Lululemon marketing plan   revised
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  • http://www.slideshare.net/carolinathomas/lululemon-mba-marketing-plan
  • Dennis Chip Wilson founded in 1998 in BC, was passionate about fitness, health and wellness. 174 stores in US and Canada. Due to being the first in market to provide such luxury yoga wear and basing it’s core business on yoga, having a manifesto centered around well being and self, it created a craze and became a status symbol the the affluent Starbucks, min dog touting women of well to do neighborhoods as well as yoga devotees who now have a soap box to stand on and pronounce to the world how great a yoga lifstyle is. 30% dive in stock over the last year. Chip has made many off color comments from stating that many women’s bodies aren’t for lulullemon’s clothes to supporting child labor in the countries that the products are produced. This has all cause horrible financial and brand image impact, turning what should was a healthy focused, namaste brand that is all about community into a self absorbed, pretentious brand that excludes women who don’t model “hot dog legs” and “bikini bridges”. *Huffington Post, “Lululuemon Stock Tumbles as Company Cuts outlook on disappointing sales”, January, 13th, 2014
  • Direct to Consumer In fiscal 2009 we launched our e-commerce website which makes up our direct to consumer channel. Direct to consumer is an increasingly substantial part of our business, representing approximately 14% of our net revenue in fiscal 2012, compared to 11% of our net revenue in fiscal 2011. We believe that a direct to consumer channel is convenient for our core customer and enhances the image of our brand. Our direct to consumer channel makes our product accessible to more markets than our corporate-owned store channel alone. We use this channel to build brand awareness, especially in new markets. Throughout fiscal 2012, we were able to grow our e-commerce business which has further increased our brand awareness and has made our product available in new markets, including those outside of North America. This sales channel offers a higher operating margin than our other segments and accounted for 16.1% of total revenue in the fourth quarter of fiscal 2012 compared to 13.5% of total revenue in the same period of the prior year. Continuing increases in traffic and conversion rates on our e-commerce website lead us to believe that there is potential for our direct to consumer segment to become an increasingly substantial part of our business and we plan to continue to commit a portion of our resources to further developing this channel. In fiscal 2012 we launched country and region specific websites in Australia, Europe and Asia to provide our online guests with local content, assortment and pricing. we plan on investing in new and legacy information technology systems to develop new capabilities in our vertical retail strategy. We have recently added strong leadership in Quality Control, our Liason Office and our commercialization and development teams, and expect these people and other investments to solidify our quality consistency and our delivery capabilities. We believe our strong cash flow generation, solid balance sheet and healthy liquidity provide us with the financial flexibility to continue executing the initiatives which we believe will lead to quality growth.
  • Lululemon/Lucy/Athleta are more women centric brand and playing in a narrow market. Nike and Adidas have more diverse product range and cater to a wider market.
  • Plan is to widen the product line while continue to remain in a niche & premium category player
  • http://www.motherearthnews.com/nature-and-environment/patagonia-clothing-zmaz09djzraw.aspx?PageId=4Expand our Product Categories. We continue to expand our product offerings in complementary existing and new categories such as bags, underwear and outerwear; Increase the Range of Athletic Activities our Products Target. Our guests purchase our products mainly for activities such as yoga, running and general fitness. We will continue to expand our product categories and educate our guests on the versatility of our products; Grow our Men’s Business. We believe the premium quality and technical rigor of our products will continue to appeal to men and that there is an opportunity to expand our men’s business as a proportion of our total sales; and Develop our Youth Brand. We launched our youth focused brand, ivivvaathletica, in fiscal 2009. We believe the premium quality and technical rigor of our dance-inspired products designed for female youth serve an open market and provide us with an opportunity for future growth. 2012 Annual Report, page 7Info on New CEO: http://www.businessinsider.com/lululemon-ceo-laurent-potdevins-career-2013-12
  • Our primary target customer is a sophisticated and educated woman who understands the importance of an active, healthy lifestyle. She is increasingly tasked with the dual responsibilities of career and family and is constantly challenged to balance her work, life and health. We believe she pursues exercise to achieve physical fitness and inner peace. As women have continued to embrace a variety of fitness and athletic activities, including yoga, we believe other athletic apparel companies are not effectively addressing their unique style, fit and performance needs. We believe we have been able to help address this void in the marketplace by incorporating style along with comfort and functionality into our products through our vertical retail strategy. Although we were founded to address the unique needs of women, we are also successfully designing products for men and athletic female youth who also appreciate the technical rigor and premium quality of our products. We also believe longer-term growth in athletic participation will be reinforced as the aging Baby Boomer generation focuses more on longevity. In addition, we believe consumer purchase decisions are driven by both an actual need for functional products and a desire to create a particular lifestyle perception. As such, we believe the credibility and authenticity of our brand expands our potential market beyond just athletes to those who desire to lead an active, healthy, and balanced life. 2012 Annual Report, page 5By Skip Brand Wednesday, Jan. 29, 2014MediaPost:Engaging Audiences With Content Via Owned, Earned And Paid Media Marketing is all about story telling, right? And luxury brands often have wonderful stories to tell, and beautiful content to convey those narratives. Historically, their stories have been told across the glossy pages of magazines and in enigmatic perfume ads shown during later prime-time television. Affluent audiences respond to content. As this year’s Ipsos Affluent Survey revealed, the affluent and wealthy continue to consume content at growing levels both online and off. That’s why brands like Porsche, Burberry and Kate Spade invest so much in content creation. It’s why Michael Kors was the first brand to advertise on Instagram. Content presents the opportunity for luxury brands to create experiences in digital media. Social media has provided an excellent platform for brands to syndicate their messages to fans of their brands and to grow their audiences. Nordstrom loves Pinterest; Longchamp and Calvin Klein, among others, have effectively leveraged YouTube. So how are the other channels playing out? L’Oreal’s content site, Makeup.com, seems to be thriving; its content is frequently featured on BuzzFeed. The site features fashion and makeup tips that can easily be shared on Facebook and Pinterest. While the content is original and pithy, it does feature products from L’Oreal brands like Lancome and Urban Decay – but in ways that are helpful rather than obnoxious. For example, a how-to video on a current eye makeup trend is captioned with phrases like “I like Maybelline Great Lash mascara,” as a makeup artist demonstrates her mascara technique. Who else is owning the “owned” channel? Hermes recently (and in time for the holidays) created a narrative video piece for its site that aimed to recreate the feeling of anticipation as we wait for a package to arrive – in a very artsy, French and typically Hermes kind of way. Throughout the story, Hermes clothes and accessories are showcased, of course. The video was promoted on the brand’s Facebook page. Hermes, whose site is full of engaging, unique and shareable content, is currently promoting another video and its “Silk Knots” app on its homepage.On the earned side, Gwyneth Paltrow’s Goop newsletter — once an intimate newsletter for like-minded (and high-earning) friends and fans — has grown into an empire. The newsletter highlights boutiques, restaurants and hotels in select cities, as well as designers and contemporary thought leaders. Paltrow, who has nearly two million Twitter followers, now curates “collections” on Goop, featuring new and established luxury brands including Rag and Bone and Helmut Lang. With Paltrow’s following of wealthy and aspiring girlfriends, all of whom trust the star’s impeccable taste, Goop seems the perfect vehicle for luxury brands to engage women. (Note that popular collection items frequently sell out.)And what about paid media? While traditional “closed” native and paid editorial may be the first thought for some brands, the playing field is actually much wider. Will Price of Flite recently published a blog post touting the effectiveness of programmatic to extend the reach of content-marketing efforts. But does it work? Of course, it does. As both men and women consume more of their favorite content on tablets, smartphones and desktops, their favorite brands have vehicles to follow their audiences. Bigger and better rich media ad units (like the IAB Rising Stars) allow brands to plug in their unique content, whether it’s a photo, video or other format. Some multi-module ad units allow for, say, a logo, a video and a store finder or even an e-commerce app.But the ability to add in original content is only half the story; the advantage of paid media is that brands don’t have to wait for customers to find their content. They can place their content in the path of their target audience. The opportunity is even more powerful if the ad units are standard (like the IAB Rising Stars) and can be placed programmatically. Then brands have the ability to target more effectively, ensuring their content touches the right audiences at the right moments – and achieve scale.MediaPost:Young Wealthy Consumers Crave Experiences, Not Productsby Frank Riolo, Jan 22, 2014, 9:50 AM As if it wasn’t already a challenge to capture the attention of Millennial consumers, many young affluent consumers have been handed almost everything their hearts desire before even officially becoming adults. When trying to appeal to a segment of the population that has been lavished with expensive material items since birth, the strategy for brand marketers can’t simply be to push why their product is the greatest – experience is key. Thirty-four percent of today’s Millennials have been wealthy throughout their whole lifetime, according to American Express. So when one is no longer fazed by owning luxury cars, high-end clothing and designer jewelry by the age of 18, what is left to capture their attention? Once again, the answer is experience. There’s a reason why microbreweries are so popular, electric dance shows are all the rage, and the term “foodie” has become synonymous with young, wealthy consumers. They all offer an experience that focuses on something new and different, and give them something to reflect on when speaking with their peers. However, what we should understand is that this concept can go beyond actually attending events. “Having an experience” should be factored into almost all marketing strategies, especially when the target demographic is wealthy and young.Apple understands this on several levels, particularly when it comes to its retail locations. While many pundits have predicted the demise of brick-and-mortar for years now, Apple has taken its stores and made them a desired destination. Walking into an Apple store does not simply consist of buying a product and leaving. Every detail is carefully thought through, from the sleek, clean appearance of the décor, to the deep knowledge of the staff (oh, wait, I’m sorry – “geniuses”). For Apple, the objective doesn’t only consist of manufacturing a superior product; the result of an Apple store visit often leaves consumers wanting more. Of course, the ability to share experiences has a large effect on brand loyalty. This is true regarding affluent and non-affluent Millennial consumers. Any consumer interaction, from customer service to store cleanliness, can be shared through social networks, mobile devices, and a multitude of other media. However, this isn’t the only difference between wealthy Millennials and their predecessors. Whereas affluent Baby Boomers and Generation Xers often chose to spend their wealth on materialistic entities, such as cars or large houses, this generation of well-off consumers often chooses to forego those luxuries – even opting to buy necessities in bulk at retail locations such as Sam’s Club and Costco – in favor of exotic vacations or once-in-a-lifetime concerts or sporting events. Luxury marketers must find a way to translate this trend into moving their product if they plan on garnering wealthy Millennial attention.MediaPost:Affluents' Lifestyles Are Technology-enabled And Media-infusedby Steve Kraus, Dec 18, 2013, 11:30 AM Affluent lifestyles today are technology-enabled and media-infused. In recent years, their ownership of mobile devices went from niche to mainstream with unprecedented speed, and their overall use of digital media continues to rise. At the same time, Affluent use of traditional media such as television and print are down only modestly, resulting in an overall increase in their engagement with media brands more broadly. Although Affluents describe their lives as busy and multitasking, there are no signs of satiation in their hunger for content and connectivity. The 10 takeaways below highlight the integral role of digital media in Affluent lives and lifestyles. Internet (and Google) use essentially universal: 99%+ use the Internet, and 93% used Google search in the past 30 days.Time online is rising:Affluents now average 41.6 hours online weekly – up 27% from 2011 – with strong growth for sites devoted to social media, streaming entertainment, shopping, travel, and branded/curated content sites.Mobile devices are proliferating: 41% personally own tablets, up from just 9% in 2011; 63% have a smartphone, up from 45% in 2011.Technology has become indispensable: 74% describe their lives as intertwined with technology, and many consider their devices extremely or very difficult to live without (70% of laptop owners, 66% of smartphone owners, and 33% of tablet owners).Affluent media use takes no holidays: In the past year, three-fourths of Affluents took a smartphone on vacation, and nearly half took a tablet or laptop. The list of digital activities done while on past-year vacations is extensive, with a majority checking personal email (75%), checking the weather (72%), getting maps/directions (66%), and keeping up with the news (57%).TV has gone high-tech: While Affluent viewership of traditional TV is declining 3-4% per year, Affluent TVs are increasingly connected: to video game consoles (60%), to the Internet (40%), and to streaming media devices (18%). In addition, 56% watched video on an “alternative platform” (computer, smartphone or tablet) in the past seven days.Multi-screen multi-taskers: A majority of Affluents describe themselves as using their laptops, tablets and smartphones constantly or regularly while watching television, and 51% have engaged with social media about a TV program while watching that program.Technology continues reshaping retail. Two-thirds have “show-roomed” (searching merchandise prices/availability digitally while in a retail store), and one-in-five do so regularly. In addition, Affluents expect to make a majority of their holiday purchases digitally. “Tech-enthusiasts” are a large segment: In most categories, about one-fifth of Affluent consumers are enthusiasts and/or high-end shoppers. For the technology category, this figure is twice as high – for example, 42% agree, “I try to keep up with technological developments.”Technology is the new aspirational luxury: Mass Affluent purchasing of traditional luxury brands drove the luxury boom of the mid-2000s. Today, technology, and particularly the constantly-evolving mobile devices, meet the needs of aspirational luxury shopping experiences. Across a dozen categories examined, technology has by far the largest number of Affluents who “typically buy high-end or luxury” offerings.
  • Our primary target customer is a sophisticated and educated woman who understands the importance of an active, healthy lifestyle. She is increasingly tasked with the dual responsibilities of career and family and is constantly challenged to balance her work, life and health. We believe she pursues exercise to achieve physical fitness and inner peace. As women have continued to embrace a variety of fitness and athletic activities, including yoga, we believe other athletic apparel companies are not effectively addressing their unique style, fit and performance needs. We believe we have been able to help address this void in the marketplace by incorporating style along with comfort and functionality into our products through our vertical retail strategy. Although we were founded to address the unique needs of women, we are also successfully designing products for men and athletic female youth who also appreciate the technical rigor and premium quality of our products. We also believe longer-term growth in athletic participation will be reinforced as the aging Baby Boomer generation focuses more on longevity. In addition, we believe consumer purchase decisions are driven by both an actual need for functional products and a desire to create a particular lifestyle perception. As such, we believe the credibility and authenticity of our brand expands our potential market beyond just athletes to those who desire to lead an active, healthy, and balanced life. 2012 Annual Report, page 5Expand our Product Categories. We continue to expand our product offerings in complementary existing and new categories such as bags, underwear and outerwear; Increase the Range of Athletic Activities our Products Target. Our guests purchase our products mainly for activities such as yoga, running and general fitness. We will continue to expand our product categories and educate our guests on the versatility of our products; Grow our Men’s Business. We believe the premium quality and technical rigor of our products will continue to appeal to men and that there is an opportunity to expand our men’s business as a proportion of our total sales; and Develop our Youth Brand. We launched our youth focused brand, ivivvaathletica, in fiscal 2009. We believe the premium quality and technical rigor of our dance-inspired products designed for female youth serve an open market and provide us with an opportunity for future growth.
  • SECOND CHANCE PANTS
  • Mintel has shown that women are more likely to give to charity
  • WE WILL DISCUSS WHEN WE ARE ALL TOGETHER 2013 Selling Expenses:Net Revenue:$1,370,358Selling, general and administrative expenses   $386,387Total Income:$270,097Leases:   Payments Due by Fiscal Year            Total  2013      2014      2015      2016      2017      Thereafter        (In thousands)   Operating Leases (minimum rent)   $ 302,893       $ 57,691       $ 56,920       $ 53,195       $ 47,712       $ 37,192       $ 50,183   

Lululemon marketing plan   revised Lululemon marketing plan revised Presentation Transcript

  • Marketing Plan February 8, 2014 Caroline, Edina, Katie, Radhika, Prakarsh 1
  • Agenda • Situation Overview – At a glance – Our Situation – Competitive Assessment – Our focus • Marketing Strategies – Target Markets & Positioning – Product Strategies – Pricing Strategies – Promotional Strategies – Supply Chain Strategies • Marketing Implementation Steps – What – How – When – Who 2
  • At a Glance • Born out of a desire to provide high quality and comfortable clothing to yogi's with a manifesto (core values) encouraging health, wellness, strength and community • Heavily supports and empowers local stores and employees to drive business • Only yoga-wear brand that has built its brand image and profitable success without sales/discounts & driving scarcity • Within the last year, foreseeable profit and brand image nose dive due to bad press and poor product execution • Leadership changes: Out with the old CEO Christine Day, in with the New, Laurent Potdevin "Frankly some women's bodies just don't actually work for [the pants]." 3
  • External Environment Economic Environment • Economic recession • Athletic items can be described as discretionary for some Technological Environment • Emerging social media sites allow for more places for companies to make a personal relationship with consumers • New technological advances create more ability to have high performance apparel Sociocultural • In the past decade, health and peace have come to the forefront of consumer’s minds • Dieting businesses have boomed • Working out and being healthy is not a chore, but a hobby that can be done in an upscale facility using the best equipment on the market • Sustainability is key to some
  • Our Situation “Elevate the world from mediocrity to greatness” S • Strong company vision & manifesto W • Corporate structure: Local focus vs Headquarters • Premium retail locations • Vertical retail strategy • Trend setters & cult following • Training/Education of associates/educators • Pulse on consumer needs & feedback O • Line extensions: Maternity, Plus-size, other affluent sports(Tennis, Golf), Youth 6+ • Brand recognition among new targets and for new lines • Partnership & location expansion for growth • Expand direct to consumer sales (eCommerce) T • Soft same-store sales • Tarnished brand image due to CEO comments, poor quality control • Mix of high prices & scarcity game in light of economic status and current perception • Limited offerings: excludes maternity, plus-size and Youth (male) 6+ • App does not allow purchases • Current state of the economy • Competitive offering of quality clothes for less • Continued bad press if right leadership and PR not remedied • Non-patented technology • Competitive retail location copy cats (Athleta) 5
  • Competitive Assessment Product Range Broad Narrow Affordable Pricing Premium 6
  • Competitive Assessment Product Range Broad Narrow Affordable Pricing Premium 7
  • Our Focus is to RE-Focus 1. Implement strong PR plan to remedy brand image - Media blitz with new CEO, Laurent Potdevin, who comes from TOM’s to soften perception and communicate to consumers and investors his passion and vision for the company and for its costumer base 2. Validate Price & Quality to consumers - Competitive activity i.e. Athleta & internal quality issues have had major impact on “worth” of products - Provide them an exclusive experience in-store and online that they can’t get with any other lifestyle brand, proving we are the ultimate affluent and aspirational brand - Exclusive innovation in products and materials 3. Create line Extensions to expand range and attract new consumers - Attract more of affluent market (Women/ Men & sports) and Youth 6+ (point of market entry) 4. Increase sales - Increase direct to consumer sales of products in cost effective way, provide exclusive online products and customization to attract more traffic - Increase same store sales with special local offerings that will attract in-store traffic and conversion 8
  • So Where to Begin? • Primary research • Implement focus groups to find out brand perception from the consumers • Why are they angry? How do THEY want us to fix it? • Implement focus groups to hear from “self-described” plus sized women 9
  • Target Markets Affluent W18+ Life statements: -HH income of $100K+ -Cares about quality & will pay for it -Uses brands to express who she is -Wants to always look chic, even running errands -Social circle that is similar to her -Although she may not be a size 0, she wants to look good doing everything to nothing -She wants to maintain her chic appearance even through pregnancy Media Habits: -Uses Social Media to express herself, her fabulous life and engage with the brands she loves -Frequently browses brand sites for latest and greatest products i.e. LV.com, Saks.com -Watches ‘high class’ reality tv i.e RHOBH -Heavy Mobile user, specifically iPhone -Uses tablet over laptop Affluent M18+ Life statements: -HH income of $100K+ -Enjoys the finer things in life, including clothing -Certain brands represent his status -Cares about his appearance and health -Strives to always look put together (metrosexual) -His guy circle is competitive and affluent Media Habits: -Social Media shows his fast paced, fun life...ENVY ME -Frequently browses brand sites for latest and greatest products i.e. LV.com, Saks.com -Heavy Mobile user, specifically iPhone -Uses tablet more than laptop -Enjoys masculine glorifying shows like Mad Men Interests: -Engages in affluent sports/exercise: Tennis, Golf, Indoor Cycling, Yoga or Pilates -Belongs to a tier one gym like Equinox -Takes personal classes Youth 6+ Life statements: -Parents of a HH income of $100K+ -Parents heavily involved in what kids do/look like to maintain complete family image -Live in affluent neighborhoods, go to affluent schools -Exposed to finer things in life(vacations, restaurants, extra curricular activities) -Knows what Quinoa & Sushi are and enjoy them! Interests: -Enrolled in dance/ballet classes, soccer, tennis -Competitive competitions on weekends Media Habits: -Has a smartphone, mirroring parents, like an iPhone -Heavy tablet usage 10
  • Positioning For These Markets Affluent W18+ Affluent M18+ Highlight exclusivity of products on-line or seasonally in-store Develop content that shows why products are superior to any (take a page out of LV’s book with content development) Associate with a good cause so they feel good while they are spending (Tom’s CEO knows much about this) Bring to the forefront the Plus-size line additionsnot excluding size yet still maintaining aspirational Brand image Highlight what clothes are good for maternity due to high tech materials –otherwise no one will know Youth 6+ Durability of clothes is important with growing active children Parents want their children to mirror their image/style-what perfect way then with Lululemon High performance & technology and also versatility Use Social Media to communicate and influence perception Positioning the brand line extensions, the proof performance Cool, exclusive brand, great colors, variety and a social currency Increase brand recognition between 10-13 market is important as image and what friends and social circles Positive image i.e. Uggs and Facebook Use Social Media to communicate and influence perception 11
  • Product Strategies • Current product offerings Women’s & Men’s active-wear designed for yoga and running – – Youth girls sub-brand Ivivva Line Extension Opportunities Women Men Youth • Plus-size (begin immediate R&D) • Maternity • Expand sports • Product extension ‘lu-m’ • Expand sports • Grow Ivivva • Develop boys product extension
  • Product Strategies
  • Marketing Strategies: Product eCommerce • Expand product offering • Customization New products: • Align new products with the display of current products to encourage grass roots marketing • Mannequins for new products • Reintroduce OQOQO—natural material • Lu-m different brand to differentiate men’s products • Total Quality Management
  • Pricing Strategies • Retain higher pricing model – Utilize alienation to the advantage of the brand – Market the brand as a means of reaching your aspirational self • Reinforce pricing model via innovation – New and improved fabric technologies provide customers with the best quality yet – Patented technology will make the brand’s competitive advantage exclusive
  • Pricing Strategies Maternity In line with women’s pricing strategy New Plus Size Women Expansion Expanded sportswear In line with women’s pricing strategy 5-10% premium on competitor pricing
  • Pricing Strategies New Lu-m In line with men’s pricing strategy Expansion Expansion of line 5-10% premium on competitor pricing Men
  • Pricing Strategies New Youth Expansion Young Lu-m 5-10% premium on competitor pricing Ivivva In line with current pricing model
  • Promotional Strategies • Promotional Objective: Retain current consumer base as well as bring in maternity, men and youth 19
  • Promotional Strategies Overview Awareness/Knowledge Liking/Preference Conviction/Purchase Sponsorships and Special Events Consumer Sales Promotion • • Public Relations • • • • • Push Strategy Crisis management campaign which focuses on institutional advertising Explain how lululemon will help support positive self image in girls Utilize owned, earned and paid media Reach out to “key influencers” to push the message • • Continue support and sponsorship of SeaWheeze Half Marathon Increase sponsorships of local events and have a wider array of classes Specialty products at events • Will not offer coupons/price reductions lululemon is still a premium brand and price reductions may detract from the consumer perceived quality Direct Marketing • • Direct mail E-mail marketing Personal Selling • • Continue building long-term customer relationships Reward the sales force Media/Advertising • • Push and Pull Strategies Multi-channel advertising including digital/mobile, and local print 20
  • Promotional Tactics Awareness/Knowledge • • • • All Targets Highlight new CEO and his background. Cut down current “The CEO” video for pre-roll. Focus on charities that lululemon helps support Girls Inc. Second Chance Pants Conviction/Purchase Sponsorships and Special Events Public Relations Liking/Preference Consumer Sales Promotion Maternity Target • • • • Media/Advertising Strategies • • • • • Affluent MF 18+ Buy local print as well as national yoga/golf magazines All Targets Run digital display ads on content relevant sites. Incorporate sponsored blogs and blogging content Create Google hangouts to do yoga along with ambassadors Direct Marketing: Door hangers in communities to promote new stores E-blasts • • Mommy and Me yoga classes Pre-natal yoga classes POME Ivivva private parties for birthdays, etc. Sponsor after school “get active” campaigns with local schools All Targets Provide branded equipment in high end apartment buildings in cities Specialty products at events: water bottles, hair ties, etc. • • • • • • • Will not offer coupons/price reductions Free Shipping for all purchases and returns (not just bras) Loyalty Program: Club lululemon/Club lu-m Customization available online only Allow mobile app users to purchase via the app Interactive digital screens in store Partnership with American Express with special offers Personal Selling • Affluent M18+ Sponsorship of golf tournaments • Reward sales team on a store basis, not personal 21
  • Promotional Tactics Print Door Hangers Interactive Digital Screens Loyalty Card AmEx Partnership Strong PR initiative
  • Supply Chain Strategies • Vertical retail distribution strategy differentiates lululemon from its competitors and allows it to more effectively control its brand image • We propose following a three pronged approach to further strengthen its go to market strategy 1. 2. 3. Increase the store footprint in North America Grow direct to consumer online sales channel Expand strategic tie ups with fitness centers, yoga studios and high end gyms
  • Store Expansion • Open 30 new stores and 5 showrooms in USA within next three years • The distribution strategy is based more along the lines of exclusivity as opposed to intensive distribution – – • Need to identify potential location for new company owned stores which fit the brand’s aspirational image Use JIT and RFID techniques for better inventory control Change the store layout to display men’s product range in a separate section of the store with a virtual golf station to invite and engage affluent men – Front display windows
  • E-Commerce Business • Direct to consumer channel is convenient for our core customer and makes the products accessible to more markets than our corporate-owned store channel alone • Leverage social media and online marketing techniques to increase website traffic by 15 percent • Promote a BOPS (Buy Online Pickup in Store) model to avoid stock outage, better inventory planning and improve footfalls • List products on high end fashion e-tailer such as LYST to build a premium brand image and increase market penetration
  • Strategic Tie-In • While this channel contributes to only 2-3% of Lululemon’s revenue it is important from the perspective of building brand awareness among target audience • Identify high end fitness centers, yoga studios and gyms across US for sale of lululemon products • Leverage these partnerships by using their space also as a communication vehicle – • Digital screens in the lounge with lululemon branding Lululemon merchandise for annual membership to golf/racquet clubs
  • 5-year Implementation Year 1 Year 2 Year 3 Year 4 Year 5 Hire full-service agency to create PR campaign to handle negative press. Have research groups to determine most negative aspects of company Jan. 1-June 1 Install in-store interactive digital screens January 1- June 1 Identify prime locations to open 10 new stores January 1-June 1 Identify 2 new geotargets for showroom openings Continue innovating new products & designs March 1 – Dec 1 Begin R&D on new line extensions Begin patent process on any new technology July 1 – Dec. 1 Identify prospective locations to open 5 new showrooms Continue paid media support of local events, store openings, etc. Brainstorm new classes for stores June 1-December 1 Open 10 new retail stores Continuing expanding stores and showrooms Goal: •10 new stores & 3 showrooms/year Start paid advertising initiative to push more institutional messaging July 1- Sept. 1 Identify high-end athletic partners for wholesale opportunities Re-introduce OQOQO with paid media Continue paid media support to push ecommerce Open 2-3 youth boys stores in key markets to test consumer want/need March Dec. 1 Ramp up community sponsorships & involvement; introduce lululemon loyalty club Sept. 1- Dec. 1 Contact and contract with high-end athletic partners & fashion etailers Introduce new classes such as Mommy and Me as well as the ability to have Ivivva parties Dec. 1 – New Year Continue product line development to include customization Marketing Budget: $15 million Marketing Budget: $15 million Marketing Budget: $16 million Marketing Budget: $17.5 million Marketing Budget: $18.5 million 27
  • Performance Measurement Metrics • • • • • Store foot falls & revenue per square foot Quarterly website traffic & online sales Digital campaign click through rates App downloads and purchases Customer satisfaction surveys on their experience with the brand after certain periods of time and brand recall scores • Look at percentage of merchandise returned • Employee satisfaction surveys • OQL 28
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  • Works Cited Allison, Pam. "How Different Demographics Use Credit Cards." SmartBlogs. N.p., 11 Jan. 2013. 05 Feb. 2014. <http://smartblogs.com/finance/2013/01/11/how-different-demographics-use-credit-cards/>. “Girls Inc.” Girls Inc. |. N.p., n.d. Web. 06 Feb. 2014. Leahy, Colleen. "Meet Lululemon's New CEO." CNNMoney. N.p., 10 Dec. 2013. 11 Jan. 2014. <http://features.blogs.fortune.cnn.com/2013/12/10/meet-lululemon-ceo/>. “lululemon Athletica, Inc. - Annual Report." lululemon Athletica, Inc. - Annual Report. N.p., 21 Mar. 2013. Web. 06 Feb. 2014. “Our History" lululemon Athletica, Inc. N.p., n.d. Web. 04 Feb. 2014. Solomon. Marketing New Mymarketinglab With Pearson Etext Real People, Real Choices. N.p.: Pearson College Div, 2011. Print. 30