27. Recommendation 1
• Differentiate and rebrand
– Lack of connection with men
– Too feminine
– Ivviva for kids
– Relate to men’s needs
– Running and biking
28. Recommendation 2
• Restrain expansion
– Plans for more than 250 stores
– Expansion threatens culture
– Cult and grassroots appeal
– Impact to quality
29. Recognitions
Avenger Market Research Inc.
Kris Head
John House
Sarah Iacoe
Corey Halford
Pamela Kamphuis- Finnigan
Royal Roads University
MBA Program
2012 Cohort B – Team 1
Editor's Notes
Hello. My name is Corey Halford and on behalf of the research team at Avenger Market Research Inc. I am excited to present the findings of a brand audit that we conducted on lululemonAthletica
The audit consisted of research of the brand’s strategy and positioning while a competitive strengths analysis evaluated lululemons product, price, placement and promotional characteristics. Also known as the 4 P’s.Following the 4P’s I will walk you though the results of a brand survey we conductedI will close out this presentation by identifying the findings of our brand audit and identifying our recommendations for lululemon
lululemonwas founded in 1998 by Chip Wilson and since that time it has become Canada’s fastest growing brandlululemonis known for its high quality products that are made of high tech materials and are made to fit you perfectlylululemonemploys a focused differentiation strategy. The market segment that lululemon primarily targets is the 30 + professional woman who is educated and looking for a customized product that looks and fits great.lululemonis a grassroots organization that is committed to promoting a healthy lifestyle by engaging the community and getting creative with its use of social media.
The foundation for the lululemon brand is its mission and vision.The Mission statement is ”creating components for people to live longer, healthier and more fun lives”While their vision is “elevating the world from mediocrity to greatness”The mission and vision provide the foundations to which lululemon has built its culture and grassroots community based movement.It is the culture and community to which lululemon credits for its successeslululemonhas established itself as a sophisticated, high quality brand that promotes a healthy lifestyleThe act of purchasing something from lululemon is also considered and equivalent to buying an exclusive membership towards better physical, emotional and spiritual health.Each purchase is wrapped in lululemon bag that portrays the lululemon manifesto. This extends the brand and identity of lululemon.Throughout this presentation you will be treated to various components of this manifesto
Now that we have looked at lululemon’s brand strategy and positioning we will now describe the competitive strengths analysis we conducted using the four P’s: Product, Price, Placement, and Promotion.
The competitive analysis for lululemon includes comparisons to its competition form Gap Athleta and Lucy Activewear
When we look at lululemon as a product we find that it is considered to be a very high quality product that consist of features not seen in other lines of clothing. Adding to these features is the use of custom and cutting edge fabrics that ensure an excellent fit and feel.A recent lululemon survey indicated 25% of its annual sales were for yoga wear while the remaining 75% was accredited to athletic or fashion wear products
Now if we look at lululemon Athetica, Gap Athleta and Lucy Activeware products in our competitive strengths analysis we find that lululemon is percieved as having a far superior quality product than its competitors. This is closely associated with the strong results also achieved for its product image. When it comes to differentiation, this is where lululemon struggles to stand out from the crowd. Although lululemon was a pioneer in the yoga and activeware market they are facing increasing competition and as they mature and they need to work harder to differentiate themselves from their competition.
lululemonproducts are currently available in 174 branded stores and a handful of high-end lifestyle centers and yoga studiosEach store is independently owned and designed with the intention that each store is unique while providing for an inviting and educational experience that puts the customer at ease. The lululemon retail experience is tightly integrated with its overall brand storylululemonstores are typically located in urban shopping malls that cater to the higher income, trendy and active customer. Through strategic locations such as this lululemon aims to be an integral part of the community
The competitive strengths analysis indicates that the lululemon’s brand may lacking strategic strength when it comes to product distribution and placement. The reason for this is that lululemon maintains tight control over its products and their distribution while its competitors exhibit much less restraint.
When it comes to price, there is no argument that lululemon products do not come cheap. Lululemons high quality products come with a high price point that targets affluent customers and this is a strong part of its brand strategy.Adding to this strategy is the scarcity model that it employs for all its products. It continually ensures that there is just enough product available so that it avoids any marking down or having sales to clear out its products.The lack of sales and prmotions of lululemon products elevates its value and quality proposition which in turn validates the price of the products.It is for this reason that lululemon is able to generate $1,700 of sales per square feet while its competitors are unable to break $400
When we return to the competitive strengths analysis in the price category, we find that lululemon possesses the strongest relative cost position in comparison to its competition. What this means is that the cost of the product is validated by its quality and if customers are seeking a high quality, long lasting and dependable product, lululemon is the brand of choice
When it comes to promoting its products lululemon continues to stick to its grass roots approach. This is a community based approach where its customers, practitioners and ambassadors do the advertising through word of mouth because they feel the lululemon provide high quality products
The grass roots promotional methods are supported by a number of social media tools such as TumlrFourSquare, Instagram, Zite, Pinterest, facebook and twitter
In addition to social media, lululemon also has ambassador. These are individuals who embody the lifestyle and ive the culture of lululemon. It is their engagement and promotion of lululemon that facilitates the grass roots promotion of lululemon. The individuals in the picture are all lululemon ambassadors.All of lululemons promotional methods express the authentic values of the products and its associated lifestyle. This authenticity builds a strong trust and loyal bond with its customers.
The promotion category is where lululemon exhibits its greatest weaknesses. Since it focuses on grass roots advertising and never offers sales or promotions, this results in brand vulnerability.When it comes to sales force however, lululemon demonstrates strength as its sales force is well trained to educate and ensure the customer get the product that suits them best and these efforts translate in to sales.
Overall the analysis indicates that although lululemon’s brand has areas of weakness, its strengths propel lululemon be the strongest competitor in the yoga and activewear market
In addition to the competitive strengths analysis an Brand Survey was developed and deployed online for the public to respond to. Through crowd sourcing methods we obtained 65 responses in a very short period of time.Of the 65 respondents, 63% have shopped at lululemon
The survey found that 81 % of respondents heard about lululemon from word of mouth advertising, this is a result of lululemon’s grass roots approach
6 months and 12 months are the most common shopping frequencies
Most people shot at lululemon for their high quality products
Most people feel lululemon stands for quality, fashion and fit and healthy living
Respondents feel that quality, fit or fabrics and branding are lululemon’s greatest strengths
53 % of respondents feel that price is lululemon’s greatest weakness. 11% of respondents also feel that the lack of men's clothing as well as annoying sales staff are weaknesses of the brand
Overall respondents were very satisfied with lululemon with 75% of customers rating their satisfaction with lululemon as very satisfied or satisfied. One notable point here is that no respondents indicated they were dissatisfied with lululemon and this is a very good result
Overall, our research has found that lululemon possesses strong brand alignment among its product, price, placement and promotional components.This alignment is strengthen with integrated marketing approaches that are consistent across all mediumslululemonis recognized for their quality products and its customers appreicate its innovated approaches
Our first recommendation is for lululemon to differentiate its line of mens clothes into a new brandThe reason for this is that lululemon does not connect well with most men as its products are considered to be too femininelululemonhas already done this with their kids line which is known as IvvivaBy rebranding and focusing on mens clothing lululemon can delivery products that align with the needs of most menSpecifically running and biking apparel is where we suggest they should start
Our second recommendation is for lululemon to restrain its desires for expansionResearch indicates that lululemon is seeking to expand to more than 250 stores by then end of 2012Not only will this potentially dilute the novelty of the brand but it is likely to negatively impact the culture of lululemon.The grass roots appeal of lululemon is a slow, sustainable and natural process and lululemon should make sure it is in line with its roots when considering how fast it is expandingIn the end, more stores will mean more faster production and a possibility of decreasing quality of their clothing. Since lululemon is known most for their quality, this is not a brand characteristic they can afford to compromise on.
That concludes the brand audit of lululemonAthleticaThis audit would not have been possible without the commitment and perseverance of an incredible team of researchers at Avenger Market Research Inc. At this time I would like to thank Kris Head, John House, Sarah Iacoe, Corey Halford and Pamela Kamphuis-Finnigan for their contributions.On behalf of the project team I hope you have enjoyed this presentation as much as we enjoyed creating itThank you very much and have a good day.
