Lululemon Athletica Brand Audit

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Lululemon Athletica Brand Audit

  1. 1. Brand Audit: Lululemon AthleticaBy: Christina Johanson, Joanna Komvopoulos, Shital Kadakia Professor  O’Meara   MBA 6403 December 12, 2012
  2. 2. Table Of ContentsCompany History ............................................................................................................................................ 4Brand Offering ................................................................................................................................................. 4Point of Differentiation ................................................................................................................................. 5Brand Architecture.......................................................................................................................................... 6 Product ........................................................................................................................................................... 6 Product Attributes ................................................................................................................................. 7Positioning ......................................................................................................................................................... 8Brand Elements and Promotion ................................................................................................................. 9Marketing Channels ....................................................................................................................................... 9 Media Advertising .................................................................................................................................. 10 Public Relations ....................................................................................................................................... 10 Consumer Promotions ........................................................................................................................... 10 Direct & Online Marketing ................................................................................................................. 10 Event Marketing & Sponsorship ....................................................................................................... 11 Word of Mouth ......................................................................................................................................... 12 Other............................................................................................................................................................. 12Current Market Strategy & Objectives ................................................................................................ 12 Distribution Channels ............................................................................................................................ 12 Added Value of Distribution Channels ........................................................................................... 13 Pricing Strategy........................................................................................................................................ 14 Price Compared to Competitors......................................................................................................... 14Brand Performance ...................................................................................................................................... 14 Growth ......................................................................................................................................................... 14 Athletic Apparel Market .................................................................................................................. 15 Profitability and Income ....................................................................................................................... 15 Brand Value............................................................................................................................................... 16 Quantitative and Qualitative Surveys .............................................................................................. 16 Brand Elements ........................................................................................................................................ 16 Brand Image & Associations .............................................................................................................. 17 Success of Marketing Efforts.............................................................................................................. 19 Brand Equity Improvements ............................................................................................................... 21 Leveraging & Extension Strategies .................................................................................................. 21 Secondary Associations ................................................................................................................... 22Conclusions ................................................................................................................................................... 22Work Cited ..................................................................................................................................................... 23Appendix 3. Product Circle .................................................................................................................... 27Appendix 4. Fabric List ............................................................................................................................ 27Appendix 7. Descriptions of Social Media Marketing Channels ........................................... 30Appendix 8. Competitor Comparison Pricing ............................................................................... 34Appendix 9. Direct and Indirect Athletic Apparel Retailers in U.S. .................................... 34Appendix 10: Profit Margins of Top 10 Apparel Retailers ..................................................... 35Appendix 11. Survey Questions and Results: ............................................................................... 36 Survey 1: ............................................................................................................................................... 36 2
  3. 3. Survey 2: ............................................................................................................................................... 45Appendix 12. BCG Growth Share Matrix ......................................................................................... 56Appendix 13: Ansoff’s  Model ................................................................................................................ 57Appendix  14:  Recommendation……………………………………...………………………………….  58Appendix  15:  Implemented  Recommendation…………………………………………………….  59 3
  4. 4. Brand  InventoryCompany HistoryLululemon Athletica [Lululemon] wasfounded  by  Denis  “Chip”  Wilson  in  1998, after he took a yoga class and was Figure 1. Brand Word Mark & Logoswept away by the fitness high, butdisappointed by the ill-fitting cotton clothing people wore. Wilson recognized anopportunity to change the status quo by using innovative design and athletic fabrics tocreate a new offering for customers. Wilson started an underground yoga apparelmovement by offering clothing to instructors and relying on their feedback to grow hisbusiness.1 Lululemon opened its first store location in Vancouver, Canada in 2000, developing an environment within the store where consumers could learn, exchange ideas, and contribute to a healthy living community through their love of yoga. The company soon took this idea of wellness education a step further, training staff as educators not only about product performance, but also health and fitness in general.2 The Figure 2. Lululemon Store Exterior, Walnut company has now expanded to over 201 Creek, CA locations, with stores in the United States, Australia, and New Zealand andshowrooms  in  Hong  Kong  and  Great  Britain.    The  company’s  huge  success  led  it  to  go  public in July 20073.4 In the fall of 2009, the company expanded and launched Ivivva Athletica, a subsidiary that targets a younger female demographic - girls ages 6-12 years old. Ivivva Athletica currently has 7 locations, which are located in Canada and the United States.5Brand OfferingSince 1998, the company has expanded its product portfolio beyond its original nicheoffering  to  include  men’s  apparel  and  products  designed  specifically  for  activities  such  as1 our history | lululemon athletica. (n.d.). yoga clothes & running gear for sweaty workouts | lululemon athletica. RetrievedOctober 25, 2012, from http://www.lululemon.com/about/history2 ibid3 Hutchinson, T. H. (2011, January 31). The Worlds Hottest Retail Stock Has Room to Run - NASDAQ.com. Home - NASDAQCommunity. Retrieved November 18, 2012, from http://community.nasdaq.com/News/2011-02/the-worlds-hottest-retail-stock.aspx?storyid=55806#.UK0ZzkJ-jPo4 "Dennis "Chip" Wilson, founder of Lululemon Athletica, presides over the opening bell". Nasdaq. Retrieved 2012-07-29.5 Form 10-Q 4
  5. 5. spin and running. However, there continues to be a strong focus on high-end yoga apparel for female consumers. Lululemon does not simply sell fitness apparel; it sells an experience and a lifestyle that combines high fashion with health and wellness in a way that has enabled the Lululemon brand to become synonymous Figure 3. Lululemon Store Interior with stylish fitness apparel that evokes a modern athletic life. By selling an attitudeand mindset, Lululemon has successfully taken advantage of a societal shift toward amore holistic lifestyle, enabling it to create a large base of loyal customers.6Point of DifferentiationLululemon was founded on the premise thatwomen should not be an afterthought in thesportswear and fitness market. The companyrecognized a consumer need for stylish, high-performance yoga apparel that was not beingmet by sportswear giants such as Nike orAdidas. As such, Lululemon differentiates Figure 5. In-store Yoga Class itself by providing women high-quality, stylish, and functional fitness apparel, treating them as the target consumer, not an  afterthought  to  a  men’s  line. Figure 4. Lululemon Special Community Events The company also differentiates itself from other industry giants by cultivatingand providing a community of health and wellness in each of its stores where consumerscan participate in outdoor fitness events, free yoga classes, and other group activities thatalign  with  the  company’s  mission  of  health  and  fitness.    6 Hutchinson, T. H 5
  6. 6. Brand Architecture Traditionally, Lululemon has had a very monolithic brand portfolio, until launching the Ivivva brand for girls. The current brand architecture segments products by both category and function, leaving room for confusion. While Yoga Apparel seems to have received more attention within the Women’s  Lululemon line, the other categories of this brand are not segmented by function or given trademark names. As a result, running and spinning,  the  brand’s  other product focuses, are not clearly communicated through the brand hierarchy. This indicates a growth opportunity for the Lululemon brand. Lululemon’s focus on yoga apparel is logical given its brand heritage. However, given the  brand’s  expansion  into  new athletic functions with new product lines, it must realign its architecture to better fit the product offering of the company as a whole.Figure 6: Lululemon Brand Architecture. For complete brand portfolio and architecture see Appendix 1 & 2. Product All Lululemon products use the company brand name. While some products, particularly in  the  Yoga  Apparel  category,  seem  to  have  individual  names  (e.g.  “Groove  Pant”,   “Astro  Pant”,  etc.)  all  products  fall  under  the  Lululemon  brand  name  and  are  tagged  with   the  Lululemon  logo,  a  stylized  “A”. 6
  7. 7. Product AttributesLululemon products are strategically positioned and differentiated from competitors byusing high-quality and technically advanced fabrics to create products that are speciallydesigned for optimal, activity-specific fit and function. For example, the company usesdifferent fiberfabrics toproduce Yogaapparel pantsthan it does forits running orspin products.The use oftechnicallyadvancedmaterial is notvery differentfrom whatcompetitorssuch as Nike,Reebok, orUnder Armourare employing.However, thekeydifferentiatorfor theLululemonbrand is that Figure 7: Lululemon Total Product. See Appendix 3 for larger view.the companycombinestechnology and function with style, thus  appealing  to  women’s  inner  need to look andfeel beautiful and sexy while working out. Until recently, this has not been the focus ofmost  of  Lululemon’s  competitors, allowing Lululemon the opportunity to gain significantrecognition in this category. Furthermore, Lululemon places a premium on offering atotal product experience, emphasizing the importance of exceptional customer service,custom tailoring and community events.Fabrics. For a list of trademarked fabrics please see Appendix 4. 7
  8. 8. PositioningLululemon positionsitself by takingadvantage of itspoints ofdifferentiation(PODs). Thus,Lululemon placeswomen front andcenter and focuseson its reasons tobelieve (RTBs) ofinnovativetechnology, highquality fabrics, andfunctional apparel toprovide fashionableluxury fitnessapparel in an Figure 8: Perceptual Map Based on Survey Results, Demonstrating Lululemons Unique Market Offeringindustry with fewpremium products.Through unique positioning and strategic laddering up the brand pyramid, Lululemon hasmanaged to create a niche market within the fitness apparel industry, differentiating itselffrom its competitors by providing a unique product offering in the form of stylish, high-performance apparel. Figure 8 illustrates this unique position, using data from ourconsumer surveys. Figure 9: Brand Pyramid 8
  9. 9. While Lululemon has positioned itself on each rung of its brand pyramid, its focus is onthe top two tiers, beliefs and values and emotional benefits. This allows the brand tocultivate value based on how the products make consumers feel. This is furthersupported by the  brand’s  elements,  mainly the manifesto, which feed into the top tworungs along with the in-store classes and community events, which help to sell a lifestyleof empowerment. (see Appendix 5 for Brand Blue Print)Brand Elements and PromotionThe brand is clearly communicated through its brandelements. The most distinguishing element is the brand’slogo,  a  stylized  “A”,  which  was  part  of  the  word  mark  for  “athletically  hip”  – a name that the brand ultimately did notuse.7 This  logo  appears  on  all  of  the  company’s  product  offerings, marketing materials, and communicationelements. The company has built such equity in its logo,that it is immediately associated with the company name,allowing consumers to recall the brand in a variety of Figure 10: Lululemon Logosettings without the need for a category cue. The Lululemon reusable shopping bags have also become a tremendous brand element for the company. The red and white bags rarely include the Lululemon Athletica name. Instead, they are filled with manifestos and mantras that represent the company and its mission. These bags have taken an active role in the societal trend that is Lululemon, as men and women alike, use the bag in their daily lives for non-shopping reasons. The bag thus has become a type of status symbol through which consumers can express their belongingFigure 11: Lululemon Manifesto, as on Reusable Bags to the Lululemon lifestyle. Furthermore, the ability for consumers to recognize these reusable bags and recallthat they are Lululemon, without the bag explicitly indicating the brand name, furthersupports  the  strength  of  Lululemon’s  brand  awareness  and  overall  equity.Marketing Channels Unlike active wear industry giant Nike, Lululemon Athletica does very littlemarketing communication through traditional media channels like TV and print. Instead,it has focused its efforts on IMC elements that emphasize the personal, emotionalconnection customers have with the brand, mostly through interactive and word of mouthcommunications. IMC elements in the Lululemon marketing mix include:7 our history | lululemon athletica. (n.d.). yoga clothes & running gear for sweaty workouts | lululemon athletica. 9
  10. 10. Media AdvertisingThe brand limits resources allocated to traditional media advertising. Select, cheeky printads  (i.e.  2010  “Say  no  to  camel  toe”  campaign)  run  in  niche  yoga and runningmagazines.8Public RelationsLululemon’s  Public  Relations  and  Sustainability  Communications departments work to make surethat key efforts and brand messaging are consistentacross communication platforms, including in-storeeducators, support and social media. Internal PRspecialists work as evangelists to developrelationships with bloggers, investors and mediainfluencers, ensuring positive publicity for thebrand.9Consumer PromotionsConsumer promotions are limited. The brand does Figure 12: 2010 Lululemon Ad Campaignnot promote in-store sales, and has articulated onlinediscounts  as  “We  Made  Too  Much”  to  minimize  damage to the perceived brand value.Direct & Online MarketingLululemon.com.The website has two goals: tocreate an online community andfacilitate the online shoppingexperience. Landing page visualshighlight product and people, notbrand elements. Value-addcontent includes productinformation, videos, a blog and(e.g. product demos, yoga classesand  ambassador  “chats”)  profiles  of all brand ambassadors,described below. Figure 13: Lululemon.com Black Friday Homepage, 11/23/2012Digital Relationship MarketingProgram.Customers have the option to sign up for email list, but it is not aggressively marketed onthe consumer landing page, staying true to the visual language of the brand andimproving the consumer landing experience.8 Helliker,  Kevin.  “Lululemon  Grows  Fast  on  a  Slim  Budget”.  WSJ, September 13, 2010.http://online.wsj.com/article/SB10001424052748703960004575481890366935552.html9 careers | lululemon athletica. (n.d.). yoga clothes & running gear for sweaty workouts | lululemon athletica. Retrieved October 25,2012, from http://www.lululemon.com/about/careers 10
  11. 11. Mobile.In 2011 Lululemon launched a mobileoptimized shopping site for iPhone,Android and Blackberry devices but doesnot engage in mobile advertising.Social Media & Viral Marketing.Lululemon uses various social media andviral marketing platforms to develop adeeper emotional connection withconsumers and foster the feeling of localand global community. This channel,along with event marketing, is arguablythe heart of their promotional mix andcommunications strategy. Verbiage,imagery and tags (e.g. #thesweatlife) areconsistent and shared across all corporatecommunication platforms. Many localstores use independent social media Figure 14: Images from Various Lululemon Social Media Channelsaccounts to connect more directly withcommunity and facilitate geographicalconsumer targeting. See Appendix 7 for more details on specific social media channelsand engagement statistics versus competitors.Event Marketing & Sponsorship Athlete Sponsorship. In an effort to appeal to male consumers, a relatively new market  for  the  brand,  Lululemon  sponsored  the  US  Men’s   Beach Volleyball team at the 2012 Summer Olympics. Lululemon logo (w/o name) appeared subtly on uniforms. Both Jake Gibb and Sean Rosenthal are Lululemon Elite Ambassadors. Sponsored Community Events. The brand often sponsors yoga festivals (i.e. Wanderlust) and produces the SeaWheeze Lululemon Half Marathon in Vancouver. Events are promoted through social media Figure 15: Jake Gibb at the channels. 2012 Olympics. Source: www.lululemonstory.com Additionally, individual stores promote the community values of the Lululemon brand through free in-store yogaclasses and co-sponsored private shopping events with companies such asBloomspot.com. 11
  12. 12. Word of MouthAmbassador ProgramThe company recruits fitness instructors who lead yoga, spinning, pilates and runningclasses who embody the lifestyle and live the culture, giving them a clothing $1000allowance for apparel. Ambassadors act as guerilla marketers in communities. Similarly,the brand fosters relationships with select gyms, exercise studios and yoga/pilatesfacilities  that  align  with  the  brand’s  positioning  to  offer  instructors  a  corporate  discount  on merchandise.OtherShopping Bags.Reusable shopping bags emblazoned with the Lululemon Manifesto and/or images fromadvertising campaign are used as another form of practical and recognizableadvertisements for the company especially since the target customer would be proud toreuse the shopping bag.Lululemon Running Clubs.Many retail locations hold weekly/bi-weekly group runs. This serves as a way to engageconsumers in the Lululemon community and encourage store traffic as runs generallybegin at a store location.Current Market Strategy & ObjectivesDistribution Channels Lululemon Athletica Retail Stores. Lululemon retail stores are owned by the parent company and fully branded as Lululemon Athletica locations. They are stocked using centralized distribution facilities strategically located in their operating footprint.10 Lululemon Athletica Showrooms Figure 16: Lululemon Retail These small retail Store - Union St., San locations are meant to Francisco be  “cozier  versions  of  our  retail  stores,”  according  to  spokesperson  Tracy  Keough. Such locations allow the brand to becomean integrated part of the community, providing aretail experience that is unique to the area yet stillembodies the Lululemon brand promise. These Figure 17: Lululemon Showroom -10 Form 10-K MARRS Building, Sacramento 12
  13. 13. stores are only open part of the week so that employees can actively engage with the localcommunity.11Lululemon.com – See Direct & Online Marketing on Page 9Lululemon Outlets.Overstocked items are available at discounted prices at outlet locations. While theLululemon logo is used, the full brand name is not visible on store signage.Certified Partners/Strategic Sales.Lululemon has a selective strategic sales program through which the brand works withcertified partners to offer its products at yoga studios, gyms and wellness centersinternationally.  Partners  are  generally  a  strategic  fit,  serving  “high-end”  clientele  and  aligning with the Lululemon brand image. Examples include Equinox Gyms, The DaileyMethod and Physique 57.Added Value of Distribution ChannelsThe primary drawback of this distribution strategy is that it limits both reach andaccessibility. While the brand has grown substantially, opening retail stores in areas thatmeet certain demographic and psychographicsegmentation criteria, most stores areconcentrated around metropolitan areasincluding San Francisco, Los Angeles, NewYork and Chicago. As a relatively youngbrand, it is likely that this is part of an earlymarket growth strategy designed to launchthe company into the mainstream market.The  primary  benefit  of  Lululemon’s  distribution strategy is that it gives the branda large degree of control over merchandisingand marketing – ensuring that the brandmessage is strong and consistent at allconsumer touch points. While certifieddistribution locations are not branded, theytoo add value to the brand by associating theLululemon with “luxury  fitness” in the mindsof  consumers,  thus  reinforcing  the  brand’s  market position. Scarcity of the product mayalso support the premium position of the Figure 18: The Dailey Method - Vancouver.brand. Source: www.thedaileymethod.com11Kelly Johnson (March 30, 2012). “Yoga gear chain Lululemon coming back to Sacramento.”  Sacramento Bee.Retrieved November 26, 2012 http://www.bizjournals.com/sacramento/blog/kelly-johnson/2012/03/yoga-gear-chain-lululemon-sacramento.html?page=all 13
  14. 14. Pricing StrategyLululemon has positioned itself as a premium athletic brand – a position supported by thebrand’s  overall  pricing  strategy.  Product  life-cycles are short and stores intentionally keepstock low. The planned obsolescence and promise of exclusivity create a sense ofurgency for shoppers in search of specific product/color offerings. This tactic helps tosubstantiate the premium price point and keep consumers coming back to their stores.The brand rarely discounts merchandise and attention is not drawn to in store sales. Bothof these tactics help to maintain  the  brand’s  perceived  value  and  encourage  customers  to  buy at full-price. Figure 19: Lululemon Product Lifecycle and Planned ObsolescencePrice Compared to CompetitorsThe  brand’s  price  point  is  on  par  with  other  luxury  active  wear  brands  such  as  Lucy andGap,  Inc.’s  Atheta  brand. The premium price point is slightly higher than “performancebrand” competitors such as Nike and Under Armour. Despite higher prices, our researchrevealed that the brand has created significant perceived value for consumers, which hashelped to differentiate it from its competitors. (See Appendix 8. for Comparison Pricingand Appendix 11 for Survey Results).Brand PerformanceLululemon is financially sound and is exhibiting overall strong performance. Thecompany has a healthy balance sheet, income and cash flow to sustain future growth andprofitability. The following is a brief financial summary of the company.GrowthSince  the  company’s  inception,  Lululemon  has  grown rapidly in the United States,Canada, Australia, and New Zealand. The company ended their third quarter of fiscal2012 with a total of 201 stores worldwide which includes 194 Lululemon branded stores.Majority of the stores, 127, are located in the United States, which accounts for majorityof the company’s  revenues.12 The United States market is expected to lead the12 Form 10-Q 14
  15. 15. company’s  future  expansion  with  new  store  openings  (8 expected in Q4) but the brand is looking to continue expansion into Asia and Europe over the next two years.13 Lululemon ended fiscal 2011 with just over a billion dollars in revenues, an increase of 40.62% over fiscal 2010.14 The company is on track to surpass fiscal 2011 revenues and is estimated by analysts to earn around $1.37B in revenues for fiscal 2012.15 For the third quarter of fiscal 2012, the company earned revenues of Figure 20: Lululemon net revenue growth. Source: $884.9M for the 39 weeks. This is shareholder.com an increase year over year of 41%. The company is poised forcontinued growth and expansion heading into the fourth quarter, generally their strongestquarter due to the holiday season.Athletic Apparel MarketLululemon competes directly with a handful of competitors who are more established andhave greater financial resources. Two of its closest competitors, Lucy and Athleta, areboth owned by larger corporationswith broader brand portfolios and have $50.00greater resources to expand, grow and $40.00compete (see Appendix 6 for in BillionsCompetitive Review). The company $30.00has a much longer list of indirect $20.00competitors such as Walmart andsporting goods stores that also sell $10.00athletic apparel (See Appendix 9). $0.00Profitability and IncomeLululemon’s  apparel  is priced at apremium. These high prices help the Figure 21: Market Capitalization of Top Athletic Apparelcompany enjoy a healthy profit Brands, 12/10/12.margin. The company ranked secondamong the top ten apparel retailers worldwide in terms of profit margins. The profitmargin improved from fiscal 2010 at 17.11% to 18.40% in fiscal 2011. (see Appendix 10for graph of leading profit margins by retailers). Lululemon increased net income51.15% from fiscal 2010 to fiscal 2011, earning $184.1M in net income. This is one ofthe highest among the top U.S. publicly traded apparel companies. The company endedthe third quarter with net income of $162.1M for the 39 weeks in fiscal 2012.1613 (Maurer, 2012)14 Form 10-K15 http://finance.yahoo.com/q/ae?s=LULU+Analyst+Estimates16 http://www.sec.gov/Archives/edgar/data/1397187/000119312512492935/d423946d10q.htm 15
  16. 16. Brand  ExploratoryBrand ValueOne  of  the  major  disadvantages  of  grassroots  marketing  efforts  is  that  the  company’s  brand may not be as widely known or recognized. Figure 22 demonstrates the  company’s  enterprise and brand value for 2012. We expect that as Lululemon continues to expand itsfootprint and grow, brand value should also increase with comprehensive marketingefforts.Figure 22: Source: http://0-www.statista.com.ignacio.usfca.edu/statistics/238666/enterprise-and-brand-value- of-lululemon/Quantitative and Qualitative SurveysTo further explore what consumers thought about Lululemon, two surveys wereconducted. The surveys were conducted using surveygizmo.com and included bothquantitative and qualitative questions. They were  designed  to  understand  consumer’s  knowledge, understanding, perceptions and associations of Lululemon and itscompetitors. Survey 1 was more exploratory and included more assisted recall questions.Forty-three total surveys were completed. Survey 2 was more in depth with 67 surveyscompleted. Both men and women completed the survey though women made up threequarters of participants. Participants also were from a wide geographic, age and incomerange. The following are the key findings and takeaways from these surveys. (SeeAppendix 11 for survey questions and results)Brand ElementsBrand NameThe brand name consists of black, red and white, which most respondents were able torecall. However, survey results suggest that consumers are only familiar with“Lululemon”  and  not  the  full  brand  name,  “Lululemon  Athletica.”  Furthermore,responses revealed that many participants were confused as to the spelling of the name,indicating many  variations  including  “Lulu  Lemon”  and  “Lulumelon.” Survey resultsalso suggest  that  the  company  should  consider  dropping  the  “Athletica”  name  to  avoid  confusion with Athleta and strengthen the equity of the Lululemon name. 16
  17. 17. Brand recall was much lower for men than for women. When asked to name the top fivebrands that came to mind in the athletic apparel category, only 44% of men namedLululemon. At the same time, three quarters of women surveyed recalled the brand andfor 43% of these respondentsLululemon was the first brandnamed. It is clear the branddoes not resonate with men, amarket which the company hasbeen trying to attract and grow.LogoSurvey findings show that theLululemon logo is recognizedmore than Athleta, UnderArmour and Reebok logos but Figure 23: Word Map Based on Survey Results on Logowas not as widely recognized Associationsas the Nike logo. Figure 23 highlights the most common associations that participants hadwith the logo and emphasizes the strong female and yoga-centric messaging thatresonates with consumers.Brand Colors The core brand colors are black, red and 5% Black white, which were accurately identified by a 5% majority of survey respondents, suggesting 6% Red strong consumer recall. 25% White 6% Lululemon Manifesto Pink Another brand element is the reusable 7% Purple shopping bag imprinted with the Lululemon 11% 19% Manifesto. A majority of participants Green 16% claimed not to see the bag on a daily basis. Yellow However, follow-up questioning revealed Orange that this may be due to selective attention on the part of many consumers.Figure 24: Colors Most Associated With Lululemon Brand Elements. Based on Survey Results, n = 33. Brand Image & Associations Image Identification and AssociationSurvey participants were shown three types of brand images that featured products,advertisements and other images featuring male and female athletes. When participantswere asked to match advertising images to athletic retailers results revealed that 49% ofparticipants associated the Athleta campaign, which featured a female doing yoga, withthe Lululemon brand while approximately 30% of participants associated the Lululemonimage of a female running on the beach with the Nike brand. This suggests that while theLululemon campaigns may convey a message that supports the brand’s essence andpositioning of empowerment, it is a message that consumers do not predominantlyassociate with the brand. 17
  18. 18. Gender associations hindered notableresults. When participants were asked toidentify which of the four images featuringmale athletes they associated with thebrand 54% overall all participants and 56%of males did not associate any of theimages featuring men with Lululemon. Oneimage, of the official US volleyball men’s  team of the 2012 Olympics wearingLululemon branded uniforms, was onlyrecognized by one participant (out of 67).The brand is clearly not resonating orassociated with men. However, the runningand spin images were recognized as fitnessactivities Lululemon caters to, suggesting a Figure 25: Campaign Images Included in Survey 2slight degree of consumer brandknowledge.Consumer & Brand PerceptionsLululemon brand perceptions are closely related to how participants described Lululemonconsumers. The top unprompted brand  associations  were  “yoga”,  “women”,  “expensive”,  and  “fashionable.”      The  brand  ranked  highest  among  competitors  for   “luxury  fashion appeal.”    Lululemon   consumers were described as an active female who practices yoga. She is wealthy and conscious about being trendy, fashionable and fit, which aligns with the psychographic and demographic market segments the brand targets. Men were not associated with the brand, despite the  company’s  attempt  to  develop  a   men’s  line  of  products.     Figure 26: Primary Brand Associations Based on Survey In addition, while community is a Results cornerstone and point of differentiation for the brand, thismessage does not seem to resonate with most survey participants. Being a part of acommunity ranked the lowest when consumers were asked which lifestyle statement theyidentified with most. Over 50% of participants identified with the statement thatsuggested  superior  athletic  performance,  supporting  the  brand’s  decision to provideconsumers technically advanced products.Survey participants also purchased Lululemon products more for themselves rather thanas gifts citing reasoning such as “comfort”,  “fit”,  “quality”  and  love  for  the  brand.    Quality also ranked first in what consumers looked for in athletic apparel. Lululemonshould continue to innovate and develop products with these qualities and highlight themin their integrated marketing communications. Lululemon products are perceived as 18
  19. 19. expensive, but the value of the products in relation to the cost was perceived as mediumto  high.    This  plays  squarely  into  the  brand’s  current  positioning.Customer LoyaltyCurrent market trends suggestthat brand loyalty is not asimportant to consumers today 0% Nothingas in years past. Overall, our 5% 10%research was consistent with Yoga Pantsthis theory; however, 7% Tops 39%approximately 10% of 0% Equipmentrespondents claim to purchase 10% Cropseverything from Lululemon,which suggests loyalty to the Outerwearbrand does exist. The most Accessories 29%popular item purchased from EverythingLululemon is yoga pantsfollowed by tops. Mostrespondents wear Lululemon Figure 27: Top Lululemon Products Purchased by Consumers.products to the gym or yoga Based on Survey Results, n = 43studio but a notable percentageof consumers revealed that they wear the products “everywhere.” This fits with theassertion that the brand caters to a lifestyle, selling products that are not only functionalfor athletic activities but also fashionable for everyday life.Brand  StrategySuccess of Marketing EffortsOverall, Lululemon as a brand has beenrelatively successful in its marketing effortsto date. For its initial go-to-market strategy,Lululemon chose a well-defined targetconsumer in the niche yoga market, filling aneed for technically advanced yoga-wear.From the start, they offered a whole productcentered on the idea of creating a communityfor its customers and as a result has seentremendous growth since it first launched in1998. Its success appealing to the yogacommunity made for a smooth transitionfrom the early market to the mainstreammarket – a challenge that many new brandsstruggle to overcome. However, the brand isin a transitional stage due to its rapid growthand must reevaluate its positioning and Figure 28: "Love Notes" Campaign, Dec. 2012. Source: www.lululemon.com 19
  20. 20. communication strategy if it hopes to achieve sustainable growth in the athletic wearcategory.All  of  Lululemon’s  marketing  communications  are  driving  towards  the  goal  of  creating  a  sense of community. Each of the IMC elements used works well together for crosspromotion and delivers a consistent, authentic voice and message across channels. Thebrand has been very successful in communicating values of empowerment, quality,luxury, fitness and style to its loyal customers. By emphasizing interactive andexperiential marketing initiatives the company has positioned itself to create positivesensory-emotional connections with consumers, that can improve brand resonance andultimately consumer based brand equity.However, as we have discussed, Lululemon has attempted to extend beyond its originaltarget market – a move not recognized by many consumers due to selective distortion.While Lululemon has tried to communicate that theyoffer a diverse portfolio of products for both men andwomen, most consumers retain a narrow view of whatthe brand stands for. Furthermore, the ideas ofcommunity and holistic lifestyle – values at the coreof the Lululemon brand – are lost on many consumerswho instead view the brand as a symbol of wealth,egoism and superficiality.A primary cause of the disconnect betweenLululemon’s  positioning  and  consumers’  perceived  brand image is likely the brand’s  accelerated growthand differentiation, which has confusion amongconsumers in the mainstream market. This Figure 29: "Love Notes" Campaign,communication breakdown provides an opportunity Dec. 2012. Source:for the brand to redefine the way consumers view it. www.lululemon.comWe believe that Lululemon can achieve this goal byreassessing the foundation of its positioning, fundamental customer needs, and productportfolio to identify its core competencies and successes and increasing the amplificationof the  brand’s  core  beliefs and elements to increase brand knowledge and esteem.While Lululemon has managed to create strong brand awareness and loyalty within itsoriginal target market, the lack of a more traditional media platform has limited coverageon a mass scale, which may hinder future growth if the brand hopes to gain significantmarket share from competitors such as Nike or Under Armour. By dialing-up its IMCthrough broad-reaching platforms and supporting campaigns, emphasizing the heart of itspositioning, Lululemon can successfully amplify its core message and strengthen brandequity. 20
  21. 21. Brand Equity ImprovementsLululemon can enhance their brand equity byimproving the recognition and recall of someof their brand elements. The brand name isnot fully utilized and is more wide known as“Lululemon”  rather  than  “Lululemon  Athletica”.    Since  the  “Athletica”  name  is  sometimes confused with Athleta, thecompany should consider dropping“Athletica”  altogether.    Furthermore,  the  company should reinforce the brand name soconsumers know how to spell it. Colorassociations are strong with the brand but thecompany should consider standardizing theusage of color for the brand name and logoson storefront and other non-product specificbranding to reinforce brand awareness and Figure 30. Part of Brand Manifestoknowledge.We do not recommend repositioning the brand but rather reinforcing and featuring brandvalues and messages so they are more strongly associated with the brand. Two of the keypoints of differentiation  highlighted  in  the  brand’s  Manifesto,  community values and thebalance of self, were missing altogether in the survey aided and unaided brand recallexercises. These values and beliefs are at the core of the company and should resonatewith consumers.Leveraging & Extension StrategiesThrough our analysis of the Lululemon brand, we have come to realize that there istremendous room for growth within the brand. Using the BCG matrix model,  the  men’s  line stands out as a category with low growth potential and low market share for thebrand (see Appendix 12). The company should consider exiting this market until it hasstrengthened its position its  current  market  per  Ansoff’s  model  (see  Appendix 13), usingresources generated by its yoga product lines to further develop new product lines forwomen.The  Lululemon  brand  is  synonymous  with  “women”  and  “yoga”  and  this  is  in line withthe  brand’s  core  competencies  and  strengths. We suggest that the brand realign focus onits female consumer by expanding its product offerings for women and branding otherproduct lines in the running and spinning functions similarly to the current strategy in theyoga apparel function (see Appendix 2 for Current Brand Architecture). This willfacilitate better organization of its brand architecture and will clarify its offerings toconsumers, while also providing the company with the opportunity to establish newnomenclatures to brand their fitness category lines (See Appendix 14 and 15 for BrandArchitecture Recommendation & Implementation). 21
  22. 22. Secondary AssociationsAs our qualitative research indicated, Lululemon is not currently extracting the true valueof its Elite Ambassadors, such as the USMen’s  Olympic  Beach  Volleyball  team.    This was a failed secondary association dueto lack of promotion and projection thoughthe  brand’s  IMC  strategy.    We  believe  that  such campaigns would be more successful ifthe brand chose different sports that are morein line with  the  heart  of  the  brand’s  positioning rather than a superficial attemptto  extend  their  brand  into  men’s  wear.In addition we believe that Lululemon cangain tremendous equity by leveraging its Figure 31. Suggested Secondary Associationsexisting certified partners such as the DailyMethod, Equinox, and Physique 57 to increase brand knowledge and strengthen itsassociations with health and fitness rather than trendy fashion. Finally, Lululemonshould seek out partnerships and secondary associations with companies such as WholeFoods Market and Luna Bar, which target the same consumer segments but focus on aholistic lifestyle.ConclusionsThrough qualitative and quantitative research we have identified key strengths andweaknesses for the Lululemon brand, provided recommendations to strengthenbrand equity, and analyzed the market conditions for the brand to expand in thefuture. For now, we suggest that the brand maintain focus on its primary customerand expand its function categories while dialing up its IMC in order to better alignconsumer  brand  associations  with  the  brand’s  core  essence  and  values. 22
  23. 23. Work Cited1. http://www.lululemon.com/about/history?mnid=ftr;company_history2. "Dennis "Chip" Wilson, founder of Lululemon Athletica, presides over the opening bell". Nasdaq. Retrieved 2012-07-29.3. Helliker,  Kevin.  “Lululemon Grows Fast on a Slim Budget”.  WSJ, September 13, 2010. http://online.wsj.com/article/SB100014240527487039600045754818903 66935552.html4. http://www.lululemon.com/about/careers/job-details/?jobId=0054825. Hutchinson, T. H. (2011, January 31). The Worlds Hottest Retail Stock Has Room to Run - NASDAQ.com. Home - NASDAQ Community. Retrieved November 18, 2012, from http://community.nasdaq.com/News/2011- 02/the-worlds-hottest-retail-stock.aspx?storyid=55806#.UK0ZzkJ-jPo6. Tracy Keough, Lululemon spokesperson. http://www.bizjournals.com/sacramento/blog/kelly- johnson/2012/03/yoga-gear-chain-lululemon-sacramento.html?page=all7. Maurer, B. (2012, 12 10). Lululemon perhaps the best buy in retail. Retrieved from http://seekingalpha.com/article/1054581-lululemon-perhaps-the- best-buy-in-retail8. Lululemon Athletica Inc. (2012, December 6). Form 10-Q. Retrieved from http://sec.gov/Archives/edgar/data/1397187/000119312512492935/d42 3946d10q.htm9. Lululemon Athletica Inc. (2012, March 22). Form 10-K. Retrieved from http://sec.gov/Archives/edgar/data/1397187/000119312512126444/d27 7556d10k.htm 23
  24. 24. Appendix     24
  25. 25. Appendix 1. Brand Portfolio
  26. 26. Appendix 2. Current Brand Architecture Appendix 2. Current Brand Architecture 26
  27. 27. Appendix 3. Product CircleAppendix 4. Fabric ListLululemon has invested in developing fabrics and technology as a point of differentiation.One of its main signature fabrics is the luon that is used in their yoga apparel. This fabricnot only feels cottony, it is preshrunk, offers 4-way stretch and is wicking.    The  company’s  signature fabrics include all of the following:luon family (including country cousins)swift familysilverescent familymeshes and liners familynatural blend familyouterwear & insulation familyFor an expanded list and detailed description, visithttp://www.lululemon.com/education/info/fabricsandtechnologies
  28. 28. Appendix 5. Brand Blue Print
  29. 29. Appendix 6. Competitive Review 29
  30. 30. Appendix 7. Descriptions of Social Media Marketing ChannelsYouTube (http://www.youtube.com/user/lululemon) – this a mix of content, brandcontrolled.  Viral  videos  like  “Sh*t  Yogis  Say”  as  well  as  footage  from  events.Facebook (www.facebook.com/lululemon) – Mix of product and lifestyle posts. Friendly,familiar toneTwitter (www.twitter.com.lululemon) – Unlike many brands, this platform is not used as acustomer  service  “call  center”.  Instead,  the  brand  showcases  a  mix  of  product  and  lifestyle  content, both branded and notPinterest (www.pinterest.com/lululemon) – Boards are dominated by motivational fitnessimagery, goal setting inspiration, healthy recipes and photos from Lululemon stores andevents.Instagram (www.instagram.com/lululemon) – Pictures  taken  by  Lululemon’s  social  media  team that capture the spirit of the brand. Include behind-the-scenes shots and light-heartedimages from the Lululemon offices.yoga. run. life. blog. (www.lululemon.com/community/blog) – Blog posts covereverything from lifestyle topics to spotlights on new product launches. The blog is anintegrated part of the ecommerce site and facilitates the shopping experience whenapplicable (product related posts). Post credit specific authors/members of the communityand  consumers  engage  via  comments,  helping  to  generate  content  in  features  like  “Ask  A  Runner”,  which  encourages  engagement  and  community.Twitter Statistics Brand Tweets Followers Following Nike 10,181 783,229 145 Lululemon 36,164 358,450 101,772 Under Armour 5,487 142,128 1,084 Adidas 481 42,251 124 Athleta 2,763 14,292 473 Lucy 972 8,681 810 Source: www.twitter.com, 12/09/12
  31. 31. Facebook Statistics Brand Likes Mentions Check-InsNike 11,474,941 105,011 6,613Lululemon 757,551 30,526 36,935Athleta 85,584 4,527Lucy 34,193 211 219Adidas 10,153 114,345Under Armour 2,142 42,661 186Source: www.facebook.com, 12/09/12Examples of Social Media Pages The Lululemon Athletica Facebook Timeline (11/23/12), www.facebook.com/lululemon 31
  32. 32. The Lululemon Athletica Facebook Timeline (11/23/12), www.facebook.com/lululemon The Lululemon Athletica Twitter Profile (11/23/12), www.twitter.com/lululemon 32
  33. 33. The Lululemon Athletica Pinterest Boards (11/23/12), www.pinterest.com/lululemonThe Lululemon Athletica Instagram Profile (11/23/12), www.instagram.com/lululemon or @lululemon on the Instagram App 33
  34. 34. Appendix 8. Competitor Comparison Pricing Pants - Pants - Brand Yoga Running PerformanceTanks Nike $60 - $70 $55 - $100 $28 - $55 Lululemon $88 - $98 $92 - $128 $39 - $64 Athleta $79 - $98 $64 - $98 $49 - $69 Lucy $79 - $98 $79 - $89 $45 - $65 Under Armour $59 - $89 $49 - $64 $22 - $68 Sources: www.nike.com, www.lululemon.com, www.athleta.gap.com, www.lucy.com, www.underarmour.com, 12/11/12Appendix 9. Direct and Indirect Athletic Apparel Retailers in U.S.Source: http://0-www.statista.com.ignacio.usfca.edu/statistics/242039/sporting-goods-retailers-in-the-us-by-revenue/ 34
  35. 35. Appendix 10: Profit Margins of Top 10 Apparel RetailersSource: http://0-www.statista.com.ignacio.usfca.edu/statistics/242104/leading-10-apparel-retailers-worldwide-based-on-their-profit-margin/ 35
  36. 36. Appendix 11. Survey Questions and Results:Survey 1:Note: This first survey was designed to be exploratory and geared towards obtaining a firstimpression of the Lululemon brand and product. It was conducted using an online surveytool, surveygizmo.com and was sent to our personal network of friends. 43 participantscompleted the survey.Question 1: How familiar are you with the Lululemon brand? o I  don’t  know  much  about  the  brand o I know the brand name o I know the brand name and logo o I know everything about the brand (logo, name, products, etc.)Question 1 Results: How familiar are you with the Lululemon brand? n=43 50% 42% 40% 35% 30% 20% 14% 9% 10% 0% responses I dont know I know the I know the I know much about brand name brand name everything the brand and logo about the brandMajority of respondents from survey 1 had knowledge about the Lululemon brand, logoand products. Only 9% of respondents did not know much about the brand.Question 2: What colors do you associate with the Lululemon brand? (Select all thatapply) o Green o Black o Orange o Yellow o Red o Purple o White o Brown o Pink o Blue 36
  37. 37. Question 2 Results: What color respondents at least familiar with Lulu brand/logo associate w/ Lululemon brand? n=33 15.2% 15.2% 75.8% Black 18.2% Red 18.2% White 21.2% Pink 48.8% Purple 33.3% 48.5% Green YellowWhile  the  dominant  color  in  Lululemon’s  brand  is  red,  about  three  quarter  of  respondents  who were at the least familiar with the brand name and logo identified the brand withblack. Of respondents who were familiar with at least the brand name and logo, red wasthe second highest associated color followed by white but less than half of respondentsidentified the brand with these colors. Red, white and black are respectively the top threecolors of Lululemon but interestingly pink, purple, green and yellow were also identifiedwith  Lululemon’s  brand.    Clearly,  the  brand  name  and  logo  colors  are  not  overwhelmingly  associated with the brand. The brand does offer colorful products and perhaps theadditional colors are associated with the brand because of their product offering.Question 3: How often do you purchase Lululemon products? o Less than once a month o Every 1-3 months o Every 3-6 months o Every 6-12 months o More than once a monthQuestion 3 Results: 37
  38. 38. How often respondents familiar with Lulu purchase products n=33 33.3% 33.3% 35.0% 30.0% 25.0% 21.2% 20.0% 15.0% 10.0% 6.1% 6.1% Response 5.0% 0.0% Less than Every 1-3 Every 3-6 Every 6- More once a months months 12 than one month months a monthOne third of respondents who are at least familiar with the Lululemon brand and logopurchase products from the company less than once a month while another third of theserespondents purchase products every six to twelve months. Of the remaining third, 21%purchase products every one to three months while about six percent purchase productsmore than once per month.Question 4: How would you rank Lululemon against its competitors? (highest on top) o Nike o Under Armour o Lululemon o Lucy o AthletaQuestion 4 Results:n=43 % of responses by rank (1 is highest) Competitors 1 2 3 4 5 Nike 39.5% 20.9% 16.3% 20.9% 0.0% Under Armour 16.3% 30.2% 11.6% 14.0% 27.9% Lululemon 37.2% 23.3% 16.3% 9.3% 9.3% Lucy 0.0% 18.6% 20.9% 16.3% 34.9% Athleta 4.7% 4.7% 30.2% 30.2% 18.6%Nike ranked as the highest among athletic apparel companies but Lululemon was closebehind.Question 5: What do you think a Lululemon consumer is like? Describe.Question 5 Results: 38
  39. 39. The word map above highlights the main key words that respondents used to describe aLululemon consumer. According to respondents, a Lululemon consumer is an active and fitfemale who is into yoga. She is wealthy, and conscious about being trendy, fashionable andfitness conscious.Question 6: How active are you? o 1 Not active at all o 2 o 3 o 4 Somewhat o 5 o 6 o 7 Very activeQuestion 6 Results: How active are respondents n=43 40.0% 35.0% 30.0% 25.0% 20.0% Response 15.0% 10.0% 5.0% 0.0% Not active at all Somewhat active Very active 39
  40. 40. Majority of respondents ranged from somewhat to very active.Question 7: How would you rank the cost of Lululemon products? o 1 Not expensive o 2 o 3 o 4 Somewhat expensive o 5 o 6 o 7 ExpensiveQuestion 7 Results:n=39 ranking from 1 (not expensive) to 7 (expensive) Responses 1 2 3 4 5 6 7 at least know brand 2.6% 0.0% 0.0% 10.3% 12.8% 30.8% 48.7%Majority of respondents, who had at least heard of the brand, thought the products wereexpensive.Question 8: How would you consider the value of Lululemon products in relation tocost? o 1 No value o 2 o 3 o 4 Moderate value o 5 o 6 o 7 High valueQuestion 8 Results:n=39 ranking from 1 (no value) to 7 (high value) Responses 1 2 3 4 5 6 7 at least know brand 0.0% 0.0% 10.3% 33.3% 33.3% 12.8% 10.3%Majority of respondents, who had at least heard of the brand, thought the value ofLululemon products were medium to high in relation to cost.Question 9: Which of the following do you associate with the Lululemon brand?Check all that apply o Sports o Fitness o Yoga o Running 40
  41. 41. o Spinning o Men o Women o Active o Gym o Workout o Innovative o Quality o Trend o Athletic o Expensive o Apparel o Performance o Power o FashionableQuestion 9 Results: Most associated with Lulu brand n=39 Innovative Sports Performance 1% Men 2% Gym 2% 1% Power 0% Spinning 3% Yoga Women 3% 11% 11% Apparel 5% Athletic 5% Workout 5% Running Expensive 10% 5% Quality 6% Fashionable Active 6% Fitness Trend 10% 7% 8%Among respondents that at least know the brand, the top associations with the Lululemonbrand  are  “yoga”  and  “women”  and  “expensive”  and  “fashionable”.    The  words  least  associated  with  the  Lululemon  brand  are  “power”,  “men”,  “innovative”,  “performance”  and“sports”.    Even  “spinning”,  a  fitness  activity  that  Lululemon  focuses  on,  ranked  among  the  lowest 5% of brand associations. The below word map shows these results in a differentway 41
  42. 42. .Question 10: Which is your preferred brand? o Lululemon o Nike o Under Armour o Lucy o AthletaQuestion 10 Results: Brands preferred by respondents n=39 Lucy Athleta 5% 7% Under Armour Lululemon 12% 44% Nike 32%Survey respondents who at least know the Lululemon brand overwhelmingly preferLululemon followed by Nike and Under Armour.Question 11: How loyal are you to your preferred brand? o 1 Not at all loyal (I buy whatever I like) o 2 o 3 o 4 Somewhat loyal (I sometimes buy other brands) o 5 o 6 o 7  Very  loyal  (I  only  buy  this  brand’s  products) 42
  43. 43. Question 11 Results:n=43 ranking from 1 (not at all loyal) to 7 (very loyal) 1 2 3 4 5 6 7 Responses 27.9% 4.7% 18.6% 23.3% 11.6% 7.0% 7.0%More than half of survey respondents are not loyal to moderately loyal to preferred brands.Even respondents who know everything about Lululemon were not more loyal to thebrand.Question 12: What do you purchase most from Lululemon? o Nothing o Yoga pants o Crops o Outerwear o Tops o Accessories (eg. Water bottles, towels, etc.) o Equipment (eg. Yoga mat, etc.) o EverythingQuestion 12 Results: What respondents purchase from Lulu n=43 Accessories Everything 0% 10% Outerwear 5% Crops 7% Nothing Equipment 0% 39% Tops 10% Yoga Pants 29%Yoga pants are the most popular item purchased by respondents who purchase fromLululemon followed by tops. About 10% of respondents also seem to shop exclusively fromLulu and purchase everything. They are also more loyal to the brand. No respondentspurchase accessories or equipment from Lululemon.Question 13: Where do you wear your Lululemon products? Check all that apply o Nowhere,  I  don’t  own  any  Lululemon  products o Only when taking a yoga/pilates class o At the gym 43
  44. 44. o Around the house o On a casual day o EverywhereQuestion 13 Results: Where do respondents wear Lulu products n=43 Everywhere 15% I dont On a casual own day Lulu 15% 28% Gym Around the 19% Yoga/Pilates house class 8% 15%Most respondents wear Lulu products at the gym but respondents also wear Lulu productsfor yoga/pilates class, on a casual day or everywhere.Question 14: How many times in a day do you see a Lululemon reusable bag beingused for something other than shopping at Lululemon? o I  don’t  know  what  the  bag  looks  like o Less than 1 time per day o 1-3 times per day o 3-6 times per day o 6-9 times per day o 9-12 times per day o More than 12 times per dayQuestion 14 Results: 44
  45. 45. How often respondents see Lulu shopping 9 to 12 each day bags >12 0% 0% dont know 6 to 9 7% 3 to 6 what the bag looks like 7% 23% 1 to 3 26% <1 37%Majority  of  respondents  don’t  see  the  Lululemon  shopping  bag  featuring  the  Lulu  Manifesto  on it.Survey 2:Note: This survey was designed to obtain more in-depth associations and impression of theLululemon brand and product. It was conducted using an online survey tool,surveygizmo.com and was sent to our personal network of friends. 67 participantscompleted this survey.Question 1: What is your age group? o 10-18 o 19-25 o 26-35 o 36-45 o 46-55 o 55+Question 1 Results: Age of survey respondents n=66 80.0% 60.0% 40.0% 20.0% 0.0% 19 - 25 26 - 35 36 - 45 46 - 55 55+Majority of survey respondents were between the age of 26 to 35. The survey included awide age range but it is skewed towards the 26 to 35 year old. 45
  46. 46. Question 2: What is your gender? o Male o FemaleQuestion 2 Results: Gender of survey respondents n=67 Male 24% Female 76%Just over three quarter of survey respondents were female.Question 3: Are you currently employed full-time? o Yes o NoQuestion 3 Results: Are respondents employed full time n=67 No 34% Yes 66%Majority of survey respondents are employed full-time.Question 4: What is your current or most recent (if unemployed) household income? o Less than $35,000 o $35,000 - $55,000 o $55,000 - $75,000 o $75,000 - $100,000 o $100,00+ 46
  47. 47. Question 4 Results: Household income level n=67 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% <$35,000 $35,000 - $55,000 - $75,000 - $100,000 + $55,000 $75,000 $100,000Question 5: What is your favorite way to stay fit?Question 5 Results:Running, yoga and the gym were equally the top response followed by walking and hiking.Lululemon definitely addresses the running and yoga market segments.Question 6: Where are you most likely to wear athletic apparel? o At the gym/studio o Running errands o Around the house o To work/school o All of the aboveQuestion 6 Results: 47
  48. 48. Where respondents wear athletic apparel n=67 Around Running the house errands All of the 9% 3% above 22% At the gym/studio 66%Majority of respondents wear athletic apparel at the gym or studio but almost a quarter ofrespondents wear athletic apparel everywhere.Question 7: List 5 brands that come to mind when you think of athletic apparel?Question 7 Results: 160.0% 140.0% Recall of Top 5 Athletic Apparel 120.0% Companies n=67 100.0% 5 80.0% 4 60.0% 3 40.0% 2 20.0% 1 0.0%The top response was Nike with 39% of respondents recalling the brand first and about88% recalling it in their top five. Lululemon was second with 31%. No other competitorcame  close.    What’s  interesting however is how respondents recalled the brand. Someseparated  “Lulu”  and  “Lemon”,  capitalized  both  “L”  and  yet  others  recalled  it  as  “Lulemon”.    No  responses  included  the  brand’s  full  name,  Lululemon  Athletica.    It  also  appears  that  there may be  some  confusion  between  “Athletica”  and  Gap’s  “Athleta”.For men, Lululemon was not top of mind and was only mentioned as the third or fourthbrand that came to mind. Less than half, only 44%, of men identified Lululemon while 75%of women recalled Lululemon overall. 43% of women identified Lululemon as the firstbrand that came to mind. 48
  49. 49. Question 8: Please identify the logosQuestion 8 Results: 1. Nike – 99% identification 2. Athleta – only 30% identification. About 5% confused the name as Athletica and others were unsure as evident by question marks. 3. Adidas – 73% identification though misspelling was common. 4. Under Armor – 55% identification though misspelling was common as was brand name combined into one word. 5. Lululemon – 72% identification though misspelling was common. Men had 75% identification while women had 80% identification of the brand. 6. Adidas – 79% (slightly more) identification than the first logo. Commonly misspelled. 7. Reebok – 63% identification and misspelled.Question 9: Are you able to identify which brands make the products depictedbelow? Match the numbers to the appropriate brands. o Adidas o Nike o Lululemon o Under Armour o Athleta o ReebokQuestion: Answer Key (for reference, not included insurvey): 49
  50. 50. Question 9 Results: Product to brand identification n=67 120.0% 100.0% 80.0% 60.0% 40.0% 20.0% 0.0% Adidas Under Reebok Lululemon Nike Athleta ArmourLululemon products were widely recognized by 70% of respondents. It was most oftenconfused with Athleta. Surprisingly Nike and Reebok had lower recognition thatLululemon and Athleta which tied.Question 10: What brands do you associate with the images below? Match theappropriate number of the brands o Nike o Lucy o Athleta o Lululemon o Under ArmourQuestion: Answer Key (for reference only):Question 10 Results: 50
  51. 51. Image to brand identification 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% Athleta Under Nike Lucy Lululemon ArmourUnder Armour had the highest image to brand recognition while Lululemon and Athletatied with the lowest recognition. The Athleta image was mistaken to be one for Lululemonby 49% of respondents. But it was actually the Nike image that majority of respondents,30%, associated with Lululemon. Most survey respondents associated this actual Lululemon image with Athleta. Most survey respondents associated this actual Athleta image with Lucy. About 27% associated this image with Lululemon. Most survey respondents associated this actual Nike image with Lululemon. 51
  52. 52. Question 11: What are the first five things that come to mind when you see the imagebelow?Question 11 Results:24% of respondents identified the logo as one of the first things that came to mind. Otherbrand  image  associations  were  “yoga”,  “expensive”,  “pants”,  “hair”,  “quality”,  “trendy”,  “red”  and  “women”  or  “female”.    Question 12: Which image do you associate with the Lululemon brand?Question: Answer Key (for reference, not included insurvey):Question 12 Results:54% of survey respondents did not associate images of men with Lululemon even thoughtwo out of four pictures were from Lululemon. 56% of men did not associate images ofmen with Lululemon and only 31% of men correctly associated one of the images withLululemon. Interestingly, 84% of those who responded got one of the images correct, of a 52
  53. 53. man  running  but  the  second  picture,  of  the  Olympic  men’s  volleyball  team  that  Lululemon  sponsored over the summer had only one respondent associate the brand. It seems thatthere may be some awareness of the sports Lululemon caters too since the running andspin images had the highest associations by respondents.Question 13: Please rank the brands below for luxury fashion appeal and athleticperformance. o Nike o Adidas o Lucy o Lululemon o Athleta o Under ArmourQuestion 13 Results:Nike had the highest average rating for athletic performance followed by Under Amour andAdidas. The ratings between these competitors were fairly close, with all rating between5.75 and 5.08. Lululemon had the highest average luxury fashion appeal rating followed byAthleta and Nike. The gap between these competitors was bigger than for athleticperformance.    Lululemon’s  products  are  positioned  as  luxurious  and  fashionable.Question 14: Which of the following is most important for you as a consumer whenpurchasing athletic apparel? o Recommendation by a friend/peer 53
  54. 54. o Advertisement, promotion or sale o Celebrity endorsement o Quality of materials and designQuestion 14 Result: Most important thing about purchasing athletic apparel 100.0% 80.0% 60.0% 4 40.0% 20.0% 3 0.0% 2 1Quality of materials and design ranked as the most important aspect of purchasing athleticapparel followed by a recommendation from a friend or peer. Advertisements andpromotional sales was ranked third and finally celebrity endorsement was last.Question 15: Which statement do you identify with most? o I want to run faster, spin harder, stretch deeper o When I do work out, I want to look good doing it o Work out? I wear my yoga pants to brunch o I want to feel like I am part of a communityQuestion 15 Result: What respondents identified with most n=67 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% brunch look good community run, spin, stretchOver  half  of  survey  respondents  identified  with  “I  want  to  run  faster,  spin  harder,  stretch  deeper”  while  “I  want  to  feel  like  I  am  part  of  a  community”  had  the  least  response.     54
  55. 55. Community is one of the cornerstones of the Lulu brand, it appears to not resonate withsurvey respondents.Question 16: Please rank these shopping experiences in order of preference. o Online o Off-price/discount retailer o Department stores o Brand retail store o Local specialty retailersQuestion 16 Results: Shopping preferences n=67 120.0% 100.0% 80.0% 60.0% 5 40.0% 4 20.0% 0.0% 3 2 1About 28% preferred to shop at brand retail stores followed by online. Department storesranked last for shopping preferences of survey respondents.Question 17: Are you most likely to purchase Lululemon products for yourself or forothers? Why do you buy it?Question 17 Results: Who do you purchase Lululemon for? 100.0% 50.0% 0.0% myself others bothAbout 70% of respondents said they purchase Lululemon. Of that, about 60% purchase forthemselves and 30% purchase it for others as gifts. Another 11% purchase for both 55
  56. 56. themselves and as gifts. Some of the main reasons people purchase Lululemon clothes isbecause  it  is  “comfortable”,  “high  quality”,  has  a  “good  fit”  and  were  also  given  as  “gifts”.    Appendix 12. BCG Growth Share Matrix 56
  57. 57. Appendix  13:  Ansoff’s  Model 57
  58. 58. Appendix 14. Recommendation
  59. 59. Appendix 15. Implemented Recommendation 59

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