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Lululemon Athletica Case Solution

Solution Id Length Case Author Case Publisher
2130 1314 Words (7 Pages) Alice M. Tybout Kellogg School of Management : KE1010
This solution includes: A Word File A Word File

Lululemon Athletica has emerged as a global brand with its roots beginning in Canada in 1998. The company deals with athletic wear and goods (Lululemon Athletica, 2019a). This report will discuss the marketing and branding aspects of the company and make suggestions according to the challenges identified.

Following questions are answered in this case study solution:

  1. Introduction

  2. Marketing Mix

  3. Brand Architecture

  4. Brand Exploratory

  5. Strategy Changes

  6. Recommendations

  7. Conclusion

  8. Appendices

Case Study Questions Answers

2. Marketing Mix

i. Product

Lululemon Athletica deals in athletic wear for men, women, and girls. They also deal with athletic goods such as yoga mats, bags, and bottles (Lululemon Athletica, 2019b). They also offer unique fabric and products developed after research in their research institute (Lululemon Athletica, 2019c). 

ii. Price

Lululemon’s pricing strategy is consistent. It is a high-end brand, and even in the sale season, the discounts are minimal. This pricing strategy is a way to ensure that the brand value is preserved (Marci, 2019). 

iii. Place

Lululemon products are available in-store as well as online. The company also ships internationally (Lululemon Athletica, 2019d). To add to the brand value, Lululemon also has experiential stores that offer athletic classes for its customers (Thomas, 2019). 

iv. Promotion

A focus on its digital channel has helped Lululemon to increase sales. This focus includes an increase in marketing spending on social media, backed by product innovation (Pasquarelli, 2018). 

3. Brand Architecture

The brand is well defined, and the products that it offers are connected to the brand. For Lululemon, yoga is the core of the business. All product offerings, experiential stores, positioning are based on yoga. The product categories also reveal that Lululemon’s brand architecture is divided into men, women, and girls. Similar product categories exist within these three major categories (Lululemon Athletica, 2019e). 

4. Brand Exploratory

i. Awareness

While Lululemon is widely known for yoga apparel for women, there is little awareness about the variety of products that it offers for men. In 2019, Lululemon CEO stated that 70% of the brand’s profits come from women, while awareness regarding Lululemon’s products for men has little awareness. Furthermore, the lack of awareness is also a resultant of the strong brand image developed by Nike in the sportswear industry for men. The company aims to achieve a strong foothold in the men’s category by 2023 (Thomas, 2019). 

ii. Favorability

According to Business Insider, Lululemon’s investment in in-store technology and product innovation has resulted in the customers favoring Lululemon to competitor brands such as Athleta, whose parent company is GAP (Biron, 2019). However, this industry also includes giants like Nike, Adidas, and Puma, which offer similar products at a lesser price point than Lululemon (Business Strategy, 2019). 

iii. Uniqueness of Associations 

Lululemon is known for its innovativeness when it comes to fabric and new product development. The brand focuses on comfort and implements it through its products. The company’s innovation lab is focused on developing new product offerings and fabrics that feel comfortable. In 2018, the company announced that it could offer tailored products according to each person’s unique movements (Fast Company, 2019). 

5. Strategy Changes

While the above analysis reveals that Lululemon is progressing because of its model to innovate according to customer needs. Furthermore, the company reports exponential growth because of its investment in technology in-store. The investment in digital marketing also resulted in Lululemon gaining profits. However, the profit gains are a result of a combination of strategies of innovativeness, technology, and digital marketing. 

One challenge revealed through the above analysis is that strong competitors such as Nike and Adidas dominate men’s sportswear. In order to develop a market positioning in the men’s category, Lululemon should adopt a blue ocean strategy (Kim & Mauborgne, 2005). This would mean using the strengths of a dedicated research center to develop products for men that the competition does not offer. Wu and Chalip’s research (2013) finds that co-branded products, including fashionwear co-branded with sportswear, are preferred and commanded a higher price amongst men when compared with women. Women were willing to pay higher prices for fashionwear rather than sportswear. While competitors such as Athleta have co-branded with several fashion brands, Lululemon is not found to be doing so (Biron, 2019). 

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