The Key to Continuing Success

By: Alexis Kelly

Final Project

Creating Customer Value Through Marketing

Introduction

• Founded in 1998 by Chip Wilson in Vancouver, Canada

• Started as a ”One Stop Shop”

• Focused on Female Yoga Enthusiasts

• Wilson believed the yoga products available weren’t fashionable or efficient

Lululemon sells ”athleisure” apparel and accessories for women, men,

and girls

Company Description

• 350 stores Internationally

• 12,500 Employees Worldwide

• 2015: Profit = $997.2 million

• 10 % growth in sales

• 9% increase in profit

• Created Ivviva brand in 2011 to reach children

• Focus Switch: Males and Children

Marketing Mix

• PRODUCT • Activewear & Accessories

• PRICE • Premium

• PROMOTION• Social Media

• Brand Ambassadors

• Advertisements (Print, Online, TV)

• PLACEMENT• In-store

• Online

Target Market

• Demographics:

• Primary: Women

• Secondary: Males and Young Girls

• Age: 25-45

• Income: High

• Psychographics:

• Lifestyle: Active, Outgoing, and Healthy

• Personality: Social, Extroverted and Trendy

“At lululemon, we’ve made it our vision to elevate the world from

mediocrity to greatness.”

Market Trends & Macro Analysis

• Health Consciousness• Physical activity, organic foods, etc.

• Casualization of Fitness Apparel • ”Athleisure” Market

• Increased disposable income• Increased apparel spending

• Advancing Technology• Apps, online shopping, fitness technology

• Low Price Alternatives • Fitness product line extension

• In 2012, 94% of Americans said they have given thought to the amount of physical activity they get a day

• In 2012, more than half of Americans said they were trying to lose weight by being active

(International Food Information Council Foundation)

Market Analysis

• 2015: Global Activewear Market = $270 Billion

• 42% increase in the last 7 years

• 2015 U.S. Sales = $98 billion

• In 2015, the male apparel market grew 1.5% more then the female market

• Children's Wear Market valued at $160 billion

Market PositionBrand Name Percentage %

Nike 20.70

Under Armour 3.90

Adidas 3.50

Skechers 3.10

North Face (The) 2.20

Timberland 2.10

Champion 2.00

Lululemon Athletica Inc. 1.40

New Balance 1.40

Puma North America Inc. 1.00

Other 56.80

"Top Athleisure Apparel Makers, 2015." Market Share Reporter. Ed. Robert S. Lazich and Virgil L. Burton, III.

30%

24%14%

32%

Top Women's Athletic Apparel Brands (Online), 2015

Athleta

Lululemon Athletica Inc.

Nike

Other

Strategic & Tactical Issues

• Competition • Low price alternatives• Nike, Under Armor, Adidas

• Negative Publicity • Negative WOM • Product recalls

• Brand Perception • Yoga gear for females

• Limited Products • No footwear• Sizes 0-12

Brand value of Lululemon from 2012 to 2015 (in million U.S. dollars)

Strengths

• Unique Designs • Brand Affinity• Brand Loyalists (“Lululemon Cult”)

Weaknesses

• Viewed as the Yoga Brand • High Price • Negative Publicity • Size limitation

Opportunities

• Focus on the Male Market • Loyalty Rewards Program• Expand Product Line

Threats

• Competition• Industry Trends

Conclusion & Recommendations

Lululemon needs to revisit their value proposition

• Expand Product Line

• Plus Size Line

• Sneakers and Footwear

• International Expansion

• Product Placement

• Movies and TV Shows (Ex. Dancing with the Stars and Sporting Events)

• Create a Loyalty Rewards Program

• Added value for loyal customers

• Celebrity Endorsement (Face of the Company)

• Ex. Khloe Kardashian, Juliane Hough, Kayla Itness, Trending Male Sports Player