Lululemon Athletica is a popular sports apparel brand, based in Vancouver, Canada.
The company makes athletic apparel and accessories that are inspired by a healthy lifestyle.
Dennis J. Chip Wilson founded Lululemon Athletica Inc in 1998.
Lululemon in its early days produced workout apparel for women.
Now, it has expanded its product offerings to include a more diverse range of apparel products for both men and women.
It creates pants, shorts, tops, and jackets that are designed for athletic pursuits like yoga, running, training, and other sports.
The company does not own or operate any manufacturing facilities.
It has outsourced all its production to external manufacturers.
The athletic apparel industry is marked by heavy competition.
Lululemon competes with companies like Nike, Adidas, Gap, Athleta, Puma, and Columbia sportswear.
The company uses both physical and digital sales channels.
Lululemon’s product portfolio is mainly targeted at women.
It accounts for the largest source of revenues for the company.
However, Lululemon also offers an attractive range of men’s products.
The company is known worldwide as an innovative fashion brand.
In this marketing mix, we will analyze the four Ps of Lululemon’s marketing mix:
Product:
Lululemon offers a nice range of products for women including leggings, coats and jackets, hoodies and sweatshirts, joggers, pants, shirts, shorts, socks, sports bras, sweaters, swimsuits and underwear.
It also sells a nice range of men’s products including joggers, button down shirts, coats and jackets, hoodies and sweatshirts, pants, polo shirts, shorts, socks, swim trunks, tank tops, trousers, Tshirts, underwear and other products.
Lululemon sells a solid range of accessories also.
Its range of accessories includes backpacks, bags, belt bags, crossbody bags, gloves and mittens, hair accessories, hats, scarves and wraps, water bottles, yoga accessories and yoga mats.
The company mainly uses Luon fabric for making clothes.
It uses four types of Luon that include seriously light Luon, light Luon, Luon, and Full Luon.
Lululemon does not own any manufacturing facility.
It has outsourced its production to external suppliers.
In 2020, 40 independent vendors manufactured Lululemon products and 65 independent suppliers supplied the fabrics needed to create Lululemon products.
Lululemon products were manufactured by independent vendors located in Vietnam, Srilanka, Taiwan and Cambodia. (Lululemon Annual Report, 2020)
The company maintains a strong focus on product quality and design.
It has a dedicated team of expert designers, scientists, engineers and researchers to lead its product design and development team.
Its product team also includes athletes and its product users.
The design and development team of the company identifies trends based on market intelligence and research.
Apart from that, the company also proactively seeks the input of its ambassadors and guests to continuously product quality and the appeal of its product range.
Another great offering from Lululemon is Mirror, which is a mirror like display and an online platform for workout classes.
Lululemon marketing mix.
Place:
Lululemon Athletica Inc has its headquarters in Vancouver, Canada.
The company has a strong sales and distribution network.
It uses both physical stores and digital distribution channels for reaching its customers worldwide.
The company operates stores in 17 countries across the globe.
Its biggest market is North America, which accounted for 86% of the company’s net revenues in 2020.
The largest number of Lululemon company operated stores are located in the United States, where the company operates 315 stores.
At the end of 2020, the company operated 521 stores across the world in 17 countries.
Number of company-operated stores by country January 31, 2021.
United States – 315
Canada – 62
People’s Republic of China – 55
Australia – 31
United Kingdom – 16
Germany – 7
New Zealand – 7
South Korea – 7
Japan – 6
Singapore – 4
France – 3
Malaysia – 2
Sweden – 2
Ireland – 1
Netherlands – 1
Norway – 1
Switzerland – 1
Total company-operated stores – 521
Apart from the physical retail stores, the company also uses ecommerce channels for sales.
Its direct to consumer (digital) sales channel played an important role in driving sales during the pandemic.
The company has its distribution facilities in the US, Canada and Australia.
It also utilizes third party logistics providers for warehousing and distribution.
Price:
Pricing is one of the core pillars of a brand’s marketing strategy.
How brands price their products affects their brand image, customer loyalty, popularity and demand.
Brands employ various pricing strategies to win market share.
A competitive pricing strategy is used to penetrate the market and encourage brand switching.
Companies driven by innovation and quality and having a strong market position often employ a premium pricing strategy to differentiate their brand from rivals.
Lululemon’s pricing strategy is outstanding.
It has differentiated its brand from the majority of rivals using a distinct strategic pricing model.
The company uses a premium pricing strategy.
It does not heavily discount its products like many other rival brands in the fashion industry.
According to industry analysts, its price integrity is an important reason behind its outstanding success.
Even during the pandemic, when the fashion businesses depended heavily on discounting, Lululemon maintained its price integrity.
Still, the company enjoyed growth in revenues compared to the previous year.
Its price integrity strategy has helped the company maintain a distinct image and customer loyalty.
With minimal discounts, the company’s profit margins have remained high.
The company has priced Mirror at $995.
Promotion:
Marketing and promotions play an important role in driving demand and popularity in the business world.
The fashion industry is experiencing heavy competition.
Fashion brands now depend heavily on digital channels, influencer marketing, social media promotions and other traditional and modern marketing channels to attract customers and maintain growth rate.
Lululemon has employed a distinct marketing strategy to differentiate its brand from rivals.
The company has created a special marketing team that it calls strategic sales.
While Nike mainly targets athletes and sports lovers in its marketing strategy, Lululemon’s strategy is different.
It engages sports lovers and people who are passionate about a healthy and active lifestyle.
The strategic sales team at Lululemon reaches out to athletes, sports enthusiasts and local entrepreneurs and builds strong partnerships to encourage a sense of community well being.
Another great marketing strategy that the company has employed is called Mirror.
It is an innovation that offers more than ten thousand workout classes.
It looks like a mirror and can be installed in your living room.
Mirror is a personal trainer, cardio class, yoga studio and much more.
It is a distinct offering of Lululemon that complements its range of activewear products designed for health and sports enthusiasts.
Mirror has 43 inch full HD 1080p display with 178* wide viewing angle that makes it easier to workout at home.
Lululemon also uses online marketing channels and social media platforms for marketing and promotions.
The company actively engages its customers and followers on social media channels including Facebook, YouTube, Instagram, and Twitter.
In its 2020, annual report, the company noted about its community based marketing approach,
We utilize a community-based approach to build brand awareness and guest loyalty. We pursue a multi-faceted strategy which leverages our local teams and ambassadors, digital marketing and social media, in-store community boards, and a variety of grassroots initiatives. We also plan to complement and amplify our community-based initiatives with global brand-building activity.
Lululemon Annual Report, 2020.
A few last words:
Lululemon Athletica started as a workout apparel brand mainly targeted at female customers. Over time, it has continued to expand its product offerings and now also sells sports and lifestyle apparel for men and women. While women’s products are still its main focus and account for the largest part of its net revenues, the company is offering a nice range of products for men. It has relied mainly on product innovation to grow its brand. While the United States is its largest market, Lululemon also sells its products across 17 foreign markets. It uses a special fabric called Luon for making clothes.
Lululemon is operating in a highly competitive business environment. It competes against several leading sports shoes and apparel brands including market leaders like Nike and Adidas. The company has adopted a premium pricing strategy and is known industrywide for its price integrity.
The success of Lululemon can also be attributed to its different approach to marketing. The company markets its products and brand using digital channels mainly. It also makes a device called Mirror which is a display to help people carry out workouts at home and remain physically fit. Mirror offers more than ten thousand workout classes and is highly effective in terms of customer engagement. The company calls its marketing approach – community based marketing. It pursues a community based approach to creating brand awareness and customer loyalty.
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