Below is an example of a real marketing plan so you can see what one looks like for Lululemon. Lululemon is known as the first professional sports brand in Canada. Nike is one of the most well-known and trusted brands around the world whereas Lululemon is still trying to create that fan base. Platform Names will include: LululemonChina, LululemonShanghai, LuluLemonHangzhou, LululemonGuangzhou, LululemonChengdu, LululemonShenzhen and LululemonBeijing to target specific communities. When researching culture in China, it is stated they big logos are a sign of status and luxury (Pan, 2018). This means that Tmall assists in helping brands and companies connect with local Chinese distributors. Another idea is to open a womens only store. Tmall shortens the distribution chain and works as an agent. Why or why not? 4. Lululemon products are constantly changing but always ensuring to keep the basic collection which is the most favorite of their consumers. Lululemon has since tried to recover its commitment to product quality, plus fix the medium term weaknesses in its inventory, commerce and management team. Lululemon has not expanded into China enough to engage with the customers the way they do in the US. Digital marketing received a total budget of $447.5 million, product adaption received a total budget of $268.5 million. LULU started online sales in 2009. They will be responsible for creating the discount structure, an allocation plan for retail stores as well as e-commerce platforms and distributors and an advertising campaign. Lululemon will temporarily cut the price of its Mirror home-fitness device by roughly 50%, taking the price down to $795 as it works to build interest in a new studio membership platform, the. Our writers will provide you with an essay sample written from scratch: any topic, any deadline, any instructions. Where we perform the weakest relative to our competition is in the following product and services features and benefits: Modifications to these product features will form the basis of our marketing strategy. Lululemon CEO Calvin McDonald joins "Squawk on the Street" in his first TV interview since taking over the company to discuss the company's strategy, pricing. Since Lululemon uses competitive pricing strategy with a premium pricing approach versus its competition, it is also part of customer value-based pricing strategy, where the brand clearly has something more to offer than the competition, and accordingly sets a higher value perception to its customers, and the willingness of the consumers to pay a full price based on their set perception of the brand and the value it represents. Lululemon is sold exclusively in Lululemon retail stores and on the company's e-commerce website. Available from: https://edubirdie.com/examples/case-study-of-lululemon-analysis-of-pricing-strategy/. 1. Lululemon completely embodied the law of category. Lululemon should make a Chinese version of the Lululemon App. The following selection describes the market, the competition, a SWOT analysis of Lululemon, Lululemons customers, as well as its products and services. We specifically focus on partnering with spaces that offer yoga, wellness, training, and fitness classes; and who have a designated retail floor. Even at its highest in July when 17% of products were reduced, the average discounting amount remained lower than the rest of the market at 30% vs. 31% at adidas, 35% at Puma and 43% at Fabletics. Marketing, Advertising, Finance and the Social Media teams will be responsible for overseeing these initiatives. Lululemon focuses on ensuring that they have made a superior quality product (CPG, FMCG & Retail, 2019). Have no time to work on your essay? Despite the raised price tag, these styles continue to perform well. One of the most important aspects of any business marketing strategy is pricing a product successfully. We then estimated that their spending for 2019 would increase by 25%, and further determined that their spending in 2020 would be up 30% for a total budget of $1.79 billion for our implementation strategy. I dont plan to take any additional actions on footwear this year and we will manage the category as we look forward with additional innovation, as well as evolution of the category, over the years ahead, he stated on an investor call yesterday (29 March). It appears not even a global pandemic can stop the activewear juggernaut, making market intelligence essential to compete in this space and the new era of retail. Over half of the styles currently retailing in the US are priced up to $20 higher than the majority of leggings at Fabletics and Gap, and even higher than at adidas and Puma where the bulk of the range is priced between $40-$60. lululemon's Social Media Strategy. Lululemon's strategy to target the high-end market has proven successful in maintaining its competitive advantage. On a two-year basis, the brands ecommerce sales grew by 50%. There are major gaps in Lululemons offered products and services compared to their competition. These women would be part of the upper class with a higher household income, valuing quality and fashion. However, during the fourth quarter the company reduced digital marketing costs related to the Mirror business. We will write an essay sample crafted to your needs. They should use their website and WeChat to encourage customers to visit their brand-owned apps, where they can get information on products, events and exclusive content including coaching tips and personalized services for Chinese members. WeChat and Weibo will also be used as a platform to connect with the brand with any customer service issues, which has already been established. 3. Breeze is a professional in her twenties, and she is successful in her career. Maposa, J., Pierno, A., Magers, D., Franz, A., Hackel, E., Scognamiglio, M., Herrmann, B. To attract more Chinese consumers to their product, Lululemon has inflated its already high price. Products for athletic consumers have to be comfortable and have to perform well, and lululemon products due to the material used offer both. These include: Lululemons strategy allows them to become one of the major players in athletic apparel. . Lululemon is a yoga and exercise apparel company, whose business strategy is based on marketing a lifestyle rather than a product. During the period, Lululemon notched up a gross profit of $1.2bn (916m), or 58.1% of net revenue, compared to $1bn (763m), or 58.6% of net revenue in the fourth quarter of 2020. In this store, they could put on events that are designed to inspire active women. PROMOTION Heavy. There are many reasons as to why consumers buy Lululemon products. And Spotify customers agree. (2018, February 28). These leggings are machine washable and the only thing Lululemon advises consumers of is to wash them in cold water to keep the colour and shape longer. These events will be covered through social media channels as well. Learn more about how Pressbooks supports open publishing practices. Ocean is also engaged, has her condo, is travelling, fashionable, has an hour and a half to work out a day. Edited noted that this consistency leads to a strong shopper awareness of pricing and most will not expect pricing reductions. However, some . For 2019, the company's sales increase by 18.4 percent to 5,502 million euros in revenue, according to the company's latest annual. All rights reserved, Impact Of Discount Pricing Strategy On Organizational Profits: Analytical Essay, Consumer Behavior and Pricing Strategy at Costco: Analytical Essay, Main Factors Determinants That Influence the Export Pricing Strategy: Analytical Essay, Analytical Essay on Pricing Strategy: Synergy of Dynamic Pricing in Different Ways, Unethical Management Practices of Valiant Company, Overview Telstra's Pricing Strategy Decisions, Differentiated Pricing and Price Pooling in Supermarket and Cinema Pricing Strategies. While the experience of developing and presenting a marketing plan for a class may seem far removed from the real thing, rest assured that the key elements, structure, and basic layout of your plan arent contrived at all. Lululemon also reported Mirror, the fitness startup it acquired in June 2020 for $500m, is performing in line with revised expectations. Abstract: The purpose of this study to investigate the impact of discount pricing strategy on organizational profit and the importance of planning for a discount; the study was conducted depending on unreal numbers, and it clarify that discounts increase sales volume, but not always increase the profits. Lululemons products want to be perceived as innovative and cutting edge in the athletic apparel industry. Challenges faced by sports apparel companies include constantly changing fashion trends, tough competition and price-conscious shoppers. Partnering with Team Canada is a unique opportunity for us to build awareness for Lululemon on the global stage and to support some of the worlds most elite athletes, said McDonald. Through this paper is aiming to explore the main factors and determinants that influence the export pricing strategy. These factors justify the high price point in the Chinese market (Thangavelu, 2018). By raising prices of core categories helps to protect margins, creating a necessary buffer during this volatile trading period. When buying Lululemon Wunder-Under leggings from a store youll be given them in 25% recycled reusable bag, which is 100% disposable. The immediate response has been incredible. High Cost Of Production. The number of items arriving and selling out in this space over the past three months has outpaced 2019 by 13% and 9%, respectively, while discounting remains flat compared to last year. Market Skimming Pricing For certain well established brands, Lululemon Athletica can increase the prices as customers can pay higher price. Lululemon's team will utilize a customer value based pricing strategy, more specifically, value added pricing. Expand the social media team and divide them into National and Local levels for each major city. The pricing strategy of the Lululemon Athletica Inc will focus on setting the list price, credit terms, payment period and discounts. Chapter 1: Introduction to Global Marketing, Chapter 2: The Economic and Political Environment, Chapter 3: Social and Cultural Environment, Chapter 5: Competing in a Global Marketplace, Introduction to Marketing II (MKTG 2005) 15.5 Putting It Together: Marketing Plan, Creative Commons Attribution 4.0 International License, Be able to work out in certain positions without any problems, The longevity of the product before it needs to be replaced, Good Lululemon offers a replacement service, Variety of colours, patterns and logos to fit personal styles, Great Large variety of logos, colours, and patterns offered, higher end brand but not as expensive as Lululemon, Feeling comfortable in leggings that fit all body types, Wonderful sized to fit all body and focused on length. We tested a loyalty programme that extended that relationship into sweat and strengthened our position of community in our stores. In premium consistent pricing strategy the brand aims to display the quality and experience associated with a product, setting it on a different dimension from its competition, any change to this method of pricing will result in loss of trust in the brand and accordingly loyal consumers to the brand will start shifting from the brand. How does price affect customer perceptions of the Lululemon brand? << LULU Stock Performance Comparisons Lululemon Athletica Inc 's Comment on Competitors and Industry Peers Products from the company are meant to last for a long time and not show wear and tear through the times. Mintel, an international marketing agency has estimated that the value of the sportswear industry in China will reach up to 2200 billion before 2020. This essay is available online and was probably used by another student. You can order a unique, plagiarism-free paper written by a professional writer. 1. 3.8K views 1 year ago Lululemon built a $4 billion business in a highly competitive fitness apparel industry by implementing a unique influencer marketing model. As new channels emerge the opportunities for brands multiplies, but with control over place diminishing, what can marketers do to reclaim influence over this often forgotten P? Biodiversity Data Journal 3: e4541. According to CEO Calvin McDonald, modest selective price increases are planned from the second quarter onwards, impacting around 10% of styles. They are hoping to introduce Wunder Unders into the Chinese Market. doi: 10.3897/bdj.3.e4541.figure3a. While the prints on Lululemon leggings and sports bras have changed, its pricing remains consistently high, unwavering as other retailers scramble to slash prices to offset the pandemics economic fallout. Not only do we work with some of the biggest activewear retailers, but we can also help you refine your pricing strategies. Deciding how much to charge for each of your products or service requires evaluating how much customers value what they are buying. Lululemon Athletica, Inc. (LULU) is a company that sells athletic clothing and accessories. https://doi.org/10.3897/BDJ.3.e4541. She has some extra money to spend and looks for quality products and a recognizable brand to sweat in during her favourite yoga practices. Nikes consumers have a wide range of options to choose from, womens and mens loungewear, workout wear, shoes and so on whereas Lululemon is still only truly tailored to mens and womens workout and yoga gear. The most effective way to reach our target market is by Mobile Marketing campaigns. The Canadian clothing brand saw its net revenue increase by 23% to $2.1bn (1.6bn), primarily attributed to increased sales generated by company-operated stores. The average price of Lululemon leggings cost more or less around $80.00 to $100.00. Marketing is about creating value. The marketing and finance departments will be responsible for defining the effectiveness of our mobile marketing initiatives, while advertising, social media will create the content and execute the planned schedule. This strategy helps in business engagement, retaining customers, and attracts repeat business. Lululemon should go with colourful and all-purpose leggings. Since the pricing is made on the buyers perception value rather than the sellers cost, Lululemon created special products, with special features to meet a niche market segment by creating a new demand which never existed before. And that led to our confidence around the Mirror acquisition, which is really an opportunity for us to position it in that membership base as a means to drive loyalty and retention, said McDonald. (n.d.). Lululemon benefits from the growing number of people that participate in yoga, they believe the percentage of their products sold for other activities will continue to increase as they broaden product range (Farooq, 2018). PLACE. This report proposes a marketing strategy and plan for Lululemon Athletica, focusing on their Wunder Under product line. . How Customers Perceive a Price Is as Important as the Price Itself. In 2018, Lululemon implemented its Power of Three growth strategy focused on three main categories. Of that, 65% of it came from their own stores. lululemon is an experiential brand that ignites a community of people living the sweatlife through sweat, grow and connect. Lululemon keeps discounting to a minimum. Perfecting second-skin, four-way stretch, moisture-wicking leggings in all your favorite colors may have something to do with it. Lululemon uses vertical integration model. Logos are the foundation of brand identity and it will make Lululemon more memorable while separating them from their competition. They have to contemplate obvious objective clients. Lululemon uses a strict pricing strategy to create pricing awareness and maintain their luxury status using the following tactics. Lululemon a well-known athletic apparel company, founded by Chip Wilson, who initially embarked in the surf, skate, and snowboard apparel business for more than 20 years, when in the mid of 90s was introduced to Yoga for the first time, he got hooked and moved into the yoga trend at just the right time. Should you have any questions regarding our 1. This essay wont pass a plagiarism check! The number of products selling out of majority SKUs from these categories combined between May to August eclipsed January to April numbers by 152%. This consistency is key to brand success, this is different from premium brand pricing where the product is freely available to those willing to pay the price. The brand entered the market with a skimming pricing strategy targeting a certain segment, as the segment grew to become a trend and a lifestyle the brand was able to grow, moreover, the startup of the brand was using all the yogi trainers who are role models to their teams, so this furthermore helped the brand attract more of its customers (the yogis and athletes) who are ready to accept their price and willing to pay for the value not only but as a product but a lifestyle. McDonald explained the brand sets its prices based on several factors, including the value of the innovation and an analysis of the range within the product category and market. This proves that it knows what its customer wants and delivers. Simply by setting the higher point of pricing Lululemon created a strong barrier to entry, Lululemon created a product patent only for the brand, that gave the brand special feature and set its unique selling proposition and thus the higher justified price then competitors. lululemon makes technical athletic clothes for yoga, running, working out, and most other sweaty pursuits. Lululemons sales have jumped with the rising popularity of yoga and their improved brand awareness. Finance and marketing will determine these prices to maximize the pricing strategy. (n.d.). Introduction: Pricing strategy can be regarded as an organizations Introduction Kotler, Burton, Deans, Brown, and Armstrong, (2015), are of the viewpoint that dynamic pricing is considered to be referred as that surge pricing strategy, in consideration of which a business entity sets the flexible pricing for the goods and services it offers to the potential customers and the end market.