Lululemon Case Study

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Currently, Under Armour has shown that it will be a major competitor with their recent female friendly ad campaign using Misty Copeland with the “I will what I want” slogan sending a very powerful message to the women out there by giving them a sense of empowerment. (Schlossberg, 2015)

Competitive Advantage

The company’s current competitive advantages include its strategy to keep a small amount of stock in each of the stores and then constantly updating the selection. This strategy leads customers to make their purchase now for fear that it will not be there when they come back. This strategy has allowed Lululemon to sell the vast majority of their stock at full price. This allows them to keep their margins high. (Schlossberg, 2015)

The other advantage they have is that they do not own any of the manufacturing plants that produce their clothing line. This means that they do not have the added expense of running production operations and can focus on sales, design and marketing. This reliance on outside factories to produce their products can also have the opposite affect if things go wrong. They do not have control over what is going on at the factories.

Marketing Research Effort

Lululemon’s success has been due to a high level of customer-perceived value and they must focus their marketing research efforts in ensuring that they do not lose that customer-perceived value. (Kotler & Keller, 2016). I would say based on what I have read about the typical Lululemon customer, I think that the “Semantic Differential Scale Question” type of survey might give some good insight as to why the customer chooses to buy from Lululemon. This will help ensure that they continue to deliver that type of experience for their customer. (JWI 518 Wk 3)

I would recommend that they continue doing what they were doing back in 2006 by bringing in the people that use the products to be a part of the design process. This will enable the company to be able to sell that to the consumer by demonstrating that they are coming right to them and designing the products based on their desires and not what some fashion designer decides is now the newest and latest fashion.

Marketing Measures of Effectiveness

The company should continue to monitor their same store sales growth to ensure that their current stores are still experiencing growth year over year. The numbers that they should also be looking at is “what is the estimated size of this market”? When they have that number, then they need to understand what their current market share is. It is important that they keep an eye on both of these metrics. This is due to the fact that the market for their line of products is still growing, so while they might be still showing year over year growth, they might not be gaining market share. In fact, they could actually be losing market share because the size of the market has grown and their piece of it didn’t grow with them.

They also need to develop a customer satisfaction score so that they do not lose touch with their very loyal customer base. This can happen as a company continues to grow. They forget what got them there.

Conclusion

Despite a few bumps in the road since they opened in 1998, Lululemon has been a very successful company with a unique marketing strategy that has garnered them a loyal following. The company has been credited with creating the niche market of athleisure and as long as companies avoid upgrading their quality to match Lululemons’, they will continue to be successful and continue their growth into the near future.

References:

Kim, Chan W. & Mauborgne, Renee, Blue Ocean Strategy, HBR, 2004

Lululemon Athletica in 2005, Case Study, Richard Ivey School of Business 2006

http://www.investopedia.com/articles/investing/052715/understanding-lululemons-business-model.asp

http://investor.lululemon.com/releasedetail.cfm?ReleaseID=974786

http://marketrealist.com/2014/12/lululemons-distribution-channels-competitive-advantage/

http://www.businessinsider.com/lululemon-and-the-rise-of-athleisure-2015-7

Kotler, P., & Keller, K.L. (2016), A framework for marketing management, 6th Edition

JWI 518: Marketing in a Global Environment, Week Three/Lecture One, “Conducting a Survey”