Maketing on Lululemon Case

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- The Athleisure Industry[pic 2]

The ‘Athleisure‘ industry is one of the biggest trends in the fashion as well as the retail world today. The term ‘Athleisure‘ has become so popular, it has made an entry into the Merriam-Webster dictionary. According to the Merriam-Webster dictionary, the definition of ‘Athleisure‘ is: casual clothing designed to be worn both for exercising and for general use. The industry has grown substantially as athletic and casual wear became more and more acceptable in a wide variety of social situations. The popularity of the industry has been driven largely by the millennials which contain nearly 28% of the U.S population. Also the increased consciousness of health has had a major impact of the growth in the industry.

- Competitors

Because of the recent popularity as well growth, the athleisure industry has become a highly competitive red ocean industry. Its major competitors are Nike, Under Armour, Addidas and Hanesbrands. The number-one and number-two players in the U.S. are Nike and Under Armour followed by Hanesbrands. However unlike its competitors, Lululemon is focused on the women segment and has distinguished itself and has accomplished a compounded annual growth rate of 47% as well as 20% growth rates in sales in the last five years.

- Part II Company Analysis

- Competitive Positioning (5C Analysis)

- Company (SWOT Analysis)

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- Collaborators

Lululemon’s manufacturing is outsourced. The fabric used in its products is sourced from a single supplier, risk of the supplier not holding enough inventories are present.

Lululemon has about 35 manufacturers as of the fiscal year ending February 2, 2014. Among them, five have contributed 63% of the company’s products. South and Southeast Asia accounted for 67% of production, the remaining 23% produced in China. In order to meet the market need in the sales season, Lululemon maintains 3% of its production in North America.

Lululemon operates distribution centers located in Vancouver (Canada), Sumner (Washington), Melbourne (Australia), in order to deliver their products to online shoppers within two days in the US which is very crucial online sales service. It has also diversified its sales distribution channels, such as corporate-owned retail stores, corporate-owned retail stores, wholesales, franchise, and other channels.

Lululemon puts significant efforts into social media presence in order to increase the exposure to target customers. It current has over 1 million Facebook likes, over 650,000 Twitter followers and nearly 700,000 Instagram followers significantly higher than Atheta’s 200,000.

- Customers

Lululemon’s customers are fairly aligned with its target consumers which are women in the age range of 18-44 with high income and education level, and who are sophisticated, urban, dynamic, trendy and who prefer work-life balance.

However recently they are broadening their product range for men in the 18-45 year age range. But it is highly likely that the target consumers are changing if considered the fact that the actual buyers of the men’s apparels are the initial target consumers who are women.

- Competitors

The athleisure industry is a highly competitive red ocean industry. Lululemon faces vigorous competition from multiple large companies such as Nike, Under Armour, and Adidas etc. Lululemon’s competitors have substantial competitive positioning due to early establishment and broader customer base as well as products.

Lululemon differentiates itself with a strong loyal customer through its grass root marketing and vertical retail strategy. It also possesses strong brand equity, allowing consumers to easily distinguish it for its high quality products.

- Contexts

- Political factors

Political factors such as US government’s tax incentives on extra-curricular activities has enforced parents to involve their children in extra-curricular activities, which has increased the need for athletic apparels and hence made a positive impact on Lululemon’s business.

- Economic factors

Global recession has made a negative impact on the Lululemon’s international market expansion in 2016. Economic conditions, such as recession, unemployment and cost of consumer credit, in North America have reduced the range of consumer discretionary spending and the demand for athletic products.

- Social factors

The public has become more health conscious and is willing to spend more on fitness products. In addition, the physical training institutions and Yoga classes are increasing significantly in North America.

- Technological factors

The Financial Post (2014) reports that online shopping has helped clothing retailers attract more customers. This has highly contributed to Lululemon’s sales. Lululemon improved its technology through increasing its social media usage, electronic retailing by using advanced technologies in production. These technological factors have helped Lululemon to spread its brand awareness and achieve competitive advantage.

- Marketing Mix (4P Analysis)

- Nike

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- Product

As one of the top players in athletic industry, Nike provides a wide range of products such as shoes, apparel and equipment to its consumers, which covers diversified age, income level and education background. Nike also provides products for professional sports training as well as customized and signature products to customers.

- Placement

Nike has retail Nike stores and well-built distribution channels all over the world. This includes independent distributors, licenses and subsidies. Nike also has some Exclusive distribution outlets for its products, such as Nike town shop, flagship stores, Nikeid - Nike online store, and big retail discount stores

- Pricing

Nike has a value based/price leadership strategy that customized for different products