Lululemon Swot Analysis Essay

SWOT ANALYSIS

Strengths
Premium products, high quality, Innovative designs, Corporate culture of social responsibility, Strong brand awareness, Community involvement, Charities, Storefront distribution, Unique employee culture
Weaknesses
Perceived female focus, Brand relatively unknown, Price point, Limited locations

Opportunities
Product diversification and line extensions, E-commerce, Expansion to other countries

Threats
Low barriers for entry, Recognition of brand is low in new markets, Supplier failure

Introduction

Physically fit and active, well-educated, in the upper to middle class, women who are conscious about their appearance, aged between 16 and 45, residing in North America are the current primary target market of Lululemon.

Lululemon’s brand strategy is niche marketing (market segment is very narrow) and they were very successful with this strategy. Because they developed very strong and loyal following so far, Lululemon could explore expansion to further capitalize on the yoga and non-yoga apparel needs as well as on widening of their customer base.

Target Market

As Lululemon’s primary target population ages, new opportunities could open up, for example to target “Over 45” female market - more matured ladies who were using Lululemon’s products from inception of the company or to target “Pre-teen” female population, that may not be able to quite identify itself with existing (more mature) product line and of course to expand more into male market as they already have men’s clothing line. Lululemon started targeting men in 2010 by sponsoring USA volleyball team at Summer Olympic Games in London. There were rumours that they struck a deal with some NHL clubs and players (Lululemon’s male underwear).

Male perception that Lululemon is mostly “female” brand was tested (and consequently proved) by conducting survey, where men were shown 4 pictures; two of them were associated with Lululemon, the other two not. 56% of male respondents did not associate images of men with Lululemon at all, 31% of men correctly associated one of the images with Lululemon. Survey conclusion was that there may be some awareness of sports and Lululemon, since running had the highest association by male survey respondents.

Positioning

It is common opinion that Lululemon (currently positioned as a high quality, exclusive, yoga and exercise apparel company) is in many ways over-positioned as a strictly female company, which is why they would need to re-address men and yoga strategy while trying to enter other indoor and outdoor sports exercise and apparel markets, where in my mind Under Armour would be main competitor.
Male brand should target the “outdoorsy, educated, confident, self-conscious and active males”. Highest quality standard of their products along with high pricing strategy should be kept in order to gain customer loyalty and not to lose image of superiority. This strategy should be supported with increased advertisement and promotion in order to help differentiate from competition.

Pricing Strategy

Currently, Lululemon is using couple great pricing techniques, such are:

Value Added Pricing (more for more) – to differentiate from competition and to justified spending more money on the products (adding extra features such are adjustable straps, women’s pockets, free alternations)

Prestige Pricing – Lululemon clothing is not in the same category as Rolex watches, Giorgio Armani suits or Louis Vuitton purses, but it is prestigious and exclusive in its product category. It cannot be found in every city and in every mall, it is high-quality, fashionable and represents a healthy lifestyle.

The pricing of male brand should follow and mimic common Lululemon approach pricing-wise, meaning relatively high price for great quality with some built-in options. Most likely it will help differentiate male brand from competition.

Distribution Strategy

It is well known fact that Lululemon is keeping its exclusivity by strategically placing their stores.

We will find Lulu store where are their target customers (working high-class woman and young university females both leading active lifestyle). That’s why male brand stores should be ideally positioned right beside existing female-only stores (if possible) or as separate store, but in the same neighbourhood core as female-only store. Male oriented atmosphere/scent/themes should be appealing to men they target in hope that will eliminate stereotype perception of Lululemon as strictly female brand.

Product Strategy

Lululemon’s female product line has very wide spectrum - products are available in many colors and in many patterns. All this allows Lululemon to remain attractive to the customers. Some of the components of current Lululemon’s product and branding strategy are well suited and should be maintained (re-usable stylish shopping bags, very informative price tags, free alterations – they are all match for male target market); the others should be either altered or abandoned in order to increase product differentiation and brand awareness.

Branding Strategy

Lululemon is currently branded as a high quality, high priced, trendy and prestigious brand. This approach should be kept for male brand as well. Male brand should be targeting active man in the same age category as current main Lululemon

brand.

Advertising and Promotion Strategy

Currently, Lululemon’s advertising strategy is: through their reusable bags, logos (found on each product), word of mouth, and events they organize (charities, yoga courses, etc.) This strategy makes Lululemon an exclusive and prestigious brand. Having very few sales or promotions adds to the exclusivity and value of the brand. The same strategy is appropriate for men target market (distinctive and privileged appeal) and it should be maintained. As male brand is still in “baby stages” (beginning of lifecycle) there should be increase in advertising and promotion (athletic teams sponsoring, online promotions and men magazines). All these activities are necessary to differentiate male brand while keeping all original Lululemon’s core values and perception (except as a female brand). After men brand occupies projected market share and establishes itself as a strong competitor, presence of advertising and marketing will go down because brand will advertise itself again (bags, logo on each sold product, etc.)

Conclusion

In conclusion, the main goals (addressing male market, preserving exclusivity of Lululemon as brand, while increasing brand awareness) are very tough to reach, but not impossible to achieve. Since its inception as a brand, Lululemon was very successful establishing themselves as high-quality, high price and inventive. Major issue of male brand will be battling negative male perception about Lululemon as “female only” brand and management should consider naming male brand accordingly to avoid confusion and to steer male population into their stores. Current pricing techniques should be kept as they retain exclusivity of the brand.
Lululemon has very positive image as “honest” brand with no negative issues (example: Nike and sweatshops); its philanthropy and community outreach is great. All these factors should help to further increase brand awareness and distinguish Lululemon from competitors.

However, there are some concerns too:

While building men’s line, Lululemon needs to be aware that brand projects feminine image. Male population is not big yoga practitioner - therefore there should be somewhat wider focus on other male exercise activities, such are rock-climbing, rafting, cycling or wrestling.
Lululemon’s most valuable asset is the set of customers and special care and effort should be undertaken to avoid alienating existing customers.