functional and decorative because everybody should look as good as

they feel when being active.

Lululemon Fall 2015 Hangtags

1.


Appendix A: (Newport)

Appendix B: (Newport)


References

Bhasin, K. (2013, July 31). Shunning Plus-Size Shoppers Is Key To Lululemon's Strategy,

Insiders Say. Retrieved November 8, 2014, from http://www.huffingtonpost.

com/2013/07/31/lululemon-plus-size_n_3675605.html

Alindogen, M. (2014, October 15). Size Matters: Lululemon And Athleta's Marketing Strategies

| Neon Tommy. Retrieved November 8, 2014, from http://www.neontommy.com/

news/2014/10/size-matters-lululemon-and-althetas-strategy

Dishman, L. (2013, November 8). Lululemon's Biggest Problem Is A Founder With Foot-In-

Mouth Disease. Retrieved November 8, 2014, from http://www.forbes.com/sites/lydia

dishman/2013/11/08/lululemons-biggest-problem-is-a-founder-with-foot-in-mouth-dis

ease/

Advertising on Facebook. (2014, January 1). Retrieved November 11, 2014, from https://www.

facebook.com/business/products/ads

Alleger, J. (2011, December 11). How Much Do Ads on Twitter Cost? Retrieved November 11,

2014, from http://www.pennapowers.com/how-much-do-ads-on-twitter-cost/

Gap, Inc. (2014). Form 10-K 2014. Retrieved from SEC EDGAR website http://www.sec.gov/

edgar.shtml

Gensler, L. (2014, October 8). Gap Stock Sinks After CEO Announces Departure. Retrieved

November 8, 2014, from http://www.forbes.com/sites/laurengensler/2014/10/08/gap-ceo

glenn-murphy-to-retire/


O'Connor, C. (2014, September 4). Under Armour Goes After Lululemon With Gisele And

'Womanifesto' Retrieved November 8, 2014, from http://www.forbes.com/sites/clareocon

nor/2014/09/04/under-armour-goes-after-lululemon-with-gisele-and-womanifesto/

O'Connor, C. (2013, November 11). Do You Accept Lululemon Billionaire Chip Wilson's Teary

Apology Over His Body-Shaming Comments? Retrieved November 8, 2014, from http://

www.forbes.com/sites/clareoconnor/2013/11/11/do-you-accept-lululemon-billion

aire-chip-wilsons-teary-apology-over-his-body-shaming-comments/

Newport, F. (2007, November 28). Average American Weighs 17 Pounds More Than "Ideal"

Retrieved November 8, 2014, from http://www.gallup.com/poll/102919/average-american-

weighs-pounds-more-than-ideal.aspx

Lululemon, Inc. (2014). Form 10-K 2014. Retrieved from SEC EDGAR website http://www.sec.

gov/edgar.shtml

Martha Stewart Media Kit. (2013, January 1). Retrieved November 11, 2014, from http://mslom

ediakit.com/

Mad Men's Christina Hendricks on Loving Your Body. (2014, January 1). Retrieved November

11, 2014, from http://www.webmd.com/women/features/christina-hendricks?page=2

Henage, M. (2014, October 16). 2 Reasons To Buy Under Armour, 1 Reason To Worry. Retrieved

November 8, 2014, from http://seekingalpha.com/article/2567405-2-reasons-to-buy-un

der-armour-1-reason-to-worry?page=2


Under Armour, Inc. (2014). Form 10-K 2014. Retrieved from SEC EDGAR website http://www.

sec.gov/edgar.shtml

Yoga for the Special Child - The Sonia Sumar Method. (2014, January 1). Retrieved November

10, 2014, from http://www.specialyoga.com/

Sherman, L. (2014, June 5). Is Activewear the New Denim? - The Business of Fashion. Retrieved

November 8, 2014, from http://www.businessoffashion.com/2014/06/is-active

wear-the-new-denim-lucas-hugh-lululemon-athleta.html

Women's Health Media Kit 2014: Digital. (2014, January 1). Retrieved November 11, 2014,

from http://www.womenshealthmag.com/files/mediakit/WH-MediaKit-OnlineAdSpecs.

Yoga Directory: Pricing. (2014, January 1). Retrieved November 11, 2014, from https://secure.

yogajournal.com/yjdirectory/pricing/

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