Sigma (“self-energy”) Marketing
Lululemon Marketing Plan Phase 3
Mark Hughes, Kirsten Schafer, Mary Hipperson
2010
Table of contents
Topic
Page Number
Introduction
2
Target Market
2-3
Positioning
3-5
Pricing Strategy
5-6
Distribution Strategy
6-7
Product Strategy
7-8
Branding Strategy
8
Advertising and Promotion Strategy
9
Conclusion
10
Appendices
11
1
Introduction
The Lululemon marketing plan for 2010 includes recommendations and goals for the
Lululemon brand, as well as goals for the newly proposed male brand Outer Muscle.
Main objectives include:
 Introduce Male Brand Outer Muscle
o Target “Educated Physically Active Male”
o Price male brand similarly to Lululemon brand, using more-for-more
pricing.
o Positioned as high-price Yoga/Exercise Apparel
o Increased advertising at beginning of Life cycle, reducing advertising with
age.
 Continue with Current Lululemon Strategy
o Retain exclusivity of brand
o Continue use of Prestige Pricing
o Little to no promotion
o Very little advertising
o Persist with current marketing strategy for tween brand Ivivva
 Increase Brand Awareness
o 2% increase in advertising budget
o Sponsorship of events, increased Philanthropy work, and outreach within
community
Target Market
Lululemon’s current primary target market is the “Active Young-thinking Woman”.
Women who are appearance-conscious, physically fit/active, well educated, aged 16-45,
in the upper to middle class and residing in North America. Lululemon is using a niche
marketing strategy, going after a very narrowly defined market segment, in which they
have had great success. This niche market will remain the primary target market in 2010
however; Lululemon will also begin to target the “Pre-teen girl” market with the Ivivva
brand, and the male market with the Outer Muscle brand. Lululemon already has a male
2
clothing line, and has been trying to gain a part of the male-workout market for a while
now. In 2010 Lululemon will use product development, introducing “Outer Muscle” as a
new male clothing brand, made with the same commitment to quality as Lululemon. This
new brand will cater to a male target market similar to Lululemon’s female “Active
Young-thinking Woman”. This target market will be the “Educated Physically Active
Male” will target educated males, who are appearance-conscious, physically fit/active,
aged 16-45, residing in North America. This multi-brands branding strategy will allow
Lululemon to market to pre-teen girls who may not be able to identify with the moremature Lululemon brand, as well as to male consumers who would not be prone to shop
at Lululemon, due to it’s over-positioned reputation as a female clothing company.
Pricing strategy will continue to be a more-for-more value proposition within all brands
of the company. Each constituent of the marketing strategy serves to ensure that
Lululemon’s position in the mind of the consumer is not changed, while they venture into
new target markets.
Positioning
Lululemon is currently positioned as a high quality, exclusive, yoga and sporting apparel
company. In many ways Lululemon is over-positioned as a strictly female company,
which is why in 2010 they will use multi-branding to address the male market. In using
the proposed promotion strategy and advertisements, Lululemon will not change their
current position significantly, but instead further differentiate themselves from
competition in already established values.
3
It would be a mistake for Lululemon to try to adopt lower prices having traditionally
differentiated their products using more-for-more differentiation. By continuing to
position them self as high-quality, high-price clothing, Lululemon can gain more
customer loyalty, and ensure that they do not lose their image of superior quality.
4
Lululemon will continue to uphold the highest quality standards for it’s products and
position the male brand as high-priced, high quality clothing. Both brands will
differentiate themselves from their main competition by catering to the yoga/exercise
market, as compared to competitors addressing the daily-life fashion market, and the
sporting apparel market.
Pricing Strategy
Value Added Pricing – Lululemon uses this pricing strategy when creating their apparel.
Rather than cutting costs and making a lower quality product, they add extra features
such as adjustable straps and women’s pockets to differentiate themselves from their
competitors as well as help their target market justify spending more money on their
products.
5
Prestige Pricing – Even though Lululemon clothing is not comparable to a Rolex or
Louis Vuitton purse, it is prestigious and exclusive in its product category. This is what
Lulu’s target market loves about their brand. Its high quality not found in every city and
mall, fashion forward and represents a healthy, well off lifestyle.
These approaches to pricing are visibly successful in today’s economy. Even throughout
the recent recession Lulu managed to maintain a profitable company, expanding their
store count while creating expensive, high-end workout apparel. Changing their target
market to accommodate the middle class to lower income demographic could be
detrimental to Lulu’s success. Creating a cheaper line of clothing or marking down
products to sales items would lessen the exclusivity of Lululemon, which could then
effect the current target markets perception of the brand.
Recommendations for the pricing of the men’s brand we suggested earlier, is to keep
prices relatively high but yet great quality and options for different features and different
size options. This will follow the common theme Lulu has instilled in their customers and
will help differentiate themselves from other competitors such as Nike and Adidas who
thrive in the men’s athletic wear market.
Distribution Strategy
Lululemon stores are not situated on every street corner in every metropolitan area or
large city. They base their distribution strategy more along the lines of exclusive opposed
to intensive distribution, therefore stores can be found in cities across Canada and the
United States where the desired target market is represented by similar and correlating
demographics. Lululemon stores have a very welcoming atmosphere full of friendly faces
and have an earthy feel too them. Saskatoon’s store is located downtown where all the
great shopping lies which makes it a one stop shopping trip for Lulu customers, who can
do it all once entering Saskatoon’s downtown area. Its location provides great
convenience for their target market, which includes working, high-class women and
young university students who live active lifestyles.
Specialty store – Lululemon carries yoga inspired apparel for healthy lifestyles, which
could be categorized as a narrow product line. However, within this line is a deep
6
assortment of active wear that can be used for many sports and activities, for all shapes
and sizes.
Franchise – In Saskatoon the Lululemon is privately owned. This creates the opportunity
for the franchisee to do the hiring and management of his or her employees to the best of
their ability. For instance, the franchisee for Saskatoon’s Lululemon puts on an annual
sale that is not administered by the franchisor. It allows Lulu customers from all over to
merge in Regina for a three day sale of extremely marked down product from previous
seasons.
Recommendations for the men’s brand would be to open new stores beside the existing
Lululemons. This would offer a separate entrance and atmosphere for men to enter in
hope that it will eliminate the stereotype men have with Lululemon stores.
Product Strategy
Many of the components of Lululemon’s product and branding strategy are well
suited for the target market of the company and will be maintained. Others will be
altered in 2010 to increase product differentiation and brand awareness.
Lululemon has a wide product line. This product line is available in a wide range
of colors, designs, and patterns that stand out and are updated often. This allows
Lululemon to remain attractive to their target market of fashionable women. These
women want to stand out as trendy and unique, and because of this, the company will
continue to regularly create many different styles to cater to them.
The company will focus more attention on men’s clothing, but under a new brand.
This strategy will be explained further under branding strategies. The current product
mix will be modified. Currently it is very broad with few focal points. In 2010,
Lululemon will not be offering bags, such as luggage, and backpacks, or work-out
accessories. This strategy will give them the ability to focus more on the men’s brand.
The tween brand, Ivivva, was implemented in fall 2009. This brand will offer
products for those from the ages 6-12. Lululemon will continue to promote and develop
this brand but in addition, new products will be developed including attire for activities
such as dancing and ballet, figure skating, and swimming.
7
Lululemon will maintain their current packaging tactics involving the use of
shopping bags and price tags. The bags are reusable, stylish, and inspirational. The tags
that are found on each item are very informative, containing the directions and uses of the
product. Both methods are useful and are appropriate for their well-educated target
market. Since this packaging approach fits the need of the current target market so well,
Lululemon should continue with this strategy.
Currently, the services of Lululemon include free alterations. Lululemon will
continue to offer this courtesy. The company will also be offering various classes such as
yoga and pilates.
Branding Strategy
Lululemon is currently branded as a high quality and prestigious brand. The
company should still be positioned as such, but will become much more distinct.
Currently, Hoopla is a competitor; especially since the clothing styles and branding are so
similar. To differentiate itself, Lululemon will alter the logo that they place on their
clothing. The waistband or the hem of the clothing will feature a small inspirational
message plus the Lululemon logo. Some of these messages include “dance, sing, floss,
and travel” and “breathe deeply”. This characteristic will make Lululemon stand out, as
well as add a unique component to each item. This uniqueness will appeal to the target
market.
In addition, a new brand will be implemented under Lululemon in 2010 for men’s
wear. The name of this brand is Outer Muscle. The logo is derived from the lower case
Greek symbol theta, which will coincide nicely with the Greek Lululemon logo omega.
Theta represents a mathematical tool associate with angle, so Outer Muscle’s slogan will
be “Get the perfect angle on your work-out”. This brand will be targeting educated and
active men in the same age category as Lululemon’s target market. Outer Muscle will
also be positioned as high priced, high quality, and trendy. The branding strategy used is
multi-branding because a new brand is being developed with existing products. Now, the
men’s wear and women’s wear will be separated.
8
Advertising and Promotion Strategy (IMC)
Lululemon’s advertising and promotion strategy will mostly be maintained, with a
few modifications. Currently, Lululemon advertises through their reusable bags, through
word of mouth, and through a few events. Also, their logo is found on each product and
they are advertised in a one page spread in the University of Saskatchewan handbook.
Their strategy of involving very little integrated and marketing communications (IMC)
makes Lululemon an exclusive and prestigious brand. Having few sales or promotions
adds to the exclusivity and value of the brand. Since this strategy is appropriate for the
target market that wants to appear distinct, and privileged, it will be maintained.
One alteration is the addition of more public relations by being involved in more
events. By sponsoring athletic events and events at the University, the company will not
only be noticed by their target market, but be seen as an ethical and respectable company.
The company will also be sponsoring events such as the Breast Cancer Walk and Relay
For Life, which will also help the company’s image. Due to the upcoming Olympics,
Lululemon will be sponsoring the athletes with swag bags that include water bottles,
headbands, workout gear, and lounge gear.
An incentive will be added for shoppers in 2010. An events card will be
distributed to customers. This card is a punch card. After purchasing $500 of
merchandise, the consumer will be able to attend a free athletic class that is offered by
Lululemon. By offering events instead of discounts or bonuses as rewards, the company
will still be seen as highly prestigious.
To promote the new brand, Outer Muscle, the IMC budget will be increased from
approximately 1% of total profits to 3%. Strategies such as sponsoring athletic teams,
online advertising, and advertising in athletic magazines will be executed. Once Outer
Muscle occupies 25% of the market share for men’s athletic yoga/exercise apparel and
has been established as a competitor to brands such as Under Armour, the IMC budget
will be reduced back to 1%. It will be reduced to become an exclusive and prestigious
brand like Lululemon.
9
Conclusion
In conclusion to achieve our main goals:
 Addressing the male market
 Preserving “exclusivity” of Lululemon
 Increasing Brand Awareness
Lululemon will make use of multi-branding introducing the new brand Outer Muscle
targeted towards the male market. They will continue the use of more-for-more prestige
pricing to retain their exclusive image. Finally they will increase their budget for
advertising/promotions, with a heavy emphasis on philanthropy and community outreach,
to further increase brand awareness and distinguish Lululemon from competitors.
10
Appendices
Lululemon
Omega
Outer Muscle
Theta
11