CMA Business Case Lululemon

CMA Integrated Branding

Business Case II

May 4, 2009

Team:
Kumarie Perera
Monique Tang
Kevin Smith
Lauren Turchet
Suresh Parmachand

1
Proprietary Company Information

Table of Contents

1.0 Executive Summary…….…………………………………………………………………………………………………..3
1.1 Objectives………………………………………………………………..………………………………………….4

1.2 Goals……………………………………………………………………………………………………………………4

2.0 Company Summary…………………………………………………………………………………………………….…. 4
2.1 Corporate Strategy…………………………………………………………….………………………………..4

2.2 Brand Strategy…………………………………………………………………………………………………….5

3.0 Market Analysis…….……………………………………………………………………………….………………..……10
3.1 PEST…….…………………………………………………………………………………….………………………10

3.2 SWOT…….…………………………………………………………………………………………….……………14

3.3 Competitive Landscape…….……………………………………………………………….……..….……15

3.4 Consumer Analysis…….………………………………………………………………………………………21

4.0 Growth Analysis…….………………………………………………………………………………………….…….……25
4.1 Strategic Imperatives…….………………………………………………………….………………….……27

5.0 Media Strategy…….………………………………………………………………………………………….……………46

6.0 Conclusion…….………………………………………………………………………………………………………..……47

Bibliography…………………………………………………………………………………………………………………..…...48

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1.0 Executive Summary

Our origins and heritage are based on the teachings of Yoga. The success of our company
has been predicated on this fact, and our proposal will look to eliminate any
inconsistencies that may exist with our current management style and strategy that limit
our ability to realize this noble truth.

This “back to basics” approach will be the underlying theme throughout the entire
proposal; it will help temper our resolve to achieve more. We hope to take our company
on a journey that will look back at the fundamental roots of Yoga, identifying partners,
teachers and friends along the way. We will then follow how the Yoga tradition was
spread throughout eastern Asia and evolved into other forms of meditation in motion.

Our single belief in that a company can only be truly great when it has a close relationship
to the communities it serves will become our continued focus. We will ensure there is
focused effort to give back to the communities in which we do business in, but not forget
about the larger communities that cannot afford to enjoy life’s simple pleasures. We will
identify emerging markets through a community based growth model that will provide a
more sensible approach to market expansion.

The “prana” or life breath of our company continues to be our guests and educators. We
will leverage this gift by improving our ability to share best practices. We will provide
sensible teachings to the rest of our family through the development of innovative and
collaborative tools.

As we begin this journey together as one company, we will uncover our roots and true
identity along the way. It will provide insights and experiences that will allow us to
effectively create organic growth and deliver back value to the guests that have made us
successful.

3

“The difference between a goal and a dream is writing it down.”

- Chip Wilson, founder Lululemon

1.1 Objectives
The objectives of this proposal are to assess the current situation of the Lululemon brand
and develop a plan on how to reposition the brand and our company for a new growth
phase to begin 2010/2011.

1.2 Goals
The overall goals of this proposal are to accomplish the following:

Complete a brand assessment
•

Recommendations on corporate and brand strategy
•

• Recommendations on brand essence and identity

Creation of Communications plan
•

2.0 Company Summary

2.1 Corporate Strategy
Vision

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Elevate the world from mediocrity to greatness

Mission

Creating components for people to live a longer, healthier, more fun life.

Objectives

Maintain a 30% average growth rate


One major acquisition by 2015 (Pinetree)


Joint venture development with GAP Adventures and Sivananda Centres by 2015


Values

Quality
 Our guests want to buy our product again.
Product
 We create components designed by athletes for athletes.
Integrity
 We do what we say we will do when we say we will do it. If we cannot keep
our promise, we immediately contact all parties and set new by-when
dates.
Balance
 There is no separation between health, family and work. You love every
minute of your life.
Entrepreneurship
 We treat and pay employees as though they run their own business.

Greatness
 We create the possibility of greatness in people because it makes us great.
Mediocrity undermines greatness
Fun
 When I die, I want to die like my grandmother who died peacefully in her
sleep. Not screaming like all the passengers in her car.

Promise

Lululemon is committed to providing the highest quality, design, technologically
advanced products and lifestyle tips to our guests in order to help enhance peoples’
lives; this is to obtain a more fun, healthier, longer and happier lifestyle.
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2.2 Brand Strategy
Brand Vision

Inspire and empower people to elevate the world to greatness by living life to the
fullest.

Brand Mission

To elevate the involvement of the Lululemon in the lives of our guests through
effective use of lifecycle management and customer touch point management.

Brand Objectives

Launch two product lines and expand one existing product line by 2011


Increase customer insight through launch of lifecycle management/customer

relationship management which will lead to a 20% increase in return visits

Increase unaided brand awareness by 40%


Brand Value

Lululemon empowers our “educators” through extensive training, so they can in
return, assist our on their path to happier, longer and better lifestyles.
Our innovative and quality products ensure the greatest user experience for our
guests, secures our future earnings through an undying commitment to the guests.

Brand Promise

Living our brand through our culture we can deliver the best athletic wear to our
guests, all while striving to be one of the “greenest” corporate organizations in the
world.

Personality

Greatness: We create the possibility of greatness in people because it makes us great.
Mediocrity undermines greatness.

Fun: When I die, I want to die like my grandmother who died peacefully in her sleep.
Not screaming like all the passengers in her car.
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Tone & Manner

Holistic, Fun, Ethical, Stylish, Active

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Brand Hierarchy

Lululemon

My Lulu
Petite Lulu Lulu Mom
(Online assessment)
(Product extension) (Product extension)
(Lulu-Sivananda experience)

Note: Sub-brands will be explained in the respective Strategic Imperative section.

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Brand Assessment

Lululemon continues to be one of the most recognized brands in unaided studies
within the athletic wear market. It is also the number one recognized brand in aided
studies within the athletic wear category. This is true for both male and female
respondents. The brand is held in high regard with the overall product quality being
the number one aspect being reported by all of Lululemon consumers. Even
respondents who did not wear Lululemon perceived the brand to be of high quality –
even if they felt it was at a high price point. The brand essence is fully embraced and
managed by educators at most of the retail store locations. Guests have reported
they felt that educators to be extremely well versed in product knowledge and
understands the lifestyle requirements of their community guests.

While the brand has a very strong appeal for females it has established a rather
respectable men’s offering and is recognized as a high quality brand by males.
However, males do not feel well represented in the brand or feel it correctly
represents them in its current state. Males would prefer to wear a more masculine
styled brand name rather than showcase Lululemon product. Despite current
economic environment we find that most locations visited to be enjoying strong
activity at the register, which allows us to staff accordingly. Our community approach
is effective and allows our educators to customise the Lululemon store to the
respective “micro-markets” and appeal to the guests. We need to manage this
process to capture best practices and enforce some brand guidelines to ensure
consistency and continued elevation of the brand.

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Distribution Plan

We will discontinue our expansion program effective immediately and buyout our
franchisees by end of 2010. This will allow us to effectively manage our brand and in-
store experince to ensure that our brand is not compromised.

International expansion will be a key determinant of our success, however, the identfication of
emerging markets will be facilitated through our GAP Adventures partnership. By offering our
Lulu-Sivananda experiences through GAP adventures both online and in-store it will allow us to
understand where concentrations of users are located, so it will tie into our real estate and
expansion departments. My Lulu will assist in identifying concentration opportunities throught the
guest profiles, interes and loyalty database which will serve as our customer contact database.
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3.0 Market Analysis

3.1 PEST

Political Economical

• • CPI, November 2009, year over year:
Childhood obesity
+0.8%
• Costs on healthcare
Unemployment, November 2009: 7.8%
• Tax incentives for extra-curricular
US/Can exchange rate, December 31
programs
2009: US$ 0.78
• Healthier lifestyles and thinking Bank of Canada overnight rate target,
i.e. Particpaction December 31 2009: 0.5%
• Leverage community programs TSX, December 31 2009: 9,400

Social Technical

• •
44% - Percentage of U.S. yoga Online useage is increasing double
practitioners with household digit
•
income of more than $75,000; Canadians are technically savvy
24% earn more than $100,000.

Source: YogaJournal

The PEST provides insight on what the key criteria are for our essential for success, and
opportunities exist that the organization can capitalize.

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Political:

Childhood obesity is on the rise, this is going to have a significant impact on healthcare expenses
in the foreseeable future. This has triggered the government to deploy tax incentives to allow
parents to get their children involved in extra-curricular activities. The respective school boards
have increased awareness of this phenomenon and have initiated multi-tiered approaches
focused on diet and daily activity. This must be a collaborative effort between the schools and
parents in order to be successful.

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Children are impressionable and must be exposed to healthier lifestyles earlier in their
development, as the problem becomes progressive as the age.

Economical:

• Canadian real GDP to post 1.0% gain in 2008, underperforming U.S. growth of 1.4%.
• Multitude of shocks hitting the U.S. economy leaves forecasters divided on the 2009
outlook.
• TD Economics is more aligned with pessimistic camp on U.S. outlook, expecting meager
1.2% growth in 2009.
• Canadian forecasters are in greater agreement with 2009 predictions. Most project
reasonably solid domestic performances, so differences in forecasts are generally
contained to that portion of the economy directly exposed to the United States – credit
tightening and export demand.
• Canadian economy should post modest 1.8% recovery in 2009, giving Canada the upper
hand relative to the U.S. economic performance.

13

Social:

The number of people practicing yoga alone in the United States is at least 28 million in
2003.

Tai Chi and Yoga are by far the exercise activities with the highest growth. According to
that study, Yoga and Tai Chi combined grew 32% to 9.7M.US population, 6 year or older,
number who practice at least once a year.

Separately, results of a Harris Interactive poll were released by the Yoga Journal in June
2003. They show 15 million Americans practiced yoga last year. Additionally, the poll
finds:

Number of Americans who participate in martial arts as of 2004:

6.9 million
According to SGMA International, this is an increase of 28% over the previous five years.
Source: Wall Street Journal, 12/17/2005

More than 12% of the U.S. population or 25.5 M people quot;veryquot; or quot;extremely interestedquot;
in the practice of yoga. 16% or 35.3 M people quot;intend to try yoga within the next 12
months.” Over half, or 109.7 M people have at least a quot;casual interest in the practice of
yogaquot;. The growth over the last year was 28%.

The statistics reinforce the opportunity that exists for Lululemon; with an effective
strategy on identification of growth vectors and creation of a diversified niche business
model we can build a sensible and achievable growth plan.

Technological:

Canadian Internet Usage Statistics:
• Digital media usage in Canada grew 6% in 2007
Out of developed countries Canada has the:
• Highest Internet penetration - 71% (U.S. has 61% penetration)
• Most page views per resident (average 4,000 page views per user)
• Most time online (45 hours per month)

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Social Networking
• More than 84% of Canadians are active on social networks, viewing 828 pages and spending at
least six hours per month on these sites
• While Internet growth was just 4% in 2007, social network usage grew 16% and a whopping
70% of users in the 55+ demographic visited a social network
Video
• 89% of Canadians each watched 114.5 videos totaling 385 minutes – compared to just 77% of
U.S. residents who watched 72 videos each
• YouTube was the destination of choice for 57% of Canadians who watched 68 videos totaling
180 minutes per month
Source: www.DemographicsNow.com

3.2 SWOT

Strengths Weaknesses

• •
Quality Local centricity (poor best-practice
• sharing)
Innovation (Technical aptitude)
•
• Perceived female focus
Brand (Equity, Logo, Stores)
• Price Point
• Corporate Social Responsibility
• Inventory
• Sustainability
• Perceived as yoga only
• distribution (store front)
• Access to stores
• Consumer focused (design for
guest impact)
• Niche Market Leader
• Product Technology (Luon,
Silverescent)
Opportunities Threats

• •
Product diversification Buyout
• • Fad potential
Line extensions, accessories…
• Low barriers to entry
• Leveraging perceived expertise
• Expansion
• Category Leader, expert
• Global economic state
• Unfavourable exchange

The SWOT provides insight on what the key criteria are for our success.

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3.3 Competitive Landscape
A. Nike Yoga

B. Athleta

Adidas (Stella McCartney)
C.

D. Lotuswear

E. Gaiam

F. Tonic

Competitor Name: NIKE Yoga

Head Office Location: Beaverton, Oregon USA

Method of Distribution: Retail outlet, VAR's, Distributors, Online

Number of stores: 25,000 US retailers, 160 countries

Strategic Partnerships: Apple

Revenue: $18.627 Billion (2008)

Total Equity: $7.825 Billion (2008)

Product Offering: Sportswear, Sports Equipment, Apparel, Accessories

Direct(D)/Indirect (I), Virtual (V): Direct

url: www.nike.com, www.nikebiz.com

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Philosophy: quot;If you have a body you are an athletequot; a closed loop
business – where waste at different stages of our operations,
from our contract factories to transportation and eventually
the product at the end of its life, can be recycled – as much as
possible of it back into new Nike product.

Services: Custom ordering

Competitor Name: Athleta

Head Office Location: Sanoma County CA

Method of Distribution: On line through www.gap.com

Number of stores: Nil

Strategic Partnerships: Gap Inc. acquired Athleta in September 2008. Clothing sold on
line through the GAP website

Product Offering: Women's athletic wear quot; Feminine performance driven apparel
that transcends sport into all your casual adventuresquot;


url: http://athleta.gap.com/

Philosophy: Be Strong. Be Beautiful. Every product delivers the ultimate
performance advance for workouts with feminine designs and fits
that have been dialled into the athletic physique. Committed to
giving quality that can be put to the test, workout after workout,
and to refining even the smallest details until they attain
perfection. Recognizing that there is life after sport, they fashion
their apparel to take on an entire active lifestyle from the routine
daily run-around to the furthest off-grid adventure. Apparel is

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designed and developed by women athletes for women athletes.

Services: Services: Athleta teams up with Las Olas, the premier women’s
surf safari company whose credo is “we make girls out of women”
through the power of sport, surf and sand. Package includes: full
tuition, round trip airfare to Mexico, room and board and $750
Athleta beach wardrobe for two. Option to shop online by type
of product or sport. Sport categories by which one can shop are:
Yoga/Studio, Gym/Training, Swim/Surf, Run/Walk, Hike/Explore,
Adventure Travel, Ski/Snowboard, Golf, Tennis, and Cycling
Triathlon. They have a special yoga line - quot;Our yoga apparel is
resident athlete tested to perform from sun salutations to
sivasana to the rest of your active lifequot;

Notes: GAP Inc acquired Athleta, a women’s active apparel company
back in September 2008. Athleta sells yoga, running, skiing,
snowboarding and surfing gear online and by catalogue.

Athleta merchandise will be available on Gap’s new Web site,
which allows consumers to click through all of its labels — Gap,
Old Navy, Banana Republic and Piperlime — and pay one shipping
fee.

“This strategic acquisition complements our brands perfectly and
allows us to leverage our new online platform to expand into this
significant retail sector,” said Glenn K. Murphy, Gap’s chairman
and chief executive.
(http://www.nytimes.com/2008/09/23/business/23gap.html?
ref=business)

Competitor Name: Stella McCartney for Adidas

Head Office Location: Concord, Ontario

Method of Distribution: Through Adidas Stores

Number of stores: 160 Stores in Toronto alone

Strategic Partnerships: Stella McCartney, Y-3, Rainbow Mars Yoga

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Product Offering: Yoga, Dance, Tennis, Golf, Running


url: http://www.adidas.com/campaigns/stellass09/content/index.asp
?strCountry_adidascom=ca

Philosophy: The Sport Style Division is the home of Originals, defined as
authentic sportswear, the Fashion Group, which is the future of
sportswear, and Style Essentials, the fresh sport-inspired label
made accessible for style-adopting youth. Together they offer
consumers products from street fashion to high fashion, all
uniquely inspired and linked to sport.

Competitor Name: Lotuswear

Head Office Location: Vancouver, BC

Method of Distribution: Store Locations

Number of stores: 7 (all located on the west coast of Canada)

Strategic Partnerships: None at the moment

Product Offering: Yoga wear for men and women. Jackets, pants, T-shirts, shorts.
As well as Golf and Running clothing


url: http://www.lotusyogawear.com/

Philosophy: At Lotuswear, we believe YOU define the brand; the brand does
not define you. We aim to create an active clothing company that
fits a variety of body types and lifestyles while allowing you to
express your individual style.

Competitor Name: Gaiam Inc. – a lifestyle company

Head Office Location: Boulder, Colorado US

Method of Distribution: 1. Online (US)

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2. International Distributors
- Brazil, Argentina, Chile, Colombia, Peru, Germany, Japan,
U.K., Mexico, the Caribbean, Central America

3. International Online Store
- Australia, Belgium, Netherlands, Luxembourg, Italy

4. US Online Affiliate Program
Number of stores: None

Strategic Partnerships: Partnerships:
1. Fair-Trade
Partnered with Fair Trade and created a program called “One
Word By Gaiam” Fair Trade is a NPO that promotes standards for
international labour, environmentalism, and social policy,
empowering artisans to maintain cultural traditions and create
better lives for their families and communities. Gaiam believes
the program will help bringing people closer together by
understanding their culture through their hand-crafted products.
2. The Conservation Fund
Pioneered the first world’s carbon neutral product shipping
system through the partnership of this organization; an
organization focuses on water and land conversation in America.

Product Offering: Organic Apparel:
- Women and baby apparel that are made from natural and
fair-trade materials like soy, organic cotton, bamboo, and
leather-alternatives.
Yoga related products:
- Eco- conscious yoga bags, mats and media materials
Fitness related products:
- equipments and media resources on walking, dancing,
Pilates, eastern practices (Tai Chi, Qi Gong, muscle
strengthening, cardio work
Wellness related products:
- products ranging from pain relief, alternative therapy,
meditation and energy practice, personal care, skin care,
massage products, mayo clinic
Green Living Solutions:
- Eco Home & Outdoor products

url: http://www.gaiam.com/category/yoga-studio.do
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Philosophy: quot;To create a global community of like-minded people — a force
for positive change.quot;
Services: 1. Gaiam Life
A wellness website acts like a resource centre for people who are
interested in the following topics: Mind-body fitness, health and
wellness, green living and personal growth.

People can become a member of Gaiam Life; a program that
provides discount on Gaiam’s products and enable members to
interact with other members who share similar passions and
interests in wellness, green living, and healthy lifestyle choices.
Gaiam life’s blog offers postings from their contributors that are
related to broad range of topics such as: diet, yoga, eco-travel,
green living, personal development, climate, fitness, family issues,
organic foods; just name a few. Further, video/podcasts postings
also appear on the blog as well.

2. Gaiam Travel/Explorers’ Corner
Their goal is to create a “community” for co-travellers who have a
true passion about eco-travel and want to share their experiences
together. They provide high-end customized adventure and
unique destination travel trips based on an one-to-one customer
service experience

Competitor Name: Tonic

Head Office Location: Burnaby, BC

Method of Distribution: Store Locations and wholesale distribution

Number of stores: unable to locate

Strategic Partnerships: None at the moment

Product Offering: Yoga wear for the modern women. Pants, shorts, t-shirts and
tank tops


url: http://www.mytonic.ca

Philosophy: Tonic is a Canadian designed and manufactured yoga/active wear
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company which began in March 2004 to create a lifestyle line for
today's modern women. The line was inspired by the west coast
lifestyle, which supports healthy and active living.

Originally designed to meet the needs of yoga, TONIC's line of
workout wear is no longer tied to any one discipline. The clothing
is fashionable and functional. Its look is simple and clean, making
it easy to wear the clothes for athletics and for urban living.
TONIC is a tribute to women through the union of inner and outer
beauty. It is created with the focus on fit, function, and fashion.

Tonic Lifestyle Apparel was created with one simple idea: to
enhance the natural beauty of women. With a mission to create
a different kind of active wear line. Tonic uses fashion elements
to distinguish itself from other lines.

Has online customer profiles called “spirits.”

3.4 Consumer Analysis

Guests cover an array of diverse backgrounds and can be more appropriately categorized
by lifestyle or psychographic profiles. We have developed some profiles to better
communicate our guests and allow us to identify with them. (See Strategic Imperatives)

Gender of US yoga practitioners:

72.2% Female
27.8% Male

Household Income:

44% - Percentage of household with income of more than $75,000

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24% earn more than $100,000.

Age of U.S. yoga practitioners:
40.6%: 18 - 34 years of age
41.0%: 35 - 54 years of age
18.4%: Over 55 years of age

Where U.S. yoga practitioners live (2003):

West Coast: 20%
Northeast: 30%
Central (inc. OH): 30%
other parts: 20%

Source: 2008 YIAS (Yoga in America Study)

General Consumer Profiles:

Consumer Group Name: Janet

Demographics:

Age range: 20 - 30 years

Gender: Female

Household Income: $75 000+

Psychographic:

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Purchasing Behaviour: Trendy, Quality is of high priority, loyal to brand, seeks product
that meets both fashion and functionality

Reasons for affinity to brand: Brand is seen as an icon that represents her lifestyle and
culture - health, wellness, balance, harmony, and fun

Lifestyle:

Diet: Healthy, fresh fruit and vegetable, required serving of all necessary food groups, at
least 8 glasses of water a day

Hobbies: Engaged in both indoor and outdoor activities and adventures, enjoys the peace
and tranquility that yoga brings and enjoys the serenity of nature

Leisure: Focus on health, family, friends, working out, meeting new people

Female Consumer Profile:

In terms of consumers - Men and women between the ages of 20 - 30 years of age living a
healthy, happy, active lifestyle and who are immersed in the “Lulu-culture” is the target
audience.

For the female, although she may begin her relationship with Lululemon at a releatively
young age, as she goes through the various stages of her lifecycle she looks to Lululemon
to guide her in terms of maintaining and continuing to develop a healthy active lifestyle.

Possible scenario: single woman, 20-30 year of age interested in leading an active lifestyle
and concerned about appearing trendy in terms of purchasing the right brand, is loyal to
lululemon and what it stands for. She enjoys the more high impact activities such as
running. Lululemon’s clothing meets her requirements in terms of her fashion and
functional requirements. Years pass and she starts a family. Her active lifestyle needs to
be reigned in a little and she now opts for lower impact activities such as yoga finding the
need for balance and harmony in her life has increased. Lululemon offers her support in
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terms of community programs and guidance on where she can go for classes, which kind
of clothing she should purchase etc. Once the baby comes along, she knows she can
continue her regiment with baby in tow and attend the baby yoga sessions promoted by
her local Lululemon store. If at this time, the suggested on line assessment tool – “My
Lulu” is available, she would have the option to shop at home knowing that the options
recommended are based on her unique, individual situation. If “Petite Lulu” and “Lulu
Mom” have also been put in place, they would have the appropriate attire to continue
with their lifestyles. Plus the Lululemon “educators” would be ready to provide any
necessary guidance, advice and support to ensure she continues to lead a healthy, happy
lifestyle.

Consumer Group Name: Jeff

Demographics:

Age range: 20 - 30 years

Gender: Male


Psychographic:

Purchasing Behaviour: Quality is of high priority, loyal to brand, seeks product that meets
both performance and functionality

Reasons for affinity to brand: Brand is seen as being conducive to his lifestyle, core values
and an extension of himself.

Lifestyle:

Diet: Healthy eating, balanced diet, lean meats, required serving of all necessary food
groups, at least 8 glasses of water a day

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Hobbies: Engaged in both indoor and outdoor activities and adventures, enjoys mind over
body pursuits

Leisure: Working out, networking

Male Consumer Profile:

Males may begin their relationship with Lululemon at a relatively mature age, they go
through the various stages of their lifecycle and look towards Lululemon to guide them
and continue to develop a healthy active lifestyle.

Possible scenario: single male, 20-45 years of age interested in leading an active lifestyle
and requires performance and quality in terms of purchasing the right brand, is loyal to
lululemon and what it stands for. He enjoys pursuits that focus on mind over body,
where you push beyond the limits of convention either through high impact activities or
meditation in motion. Lululemon’s clothing meets his requirements in terms of
performance and functional needs. This would be a good opportunity where Pinetree
products would reinforce his lifestyle, and create exposure to martial training and our
offering.

Years pass and he has a serious long-term relationship and would prefer activities which
they can do together. This would be a good opportunity for a GAP vacation to a Lulu-
Sivananda experience (see Strategic Imperatives). They get married and start a family,
yoga is central to their lifestyle. His active lifestyle needs to be reigned in a little and he
now opts for lower impact activities such as yoga or martial arts finding the need for
balance and harmony in his life has increased.

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This phase will take him through the remainder of his healthy lifestyle.

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4.0 Growth Agenda

Lululemon has experienced phenomenal growth in the past five years, not only have we
performed at triple digit multiples, but the company has done this without deviating from
its core strategies. As we move into an era of tough economic times we must ensure the
sustainable success of the organization through identification of new growth vectors.

We believe that the Imperatives that have been outlined will provide us with a 30%
annual growth in top line revenue. This will be done and can be maintained through a
diversified approach to growth. The diversified model will allow the business to be
managed through short and long cycle times through a multi—prong approach. With the
involvement of our strategic partners and co-branding opportunities we will find ways to
drive organic growth within our niche markets, and emerge as market leader within our
category.

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Source: Published Lululemon financials

The recommended marketing spend will be a 3% proportion of top line revenue. The
marketing cost will fluctuate with revenue, and align with the strategic imperatives as
they are deployed respectively. The acquisition of Pinetree will be funded from retained
earnings and the payback period will be coordinated through our real estate and Mergers
& Acquisitions team.

The integration of the imperatives like the Gap Adventures, Lulu-Sivananda Experience
and the Pinetree Acquisition will be integrated over the course of the next 10 years. The
integration will follow and effective change management model that will take us from our
current state, through our transition into the future state. We look forward into effective
integration and long term sustainability.

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4.1S

4.2strS4.1 Strategic Imperatives

A. Product Expansion

Petite Lulu
•

• Lulu Mom

• Product Extension in outerwear

B. Niche Market Expansion

• GAP Adventure partnership

Lulu-Sivananda Experience
•

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C. Mergers & Acquisitions

Pinetree Acquisition
•

D. Guest Lifecycle Management

My Lulu Online Assessment tool
•

Colour expert
•

E. Sustainability

• Global pipeline of innovation (Prana)

Designer Advocate (Annual campaign Limited time)
•

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PRODUCT EXPANSION:

Petite Lulu (Kids yoga clothing)

Background:

Yoga is not just an activity for adults, but there are benefits for kids at any age. Currently,
there are kid’s yoga classes that cater to participants as young as 12 months old. The
following are some of the benefits for kids to start practicing yoga:

Great solution for children who have obesity problem which allow them to gain
•
flexibility, strength and muscle tone, while performing low-impact physical activity that
enhance their athletic ability. Children will become much more aware of their diet,
posture, activities and daily exercise routine.
• Anger management: yoga also allowing children a chance to develop endurance, and to
enjoy the companionship of other children, without the focus of competing with other
kids that might lead to aggression and tantrums to get their ways
• Like adults, with deep breathing, getting proper low-impact exercise, learning how to
relax, meditating and playing “yoga games”, the above elements let children to learn
dealing with their daily stresses.
• The “yoga games” exercise for kids are asking them to do certain stretches or postures
that mimic certain types of animal; not only they are getting good exercise and fun out
of the session, but it facilitates imagination in their minds.
• Furthermore, there are great benefits for kids doing yoga with their parents. Yoga
allows bonding between parents and kids, and kids always eager to do something
together with their parents. (According to a 2003 New American Dream poll, 57
percent of children between the age of 9-14 would prefer to do something fun with
their parents compared to go shopping in a mall) For parents, when they start teaching
yoga to their kids at young age, they also learn how to guide their kids during their early
childhood, which it helps the disciplinary aspect of parenthood at a later stage.

Rationale of the Sub-brand: Petite Lulu

Yoga, as one of many alternative health practices in the US is gaining popularity among
children. In fact, one in nine US children are using natural health products, chiropractic or
osteopathic care, yoga, and deep breathing for better health. However, there is not many
yoga wear retailer in the current marketplace who would cater to this target market. As
an innovative yoga and athletic wear retailer, Lululemon has found that it is imperative for
us to fulfill this emerging need from this segment. There is certain a good opportunity for
us to tap into this segment and to start developing innovative kid’s yoga wear, so we can
start to own the market and become a leader in this segment. We feel there is a need in
32

the marketplace to develop the most innovative yoga wear for kids, so they can perform
their best in their daily yoga practice. Since yoga can start at any age, even there are
great benefits for babies doing yoga with their mommies (cover later), we would build our
children wear starting from age 2 – age 14.

We are aiming to perform R&D, material and design testing and at last, collect guests’
feedback online and implement focus group in 2009. Hopefully this line of product will be
ready to launch by 2010.

Current competitors in this field:

• Lotus Children (US)
• Everythingyoga.com (online)

Lulu Mom (Maternity Yoga Wear)

Background:

Similar to the reasons for kids yoga wear, there are lots of great benefits for expectant
mothers or for new mothers to start practicing yoga, and this has already gained popularity to
do this type of physical activity. Here are some of the benefits that women can receive if they
are participating pre-natal or post-natal yoga classes:

• Deep breathing exercise for expectant mother will enhance her relaxation and
composture, and reducing stress
• Great way for expectant mother to keep fit during and after pregnancy
• It can help strengthen the pelvic and abdominals area, normalize thyroid
functioning and blood pressure
• Increasing over-all endurance, strength and well being
• Reducing back tension and discomfort
• Receiving moral support by joining other women in class
• Helping new mom to make a smooth transition; both mentally and physically to
the new role during the time when they might be lacking of sleep and suffering
with physical strain

Furthermore, with mom and baby yoga classes, besides the benefit of bonding between
the new mom and they baby, these classes encourage child’s movement and motor
development. The class also introduces basic infant massages/baby yoga which
stimulates both mental and physical development for babies, to stay more flexible, sleep
easier, and relieves common discomforts such as gas, colic and constipation.
33

Rationale of the Sub-brand: Lulu Mom

Similar reasons with the creation of Petite Lulu, as an innovative yoga wear retailer, we
feel the need to serve not just for men and women, but for expectant mother and new
mom as well. We will follow the same procedure as the Petite Lulu during the creation of
this sub-brand; especially we will spend more time than Petite Lulu on R&D and focus
group with expectant mother, since there are more issues to cover when it comes to the
design on maternity yoga wear. For example, develop more flexible fabric for the yoga
pants, special garment design on pant to be more sensitive to body type. Although there
currently is no maternity yoga wear in the marketplace, we are striving to become a
leading global retailer in yoga wear. We should able to serve our guest at all phases of
their life. We believe, our established innovative ideas will transfer/complement well into
both Petite Lulu and Lulu Mom brands.

Sizes: S, M, L, XL

Current competitors in this field:

• Motherhood (Canada and online)
• Maternityactivewear.com (US, Canada, Mexico, Japan and online)
• Fit Maternity and Beyond (online)

Outerwear Expansion:

According to the 2008 Q4 financial results, there has been great success on our outerwear
products (both men and women) in the past 2 years. We believe this line of product
complements well with our current active wear selections, and for guests who are both
physically active in both indoor and outdoor settings, we need to expand its selection and
develop more technological advance fabric and jacket design in order to better serve this
demographic. Furthermore, with only about 30% of Lululemon clothes are actually used
for yoga, the importance of incorporating the strong fashion elements on our products is
imperative. Since outerwear will be what people see right away during outdoor activities,
it is crucial for us to explore more in-depth in term so of the creative design in this line, so
we can meet both functional and fashion needs from our guests. We will continue to
expand and improve in this area, and we believe this selection will turn into a meaningful
force as part of the contribution towards our future sales.

Note: about 30% of lululemon clothes were used only for yoga

34

Niche Market Expansion

Strategic Partnerships

“Yuj” which is Sanskrit for unite or integrate is the root of the word yoga. It is logical that
as we go back to basics that we look at the root of the word itself and devise a plan to
embody this truth. The first of which is improving our teaching and delivery of yoga.
Researching the fundamental teachings of yoga we uncovered Swami Sivananda who has
been at the forefront of bringing yoga to the world. The delivery is through ashrams yogic
centres of learning spread throughout the globe. Through a partnership with the
Sivananda Centres across the globe we will allow our guests the ability to increase their
learning as the progress along their path of higher learning. In order to facilitate these
journeys we will employ the assistance of GAP Adventures which we will discuss later.

As an organization we will learn through this partnership as well uncovering how this
ancient art form and science was disseminated across eastern Asia. In particular the
evolution of the art was taken from its free flowing roots and with migration through the
Silk Road had an effect on the development of many of the martial systems that are
prevalent in Eastern Asia today.

The eastern martial arts that most people are familiar with are said to have been brought
from Tibet and India to China by a Buddhist monk named Bodhidharma between A.D.
4702 and 543. In order to complete the extreme training necessary to ascend Zen
Bodhidharma's disciples built on Indian yoga moves to prepare them mentally and
physically. The monks used these basic movements and evolved them into the fighting
systems which we know today.

We believe that we can create a journey of discovery for our company to follow the route
that yoga took to the east and ultimately the rest of the world. We will pay close
attention to how it evolved and how we can garner insights from this evolution to evolve
as an organization to create a more robust company, with long-term sustainability.

35

SIVANANDA Experience

As we look to the fundamental roots of yoga we must find a true source of these
teachings. Through our research we have identified Swami Sivananda as the most pure
source of this knowledge. His teachings are sighted repeatedly by those in the know in
the art. We hope to extend this knowledge to our guests by creating holiday packages
with GAP Adventures to travel to the Ashrams that the Sivananda society offers
worldwide.

To understand the essence of his teachings we have provided a few of his fundamental
views:

The 5 points of Yoga

In an effort to simplify and clarify the complex philosophies and teachings of Yoga,
Swami Vishnu-devananda summarized the wisdom of Yoga in 5 principles. These
principles show the way to developing physical and mental health as well as spiritual
growth. These 5 points or principles are:

1. Proper Exercise (Asanas)
2. Proper Breathing (Pranayama)
3. Proper Relaxation (Savasana)
4. Proper Diet (vegetarian)
5. Positive Thinking (Vedanta) and Meditation (Dhyana)

There are four main paths of Yoga - Karma Yoga, Bhakti Yoga, Jnana Yoga and Raja Yoga.
Each is suited to a different temperament or approach to life. All the paths lead ultimately
to the same destination - to union with Brahman or God - and the lessons of each of them
need to be integrated if true wisdom is to be attained.

36

The 4 paths of Yoga

Another good way to begin your study of Yoga is by being acquainted with the four paths
of Yoga

1. Jnana Yoga (The Yoga of wisdom or knowledge)

2. Raja Yoga (The Yoga of Self control)

3. Bhakti Yoga (The Yoga of Devotion)

4. Karma Yoga (The Yoga of Action)

Swami Sivananda's contribution to the world is to have revived the tradition of the Yoga
of synthesis, integrating the four paths of Yoga into a well-balanced Sadhana (spiritual
discipline). We shall begin to use iconography which represents the various chakras in the
body to assist with simplification of the paths that guest can potentially follow. This will
translate to a potential product offering for each path that would be conducive to the
learning, postures and lifestyle.

Communications and Media:

The integration and communication strategy will involve a comprehensive training
program for all our educators, over a 6 month period. It will align with the following
mediums:

A. Physical - programs at the ashrams will be required for all current and future
educators, the extent of the program will include not only the curriculum and
syllabus from the ashram, but an understanding of how to complete a guest
assessment to understand their true path.
B. Online - training module that will ensure that we have consistency of the message
and teachings of Sivananda. Our Goaltender application will be upgraged to
ensure the assessment tool and personal persona consultant are integrated. We
will upgrade our blogs to discuss initiative and will begin using social marketing
platforms:
i. Facebook-communicate through our various groups o ensure that we develop
dialogue and conversations.
ii. Myspace – leverage platform to allow educators to develop their own
microsites for their communities. While the sites will subscribe to brand
standards there will be flexibility around community content and bulletins.
iii. Twitter – We will communicate all elements of the PR of this initiative
37

iv. Flikr – All photos within our website and other platforms will utilize Flikr, we
will allow guests to post photos on the various social marketing platforms
which will improve Search Engine Optimization (SEO), and Search Engine
Marketing (SEM)
v. YouTube – All videos within our website and other platforms will utilize
YouTube, we will create a channel on YouTube dedicated to Lululemon and
allow guest to post videos of “their” Lululemon experience…will assist with
SEO and SEM
vi. Wordpress – Utilize platform for all blogs on the variety of social marketing
tools.
vii. Linkedin – Utilize platform to penetrate other guest groups and identify with
other practitioners in the lifestyle. We can also use platform for jobposts, and
blogs with our Wordpress platform.
Print – A print campaign hat will communicate the partnership between SIvavanda
C.
centres and Lululemon and how the journeys can be purchased through GAP
Adventures. Focus will be in niche market publications like Yoga Journal, Ascent
and Yoga International and Lulu magazine.
Personal Selling –Our educators and online tools will be upgraded to ensure that
D.
the personal selling message will begin with an assessment for guests new to
Lululemon. For repeat guests we will suggest that they undergo an assessment to
ensure they are aligned with their true essence, and goals.
Direct Marketing – We will begin to leverage our guest database to create direct
E.
marketing campaign to communicate our new partnerships and offerings.
Merchandising – We will launch new merchandising programs that align with our
F.
new iconography and product lines, with in-store posters, shelf talkers and point
of purchase materials.
Promotions –A development of promotional campaigns that bundle our new
G.
services and offerings, while no price concessions will be provided, but the
perceived benefit from the bundled offerings would be benefit enough.
Loyalty – We will begin a loyalty program for our guests to manage their
H.
relationship with us and deploy an effective lifecycle management program. This
will be facilitated with a membership card and all data transferred to a central
customer relationship management database.

38

Consumer Profiles:

Consumer Group: Yogi’s
I.
II. Demographics:
Age: 18 – 65+
Gender: M/F
III. Psychographics:
Purchasing Behavior: Purchases product to facilitate their love of the art of yoga

Reasons for affinity to the brand: Believes in the quality of the product and that
the brand provides the best solution to their needs.
IV. Lifestyles:
Yoga practitioners who enjoy both the practice and deeper meaning of the art.
They may be either beginning the practice of the art or a seasoned veteran, but all
have the requirement to know more and live a life that revolves around the art.

39

Life cycle Management:

This model will allow us to provide a more lifelong relationship with our guests. As guests
move through the various phases of the model we will deploy tools and campaigns to
maintain their learning, engagement and commitment to their success.

Metrics:

Metrics and progress reporting will be completed with the introduction of a balanced
scorecard for business management. It will pull information from our Lifecycle
management and loyalty program models via surveys and educator assessments of
guests. It will align around four vectors:
• Prospects (loyalty cards and guest penetration will be managed through direct
marketing)
• Customers (Loyalty card and My Lulu, we will deploy customer assessments via
mail and online, as well as educator insights at checkout that can be logged in
loyalty card profile)
• Product/Service (Loyalty card and My Lulu, we will deploy customer assessments
via mail and online, as well as educator insights at checkout that can be logged in
loyalty card profile)
• Employee (Annual employee assessments will be completed to understand
employee engagement and corporate direction)

Critical Success Factors:

Extending the length of guest relationships
•
• Mitigate any erosion from Ambassadors to Wanderers by refining our approach to
guests
• Better management of guest touch points
Improved learning environment for our educators
•
• Improved knowledge transfer for our guests

40

GAP ADVENTURES PARTNERSHIP

GAP Adventures is a significant partnership opportunity for Lululemon, not only will the
organization allow us to facilitate the “back to basics” knowledge of the Sivananda Centre
excursions, but holistically the ideology of both companies align.

Here is an excerpt from the company’s corporate strategy:

Our mission statement and Core Values

Our priority is to satisfy every guest, every time, through outstanding, personalized
service! We are dedicated to the guest experience and are constantly evaluating how we
can improve this experience.

Vision

We are the Great Adventure People and we are a company of travellers. Through a
dedicated group of travellers an exciting company was born with a vision of travelling
while respecting the land and her people. While others focus on attractions and creating a
western environment, our vision is face to face travel at a grassroots level.

Sustainable Tourism

Our groups are small and sustainable tourism is on the forefront of our agenda. If G.A.P
Adventures is successful then our local host shall benefit as well. Defying the mainstream
on a quest to define the spirit of adventure.

How People View Us

We recognize our success as an organization is best achieved through cooperation and
team work, and our guests measure us as a whole, rather than by distinct departments.

Guest Focus and Understanding

We always seek to understand our guests’ needs, and provide them with timely, accurate,
quality service. All initiatives we undertake, products we develop, and systems and
processes we establish, are aligned with increasing value to our guests.

Continuous Improvement

We constantly strive to improve the quality and effectiveness of our products and
services. We innovate and welcome change, continually increasing our standards of
quality and service to clients.

41

Aggressive, Profitable Growth

We expand our thinking and grow faster than the industry average, and we enjoy being
seen as young aggressive company. We believe that we do not have to compromise our
integrity to be profit driven.

Innovation

We were the first and we continue to innovate. By doing this we stay ahead of companies
that have since followed our path. Our travelers know that by travelling with G.A.P
Adventures they are travelling with innovative leaders who set the path and don't follow
it.

The GAP Adventure partnership will provide Lululemon with insight on the markets that
have a propensity for yoga and with the proper models put in place will allow us to build a
more refined emergent market strategy, whereby, growth markets are identified more
pro-actively.

The integration will be done both in-store and on-line and will be facilitated with
discussion forums and webinars. It will work jointly across both organizations and an
integration plan will be developed to outline training of educators and Gap agents to
ensure effective transition.


mediums:

A. Physical – travel sessions will be managed by GAP Adventures hosting open house
sessions periodically to communicate available programs.
B. Online – there will be a joint program between Lululemon and GAP Adventures
whereby the websites will have a page dedicated to program. We will upgrade
our blogs to discuss initiative and will begin using social marketing platforms:
(Same as Sivananda Experience)
C. Print – A print campaign that will communicate the partnership between
Sivavanda centres and Lululemon and how the journeys can be purchased through
GAP Adventures. Focus will be in niche market publications like Yoga Journal,
Ascent and Yoga International and Lulu magazine.
D. Personal Selling –Our educators and online tools will be upgraded to ensure that
the personal selling message will capitalize on the Sivananda Experience and
related journey.

42

E. Direct Marketing – We will begin to leverage our guest database to create direct

Consumer Profiles:


Critical Success Factors:


43

Mergers & Acquisitions

PINETREE Acquisition

The arts in the west have been diluted and deviate from their original forms. They are
known now more as sport versus discipline. They have created systems that pride
themselves on prestige versus perseverance and tranquility, strength and self defense
versus self-discipline of mind and body.

We believe our company can benefit from the acquisition PINETREE and a divesture by
SANG MOOSA of this business unit. PINETREE not only provides and established name in
the field of martial arts, but complements our existing product line-up with a footwear
option. The footwear would be conducive to tai-chi, wushu or any of the other martial
arts as well as shoes for yoga for individuals who would like the flexibility to practice
outdoors.

This opportunity would allow us to bring our company’s innovation and culture to a
fledgling business that is seeing sales drop significantly with the integration and
widespread awareness of mixed martial arts. They are experiencing increased
competition with off-shore imports and the larger schools are capitalizing on this
opportunity to create their own private label brands.

In order for PINETREE to be successful they must refocus on the core systems within their
portfolio of products. This would involve arts that have a strong mind over body aspect.

PINETREE “SANG MOOSAquot;

SANGMOOSA known for quot;Pinetreequot; has provides refined quality products with its
accumulated experience and craftmanship. quot;PINETREEquot; brand uniforms and equipment
have hold the Official Certificate of World Taekwondo Federation and sponsored quot;the 86
Asian Gamesquot;, quot;the 88 Seoul Olympicsquot;, quot;the 89 World Taekwondo Championshipquot; and
various kinds of domestic and international games. SANG MOOSA tries its best to keep the
reputation enjoyed by the help of its clients that cover 30 countries and the Best Quality,
the Best Trust is its life-long creed.

Since 1948, PINETREE SANG MOOSA has made martial arts items and has exported its
goods to more than 30 countries worldwide.

It started as a private company by the former president Mr.Jung in 1948.
In the beginning, it made one uniform for one master who was invited to Taekwondo in
other country.
44

Different from most of the small manufacturers, Pine Tree Sang Moo Sa have well
organized system from custom tailored production to import & export service with
computerized operation. Individual guests can get Pine Tree Products in 30 countries
through more than 100 agents or distributor.

All members of Pine Tree promise to do our best for best quality products and service
until guests are to be fully satisfied and then to be proud of us.


mediums:

A. Physical - programs at the ashrams will be required for all current and future
educators, the extent of the program will include not only the curriculum and
syllabus from the ashram, but an understanding of how to complete a guest
assessment to understand their true path.
B. Online - training module that will ensure that we have consistency of the message
and teachings of Sivananda. Our Goaltender application will be upgraged to
ensure the assessment tool and personal persona consultant are integrated. We
will upgrade our blogs to discuss initiative and will begin using social marketing
platforms:
i. Facebook-communicate through our various groups to ensure that we
develop dialogue and conversations.
ii. Myspace – leverage platform to allow educators to develop their own
microsites for their communities. While the sites will subscribe to brand
standards there will be flexibility around community content and bulletins.
iii. Twitter – We will communicate all elements of the PR of this initiative
iv. Flikr – All photos within our website and other platforms will utilize Flikr,
we will allow guests to post photos on the various social marketing
platforms which will improve Search Engine Optimization (SEO), and
Search Engine Marketing (SEM)
v. YouTube – All videos within our website and other platforms will utilize
YouTube, we will create a channel on YouTube dedicated to Lululemon and
allow guest to post videos of “their” Lululemon experience…will assist with
SEO and SEM
vi. Wordpress – Utilize platform for all blogs on the variety of social marketing
tools.

45

vii. Linkedin – Utilize platform to penetrate other guest groups and identify
with other practitioners in the lifestyle. We can also use platform for
jobposts, and blogs with our Wordpress platform.
Personal Selling –Our educators and online tools will be upgraded to ensure that
C.
the personal selling message will identify guests that may be receptive to exposure
on this type of path. For repeat guests we will suggest that they undergo an
assessment to ensure they are aligned with their true essence, and goals.
Direct Marketing – We will begin to leverage our guest database to create direct
D.
Merchandising – We will launch new merchandising programs that align with our
E.
new offering with in-store posters, shelf talkers and point of purchase materials.
Loyalty – We will begin a loyalty program for our guests to manage their
F.
relationship with us and deploy and effective lifecycle management program. This
will be facilitated with a membership card and all data transferred to a central
customer relationship management database.

Consumer Profiles:

Consumer Group: Peaceful Warrior
I.

II. Demographics:
Age: 18 – 65+
Gender: M/F
III. Psychographics:
Purchasing Behavior: Purchases product to facilitate their love for any martial art.
Reasons for affinity to the brand: Believes in the quality of the product and that
the brand provides the best solution to their needs.
IV. Lifestyles:
Martial practitioners who enjoy both the practice and deeper meaning of the art.
They may be either beginning the practice of the art or a seasoned veteran, but all
have the requirement to know more and live a life that revolves around the art.

46

My Lulu (On Line Assessment Tool)

In an attempt to increase consumer involvement in the product purchasing process and to
make greater use of the brand’s online presence, an online guest profile and needs
assessment tool is recommended for integration on to the existing website.

The tool would allow for visitors to the site who may or may not be new consumers, to
learn more about what the best purchasing options would be for them as an individual.
Factors such as lifestyle, level of activity, colour preferences, physical sensitivities such as
light, temperature, fabric, allergies etc. would be taken into consideration and a
customized profile with clothing and accessory suggestions to meet individual
requirements would be produced for use by the consumer.

The consumer would have the option of creating this profile and making changes and
updates to it as they go through their lifestyle changes so that the assessment tool can
recalculate based on the new information and provide the consumer with the necessary
recommendations and suggestion for living a healthier, happier more fun life.

Suggested name for this online assessment tool is “My Lulu” - users may denote by its
name that this customized, personal assessment tool caters to their specific requirements
and takes their personalities, lifestyles choices and preferences into consideration.

My Lulu - My Colour

Colors are of the deepest significance to us throughout all phases of our life. They have
more influence on us then we can possibly imagine. If we use them intelligently, they can
help us by strengthening, soothing, and inspiring us. Dark, drab and dingy colors can harm
our spirits and health. Strong bright colors may bring out the best in us, physically,
spiritually, mentally and emotionally.

Although color psychology is a relatively new area of scientific research, ancient
civilizations believed in the influence of color on humans. Scientists and historians have
47

shown that the ancient Chinese, Egyptians and Indians believed in Chromotherapy or
healing with colors.

Colour psychology is the effects of the electro-magnetic radiation of light on human mood
and behaviour - a universal, psychophysical reaction, which is not as heavily influenced by
culture, age and gender as is generally thought.

Personal Assessment:

We will employ the services of “Colour Affects” to design an online environment where
our guest will be able to have a personal colour consultation. We will explore their
personality, their colour preferences and their likes and dislikes in a variety of social
situations; from this we can draw up their personal palette of colours that will best bring
out the best in them, physically, spiritually, mentally and emotionally.

48

Sustainability

Global Pipeline of Innovation

Lululemon does a great job of promoting ideas from the store educators and
implementing them to cater particular stores to the surrounding community. While it is
important to leverage the ideas of these educators, we need to implement best practices
across all stores in order to stay on point with the Lululemon brand. We noticed a lot of
inconsistencies across stores in Toronto in terms of what the store focuses on. Some
were more into running while others focus more on yoga or walking. While these are all
important activities to Lululemon, they need to set some ground rules so that the store
educators do not stray too far from the brand values when catering to the surrounding
communities.

Opinion Leaders – “Design for Water” Campaign

As the Lululemon brand grows and becomes more popular, one way to create buzz would
be by using opinion leaders to create a clothing line exclusively for Lululemon stores that
is sustainable and eco-friendly while at the same time, fashionable and functional.
Ultimately this will help Lululemon grow their sales, and gain exposure, while at the same
time helping make the world a better place.

These opinion leaders could be anyone from up and coming fashion designers, to
celebrities, athletes or yoga professionals. They would be used to generate income to
help fund a charity that fits within Lululemon’s corporate strategy. For the purposed of
this study, we plan to choose a water purification charity such as “The Water Project” in
Africa. The Designer (or Opinion Leader) would create a line of clothing that would be
sold in stores for a period of 30 days and a portion of all proceeds would be donated to
the Water Project. Ultimately this is a win - win for the Designer and Lululemon as it will
generate good PR on both parties account while at the same time doing good for the
Charity in need. This is also directly aligned with Lululemon’s vision by providing people in
need with a gift that is essential for changing lives.

In order to promote this, Lululemon would have to think of a really creative marketing and
PR angle. Currently their marketing is primarily grassroots, and we are suggesting that
they use a PR firm to help them implement something that will reach their target
audience but still incorporate Lululemon’s “off the wall” marketing presence.

49

5.0 Media Strategy

We pride ourselves on our interaction with our guests, and this has been paramount to our
success as an organization. We will continue to be committed to at the line and below the
line communications as this is the only way to create true dialogue with our guests. This will
not dismiss any above the line activities, but ensure that a greater proportion of effort and
expense is spent in this area. They will include the following:

At or below the line (75% of Marketing Communications spend)

• Public Relations

• Educator training

• Guest lifecycle management

• Direct marketing

• Bundled sales promotions

50

• Social Marketing

• Grass roots marketing

Above the line (25% of Marketing Communications spend)

• Print advertising

51

6.0 Conclusion

We are at a critical time in our company’s evolution, one where any decision we make or
choose not to make will affect our future. We hope the approvals will be granted in favour of
our recommendations as we are confident that our strategy and plans will see us transformed
into a stronger organization.

Focusing on our core which is yoga and using it as a catalyst for change will ensure that we do
not deviate from our heritage, enriching our sustainability and community relations programs
through our ambassadors, educators and guest will leverage our strengths, passion and
intelligence.

“At the end of the day when you are 80 or 90 you want to know that you have made a
difference in life.”

-Chip Wilson

52

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http://selfinvestors.com/tradingstocks/weeklyafter-stock-market-review-archives/bullsbears-
battle-resistance-hot-ipo-lululemon-athletica-lulu/

http://www.facebook.com/pages/lululemon-athletica/33693527731

53

http://finance.google.com/group/google.finance.715923/browse_thread/thread/d49b0ef37fdc0
8f?pli=1

Marketing Magazine: April 14, 2008 cover story

http://www2.canada.com/montrealgazette/news/business/story.html?id=706d0299-be29-4cc8-
b272-c36464ed0bba&k=56749 (Japan stores closing)

http://www.streetinsider.com/Corporate+News/Highlights+From+lululemon+athleticas+(LULU)
+Q4+Conference+Call:+Positive+Outlook+In+Tough+Economic+Environment/4518687.html

http://www.aurawellnesscenter.com/yoga-for-kids.html (benefits on kids for doing yoga)

http://www.syl.com/hb/yogapositionsforkidsdevelopsflexibilityandstrength.html

http://www.kidsexercise.co.uk/Yoga.html

http://www.a2zyoga.com/yoga-faqs/can-do-yoga.php#Q2 (mom)

http://www.yogaspace.com/classes/momandbaby.html (yoga mom and baby together)

http://www.education.com/reference/article/Ref_Facts_Marketing/ (marketing with kids)

http://www.aaafranchiseopportunities.com/AAA_Best_Franchise_Opportunities.asp?ID=2353

http://www.yogaplus.net/momandbabyyoga.htm (yoga mom and baby class info)

http://www.colour-affects.co.uk/how-it-works

http://www.gapadventures.com

http://www.sangmoosa.com

Marketing Week 2008

54

CMA Business Case Lululemon

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