Lululemon Athletica Class Project

Table of Contents

Executive Summary .................................................................................................................... 1 1.0. Situation Analysis ................................................................................................................ 2

1.1. Company & Product History ................................................................................... 2 1.2. Product Analysis...................................................................................................... 2

1.2.1. Distribution ............................................................................................. 3 1.2.2. Product Lines .......................................................................................... 3

1.3. Marketing Initiatives................................................................................................ 4 1.4. Competitive Analysis .............................................................................................. 5

1.4.1. Under Armour......................................................................................... 5 1.4.2. Adidas ..................................................................................................... 6 1.4.3. Nike......................................................................................................... 6 1.4.4. Athleta..................................................................................................... 6 1.4.5. Reebok .................................................................................................... 7

1.5. Campaign Target Groups......................................................................................... 7 1.5.1. Primary Target Group ............................................................................. 7 1.5.2. Insights.................................................................................................... 8 1.5.3. Secondary Target Group ......................................................................... 9 1.5.4. Insights.................................................................................................... 9

1.6. Environment ............................................................................................................ 10 1.6.1. Social Factors.......................................................................................... 10 1.6.2. Health Factors ......................................................................................... 11 1.6.3. Economic Factors.................................................................................... 11

2.0. SWOT Analysis.................................................................................................................... 12 2.1. SWOT Overview ..................................................................................................... 12

2.1.1. Strengths ................................................................................................. 12 2.1.2. Weaknesses ............................................................................................. 12 2.1.3. Opportunities........................................................................................... 13 2.1.4. Threats..................................................................................................... 13

2.2. Priority Ranking ...................................................................................................... 14 2.3. Actionable Set.......................................................................................................... 14

3.0. Campaign Objectives ......................................................................................................... 15 3.1. T.O.M.A. Objective ................................................................................................. 15

3.1.1. Objective Rationale................................................................................. 15 3.1.2. Objective Timeline.................................................................................. 16 3.1.3. Objective Contingency............................................................................ 16

3.2. Web Sales Objective................................................................................................ 17 3.2.1. Objective Rationale................................................................................. 17 3.2.2. Objective Timeline.................................................................................. 17 3.2.3. Objective Contingency............................................................................ 17

3.3. Media Objective ...................................................................................................... 18 3.3.1. Objective Rationale................................................................................. 18 3.3.2. Objective Contingency............................................................................ 18

3.4. Social Media Objective ........................................................................................... 19 3.4.1. Objective Rationale................................................................................. 19 3.4.2. Objective Timeline.................................................................................. 19 3.4.3. Objective Contingency............................................................................ 19

3.5. Crisis Contingency Plan .......................................................................................... 20 4.0. Multi-Attribute Model (MAM) .......................................................................................... 21

4.1. Method..................................................................................................................... 21 4.2. Belief Scales ............................................................................................................ 21 4.3. Importance Scales.................................................................................................... 23

4.4. Iconic Scales ............................................................................................................ 23 4.5. Line-by-line Analysis .............................................................................................. 24 4.6. Creative Recommendations ..................................................................................... 25

5.0. Media Plan ........................................................................................................................... 26 5.1. Media Budget .......................................................................................................... 26 5.2. Media Mix ............................................................................................................... 26

5.2.1. Media Mix Rationale .............................................................................. 26 5.3. Spot Markets............................................................................................................ 27 5.4. Frequency ................................................................................................................ 27 5.5. Media Schedule ....................................................................................................... 28

6.0. Creative ............................................................................................................................... 29 6.1. Creative Strategy ..................................................................................................... 29

6.1.1. The Situation........................................................................................... 29 6.1.2. Cultural Fuel ........................................................................................... 29 6.1.3. Communication Purpose......................................................................... 29 6.1.4. Audience ................................................................................................. 29 6.1.5. Creative Insights ..................................................................................... 29 6.1.6. Competition............................................................................................. 30 6.1.7. Communication Problems....................................................................... 30 6.1.8. The Bottom Line ..................................................................................... 30

6.2. Creative Executions ................................................................................................. 30 6.2.1. Print Advertisements............................................................................... 30

6.2.1.1. Print Execution....................................................................... 31 6.2.2. Radio Advertisements............................................................................. 32

6.2.2.1. Radio Script............................................................................ 32 6.2.2.2. Pandora Advertisement .......................................................... 33

6.2.3. Direct Email ............................................................................................ 33 6.2.3.1. Direct Email Execution .......................................................... 34

6.2.4. Social Media ........................................................................................... 34 6.2.4.1. Social Media Execution ......................................................... 35

6.2.5 Transit Advertising .................................................................................. 35 6.2.5.1. Transit Advertisement Execution........................................... 36

7.0. Campaign Evaluation ......................................................................................................... 37 7.1. Objective Evaluation .............................................................................................. 37 7.2. Creative Evaluation ................................................................................................. 37

Works Cited.................................................................................................................................. 38 APPENDIX A: Financial Data..................................................................................................... 40 APPENDIX B: SWOT Priority Rankings.................................................................................... 41 APPENDIX C: Simmons Data..................................................................................................... 43 APPENDIX D: Surveys ............................................................................................................... 51

D1: Survey 1 .................................................................................................................. 51 D2: Survey 2 ................................................................................................................... 52

APPENDIX E: Ostrow Model .................................................................................................... 53 APPENDIX F: Quintile Analysis................................................................................................. 55 APPENDIX G: Media Charts....................................................................................................... 57

G1: Frequency for radio and magazine .......................................................................... 57 G2: Year at a Glance ...................................................................................................... 57 G3: National Plan ........................................................................................................... 58 G4: Spot Plan ................................................................................................................. 58 G5: Media Budget Allocation......................................................................................... 59

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Executive summary The following year-long campaign proposal presents an advertising plan for Lululemon that is aimed to increase brand awareness of this young, growing company by directly connecting with our target group and promoting the ideals of a healthy and fashionable lifestyle. Primarily, this campaign will target health-conscious and fashion forward females aged 18 to 24. It will also consider a secondary target group; females aged 44 to 54 who are mothers of the primary group and the demographic for Lululemon’s current main consumer. Based on extensive research, the two chosen target groups, Lululemon’s competition, and the current environment, a detailed campaign plan has been created that is scheduled to begin in October 2013. Because Lululemon is still in the early growth stage if its product lifecycle and due to lack of past advertising, our main objective will be to increase brand awareness by 10%. The brand’s main competitor, Under Armour, has also been kept in mind throughout this proposal. Based on audience research, Lululemon outperforms this competitor in terms of style, a characteristic that will be leveraged to Lululemon’s advantage in the following campaign. Also, based on the increasing popularity of online shopping and our target group’s tendency to use the internet, another campaign objective will focus on increasing web revenue by 50% on Lululemon’s e-commerce website. This is an important component since the target groups are so technologically savvy. Lululemon’s social media presence will also benefit this objective by growing online involvement and interaction. An objective focused on social media growth is also addressed in the following campaign. Overall, this campaign will focus on spot market advertising in nine cities that were found to have a high concentration of our target audiences and a strong yoga following. Additionally, each of these locations contains one of the 108 Lululemon storefronts. Within spot markets, a media mix will consist of radio, transit, and direct email. A national print campaign in women’s magazines will reinforce this spot campaign and create stronger brand awareness throughout the country. The campaign will also take advantage of and expand upon Lululemon’s already strong social media following on Twitter, Facebook, Instagram, and Pinterest. In order to achieve campaign objectives, creative executions will emphasize a blend of style and fitness to our target audience. It will aim to promote Lululemon as a yoga and fitness brand that sells high quality workout apparel that looks fashionable and stylish.

Situatio

nal Anal

ysis

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1.0. Situation Analysis

1.1. Company and Product History: Yoga has exploded throughout the United States as an activity that overwhelms the senses, creating an exhilarating and rewarding form of exercise that provides benefits including flexibility, athletic stamina, and forms of relaxation. Increasing interest among people of all ages proves that this form of exercise is here to stay in today’s workout culture. Lululemon has been able to grow on the heels of yoga’s increasing popularity since its founding in 1998 and its first store opening in 2000 in Vancouver, Canada. Today, the 108 US storefronts that sell men’s and women’s yoga and running apparel, as well as athletic accessories, make it one of the few large yoga apparel lines currently in the United States. Lululemon’s idea was to not only create a yoga apparel line, but a studio scenario where the company could extend their reach through an active connection with the customer. This has created an opportunity unparalleled by any women’s workout apparel line. Lululemon’s way of creating a community with their customers through health, diet, and exercise education are the basis from which this successful company has been able to grow and continue growing into the future. In 2007, Lululemon went public and since then has doubled its stock price to $18 a share (Helliker, 2010). Despite a clear economic downturn in the US, 2008 showed a 30.5% increase in net revenue from 2007. This growth came solely from newly opened stores proving that even through a recession, Lululemon could keep a constant connection with their consumers who were clearly unaffected financially. In 2009, Lululemon launched their e-commerce website which included men’s apparel and new accessories for yoga and running. Even while rapidly expanding their store base, Lululemon's high prices have allowed the retailer to maintain a gross margin annually above 50 percent since 2003, which is well above the market average. Revenue as of October 2012 has reached $1.26B (Google Finance). Lululemon has recently undergone changes in their leadership structure due to controversial statements and philosophies made outright by the former CEO, Chip Wilson. Lululemon’s executive board took action and hired Christine Day to take over Wilson’s duties and hold the position as current CEO. A recall was made in early April 2013 to a fabric line known as the Luon collection, creating high media attention and scrutiny for Lululemon. As a result of this recall, chief product officer Sheree Waterson stepped down from his role and Lululemon has put out multiple statements explaining the issues at hand. The basic sentiment of Lululemon’s statements concluded that testing protocols were incomplete for some of the variables in fabric characteristics. As a result of this recall, Lululemon’s unwavering financial stability took an undeniable hit. First-quarter sales went from $333 million to $343 million, not the $350 million to $355 million that had been expected (Memmott). These recent events are a pertinent factor that should have a set of contingencies in our campaign in order to be prepared for a crisis event like this. It will also be necessary keep a strong focus on Lululemon’s quality products and high-end materials to combat this bad press. 1.2. Product Analysis: Lululemon is a yoga inspired brand that originated as an apparel line for women. The yoga line was first introduced in 1998 and has had large success during its first years of business and is growing quickly. Entering the growth stage of the brand lifecycle, Lululemon is beginning to leave the introductory period and maturing into a household name. Within their core beliefs of a company Lululemon still remains “all about yoga”, however, they have built upon their clothing lines to offer apparel for all athletic activities.

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Today, Lululemon’s product offerings include tops, bottoms, and accessories for both male and females. One of their core values is quality and all the basic pieces, like bottoms and tops, are designed to withstand 5 years of use while still retaining its functional intent. Their clothing is made out of different “families” of materials and they use 90% organic cotton. The families of materials started with the “Luon family”, which is their original, signature fabric used for their yoga line. Since then several other families have formed. The swift family contains lightweight materials used in their running line. Other families include meshes and liners, natural blend, and outerwear and insulation materials. Finally, one of their most recent technologies is their “Silverscent family”, which contains materials that are antibacterial and anti-stink (Lululemon.com, 2013). All of these families together are what comprise the pieces in each Lululemon line. Aside from their technical product, Lululemon has other aspects that help build their brand. The stores of Lululemon pride themselves on being more than a shopping destination, but also a warm, inviting experience. Their stores, which also double as yoga studios that offer classes, hire staff that must be knowledgeable about the brand and the different products they offer. They call their associates “educators” and each employee is expected to be able to suggest the proper apparel for any activity or yoga type, to know where to find different types of yoga, and to offer any general advice regarding the Lululemon brand. These employees share the same core values as the brand and listening, discussing, and vocalizing feedback received from customers is encouraged. In fact, designers even work in-store once a week to receive feedback on different designs, fit, etc (Curtis, 2011).

1.2.1 Distribution: Logistically, Lululemon operates differently compared to other large athletic wear companies. Each store is stocked with a certain amount of product and no re-orders or refills are made. Therefore, items often sell out without having any backup inventory to replace those pieces. There is a set of basic pieces that are sold yearlong and are in constant supply, but the other pieces in-store are “catch as catch can”. These are defined as seasonal pieces that typically have a 6-12 week life cycle until replaced by new styles or colors. While this may seem like a bizarre business model, it oddly enough works in their favor. Since items live a short shelf life, 95% of their apparel is sold at full-price. Lululemon does not typically offer sales or discounts unless room needs to be made for new inventory, which is still highly situational. Offering fewer items than a regular retailer makes the items they do have seem “scarce” and “wanted”. This strategy also increases the amount of impulse purchases because the assurance that customers have that they can always come back for a product is gone. Products are also available on their online website, but these items are also not necessarily guaranteed in stock.

1.2.2. Product Lines: Product lines, as stated earlier, start with the basic yearlong pieces and add different items seasonally. Product lines include a range of tops, jackets, dresses, pants, sports bras, and even accessories like yoga mats. Lululemon uses a premium price point, pricing their items towards the higher-end to reflect the value and quality of their products. A typical long pair of yoga pants will retail anywhere from $90-120, while a typical top may cost $68. These lines can be found online and in retail stores in major cities. Lululemon has stayed away from franchising and earns a majority of their revenue, roughly 80%, from in-store purchases. They also have strategic partnerships with specific yoga, Pilates, and fitness studios. These chosen vendors sell small amounts of Lululemon’s lines in their own studios and it provides another physical location for Lululemon fan’s to make their purchases.

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1.3. Marketing Initiatives: The goal of Lululemon is to leverage local ambassadors, social media, classes and message-boards to create a community-based approach of marketing (Lululemon.com, 2012). These countless grassroots initiatives connect the customer to the Lululemon community, providing inspiration, encouragement, and an overall sense of bettering oneself through a healthy lifestyle. Lululemon has been able to sidestep traditional advertising and avoided high spending in the realm of marketing communications. We can conclude that annual advertising spending is currently less than $500,000. Instead of spending high amounts on traditional advertising, the ambassadors, usually owners or employees of fitness and yoga centers, are given a healthy allowance of free apparel and in return, model the looks to their clients and friends. Lululemon has also been able to utilize social media to a full extent by creating a twitter campaign called “#thesweatlife” featuring Lululemon lovers in their gear, participating in all types of athletic activity. Lululemon also maintains a fully functioning blog and Facebook page that has a significant reach to their consumers for which we plan to utilize in this campaign proposal. Cowie and Fox, the boutique full-service agency based in Vancouver, B.C wanted to position Lululemon as “the embodiment of the perfect utopian yoga lifestyle (Case, 2013).” This positioning seemed to be the only way to differentiate themselves from the athletic apparel masses that are Nike and Adidas. It was necessary to address that in Lululemon’s beginning stages, the “yoga lifestyle” had a lack of mainstream appeal, which presented a challenge for the brand. Cowie and Fox positioned yoga as not only a means for a happy and healthy lifestyle, but also as a fashionable, trendy activity. Images displaying happy and healthy yoga practitioners would attract current yogis but also pick up some non-practitioners and even critics of the “hippy lifestyle.” The goal was to inspire and enlighten; to make Lululemon be center of a new and improved, healthy lifestyle. As time progressed, consumer trends showed increasing interest and participation in yoga. A frequently used design featured in multiple advertising and marketing materials including their shopping bags (Figure 1.3.), stating Lululemon uses to define their manifesto. Quotes, thoughts, expression, and facts all relating to health and happiness are combined into one cohesive look, featuring the logo and the distinctive red color that is used on all marketing materials. The current advertising and marketing initiatives will prove to be a strong base for this proposed campaign. We would like to build on the idea of the “perfect yoga lifestyle” and make it even more attainable and trendy, which in turn would appeal to a specific target. By further increasing advertising and media spending, we believe Lululemon will create a closer competition with high awareness brands and competitors.

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(Figure 1.3) 1.4. Competitor analysis:

1.4.1. Under Armour (Primary Competitor): Under Armour was founded in 1996 by Kevin Plank and is one of the newest companies that offers athletic sportswear, but has quickly become a staple in the market with a share of 50% (Market Share Reporter). Under Armour positions themselves as the best compression garment distributor in the world because of the fabrics moisture wicking and heat dispersing technology. Under Armour also sponsors the NFL and MLB and is the official footwear for those clubs. Despite not having a strong retail presence, Dicks Sporting Goods and The Sports Authority, both athletic retailers, make up 26% of net revenue for the company (Seeking Alpha). One of Under Armour’s most recent marketing strategies is their “What’s Beautiful” campaign which is directed towards women, inspiring them to “sweat everyday” and make working out a staple in their daily lives. This digital campaign was released in April 2012 and since the release, the company has seen the highest response in women ages 18-34 in the past four years. In addition to the “What’s Beautiful” campaign, Under Armour also released an all green line of clothing named “UA Green” which is a line of athletic clothing made out of recycled products such as

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plastic bottles and recycled materials. Under Armour holds a steady state in the mature stage of their life cycle (Simple Way). According to the Multi-Attribute Model discussed further in the proposal, Under Armour is considered a less expensive version of Lululemon, based on consumer responses. Under Armour is in a similar product category because of the comfort and fit associated with tight and constricting materials. Because of these discoveries, Under Armour is our closest and most direct competitor. It will be necessary for Lululemon to show consumers that their products are more stylish and more comfortable than Under Armour products. Considering Under Armour was once a small company as well, Lululemon could benefit greatly from taking on Under Armour in the marketing realm.

1.4.2 Adidas: Adidas is a German based company with their headquarters located in Herzogenaurach. Adidas positions their brand as an overall athletic clothing company that specifies in sports areas such as football, soccer, basketball and many different types of training gear, including yoga apparel. Furthermore, Adidas strives to lead the world market in athletic clothing sales and continuously pledges to give athletes the competitive edge by simply using their products. In 2011, the most recent data shows that Adidas saw sales of around $17.3B and satisfied a market share of 38% (Hoover). Adidas’ marketing goals include their “fit to win” strategy, which includes famous athletes. In 2010, Adidas released their “360° concept” which includes the use of all Adidas equipment in all forms of physical training. In 2011, Adidas started the “Adidas by Stella McCartney” campaign, which is primarily directed towards style for the active woman by improving quality and color options (Adidas.com). This is one of the most threatening campaigns in relation to Lululemon. Adidas is a mature company that is in a steady state of the life cycle.

1.4.3. Nike: Nike began as a company in the early 1970’s when Bill Bowerman and Phil Knight collaborated to create the best running shoe possible. Since then, Nike has become a world-renowned company offering athletic equipment and clothing for all athletic abilities. Nike positions their brand as the “end all be all” in athletic apparel (Nike.com). They feel that their product is the breakthrough equipment for all athletes to achieve a higher level of talent and expertise. As of 2005, Nike realized that their marketing towards women was not working, so they released a campaign called “Nikewomen” which acknowledges the fact that women not only want reliable workout clothes, but they also want to wear their fashionable attire outside of the gym (Warner). Their vision for this campaign was to alert women to the possibility that they could meld their workout routines into their daily life. From recent data, Nike shows a $2.4M marketing budget and a 36% market share. Nike has changed their marketing strategy by reducing television and print advertisements by 40% and increasing digital advertising (Fluffylinks). Their “Nike Digital Sport” campaign utilizes all forms of digital media to disseminate their messages, instead of their traditional use of celebrities to advertise. As a mature brand, Nike is currently in the steady state of the product life cycle. Considering the size and expanse of Nike, Lululemon should not consider them a direct threat.

1.4.4. Athleta: Athleta is a subsidiary company owned by Gap and caters specifically to women. The company started in 1998. Most of Athleta’s sales come from catalog and website sales, but also has a flagship store located in San Francisco and other stores throughout the country. Athleta’s sales figures estimate $26.8 million as of 2011 (Hoovers). Athleta is without a doubt the smallest and youngest brand in our competitive group and is included in the rapid growth section of the life cycle. Their marketing budget is focused on public relations campaigns and catalog expansion rather than traditional advertising. Despite their lack of advertising, the recently purchased company is looking to start advertising campaigns this spring 2013. The young brand positions

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themselves as a company for the everyday woman who wants to keep in shape. Their loose fitting and stretchy clothing allows for comfortable movement while giving the consumer the motivation to get off the couch and hit the gym (Gap’s Up-and-Coming).

1.4.5. Reebok: Reebok is an American owned company and a subsidy of Adidas. The company was started in 1979 and to this date see’s annual sales in the upwards of $1.3 billion. Additionally, Reebok spends $100 million a year on their advertising budget. Reebok was not originally considered one of our main competitors. However, the Multi-Attribute Model dictated that the target audience mentioned Reebok numerous times. It is because of this occurrence that Reebok has been added to our competitors. Reebok has changed their position over the years. In the present, Reebok has changed their position as a company that “celebrates qualities that make people who they are.” In a recent marketing strategy called “EasyTone,” sneakers and apparel for women have been positioned as a means for women to get out and go have fun (McMains). This new campaign uses traditional print and television, but also includes outdoor, digital and social media to spread their message. Another interesting point associated with “EasyTone” is the use of normal women customers in their advertisements. A second campaign is titled “The Sport of Fitness Has Arrived” campaign, which partnered with “CrossFit,” a fitness workout requiring participants to workout for 30 minutes. The campaign is pushing the philosophy that physical fitness can be a sport, and that Reebok can be there to support your workouts (Baker).

1.5. The Campaign Target Group: Lululemon endorses ideals of quality, prestige, healthy living, and environmental harmony to their consumers on a daily basis. These consumers have turned into almost a brand of people known as “Luluheads”. “The Luluheads [those who wear Lululemon head-to-toe] are everywhere, at least in neighborhoods where wealth and some groping toward spirituality coincide” (Urstadt, 2009). Women sport Lululemon significantly more than men. In fact, men make up only 10% of Lululemon’s sales (Edwards, 2012). There has been discussion of shifting the positioning towards men, but currently women remain the focus. The women currently wearing Lululemon are generally in their late thirties to early fifties, and have high household incomes. These women pride themselves on being healthy. They exercise regularly and eat well. They tend to be more spiritually inclined, and their workouts of choice are pilates and yoga. The primary target in this campaign proposal is one Lululemon has not targeted in the past. The campaign’s target consumer is broken up into two groups; primary and secondary. The primary target group in this campaign is females ages 18-34. The secondary group is females ages 45-54, mothers of the primary target. This group is already a current consumer of Lululemon and not only purchases apparel for themselves, but also for their daughters that fall into the primary target group.

1.5.1. Primary Target Group: Based on results from demographic research, target group surveys and the Multi-Attribute Model analysis, the primary target audience will be females aged 18-24. This target audience will be different from the current primary consumer for Lululemon

This target is a group very concerned with self-image. They agree a lot (113) that it is “important to look attractive to others,” and especially to the opposite sex (117) (Simmons, 2010). To look attractive in today’s world women can do many things to reach this goal. They can diet, exercise, and wear the right clothing. This new target is no exception. They agree a lot (137) that “designer labels improve a person’s image”, “and that top designers make quality clothes” (119). Holding to this philosophy, they report a high index (104) agreeing that, “most of what they wear is of

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highest quality.” While doing what they can to stay in fashion, these women (204) “buy new clothes each season to keep up with latest trends” (Simmons, 2010).

According to the 2010 Census, this target group would be at least 31,165 people in size. Women in the primary target appear to be on the left side of the political spectrum. They had an average index of 132 when considering themselves “very liberal,” and very low average index of 72 when considering themselves “any conservative”(Simmons, 2010). Holding liberal ideals coincides to the messages Lululemon promotes. Women aged 18-34 report (114) to believe that “Eco-friendly products are of higher quality” (Simmons, 2010).

The numbers for exercising and diet also support this notion. An index of 129 supports that this group will “try any new diet.” High index numbers for many different fitness activities are evident as well. “Jogging” or “Running” (187) is very popular forms of exercise, and “yoga” and “aerobics” both have indexes over 200 (Simmons, 2010). A difference between this group and the secondary group is the variety of exercises. While both groups partake in low intensity exercises like yoga and walking, the primary target also spends time with activities like swimming and team sports. Most people listen to music when they exercise, and high tempo music seems to be effective for working out. Since this group has high indexes for exercise, we decided it would be beneficial to see what they listen to as well. When we ran crosstabs on types of music this group listened to most, the numbers comply. There were high indexes in almost every genre fitting high tempo. For example, “techno/electronic” music had an index of 198, and “pop/hip-hop” was indexed at 288. Easy listening was ranked at a low 47 (Simmons, 2010). The style of music also seems to have influence over personality. This group has a large number of women who believe they have an outgoing personality. They report to be “adventurous” (123) and claim that “their enthusiasm is contagious” (138) (Simmons, 2010). When it comes to technology this is an audience who is up to speed. This group consists of heavy users for both cell phones and the Internet. They “use their cell phone in many ways to get the information they need” (133), and claim that their “cell phone connects them to their social world” (138) (Simmons, 2009). Survey results from this demographic showed that price was inferior to every other feature on the “very important” scale. The high prices of Lululemon traditionally seemed to repeal younger consumers, but with this insight we believe a new frontier is open for opportunity.

1.5.2. Insights: There are many conclusions that can be made from information about our primary target. This group tends to be high-maintenance, as they need to be in constant contact with the world (high social media/ cell phone usage), and hold such importance to physical attractiveness. They hold high value in both personal image and quality. They want to stay trendy while maintaining a respect to their environment. Lululemon is at an advantage with this target because they agree, “eco-friendly products are of higher quality.” They are also in a good spot with high indexes supporting yoga exercise, but may need to expand product usage since many women in this age group workout in different ways. Marketing through social media and smart phones would be an intelligent move because of the high Internet usage in this group. This group even admits, “they have been shopping online more

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than ever” (125) (Simmons, 2010). Using upbeat music in possible TV advertisements would be beneficial as well since this group enjoys those genres the most. The fact that Lululemon only keeps products in store for a short amount of time is another benefit since this consumer tends to buy new clothes every season. 1.5.3. Secondary Target Group: “Lululemon’s main customers are typically high income women who are insulated to prices and downturns in the economy” (White, Lepore, 2011). These “typical” Lululemon consumers are the secondary target. Lululemon was a brand that actually increased profits during the recent economic recession. They did so with $98 pants, while rarely ever offering discounts. Lululemon is a relatively high-priced brand, and high prices traditionally have been a problem for younger targets (more so 18-24, than 25-34). Reaching the mothers of our primary group is excellent insurance in getting our target to wear Lululemon. Consequently, our secondary target is women ages 44-54, or mothers of our primary target. According to the 2010 Census, this group should be at least 22,459 people in size. Through crosstabs we found trends about these women. One very evident trend was that these women are also very concerned with their self-image. Indexes over a hundred for “looking attractive is important” support this notion. And these women will do whatever they can to look attractive. An index of 113 shows that they “exercise regularly.” Most even do so 3-4 times a week (Simmons, 2010). Aerobics, speed walking, and yoga are the most popular workouts in this group. The biggest reason these women workout is to either lose or maintain weight. The indexes for working out for health reasons are significantly less (like lowering cholesterol or blood sugar), suggesting that body image is the ultimate concern. So, they approve of the “healthy” ideals of Lululemon, by wanting to be healthy, but they hold higher value to looking healthy than actually being healthy. Politically this group stands mainly in the middle of the road, with a tendency of leaning left. There are relatively high indexes for being “somewhat liberal” and extremely low indexes for “very conservative.” Quality is another ideal that is very important to this group. They seem to believe that price signifies quality, by agreeing a lot that “top designers make quality clothes” (138) (Simmons, 2010). Lululemon has strong pride in the quality of their gear, and it shows with the prices in the store. Another thing to note about these women is that they are generally busy people. They have certain responsibilities that the primary target does not just because of age difference. They have a high index for having at least one child living in the household (135). Having children in the household suggests these women are juggling their family’s schedules along with their own. Most of these women own DVR machines (112), suggesting conflicts with schedules and downtime. A large portion of this group works out at home (101), because finding time to go to the gym is hard when there is a lot to do during the day (Simmons, 2010). 1.5.4. Insights: Women ages 45-54 fit the demographic of the “typical” Lululemon consumer. Integrating what we found out about the common demographic, with research about those who wear Lululemon, was the best way to grasp who these people are. Common Lululemon consumers seem to abide with most of the principles set by Lululemon. They appear to care about the environment, hold value in quality, and strive to be healthy. Although most women 45-54 support the company’s ideals, it seems that fitting the Lululemon image is still more important than strictly following its principles.

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Another thing to note is that there are in fact “Luluheads” out there, and many of them. As reported by New York Magazine, they dress in the brand head-to-toe, all the time. “Luluheads” are a group that follows these brand ideals strictly. These are women who run marathons, practice yoga every day, and eat as healthy as possible. These brand ambassadors are the ones who contribute to Lululemon blogs and truly are part of the modern yoga community. The secondary target does share similarities with the primary group. Importance of appearance and quality are two mentioned above. Highlighting the similarities of both while keeping the focus on the primary target should be considered in the creative execution.

1.6. Environment:

1.6.1. Social Factors: Social characteristics of the environment could have a strong impact on a Lululemon campaign. Social habits of shoppers, the target audience, society, and exercisers could pose opportunities and threats that must be considered when planning an advertising campaign for Lululemon. According to recent research on exercise trends, exercise is becoming more and more integrated with technology (Krol, 2012). Research states that there are about 18,000 health and fitness apps available in the iTunes App store. This technology is allowing people to exercise anywhere and to track their progress. Lululemon can integrate these new technologies into their marketing plan with apps, social media, etc. Other non-traditional trends are alternatives to the typical gym or fitness club. “Pop-up gyms,” on-demand workout videos, and even airport gyms are a few of these growing non-traditional trends. In-store classes and runs are another increasingly popular alternative that Lululemon offers in its stores (Patterson, 2011). A strong reason why these trends are becoming more popular is that 71% of exercisers believe gyms are too expensive, (Patterson, 2011). A general rising theme in nutrition and fitness today is “incorporating wellness into fitness”. In fact, general health and wellness is women’s number one reason for exercising (Krol, 2012). Lululemon already embraces this concept in their brand image and can benefit from leveraging this mentality and these new ways to use technology and innovation to achieve in today’s society. Based on Emily Krol’s 2012 Study, yoga is the most increasingly popular niche sport in America today. Therefore the demand for yoga apparel is rapidly increasing. Lululemon’s foundation is yoga-wear for women, so this growing trend is encouraging for their future success. Aerobics, hiking, climbing, and basketball are also increasing athletic apparel markets to keep in mind (Patterson, 2011) Hoover’s consumer research on women’s retail apparel found that there are threats to stores who try to portray a particular image, especially expensive stores. Also according to their analysis, “Certain customer segments, such as teens and young adults, are notoriously fickle and adopt and abandon styles quickly.” In general, people are tending to spend less time at the mall or store for each outing. However, young people spend more time in stores and go to a wider variety (Patterson, 2011). When shopping for fitness apparel, people aged 18-34 tend to care more about looking good and quality. On the other hand, he found “those aged 55+ are most likely to prefer looser clothes, to report wearing fitness clothes casually, and to favor American brands (Patterson, 2011).

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1.6.2. Health Factors: The population of the US is expected to grow 10 percent from 2010-2020 (Hoover’s, 2012). The number of adults ages of 25 and 44 are forecasted to grow by 8 percent, and the population of adults aged 45 to 64 is forecasted to grow 4 percent. It is important that to understand the cultural trends behind these increasing age demographics. A major problem with the US culture today is the rising obesity epidemic. According to the Center for Disease Control’s 2012 statistics, 35.7% of adults are obese in the United States. This high percentage is due mostly to sedentary jobs and activities and poor eating habits. This high proportion of the American population accounts for a large number of individuals who are not in the routine of a healthy lifestyle and who do not regularly exercise (cdc.gov, 2013). Considering over two-thirds of Americans are overweight. This is an important statistic to not since Lululemon is a women’s athletic wear company that focuses on a healthy overall lifestyle. According to Bill Patterson’s September 2011 research, people “very rarely” buy athletic clothing if they do not exercise (Patterson, 2011). However, something to be considered is the growing demand for plus-size workout apparel. Today the average size for women’s workout apparel is a size 14, which is considered plus size (Patterson, 2011) It is also important to note that women who make a higher salary are less likely than low-income women to be obese (Krol, 2012). High-income women are Lululemon’s main clientele. On a positive note, American culture is working hard to reverse this epidemic. For example, companies are beginning to enable more daily exercise for their employees and implementing healthy plans for their workers to become healthier (Krol, 2012). Furthermore, as a country we are becoming more aware of what we are ingesting and how we are staying active. This mentality will be useful for Lululemon to leverage.

1.6.3. Economic Factors: Based on current and forecasted trends, the future economic outlook for Lululemon is positive. National income increased 4.1 percent between 2011 and 2012, which is an indicator of more growth to come. Spending on tourism has increased also, which is an indicator of increased clothing store revenue. Between 2012 and 2016, spending on clothing is expected to increase at about 3 percent a year between 2012 and 2016 (Hoover’s, 2013). Also according to Hoover’s, since 2005 department store sales have been decreasing at now over 15%, these large stores are becoming less popular compared to smaller ones (2012). Since Lululemon is not located in department stores and relies on sales in their small-medium size stores and online, this is a positive factor.

S.W.O.T

Analysis

12

2.0. SWOT ANALYSIS

2.1. SWOT Overview: The SWOT method is a tool that is used to organize and analyze the research compiled on Lululemon. The research has been sorted in terms of the company’s strengths and weaknesses and environmental opportunities and threats affecting a marketing campaign. Once categorized, each of these components will be ranked on several important traits, detailed further in this section. Based on this ranking, the most crucial strengths, weaknesses, opportunities, and threats for Lululemon will be determined and addressed in the campaign. The definitions for this process are as follows:

Strengths are defined as positive attributes of the Lululemon brand that need to be leveraged to the company’s advantage. Weaknesses are negative attributes of the Lululemon brand that need to be demoted in the advertising campaign. Also, external factors beyond the brand’s control that are opportunities and threats to Lululemon will be evaluated. Opportunities are described as situations within the market environment that can be leveraged to Lululemon’s advantage. Threats are situations within the market environment that need to be neutralized to avoid negative effects towards Lululemon.

2.1.1. Strengths: Based on the research in the Situation Analysis, the following factors are strengths of the Lululemon brand and products:

• Lululemon has high quality materials using Silverscent Technology (anti-bacterial and anti-odor) that use 90% Organic cotton and different 'families of materials'

• The shopping experience is warm and inviting. Company produces products based on yoga and running, a high trend in today's society.

• With very few sales on product, they seem "scarce", in-demand, and "wanted" to shoppers. • Share price is extremely high within the athletic wear segment. • Strategic ambassadors in Pilates, yoga, and fitness studios result grassroots form of

marketing. • Lululemon has the highest profit margin among competitors. • Current customers are devoted followers. • The perception of Lululemon allows consumers to express that they are prestigious, healthy

in goal driven. • The goal is to provide inspiration, encouragement, and an overall sense of bettering oneself

through a healthy lifestyle. • The brand is in a growth stage of brand life cycle. • Are not considering large retail partnerships opportunities at this time, strictly corporate

owned stores. • Sales have increased in newly opened stores even in a bad economy. • Company promotes a healthy lifestyle.

2.1.2. Weaknesses: Lululemon also has weaknesses that should be downplayed. The following are internal weaknesses to be aware of:

• Lululemon offers little or no sales or discounts to their customers. • Lululemon is a newer, lesser known company • The brand experiences occasional shortages of products-place utility. • Lululemon has a premium price point, which is not affordable to everyone.

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• Their return policy is short and strict. • Current main consumers are typically high-income women (very limited). • There are currently 108 storefronts in the US. • Company is based in Vancouver, Canada, not the United States. • Some products are only available online or in certain stores. • Brand is 4th in annual sales among competitors. • Menswear makes up only 10% of customers. • In recent news, Lululemon has been the target of controversy over their see-through yoga

pants, which have been recalled and led to the dismissal of their CEO.

2.1.3. Opportunities: The following are opportunities in the environment that can be leveraged to Lululemon’s benefit:

• Room for popularity growth in other sports and fitness areas other than yoga, including biking, hiking, climbing, running, etc.

• Population has increased interest gyms, exercise, and a healthy lifestyle. • Loyalty programs are a new popular trend with shoppers. • Total US retail sales increased 5.5 percent in the first eleven months of 2012 compared to the

same period in 2011. • Yoga is the fastest increasing niche sport among aerobics, hiking, tennis, kayaking, and

gymnastics, creating a strong growth in demand for yoga apparel since 2009. • Lululemon competitor, Adidas, is not directly focused on yoga clothing. • Lululemon competitor, Nike, reduced TV and print advertising by 40%. • Most of Lululemon competitor, Athleta’s, sales come from catalog and website sales and

their advertising budget is low. • Diversity in USA is rapidly increasing, which results in changing preferences, target audience

opportunities, and room for growth. • Consumers today are willing to pay extra for quality and top designer labels, especially the

18-34 year old age group. • Shoppers are spending less average time per shopping trip and more time online shopping • Today’s consumer believes looking attractive is important (agree a lot, indexes over 100) • Today’s consumer keeps up with latest fashion trends. • Consumers gather health information from websites and blogs. • Lululemon’s main audience was cushioned from bad economy in past years due to their

higher financial status. 2.1.4. Threats: Some external factors in the environment may be detrimental to Lululemon. These threats are explained below:

• US shoppers have increasing interest in US made products. • Retail Demand Depends on the Economy - Economic factors, including personal income,

consumer confidence, job growth, and interest rates, can greatly affect consumer spending and the retail sector.

• Nationally, inactivity is growing and obesity is increasing. 35.7% of the population is obese. Two-thirds are overweight.

• Nike, Adidas, and UA all released specific women's line of athletic apparel. • Competitors have stronger men's athletic lines than Lululemon.

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2.2. Priority Ranking: The Strengths, Weaknesses, Opportunities and Threats that affect Lululemon are essential in developing the overall objectives of this campaign. In order to determine which components from the research are the most important to consider as the campaign is developed, each element will be evaluated on a scale of 0-3 on four different elements that are significant to the specifications set by the client. Each component will be rated Damage, Cost, Benefit, and Time frame. Damage is the realistic threat to Lululemon brand if the threat or weakness is not addressed. The higher the damage of not addressing the component, the higher it was ranked. Cost is the cost of addressing issue or leveraging opportunity and can be rated by monetary or other expenses to Lululemon, such as cost to their reputation. The more reasonable the cost was, the higher the component was ranked. Benefit is rated on the realistic benefit to the Lululemon brand if strength or opportunity is leveraged. The larger the benefit of using this opportunity or strength, the higher it was rated. Time Frame rates how realistic addressing the issue is within the given time frame of the October 2013-October 2014. The more feasible the timeframe was for the component, the higher it was ranked. See Appendix B for priority rankings. 2.3 Actionable Set: After ranking each component in the four categories the totals were added together. Any piece of information with a rating of 7 or higher is considered a critical issues and signifies a strengths and weaknesses that should be emphasized and weaknesses and threats that should be downplayed and avoided. Based on the rankings shown in Appendix B, the following elements, with rankings of 9 or higher are considered the Actionable Set. This actionable set represents the most important SWOT analysis and has key components for the campaign objectives.

• Yoga is the fastest increasing niche sport, creating a growing demand for yoga apparel • Lululemon focuses on yoga and running apparel • Lululemon expresses a prestigious, healthy, and goal driven consumer which aligns well with the

selected target group • Shoppers are spending less average time per shopping trip and more time online shopping which

offers an opportunity for increased e-commerce revenue • Competitors, such as Under Armour are focusing on women’s line which could pose a threat to

Lululemon • Lululemon has a strong and established social media following • Lululemon is a young company with a lower brand awareness • Recent controversy dealing with recalled yoga pants has created controversy and question

surrounding the Lululemon image and will be taken into account

Objectiv

es

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3.0. Advertising and Communication Objectives

All of the compiled research in Section 1 was analyzed through the SWOT analysis and prioritized into an actionable set in Section 2. With the actionable set determined, it was possible to develop the overall campaign objectives that will be detailed in the following Section 3. These objectives are meant to set measurable yearlong goals for communicating and advertising to the main target group of this campaign, females 18-24. These objectives will also be provided with timelines that will help to gauge the success of each objective throughout the course of the campaign. Along with the timelines, contingencies are provided for each objective. The contingencies provide solutions for reaching campaign goals, should they not be reached at each quarter of the campaign. Lululemon’s sale structure is centered around a 12-week life cycle that enables them to offer consumers new styles and colors on a short-term basis. Apparel moves very quickly through in-store sales and offers very few sales items at given times. Based on this place utility, we wanted to create our timeline around the 12-week lifecycle, catering to each new line that comes out during the year. By creating four 12-week sectors through our creative campaign, we are matching Lululemon’s style of sales and outlook on changing up items on a regular basis. 3.1. T.O.M.A. Objective: Increase awareness level of Lululemon as a quality women’s fitness apparel line from 30% to 40%

by measuring T.O.M.A. for women aged 18-34 who are health and style conscious, during the campaign time frame of October 2013 to October 2014.

3.1.1. Objective Rationale: By increasing awareness levels of Lululemon nationwide, the company will begin to have a greater reach of new customers and possibly convert consumers that wear competitors clothing. From the actionable set, it is understand that there is a growing popularity of yoga, giving way to new consumers who are looking for new yoga gear. If Lululemon can be the first brand that people think of when they are beginning their yoga lifestyle, top of mind awareness, and more importantly sales will increase. In order to measure top of mind awareness, there will be a series of surveys given to different regions of the country at each quarter of the campaign. The beginning value for this objective is set at a 30% top of mind awareness based on the survey recently given out to a group of women from all different ages and backgrounds. The survey included unaided questions about which companies came to mind when they thought of women’s workout apparel (See Appendix D1). By comparing the percentages of the most frequently mentioned brands, including Nike and Under Armour, an ending value for the campaign objective was found. Nike had a strong T.O.M.A percentage with 67% and Under Armour scored lower than Lululemon with 11%. Based on this information, a comparison was made with the low score of Under Armour, and the fact that Lululemon is a relatively new brand in the market. Increasing Lululemon’s current awareness levels will create an even larger gap against the direct competitor, putting the company at a greater advantage in market. With forethought about time frame and the achievability of this objective, this campaign can achieve a 10% increase in overall T.O.M.A with the proposed campaign’s use of traditional and nontraditional advertising.

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3.1.2. Objective Timeline: With a beginning value of 30% T.O.M.A, the included timeline shows a strong increase in the first two quarters with a slight taper towards the latter two quarters. This decision was based on the idea that the beginning of the campaign will have an expected spike in advertising and reach compared to previous amounts of advertising that Lululemon has done. By creating a goal that slowly tapers towards the second half of the campaign, it will allow room to reassess the tactics implemented in order to reach the 10% increase by the beginning of the next campaign run. 3.1.3. Objective Contingency: Based on our objectives, a set of contingency plans has been put in place for each quarter of the proposed campaign. In Quarter 1, a contingency plan will be utilized if estimated T.O.M.A. falls outside of the +/- 1% cut-off value. If quarterly awareness surveys come back below or above the target T.O.M.A percentage, the plan is to adjust the campaign’s web presence including an increase in the specified social media campaign by 5%. In Quarter 2, a contingency plan will be implemented if T.O.M.A estimates are outside our +/- 1% cut-off value. The contingency plan for Q2 follows that of Q1, increasing social media presence by another 5%. In Quarter 3, increased action will need to be taken if T.O.M.A has fallen outside of the estimated T.O.M.A percentages. The contingency plan for Q3 involves adding additional web advertisements to the proposed media mix. This plan will require the need for ads to be made based on the creative found in other transit and print ads. The contingency plan for Q4 involves revising the proposed creative strategy in order to reach the target audience more directly. Using a portion of the contingency budget to rethink message points will be useful and necessary in order to fulfill this objective. If at any point during the campaign our benchmarked awareness level is too high, the plan will be to reduce advertising spending on the web.

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3.2. Web Sales Objective:

Increase yearly web sales revenue by 50% for women aged 18-34 who are health and style conscious during the campaign time frame of October 2013 to October 2014 by measuring our total

web sales to our target audience using a survey.

3.2.1. Objective Rationale: Based on the proposed actionable set, it will be important to reach consumers through web-based sales in order to achieve a better connection with the consumer. Because shoppers are spending less time in-store and more time online, it is necessary to cater to that consumer and show them a way to shop leisurely and at their own pace. There is a strong opportunity for growth due to the fact that web sales are currently only 20% of Lululemon’s entire revenue. In analyzing the annual report published by Lululemon, it was estimated that from 2011 to 2012, web increased by 20% (Lululemon). In total, web sales amounted to $60 million in 2012. Based on a number of factors, reaching a 50% increase in sales revenue will be achievable within the given time frame. By understanding the way Lululemon distributes its product, we understand that the 108 storefronts that make up 80% of total sales have extremely large gaps where their product is sold. If more people are directed to web, especially in areas where storefronts are not located, there will be a large amount of traffic on the website and demand from the product online. Also, Lululemon stocks their stores based on availability in colors and sizes, which often run out, creating an opportunity for web sales to be a second option.

3.2.2. Objective Timeline: By creating a timeline that consists of incrementally increasing web sales, a 50% increase by the end of quarter four is achievable. With beginning web sales starting at $60 million, sales will increase by $30 million within the proposed campaign time frame. With a 12.5% consistent increase, a 5% cut-off point will be established to ensure success with this particular objective. 3.2.3. Objective Contingency: In Quarter 1, a contingency plan will be utilized if web sales fall outside of the +/- 5% cut-off value. The plan will be to adjust the campaign’s web presence including an increase in direct email media by 10%. Likewise, in Quarter 2, a contingency plan will be implemented if web sales are outside our +/- 5% cut-off value. The contingency plan for Q2 exactly matches that of Q1, increasing direct email media by 10%. In Quarter 3, further action will need to be taken if Lululemon’s web sales objectives are not met. The contingency plan for Quarter 3 involves adding additional web advertisements to the media mix that will be made based on the creative found in other transit and print ads. The contingency plan for Q4 involves revising the creative strategy on the web. Using a portion of the contingency budget to rethink message points will be useful and necessary in order to address this objectives success. It should be noted that if web sales levels are too high at any point throughout the campaign, a percentage of direct e-mail and web advertisements would be reduced.

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3.3. Media Objective:

Optimize reach amongst women aged 18-34 who are health and style conscious during the campaign time frame of October 2013 to October 2014 given a specified budget.

3.3.1. Objective Rationale: Considering that Lululemon currently does not have a large budget for advertising, one of the primary goals of this campaign is to initiate the campaigning efforts and increase reach amongst the target group. Reach was chosen as opposed to frequency because Lululemon is still a company in the growth stage of the lifecycle and still needs to be recognized amongst consumers. In the actionable set, a huge threat that is needed to defend against is the release of women’s workout apparel by our competitors Nike, Adidas, and Under Armour. Having this objective of reach will combat the competition and prevent Lululemon from being overshadowed by one of these new lines. By achieving reach and forming those unduplicated impressions amongst the target group, it will not only establish Lululemon as a top contender in the women’s athletic apparel category, but will also aid in the aforementioned awareness objective. 3.3.2 Objective Contingency: The campaign benchmark will be measured quarterly throughout the year and will begin at 0 reach (considering no advertisements have begun) and will amount to a reach of 60 each month. In the event that our reach falls +/-10 within our goal, we will then activate a contingency plan. The contingency plan consists of tapping into the contingency budget, which will be set-aside at the beginning of the campaign. This budget will be used to increase buying in specified mediums. Not only will buying increase, but there will also be a reallocation the GRPs to create a more effective plan that will bring the proposed campaign back on track. This objectives’ specific timeline will be explored further in the report when the media buying plan is discussed.

19

3.4. Social Media Objective:

Increase social media presence by implementing a new social media campaign that encourages a healthy, goal oriented lifestyle across multiple social media platforms for 18-34 who are health and style conscious, during the campaign time frame of October 2013 to October 2014 in increments as

follows: · 25% increase in Twitter followers (currently 419,262) · 25% increase in Facebook fans (currently 796,619) · 25% increase in Instagram followers (currently 134,000)

3.4.1. Objective Rationale: Considering the target group for the campaign is women 18-34, social media will play a key role in this campaign. A social media campaign will be implemented as a part of the entire campaign and the end goal will be gaining more followers on the following platforms: Facebook, Twitter, and Instagram. By gaining these followers, it will then become easier and less expensive to spread news and events surrounding Lululemon in the future. Two strengths in our actionable set that will be leveraged are that Lululemon expresses a prestigious, healthy, goal-driven consumer and provides inspiration and encouragement in bettering oneself through a healthy lifestyle. Though, this can be leveraged through the social media campaign because it will allow Lululemon and consumers to have a two-way relationship. Not only will Lululemon communicate with the consumers, but also the target consumer will be able to express themselves by having active conversations with Lululemon through different platforms. With the increase of advertising and awareness of Lululemon throughout the campaign, the social media platforms will serve as a place to educate new consumers and followers that are attracted.

3.4.2. Objective Timeline: Because this is one of the first times Lululemon will actually be employing an advertising campaign, the goals are set high at a 25% increase from current followers and fans because of the expected awareness and excitement produced from the campaign. The amount of fans and followers will be measured quarterly throughout the year. Benchmarks will be at 5% level for each quarter, except for the final quarter, which will include a final 10% increase. This is due to the delayed awareness and knowledge of the campaign to be expected in the beginning. It will take some time for word-of-mouth and online presence to spread regarding the campaign, but finally by the fourth quarter the awareness will be built and the final 10% of fans/followers will follow suit. 3.4.3. Objective Contingency: Our contingency plan for this objective will be enacted if our quarterly goals fall above or below 2% of the expected benchmarks. If our goals are not met by quarter 1, the first step will be to increase postings on all of the social media platforms in an effort to increase visibility online. This will create more awareness of the different brand accounts and get us back on track. If goals

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are not met in the later quarters (2,3,and 4) we will tap into the contingency budget to buy web ads that will redirect consumers to the specified platform. Facebook ads and promoted tweets will redirect the consumer to the Lululemon social media accounts and will have a large impact in gaining additional followers and fans.

3.5. Crisis Contingency Plan: In the event that a situation based on product recall or other company-wide issue presents itself, the campaign will include a crisis contingency that will address these problems accordingly. The plan will include a series of surveys that will address the target’s perception of Lululemon’s products and the overall brand. Based on the information gathered from these surveys, there will be an assessment of the new perceptions and, if necessary, a series creative changes and/or changes in media choices will be made based on these perceptions.

Multi-At

tribute

Model

21

4.0. MULTI-ATTRIBUTE MODEL (MAM) 4.1. Method: The Multi-Attribute Model (MAM) is a tool used to determine how a target group perceives a particular product and category. The MAM analysis is necessary for providing suggestions for message strategy and a creative platform. Survey 1 used random sampling to survey individuals in Lululemon’s customer base. Survey 1 received answers from 45 consumers and Survey 2 received 48 responses (See Appendix D2). The first step in the Multi-Attribute Model process requires an initial survey to determine attributes that are most important to consumers. Questions in this survey are open-ended and unaided. Answers to these questions served as a guide for creating questions in the second MAM survey. Survey 1, helped determine product characteristics and competitors that were top of mind examples in the category of women’s fitness apparel. This survey also helped to narrow the target audience and to understand their awareness of the Lululemon brand. Survey 2 was constructed using the competitors of Lululemon (Nike, Adidas, Under Armour, and Reebok), and the brand attributes that were found to be significant in Survey 1. The five attributes that scored the highest in Survey 1 that were used in Survey 2 were price, fit, comfort, style, quality. Survey 2 was constructed using three different scales for determining the audience’s perception of Lululemon. These three scales are Belief Scales, Importance Scales, and Iconic Scales. Each of these will be explained in further detail. Survey 2 was then disseminated to the narrowed primary target group for this campaign, health-conscious and fashionable Females aged 18-24. 4.2. Belief Scales: Respondents were asked how they “believe” Nike, Adidas, Under Armour, Reebok, and Lululemon performed on five attributes that we found to be most important in Survey 1. The results for the “belief” scale are as follows:

NIKE

Nike Question Poor Fair Good Very Good Excellent Total Mean

1 Price 4 13 3 2 1 23 2.26 2 Fit 0 0 5 12 6 23 4.04 3 Comfort 0 0 3 14 6 23 4.13 4 Style 0 0 4 3 16 23 4.52 5 Quality 0 1 1 6 15 23 4.52

By looking at the above table, we can see that the consumers believe Nike performs best in “style” and “quality” with high ratings in both categories meaning that its products are perceived as stylish and high quality.

ADIDAS

Adidas Question Poor Fair Good Very Good Excellent Total Mean

1 Price 2 8 10 3 0 23 2.61 2 Fit 0 3 11 7 2 23 3.35 3 Comfort 0 1 7 13 2 23 3.70

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4 Style 0 3 10 10 0 23 3.30 5 Quality 0 2 5 15 1 23 3.65

Adidas did not perform lower than Nike in all categories. Only “fit,” “comfort” and “quality” received higher, but the scores were still lower than Nike’s. Therefore, Nike has a higher brand perception than Adidas in “comfort,” “style” and “quality” within the target audience.

UNDER ARMOUR

Under Armour

Question Poor Fair Good Very Good

Excellent Total Mean


The last competitor, Under Armour, ranks high in all attribute categories except for price. It ranks the highest in “quality,” “comfort” and “fit” among competitors.

REEBOOK #

Reebok Question Poor Fair Good Very Good Excellent Total Mean

3 Comfort 2 1 11 9 0 23 3.17 5 Quality 2 2 12 6 1 23 3.09 2 Fit 1 5 11 6 0 23 2.96 4 Style 2 7 8 5 1 23 2.83 1 Price 2 5 13 3 0 23 2.74

Reebok is, according to this chart, the lowest scoring brand among the competitors when ranked on the five provided attributes. Reebok performed the worst in the “excellent” category. Overwhelmingly, their products only perform “good” in the “quality”, “price”, “fit” and “comfort” categories.

LULULEMON #

Lululemon Question Poor Fair Good Very Good Excellent Total Mean


Lastly, Lululemon received high rankings in all categories, except for “price”. This means that the target audience perceives Lululemon as an expensive, high quality brand that possesses good style, fit, and comfort. Lululemon performs lower than its closest competitor, Under Armour.

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4.3. Importance Scales: The second component of the Survey 2 asks the target group important a particular attribute is to the product category of women’s fitness apparel. This does not focus on individual brands like the “Belief Scales.” Respondents we asked to answer how “important” the attributes (price, fit, comfort, style, quality, durability, flattering, sweat-proof) are in their athletic apparel purchase decision. The results are as follows: Question Unimportan

t Slightly Importa

nt

Neutral

Important

Very Importa

nt

Total

Mean

1 Price 1 1 0 17 4 23 3.96 2 Fit 0 1 1 3 18 23 4.65 3 Comfort 0 0 1 4 18 23 4.74 4 Style 0 0 4 11 8 23 4.17 5 Quality 0 0 1 5 17 23 4.70 6 Durabilit

y 0 0 0 10 13 23 4.57

7 Flattering 0 2 4 5 12 23 4.17 8 Sweat-

proof 1 3 4 10 5 23 3.65

Based on the results, “fit”, “comfort”, and “quality” scored highly in the “very important” column. This dictates that the attributes of fit, comfort and quality are most important attributes in the product category for the target group. “Price” and “style” also ranked high with the majority in the “important” column. 4.4. Iconic Scales The third and last component for the MAM model is the iconic scale. The iconic scale gives the research credibility by allowing the target group to rank their “iconic” or preferred product in terms of the attributes in question. This scale helps determine what attributes are most important in their ideal women’s athletic apparel product. This particular survey dictates that “fit” and “style” are the two most important attributes an “iconic” product should have. Based on this result, our message strategy should include a stylish and flattering fit.

# Question

Unimportant

Slightly Importa

nt

Neutral

Important

Very Importa

nt

Total

Mean


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4.5. Line-by-line Analysis The line-by-line analysis (Figure 4.5) is a graphical representation of based on the Multi-Attribute Model and the results of Survey 2. A logo represents each brand and an “I” represents the “iconic brand” which was determined in the “Iconic Sales.” This charts helps to represent the relationship between Lululemon and the brand’s competition in the eyes of the target audience in comparison with their idea of an “iconic brand.” Based on the results detailed on this line-by-line chart, Under Armour is Lululemon’s closest competitor, scoring higher on every attribute, except “Style”. Due to this, Under Armour is Lululemon’s closest competitor. In the “fit” category, Under Armour scores closest to Lululemon, which is its dominant attribute. Considering this advertising campaign’s objectives, it is possible for Lululemon to surpass Under Armour in these categories. The only attribute that Lululemon is lacking in is the “price” category. The target audience perceives Lululemon as a more expensive form of Under Armour. This can be used to Lululemon’s advantage based on the price/benefit relationship. Consumers prefer to pay a higher price for a quality product and due to Lululemon’s five-year guarantee on their clothing, the higher price will not be an issue.

Line-by-line Analysis (Figure 4.5)

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4.6. Creative Recommendations: The data collected from the line-by-line analysis will play an integral role in plotting our creative execution. From this analysis we can determine important message points so we can lead the creative department in the right direction. Here we can find underlying themes and important keywords to use in the campaign. Considering that fit is the most important attribute, this is the one that we looked at first. We can see from the analysis that Lululemon may not be as close to the ideal fit as the consumer would like. However, it is second closest to the ideal after Under Armour. An attribute often similar to fit is style, in which Lululemon scored closest to the ideal product. These two facts together helped us determine that fit and style are two strong points of the Lululemon brand and should be two message points used and emphasized in our creative campaign. Both style and fit deal with how a consumer looks and feels in the apparel and is a bit more fashion-oriented than the other attributes such as comfort and price. This works in Lululemon’s favor because it is a more fashionable, feminine brand than many of the other athletic wear lines. We feel that if style and fit are the basis for our campaign, consumers will be drawn to Lululemon for its “look” and these two attributes will remain strengths for the brand. We also believe this could help raise the rankings of fit for Lululemon and make it to the top ranked brand in that category over Under Armour. How are we going to emphasize these two things throughout our campaign? In order to make the “look” of Lululemon the emphasis the campaign will clearly need to be very visual. The products will need to be the showcase of the ads and the slogan and copy will need to be produced with these keywords kept in mind. Another pattern we have observed through the line-by-line analysis is Under Armour being our top competition in almost every category. This is something we are going to need to combat and offensive advertising can be implemented in this situation. Under Armour began on the scene as a very masculine and “tough” brand. It is now branching out into the women’s sector. However, considering Lululemon began as a very feminine, stylish brand this is something we can use to advantage. We can position our brand as the one and only athletic wear brand made with the woman in mind first and foremost. We can emphasize that while Under Armour may have a great brand, they are very male-oriented in their design and styling. Lululemon, like other athletic brands, wants to keep you comfortable, but it also has the added bonus of keeping you stylish at the same time. Lululemon not only wants to provide you with great workout gear, but also wants to keep you looking and feeling stylish as well and that is something Lululemon can provide over any other brand in the category. This is something that we feel will not only help with the theme of our campaign of “style” and “fit”, but will also help create a competitive advantage over not only Under Armour, our leading competitor, but all other brands in the market.

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5.0. Media Plan 5.1. Media Budget This campaign budget was set keeping in mind that Lululemon has had minimal traditional advertising in the past. There has been tremendous success with the grassroots technique so even a substantial budget will make a large difference for this first major campaign. Lululemon is expected to increase sales by 40% in 2013, making anticipated sales $1.4B (Hoover’s, 2012). Based on research forecasting the brand’s growing sales and the increasing popularity of yoga and exercise within our target audience, the budget will be set at $11,400,000. While this number remains much smaller in relation to the expected sales, this is the first traditional campaign and will be more than satisfactory in helping us reach our objectives. Based on this budget our contingency budget will be $1,710,000 which is 15% of our total. To see how the budget is broken down by medium, refer to Appendix G5. While it may seem like insignificant funds are allocated towards direct mail and email marketing, it is important to keep in mind that these two mediums are much less expensive than buying for radio and magazine and will still make a powerful impact. Social media is not part of the media budget because it is essentially cost-free, but it will be an integral part of the campaign as well. 5.2. Media Mix When deciding on the types of media that will be used for Lululemon’s campaign media plan, a careful analysis was conducted. This procedure studied the relationship between our target group and various types of media in a quantitative and a qualitative sense. For quantitative data Simmons Experian served as a database to analyze media usage for the primary target audience, females aged 18-34. This process includes analyzing specific indexes based on five Quintiles of usage for the target group; Quintile I representing the highest usage in the medium and Quintile V representing the lowest usage. Quintiles I and II are most important for determining relevant mediums for the target audience, being that they represent the highest usage, so they were the main focus for media type decisions. (See Appendix F) An additional qualitative analysis was completed. This step analyzed the positives and negatives of each medium based on its characteristics and properties. Qualities such as reach and frequency, shelf life, effectiveness in spot markets, and cost are all factors in this analysis. Together these qualities combined with quantitative results from Simmons research determine the mediums the campaign will use to achieve objectives. This process determined five mediums that will be used in this campaign. For spot markets, Radio (FM, Pandora, & Spotify), Direct Email, and Transit Advertisements were chosen. Nationally, print advertisements in women’s magazines will be used. Social media will also be used nationally throughout the year.

5.2.1. Media Mix Rationale: Based on Quintiles I and II for the target audience, Internet, radio and transit are effective mediums. Based on this data, radio will be used for the majority of this campaign. Spot market FM radio stations will be used, along with spot commercials on Spotify and Pandora. The target group’s high Internet usage makes this a tactful way to approach radio in spot markets in addition to local FM stations. These radio mediums are also affordable and meet frequency goals.

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Transit and direct email will also be used to reach spot markets. According to Simmons research (Appendix C), these mediums are high in usage among the target, and therefore should reach them well. Also, they are successful in metro areas, which happen to be where the campaign spot markets are located. In analyzing Quintile V, this target audience is less likely to view Primetime and Late night TV. Overall, television was not the strongest medium with the target group. In addition, television advertisements are costly for a young company with a smaller budget. In regards to usage data collected through Simmons Experian, low usage in newspapers is shown in comparison to high usage in women’s and health and fitness magazines. Based on this information, we can conclude that using newspapers will not be necessary in this campaign to reach our target audience. There will be a stronger emphasis on women’s health and fitness magazines as opposed to other topical magazine issues. Magazines will be successful nationally, because of their strong usage with the target audience. Also, they have a higher pass-along rate for a larger reach, and the medium has the possibility to be very selective. This campaign will be able to place print campaigns specifically in spot markets. There will also be a strong emphasis on social medial throughout the campaign. As mentioned, Lululemon’s already strong social media standing lends itself to creating an even more successful social media campaign that will be integrated with traditional media. In addition, the target group is extremely active on mobile and computer devices and are shown to be frequently linked into social media platforms.

5.3. Spot Markets: Colorado Springs, C.O. Boston, M.A. Chicago, I.L. Los Angeles, C.A.

Miami, F.L. Minneapolis, M.N. New York, NY. Philadelphia, P.A. San Francisco, C.A.

This twelve-month Lululemon campaign will be heavily focused on spot markets. Rationales for focusing on spot markets were a restricted budget and high target audience count population in the spot markets. Simmons data found that there is an especially high concentration of active, yoga enthusiasts in metro areas. When choosing the spot market locations, several factors were taken into consideration. First of all, the spot markets had high populations of the target audience, healthy, fashion-forward females ages 18-24. They include about 25% of our target group, according to the media planning software, Media Flight Plan. Have a high number of gyms, yoga studios, and yoga enthusiasts based on Simmons research and Travel and Leisure, a popular magazine devoted to vacationing which ranked heavily populated yoga cities. The nine spot markets identified contain the best and most innovative yoga studios around the country. Undoubtedly, these areas hold the greatest potential for spot market opportunities in this spot focused campaign. 5.4. Frequency This campaign established a frequency level by using the Ostrow Model of Effective Frequency, which aims to establish the minimum level of times a consumer is exposed to an advertisement. Using this model, a 3.3 optimum frequency was determined for this campaign.

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The Ostrow Model starts by creating a benchmark of 3 impressions, and subsequently adds or subtracts .1 or .2 points for each component from a list of campaign factors. The first set of components, duly named “Marketing Factors That Affect Frequency,” aggregated +.1 points. Considering Lululemon is a newer brand that has a lower market share, less brand loyalty and longer purchase cycles dictates that an increase of .1 is optimal for marketing factors. The second group, “Copy Factors That Affect Frequency” only added .2 to the already .1 accumulated in the previous section. Lululemon’s copy strategy will be simple and more unique than established competition. It will also include smaller ad units. The third and last section of components includes “Media Factors That Affect Frequency.” This campaign outlines a plan for advertisements to be placed in magazines focused on the target demographic. Considering our media choices, a .0 increase in frequency for this section was determined. Regardless of advertising clutter and low attentiveness to media, the fact that our advertising mediums present opportunities for repetition balances out media factors and results in a zero increase of effective frequency. (See Appendix E) 5.5. Media Schedule: To optimize the budget to provide an effective campaign, the media mix will consist of 5 components: radio, magazine ads, transit ads, direct mail, and social media. A majority of the budget will be used for a flighting radio spot campaign paired with a flighting national magazine campaign. The radio ads will run strictly in the spot markets while the magazine print ads will be seen nationally. They both will run from October to January, the prime holiday shopping season, as well as April to July to precede the summer season. Both of these time periods are prime buying periods for the Lululemon product. The radio spot market goals are set at a frequency of 3.3, determined by the Ostrow Model, and a reach of 60. The magazine print ads are much more expensive, so the goals are set at a frequency of 1 and a reach of 15. We recognize this is below the standard, however, given the budget and objective the magazine print ads are simply being used to bring the campaign to a more national level and create a pairing with the radio ads. To aid in the national awareness and create buzz and excitement about the brand, social media will be heavily utilized as well. Four months out of the year (November, December, April, and May) transit and direct mail will be placed in the spot market cities. The media schedule is largely spot market driven because these are where most of Lululemon’s customers are and where the ads will be best received. Rather than spend the budget in a way that creates a mediocre national campaign, this media schedule creates strong goals and coverage in our most important markets. To see the radio and magazine media plan broken down month by month along with a visual chart of the reach goals, refer to Appendix G1.

Creative

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6.0. Creative

6.1. Creative Strategy:

6.1.1.The Situation: Lululemon is a growing athletic apparel brand which specializes in making quality items of clothing that are also extremely fashionable. Most famous for women's yoga pants, this brand promotes the ideals of healthy living, community, and positive self-image. While capitalizing on the increasing popularity of yoga and Pilates, Lululemon has been able to market themselves using non-traditional techniques such as brand ambassadors, blogs, and branded yoga classes. This community-based approach agrees with the environmental and inspirational message they strive to show market. 6.1.2. The Cultural Fuel: Image in today’s world is everything. This idea permeates the brands we wear, the activities we take part in, and the even the food we eat. In the case of apparel, having the “right look” makes all the difference in one’s self confidence and can even affect one’s quality of life. Healthy living has become a major trend among young consumers, creating an intense focus on self-image and in turn the perception we have about other people. Consumers are putting a high importance on healthy living and want their brands to do the same. Trends like “going green,” sustainability, and conservancy are all aspects of this lifestyle that interests a significant amount of our country. It will be important to not only focus on self-image, but also tap into the healthy lifestyle that is aspired by so much of our target audience.

6.1.3. Communication Purpose: The purpose of this campaign is to reach a younger target who has not been included as a primary consumer of Lululemon. Lululemon will advertise in attempt to increase brand awareness while still holding true to their established image. Their current image projects ideals of quality, style, and healthy living. 6.1.4. Audience:

Primary: Women ages 18-34 Secondary: Women ages 44-54, or mothers of primary target

The primary target puts a high value on self-image. Traditionally, the target group faces many changes in this stage of life, like starting college or a career, and all while creating new relationships with the people around them. This group holds value in brand name products and is also connected to the Internet through social media and online shopping. 6.1.5. Creative Insights: • Self-image: promoting Lululemon in a way that increases a positive self-image will

ultimately drive this campaign. This applies to physical and spiritual self-image. • Changes: When many things are changing in these women's lives it can be nice to have

something that does not change, or an escape from change. Promoting physical activity to keep fit, or to keep in routine would be viable option.

• Value in name brand products: Emphasizing that Lululemon is an elite brand can assure the target that we are a quality brand.

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• Connected: Keeping non-traditional advertising in the budget would be a smart and affordable way to reach this group. The idea of community and connectedness appeals to them.

6.1.6. Competition: The closest and most direct competitor is Under Armour. They are currently running a successful campaign challenging our target audiences’ view on what is beautiful. Under Armour targets the same audience and promotes the same type of products as Lululemon. 6.1.7. Communication Problems: Increasing brand awareness and brand equity should be a main priority. Current brand awareness is low. Also, recent scandals dealing with Lululemon’s yoga pants requiring a recall must be kept in mind. 6.1.8. The Bottom Line: • Focus of Sale

o Lululemon is a workout apparel brand that seamlessly fuses style, fitness, and quality into one amazing product.

• Support o Lululemon has a wide range of products offer anything and everything an athletic

woman needs to create a fashionable workout wardrobe. • Tone and Manner

o Simple yet powerful. An influential tone that is supported by strong images.

6.2. Creative Executions: Based on the use of the creative brief, a creative campaign is proposed that revolves around the idea of incorporating yoga attire with high fashion. These two ideas are communicated with simple, powerful messages. All creative executions (with the exception of the radio spot) are based with strong images supported by short taglines that allude to both fashion and yoga. “Look as good as you feel” gives a theme to the campaign and is carried out through each creative piece. The idea here is to emphasize the fashionable aspects of Lululemon, while also implying both comfort and the importance of being healthy. As stated in the campaign objectives, increasing brand awareness and online spending is integral to the fruition of the company. To help brand awareness, Lululemon will be associated as a fashionable brand that can be flaunted in any situation. Additionally, a call to action is established with the brand’s website featured on much the campaign creative.

6.2.1. Print Advertisements: The basis behind the print ads for this campaign will play with the idea that yoga can seamlessly blend with fashion and style, with the help of Lululemon. Yoga rhetoric, including names of poses and other well-known sayings, will combine with trendy, fashion-oriented sayings, creating a succinct and immediately recognizable relation between Lululemon and fashion. The ad will consist of a woman, specifically in the age and type of the target audience, participating in yoga poses that are also noted in the short tag line in each creative piece. This tag line with help the viewer connect the pose, and with the fashion imagery that is also used to enhance a stylish tone. This example uses the Warrior, a frequently used pose in yoga, and the imagery of a woman on a fashion runway, spotlight and all.

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6.2.1.1. Print Execution:

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6.2.2. Radio: While constructing the radio advertisement for Lululemon, two of the campaign objectives were stressed: brand awareness and increased online sales. The main concept behind the radio advertisement is two women discussing how great a pair of Lululemon yoga pants look on a young female yoga student. The discussion takes place in between stretches and deep breaths during a yoga class. The name “Lululemon” is mentioned five times and is explained to be a yoga clothing company. This aspect of the advertisement is to significantly increase brand awareness to the point where consumers will automatically think of yoga when they hear Lululemon. The second aspect of the radio advertisement is to increase online sales. “Lu” the radio spot’s main character tells the other female how she received her pants through the mail from Lululemon’s website. This is expected to increase website sales because it will direct consumers to visit the Lululemon website and purchase items off the site, instead of store locations. Once consumers visit the website, they will be able to browse through Lululemon’s collection of assorted workout apparel.

6.2.2.1. Radio Script: Lululemon “Yoga Attire Campaign” :30sec Produced Spot “Cute Pants” Copywriters: Frank Aritz, Sean Nelms April 21, 2013 Comm 424

PRODUCTION NOTES: THREE VOICES: LU, A YOUNG 22ISH FEMALE YOGA STUDENT

WITH A CUTE VOICE; KIM, ANOTHER FEMALE YOGA STUDENT WITH DIFFERENT, BUT SIMILAR VOICE TO LU; INSTRUCTOR, A DEEPER AND MIDDLE AGED FEMALE VOICE.

SFX: (:01) ROLLING MATS Kim: (:03) “Hey Lu, oh wow those are really cute pants!” Lu: (:03) “Thank’s, they’re Lululemon.” Instructor: (:02) “Breathe In…” SFX: (:02) CLASS BREATHE IN COLLECTIVELY Kim: (:02) “Lululemon?” Instructor: (:02) “And breathe out…” SFX: (:02) CLASS GASP COLLECTIVELY Kim: (:02) “Never heard of them.” Lu: (:04) “Really? They make really comfortable workout clothes. I actually just got these off their website.” Kim: (:03) “Lucky you, I have to walk home in these ratty things.” VO: (:04) LULULEMON IS A YOGA APPAREL COMPANY WHICH EMBRACES STYLE, QUALITY AND HEALTHY LIVING. FIND US AT LULULEMON.COM. LULULEMON,

“LOOK AS GOOD AS YOU FEEL”

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6.2.2.2. Pandora Ad Example:

6.2.3. Direct Email: The direct email advertising carries the same basic trend of the print ads. The medium will stay along the lines of a simple, image driven execution of a young woman doing yoga. The tag line featured in this specific execution states, “How strong is your fashion karma?” Again, this fuses the ideas of fashion and yoga terminology. Unlike the proposed print ads, the direct email will have more body copy and a brief description stating that Lululemon offers a variety of gear for every season. On the bottom of the email will show a link taking the consumer directly to Lululemon’s website.

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6.2.3.1. Direct Email Execution:

6.2.4. Social Media: Social media will be a crucial medium to use during the campaign. Not only is the primary target heavy users of social platforms, but social media will also maintain buzz and engagement with the audience during times when traditional advertising will not be heavily utilized. The social media campaign will continue with emphasis on fashion and self-image. The purpose of the entire process is to create a “Lululemon Look Book” featured on the website where women can go and reference inspiring ideas of how to wear their own Lululemon yoga pants. However, rather than featuring models and telling the target how to wear their pants, the social media campaign will allow Lululemon’s consumers to share how they wear them. It will become a Look Book that engages our audience and allows them to participate in fashionable creations. An Instagram, Twitter, and Pinterest campaign entitled “Little Black Yoga Pant” will play on the idea of every girl’s classic ‘little black dress’. It’s a staple in every woman’s closet and can be worn for multiple events. This idea will be translated to Lululemon’s classic black yoga pant, which stays in stock year-round and is a necessary piece of clothing in a workout wardrobe. The “Little Black Yoga Pant” embodies the fashion-forward underlying theme this campaign presents. It will also persuade consumers that the black yoga pant is a piece that every woman needs in her closet. It is not a want, but rather a need. The campaign will instruct participants to Instagram, tweet, or pin a picture of where they wear their classic little black yoga pants. Whether it be to an actual yoga class or styled into an everyday look, the question “where to wear?” will enable participants to portray not only the versatility of Lululemon’s classic black yoga pants, but will also emphasize how they are a staple in any closet. Those who enter will hashtag “#littleblackyogapant” in order to be included in the campaign. The use of a hashtag will create engagement, trending, and word-of-mouth marketing for virtually no cost. Participants who instagram, tweet, or pin a picture will have a chance to be added into the photo gallery named “Lululemon Look Book,” which not only motivates them to

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participate for recognition on the Lululemon website, but also creates a gallery of photos for consumers to look at and see the many different ways their yoga pants can be worn. 6.2.4.1. Social Media Execution:

6.2.5. Transit Advertisements: Every female knows that they must have the staple fashion garment, the “little black dress,” as a necessary part of their wardrobe. In accordance with the other creative, our team wanted to incorporate yoga with high fashion, hence, the “little black yoga pant.” Our transit advertisement includes a young female yoga student posing, with the tagline “little black yoga pant.” These will be located in subways and bus stops to remind consumers that Lululemon’s yoga attire can be as much as a high fashion staple as a sexy “little black dress.”

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6.2.5.1. Transit Execution:

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7.0. Campaign Evaluation 7.1. Objective Evaluation: Based on extensive research and background analysis of Lululemon’s current situation, this campaign addressed a primary target audience of women ages 18-34 in the U.S. Based on this target, research was collected on the consumer, concluding that their preferences to online shopping and interest in maintaining a healthy lifestyle will be important factors to address in the campaign. An analysis of strengths, weaknesses, opportunities and threats brought about various aspects of Lululemon that should be addressed within the campaign. Prioritizing these factors concluded that: online shopping caters to consumers in ways that in-store shopping can not, yoga is the fastest growing niche sport, and social media is an important tool to reach the proposed target. The four campaign objectives outlined in Part 3 focus on varied aspects of Lululemon that are necessary to address given the consumer and product research conducted. The awareness objective focuses on increasing top of mind awareness among the primary target audience by 10% throughout the campaign year. The beginning value of T.O.M.A. was found based on information found through the first MAM survey. This survey, which measures aspects of awareness, will continue to be sent out at the end of each quarter. Based on the information collected from those surveys, awareness will be continuously tracked and analyzed for any contingencies that may need to occur. This campaign plans to evaluate an increase in web revenue over the campaign time period. Because web sales are a relatively small percentage of overall sales revenue, the campaign creates an opportunity for overall growth of Lululemon. This objective specified an increase of 50% web sales revenue made by increases in social media and direct email mediums. Tracking web sales revenue will be the primary tool used to establish success in this objective. In addition to web sales revenue, the proposed campaign also includes a set of social media objectives that will increase our reach on the Internet and speak to the target consumer. By increasing social media platforms by 25% across the board, Lululemon will create an even higher presence on the web than it currently has. The campaign will track Facebook, Twitter, and Instagram followers, as well as build reports detailing mentions, comments, and shares at the end of each quarter. A final campaign objective deals with reaching the target consumer consistently throughout the campaign timeline. Because Lululemon is a relatively new company, added reach will help achieve an increased audience throughout the U.S. and will also help to achieve the aforementioned objectives to create a well-rounded, successful campaign. 7.2. Creative Evaluation: This campaign proposal outlines a creative messaging strategy that will enhance brand awareness and create a streamlined campaign based on a number of factors that the target consumer deems important. Keeping a focus on style and fashion while also maintaining a strong yoga and fitness-based approach to Lululemon will be a key factor to inform the target and show them the trendy side of Lululemon. Blending the idea of fashion and fitness into a harmonious campaign will speak to the target directly and help achieve the outlined campaign objectives.

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Appendix

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APPENDIX A: Financial Data Lululemon 2011 Annual Report

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APPENDIX B: SWOT Priority Rankings

Strengths Damage Benefit Cost Timeline Total High Quality Materials using Silverscent Technology (anti-bacterial and anti-odor) that use 90% Organic cotton and different 'families of materials' 0 3 1 3 7 The shopping experience is warm and inviting 0 1 1 1 3 Company produces products based on yoga and running, a high trends in today's society 0 3 3 3 9 With very few sales on product, they seem "scarce", in-demand, and "wanted" to shoppers. 0 1 3 1 5 Share price is extremely high within the athletic wear segment 0 1 1 1 3 Strategic ambassadors in Pilates, yoga, and fitness studios result grassroots form of marketing 0 2 2 3 7 Has the highest profit margin among competitors 0 0 1 1 2 Current customers are devoted followers 0 2 1 3 6 The perception of Lululemon allows consumers to express that they are prestigious, healthy in goal driven 0 3 3 3 9 goal is to provide inspiration, encouragement, and an overall sense of bettering oneself through a healthy lifestyle. 0 3 3 3 9 In growth stage of brand life cycle 0 1 3 1 5 Are not considering large retail partnerships opportunities at this time, strictly corporate owned stores 0 1 1 1 3 Sales have increased in newly opened stores even in a bad economy 0 2 1 1 4 Company promotes a healthy lifestyle 0 3 3 3 9 Weaknesses Damage Benefit Cost Timeline Total Offers a low amount of sales and discounts 1 0 1 2 4 Experiences a lot of shortages of products-place utility 3 0 1 1 5 Premium price point can be unaffordable 3 0 1 1 5 Short return policy 1 0 1 3 5 Main consumers are typically high-income women (very limited) 2 0 2 3 7 Currently 108 storefronts in US 2 0 3 1 6 Based in Vancouver 1 0 1 1 3 Some products are only available online or in certain stores 2 0 2 2 6 4th in annual sales among competitors 3 0 3 1 7 Men are only 10% of customers 3 0 1 1 5 Recent controversy with recalled pants can effect brand image 3 0 3 3 9 Opportunities Damage Benefit Cost Timeline Total Room for growth in other sports and fitness areas other than yoga 0 3 3 2 8 Increased interest gyms, exercise, and a healthy lifestyle 0 3 3 2 8 Loyalty programs are trending with shoppers 0 1 2 3 6 Total US retail sales, a measure of the retail sector, increased 5.5 percent in the first eleven months of 2012 compared to the same period in 2011. 0 2 1 2 4 Yoga is the fastest increasing niche sport among aerobics, hiking, tennis, kayaking, gymnastics (strong growth in demand for yoga apparel since 2009) 0 3 3 3 9

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Competitor Adidas is not directly focused on yoga clothing 0 1 2 3 6 Competitor Nike 40% reduction in T.V. and print advertising 0 2 3 2 7 Most of Athleta sales come from catalog and website sales and their advertising budget is low 0 1 1 1 3 Diversity in USA is rapidly increasing, changing preferences, target audiences 0 1 2 1 4 Consumer is willing to pay extra for quality and top designer labels 0 2 3 3 8 Shoppers are spending less average time per shopping trip so opportunity for online shopping on website 0 3 3 3 9 Consumer believes Looking attractive is important (agree a lot, indexes over 100) 0 2 3 3 8 Consumer keeps up with latest fashion trends 0 2 2 2 6 Consumers gather health information from websites (lulu blogs) 0 2 2 2 6 Target audience was cushioned from bad economy in past years 0 2 3 3 8 Threats Damage Benefit Cost Timeline Total US shoppers have increasing interest in US made products 1 0 1 1 3 Retail Demand Depends on the Economy - Economic factors, including personal income, consumer confidence, job growth, and interest rates, can greatly affect consumer spending and the retail sector 3 0 3 2 8 Nationally, inactivity is growing and obesity is increasing 1 0 1 1 3 Nike, Adidas, and UA all released specific women's line of athletic apparel 3 0 3 3 9 Competitors have stronger men's lines 2 0 1 1 4

43

APPENDIX C: Simmons data Women18‐34,ImportanceofAttractiveness

TotalFEMALE18‐34

Total Sample 24,463 2,606

Weighted(000) 223,765 31,906

Index 100 100

ITISIMPORTANTTOLOOKATTRACTIVETOOTHERS Sample 6,927 763

Weighted(000) 59,693 9,586 Index 100 113ITISIMPORTANTTOBEATTRACTIVETOTHEOPPOSITESEX

Sample3,841 558

Weighted(000) 36,337 6,050

Index 100 117

WomenAges18‐34,ShoppingHabits

TotalFEMALE18‐34


Weighted(000) 223,765 31,906

Index 100 100

ALMOSTEVERYSEASONIBUYNEWCLOTHESINORDERTOKEEPUPWITHTHELATESTFASHIONS

Sample917 219

Weighted(000) 7,927 2,302 Index 100 204

WomenAges18‐34,CellPhoneUse

TotalFEMALE18‐34

Total Sample 24,463 2,606 Weighted(000) 223,765 31,906 Index 100 100IUSEMYCELLPHONEINMANYDIFFERENTWAYSTOGETTHEINFORMATIONINEED

Sample4,196 640

Weighted(000) 41,544 7,857 Index 100 133MYCELLPHONECONNECTSMETOMYSOCIALWORLD Sample 4,308 665 Weighted(000) 43,195 8,529 Index 100 138

44

WomenAges18‐34,HealthandDietAttitudes

TotalFEMALE18‐34


Weighted(000) 223,765 31,906

Index 100 100

ICONSIDERMYDIETTOBEVERYHEALTHY Sample 7,034 642 Weighted(000) 61,157 7,942

Index 100 91

I’LLTRYANYNEWDIET Sample 2,007 314 Weighted(000) 18,865 3,479

Index 100 129IAMWORKINGATEATINGAWELL‐BALANCEDDIET

Sample8,320 868

Weighted(000) 76,779 10,946

Index 100 100

WomenAges18‐34,Eco‐FriendlyAttitudes

TotalFEMALE18‐34


Weighted(000) 223,765 31,906

Index 100 100

IWOULDBUYECO‐FRIENDLYPRODUCTSIFTHEYWERELESSEXPENSIVE

Sample15,840 1,724

Weighted(000) 143,153 21,392

Index 100 105

ECO‐FRIENDLYPRODUCTSAREHIGHERQUALITYPRODUCTS Sample 7,043 875

Weighted(000) 59,525 9,701

Index 100 114

45

WomenAges18‐34,ExerciseHabits

TotalFEMALE18‐34


Weighted(000) 223,765 31,906

Index 100 100

JOGGING/RUNNING Sample 1,459 318 Weighted(000) 15,398 4,108

Index 100 187

YOGA Sample 809 182

Weighted(000) 7,566 2,295

Index 100 213

AEROBICS Sample 983 224

Weighted(000) 9,772 2,892

Index 100 208

IMAKESUREIEXERCISEREGULARLY Sample 10,614 1,089

Weighted(000) 87,779 11,813 Index 100 94

WomenAges18‐34,AttitudesAboutQuality

TotalFEMALE18‐34


Weighted(000) 223,765 31,906

Index 100 100

MOSTEVERYTHINGIWEARISOFTHEHIGHESTQUALITY

Sample1,532 172

Weighted(000) 13,607 2,017 Index 100 104

46

WomenAges18‐34,MusicMostListenedTo

TotalFEMALE18‐34


Weighted(000) 223,765 31,906

Index 100 100

ELECTRONIC/TECHNO Sample 682 201

Weighted(000) 6,311 1,779 Index 100 198POPHIPHOP(KANYEWEST,SOLDIERBOY)

Sample1,818 722

Weighted(000) 24,010 9,870 Index 100 288

REGGAE Sample 1,383 291 Weighted(000) 13,893 3,106

Index 100 157

EASYLISTENING Sample 4,404 191 Weighted(000) 32,336 2,145

Index 100 47

WomenAges18‐34,AttitudesAboutPersonality

TotalFEMALE18‐34


Weighted(000) 223,765 31,906

Index 100 100

IAMADVENTUROUS Sample 3,078 455

Weighted(000) 29,771 5,226

Index 100 123PEOPLESAYMYENTHUSIASMISCONTAGIOUS

Sample2,742 413

Weighted(000) 23,496 4,617

Index 100 138

47

WomenAges18‐34,PoliticalOutlook

TotalFEMALE18‐34


Weighted(000) 223,765 31,906

Index 100 100

VERYLIBERAL Sample 1,316 211

Weighted(000) 11,154 2,101 Index 100 132

ANYCONSERVATIVE Sample 9,166 676

Weighted(000) 80,290 8,272 Index 100 72

WomenAges18‐34,AttitudesAboutDesigners

TotalFEMALE18‐34


Weighted(000) 223,765 31,906

Index 100 100

TOPDESIGNERSMAKEQUALITYCLOTHES Sample 2,296 298

Weighted(000) 16,828 2,847

Index 100 119ADESIGNERLABELIMPROVESAPERSON’SIMAGE

Sample886 129

Weighted(000) 7,321 1,427

Index 100 137

48

WomenAges45‐54,DVRintheHouse

TotalFEMALE45‐

54


Weighted(000) 223,765 22,696

Index 100 100

YES Sample 9,719 1,134

Weighted(000) 83,860 9,524 Index 100 112

NO Sample 13,650 1,526 Weighted(000) 131,168 12,333

Index 100 93

WomenAges45‐54,AttitudesAboutExercise,ImportanceofAttractiveness

TotalFEMALE45‐54

Total Sample 24,463 2,770 Weighted(000) 223,765 22,696 Index 100 100 IMAKESUREIEXERCISEREGULARLY Sample 5,881 732 Weighted(000) 51,082 5,911 Index 100 114 ITISIMPORTANTTOLOOKATTRACTIVETOOTHERS

Sample6,927 805

Weighted(000) 59,693 6,847 Index 100 113

49

WomenAges45‐54,NumberofKidsinHH

TotalFEMALE45‐54

Total Sample 24,463 2,770 Weighted(000) 223,765 22,696 Index 100 100 ONE Sample 3,810 684 Weighted(000) 34,514 4,737 Index 100 135 TWO Sample 3,477 426 Weighted(000) 32,369 2,653 Index 100 81 THREE Sample 1,540 126 Weighted(000) 13,046 579 Index 100 44 FOUR Sample 587 **28 Weighted(000) 3,946 **133 Index 100 **33

WomenAges45‐54,PoliticalOutlook

TotalFEMALE45‐54


Weighted(000) 223,765 22,696

Index 100 100

VERYCONSERVATIVE Sample 3,564 372

Weighted(000) 29,760 2,646

Index 100 88

SOMEWHATCONSERVATIVE Sample 5,602 651

Weighted(000) 50,529 5,074 Index 100 99

MIDDLEOFTHEROAD Sample 8,046 941

Weighted(000) 80,120 7,938 Index 100 98

SOMEWHATLIBERAL Sample 3,050 352

50

Weighted(000) 27,655 3,075

Index 100 110

VERYLIBERAL Sample 1,316 148

Weighted(000) 11,154 1,211 Index 100 107

ANYCONSERVATIVE Sample 9,166 1,023

Weighted(000) 80,290 7,720 Index 100 95

ANYLIBERAL Sample 4,366 500 Weighted(000) 38,809 4,286

Index 100 109

WomenAges45‐54,AttitudesAboutDesigners

TotalFEMALE45‐54

Total Sample 24,463 2,770 Weighted(000) 223,765 22,696 Index 100 100 TOPDESIGNERSMAKEQUALITYCLOTHES

Sample2,296 279

Weighted(000) 16,828 2,360 Index 100 138

WomenAges45‐54,LocationofWorkout

TotalFEMALE45‐54

Total Sample 24,463 2,770 Weighted(000) 223,765 22,696 Index 100 100 ATHOME Sample 7,204 916 Weighted(000) 67,230 6,907 Index 100 101

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APPENDIX D: Surveys

D1: Survey 1 1. What physical activities do you engage in on a weekly basis? 2. What articles of clothing do you wear when you workout or participate in physical activity? 3. What brands come to mind when you think of women's athletic wear? 4. What features are most important to you in your athletic wear? 5. When shopping for athletic apparel, what characteristics weigh most heavily on your purchase decision? 6. Have you heard of the Lululemon Athletica? If so, briefly describe what you know about the company. 7. What is your gender?

Female Male 8. What is your age?

What is your age? 18 to 24

25 to 34 35 to 44 45 to 54 55 to 64 65 to 74 75 or older

52

D2: Survey 2

53

APPENDIX E: Ostrow Model

MarketingFactorsThatAffectFrequency

EstablishedBrands ‐.2‐.1+.1+.2 NewBrands

HighMarketShare ‐.2‐.1+.1+.2 LowMarketShare

DominantBrandinMarket ‐.2‐.1+.1+.2 LessKnownBrand

HighBrandLoyalty ‐.2‐.1+.1+.2 LowBrandLoyalty

LongPurchaseCycle ‐.2‐.1+.1+.2 ShortPurchaseCycle

ProductUsedOccasionally ‐.2‐.1+.1+.2 ProductUsedDaily

+.1+.2 NeedToBeatCompetition

+.1+.2 Adv.ToOlder

Consumers/Children

CopyFactorsThatAffectFrequency

SimpleCopy ‐.2‐.1+.1+.2 ComplexCopy

CopyMoreUniqueThanComp.‐.2‐.1+.1+.2 CopylessUniqueThan

Competition

ContinuingCampaign ‐.2‐.1+.1+.2 NewCopyCampaign

ProductSellCopy ‐.2‐.1+.1+.2 ImageTypeCopy

SingleKindofMessage ‐.2‐.1+.1+.2 MoreDifficultKindsof

Message

NewMessage ‐.2‐.1+.1+.2 OlderMessages

LargerAdUnits ‐.2‐.1+.1+.2 SmallAdUnits

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MediaFactorsThatAffectFrequency

LowerAdClutter ‐.2‐.1+.1+.2 HigherAdClutter

CompatibleEditorials‐.2‐.1+.1+.2 Non‐Compatible

Environment

HighAttentivenesstoMedia‐.2‐.1+.1+.2 LowAttentivenesstoMedia

ContinuousScheduleCampaign‐.2‐.1+.1+.2 PulsedorFlighted

Campaign

FewMediaUsedinMix ‐.2‐.1+.1+.2 ManyMediaUsed

OpportuneMediaRepetitions ‐.2‐.1+.1+.2 FewerOpportunities

55

APPENDIX F: Quintile Analysis

56

57

APPENDIX G: Media Charts

G1: Frequency for Radio and Magazine

G2: Year at a Glance

58

G3: National Plan

G4: Spot Plan

59

G5: Media Budget Allocation

Documents

Lululemon Athletica Class Project