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Marketing Plan

February 8, 2014Caroline, Edina, Katie, Radhika, Prakarsh

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Agenda• Situation Overview

– At a glance– Our Situation– Competitive Assessment– Our focus

• Marketing Strategies– Target Markets & Positioning– Product Strategies– Pricing Strategies– Promotional Strategies– Supply Chain Strategies

• Marketing Implementation Steps– What– How– When– Who

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• Born out of a desire to provide high quality and comfortable clothing to yogi's with a manifesto (core values) encouraging health, wellness, strength and community

• Heavily supports and empowers local stores and employees to drive business

• Only yoga-wear brand that has built its brand image and profitable success without sales/discounts & driving scarcity

• Within the last year, foreseeable profit and brand image nose dive due to bad press and poor product execution

• Leadership changes: Out with the old CEO Christine Day, in with the New, Laurent Potdevin

"Frankly some women's bodies just don't actually work for [the pants]."

At a Glance

Economic Environment• Economic recession• Athletic items can be described as discretionary for some

Technological Environment• Emerging social media sites allow for more places for companies to make a personal

relationship with consumers• New technological advances create more ability to have high performance apparel Sociocultural• In the past decade, health and peace have come to the forefront of consumer’s minds • Dieting businesses have boomed • Working out and being healthy is not a chore, but a hobby that can be done in an upscale

facility using the best equipment on the market• Sustainability is key to some

External Environment

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• Strong company vision & manifesto

• Corporate structure: Local focus vs Headquarters

• Trend setters & cult following

• Line extensions: Maternity, Plus-size, other affluent sports(Tennis, Golf), Youth 6+

• Tarnished brand image due to CEO comments, poor quality control

• Partnership & location expansion for growth

• Mix of high prices & scarcity game in light of economic status and current perception

• Limited offerings: excludes maternity, plus-size and Youth (male) 6+

• App does not allow purchases

S W

O T • Current state of the economy

• Competitive offering of quality clothes for less

• Continued bad press if right leadership and PR not remedied

• Soft same-store sales

• Pulse on consumer needs & feedback

• Expand direct to consumer sales (eCommerce)

• Non-patented technology

• Premium retail locations

• Vertical retail strategy

• Training/Education of associates/educators

• Brand recognition among new targets and for new lines

• Competitive retail location copy cats (Athleta)

Our Situation“Elevate the world from mediocrity to greatness”

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Affordable Premium

Broad

Narrow

Prod

uct R

ange

Pricing

Competitive Assessment

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Affordable Premium

Broad

Narrow

Prod

uct R

ange

Pricing

Competitive Assessment

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Implement strong PR plan to remedy brand image- Media blitz with new CEO, Laurent Potdevin, who comes from TOM’s to soften perception and communicate to consumers and investors his passion and vision for the company and for its costumer base

Validate Price & Quality to consumers- Competitive activity i.e. Athleta & internal quality issues have had major impact on “worth” of products - Provide them an exclusive experience in-store and online that they can’t get with any other lifestyle brand, proving we are the ultimate affluent and aspirational brand- Exclusive innovation in products and materials

Create line Extensions to expand range and attract new consumers- Attract more of affluent market (Women/ Men & sports) and Youth 6+ (point of market entry)

Increase sales- Increase direct to consumer sales of products in cost effective way, provide exclusive online products and customization to attract more traffic- Increase same store sales with special local offerings that will attract in-store traffic and conversion

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Our Focus is to RE-Focus

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• Primary research

• Implement focus groups to find out brand perception from the consumers

• Why are they angry? How do THEY want us to fix it?

• Implement focus groups to hear from “self-described” plus sized women

So Where to Begin?

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Affluent W18+ Affluent M18+ Youth 6+

Life statements:-HH income of $100K+-Cares about quality & will pay for it-Uses brands to express who she is-Wants to always look chic, even running errands-Social circle that is similar to her -Although she may not be a size 0, she wants to look good doing everything to nothing-She wants to maintain her chic appearance even through pregnancy

Media Habits:-Uses Social Media to express herself, her fabulous life and engage with the brands she loves-Frequently browses brand sites for latest and greatest products i.e. LV.com, Saks.com-Watches ‘high class’ reality tv i.e RHOBH-Heavy Mobile user, specifically iPhone -Uses tablet over laptop

Life statements:-HH income of $100K+-Enjoys the finer things in life, including clothing -Certain brands represent his status -Cares about his appearance and health-Strives to always look put together (metrosexual)-His guy circle is competitive and affluent

Media Habits:-Social Media shows his fast paced, fun life...ENVY ME-Frequently browses brand sites for latest and greatest products i.e. LV.com, Saks.com-Heavy Mobile user, specifically iPhone -Uses tablet more than laptop-Enjoys masculine glorifying shows like Mad Men

Life statements:-Parents of a HH income of $100K+-Parents heavily involved in what kids do/look like to maintain complete family image-Live in affluent neighborhoods, go to affluent schools-Exposed to finer things in life(vacations, restaurants, extra curricular activities)-Knows what Quinoa & Sushi are and enjoy them!

Interests:-Enrolled in dance/ballet classes, soccer, tennis-Competitive competitions on weekends

Media Habits:-Has a smartphone, mirroring parents, like an iPhone-Heavy tablet usageInterests:

-Engages in affluent sports/exercise: Tennis, Golf, Indoor Cycling, Yoga or Pilates-Belongs to a tier one gym like Equinox

-Takes personal classes

Target Markets

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Affluent W18+ Affluent M18+ Youth 6+

Associate with a good cause so they feel good while they are spending (Tom’s CEO knows much about this)

Bring to the forefront the Plus-size line additions-not excluding size yet still maintaining aspirational Brand image

Highlight what clothes are good for maternity due to high tech materials –otherwise no one will know

Use Social Media to communicate and influence perception

Durability of clothes is important with growing active children

Parents want their children to mirror their image/style-what perfect way then with Lululemon

Cool, exclusive brand, great colors, variety and a social currency

Increase brand recognition between 10-13 market is important as image and what friends and social circles

Positive image i.e. Uggs and Facebook

High performance & technology and also versatility

Use Social Media to communicate and influence perception

Positioning the brand line extensions, the proof performance

Positioning For These Markets

Highlight exclusivity of products on-line or seasonally in-store

Develop content that shows why products are superior to any (take a page out of LV’s book with content development)

• Current product offerings– Women’s & Men’s active-wear designed for yoga and running– Youth girls sub-brand Ivivva • Plus-size (begin immediate R&D)

• Maternity • Expand sports

Women

• Product extension ‘lu-m’• Expand sportsMen

• Grow Ivivva• Develop boys product

extensionYouth

Line Extension Opportunities

Product Strategies

Product Strategies

Marketing Strategies: Product

eCommerce• Expand product offering• Customization

New products:• Align new products with the display of current products to

encourage grass roots marketing• Mannequins for new products• Reintroduce OQOQO—natural material • Lu-m different brand to differentiate men’s products• Total Quality Management

• Retain higher pricing model– Utilize alienation to the advantage of the brand– Market the brand as a means of reaching your

aspirational self• Reinforce pricing model via innovation

– New and improved fabric technologies provide customers with the best quality yet

– Patented technology will make the brand’s competitive advantage exclusive

Pricing Strategies

Pricing Strategies

Women

NewMaternity

Plus Size

Expansion Expanded sportswear

5-10% premium on competitor pricing

In line with women’s pricing strategy

In line with women’s pricing

strategy

Pricing Strategies

MenNew Lu-m

Expansion Expansion of line

In line with men’s pricing strategy

5-10% premium on competitor pricing

Pricing Strategies

YouthNew Young

Lu-m

Expansion Ivivva

5-10% premium on competitor

pricing

In line with current pricing model

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• Promotional Objective: Retain current consumer base as well as bring in

maternity, men and youth

Promotional Strategies

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Awareness/Knowledge

Public Relations• Push Strategy• Crisis management campaign

which focuses on institutional advertising

• Explain how lululemon will help support positive self image in girls

• Utilize owned, earned and paid media

• Reach out to “key influencers” to push the message

Media/Advertising• Push and Pull Strategies• Multi-channel advertising

including digital/mobile, and local print

Liking/Preference Conviction/Purchase

Phase 1

Phase 2

Sponsorships and Special Events• Continue support and

sponsorship of SeaWheeze Half Marathon

• Increase sponsorships of local events and have a wider array of classes

• Specialty products at events

Consumer Sales Promotion• Will not offer coupons/price

reductions• lululemon is still a premium

brand and price reductions may detract from the consumer perceived quality

Direct Marketing• Direct mail• E-mail marketing

Personal Selling• Continue building long-term

customer relationships• Reward the sales force

Promotional Strategies Overview

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Awareness/Knowledge

Public Relations All Targets

• Highlight new CEO and his background. Cut down current “The CEO” video for pre-roll.

• Focus on charities that lululemon helps support

• Girls Inc.• Second Chance Pants

Media/Advertising StrategiesAffluent MF 18+

• Buy local print as well as national yoga/golf magazines

All Targets• Run digital display ads on content

relevant sites. Incorporate sponsored blogs and blogging content

• Create Google hangouts to do yoga along with ambassadors

• Direct Marketing: Door hangers in communities to promote new stores

• E-blasts

Liking/Preference Conviction/Purchase

Phase 1

Phase 2

Sponsorships and Special EventsMaternity Target

• Mommy and Me yoga classes• Pre-natal yoga classes

POME• Ivivva private parties for

birthdays, etc.• Sponsor after school “get active”

campaigns with local schools

All Targets• Provide branded equipment in

high end apartment buildings in cities

• Specialty products at events: water bottles, hair ties, etc.

Affluent M18+• Sponsorship of golf tournaments

Consumer Sales Promotion• Will not offer coupons/price

reductions• Free Shipping for all

purchases and returns (not just bras)

• Loyalty Program: Club lululemon/Club lu-m

• Customization available online only

• Allow mobile app users to purchase via the app

• Interactive digital screens in store

• Partnership with American Express with special offers

Personal Selling• Reward sales team on a

store basis, not personal

Promotional Tactics

Print Door Hangers

Interactive Digital Screens

Lulu

Club

Loyalty CardAmEx Partnership

Promotional Tactics

Strong PR initiative

• Vertical retail distribution strategy differentiates lululemon from its competitors and allows it to more effectively control its brand image

• We propose following a three pronged approach to further strengthen its go to market strategy

1. Increase the store footprint in North America

2. Grow direct to consumer online sales channel

3. Expand strategic tie ups with fitness centers, yoga studios and high end gyms

Supply Chain Strategies

Store Expansion

• Open 30 new stores and 5 showrooms in USA within next three years

• The distribution strategy is based more along the lines of exclusivity as opposed to intensive distribution

– Need to identify potential location for new company owned stores which fit the brand’s aspirational image

– Use JIT and RFID techniques for better inventory control

• Change the store layout to display men’s product range in a separate section of the store with a virtual golf station to invite and engage affluent men

– Front display windows

E-Commerce Business

• Direct to consumer channel is convenient for our core customer and makes the products accessible to more markets than our corporate-owned store channel alone

• Leverage social media and online marketing

techniques to increase website traffic by 15 percent

• Promote a BOPS (Buy Online Pickup in Store) model to avoid stock outage, better inventory planning and improve footfalls

• List products on high end fashion e-tailer such as LYST to build a premium brand image and increase market penetration

• While this channel contributes to only 2-3% of Lululemon’s revenue it is important from the perspective of building brand awareness among target audience

• Identify high end fitness centers, yoga

studios and gyms across US for sale of lululemon products

• Leverage these partnerships by using their space also as a communication vehicle– Digital screens in the lounge with lululemon

branding

• Lululemon merchandise for annual membership to golf/racquet clubs

Strategic Tie-In

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5-year ImplementationYear 1 Year 2 Year 3 Year 4 Year 5Hire full-service agency to create PR campaign to handle negative press. Have research groups to determine most negative aspects of company

Jan. 1-June 1Install in-store interactive digital screens

January 1- June 1Identify prime locations to open 10 new stores

January 1-June 1Identify 2 new geo-targets for showroom openings

Continue innovating new products & designs

March 1 – Dec 1Begin R&D on new line extensionsBegin patent process on any new technology

July 1 – Dec. 1 Identify prospective locations to open 5 new showrooms

Continue paid media support of local events, store openings, etc. Brainstorm new classes for stores

June 1-December 1Open 10 new retail stores

Continuing expanding stores and showroomsGoal:•10 new stores & 3 showrooms/year

Start paid advertising initiative to push more institutional messaging

July 1- Sept. 1Identify high-end athletic partners for wholesale opportunities

Re-introduce OQOQO with paid media

Continue paid media support to push e-commerce

Open 2-3 youth boys stores in key markets to test consumer want/need

March Dec. 1Ramp up community sponsorships & involvement; introduce lululemon loyalty club

Sept. 1- Dec. 1Contact and contract with high-end athletic partners & fashion e-tailers

Introduce new classes such as Mommy and Me as well as the ability to have Ivivva parties

Dec. 1 – New YearContinue product line development to include customization

Marketing Budget:$15 million

Marketing Budget:$15 million

Marketing Budget:$16 million

Marketing Budget:$17.5 million

Marketing Budget:$18.5 million

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• Store foot falls & revenue per square foot• Quarterly website traffic & online sales• Digital campaign click through rates• App downloads and purchases• Customer satisfaction surveys on their experience with the brand after

certain periods of time and brand recall scores• Look at percentage of merchandise returned• Employee satisfaction surveys• OQL

Performance MeasurementMetrics

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“Even a mistake may turn out to be the one thing necessary to a worthwhile achievement.”

-Henry Ford

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Works CitedAllison, Pam. "How Different Demographics Use Credit Cards." SmartBlogs. N.p., 11 Jan. 2013. 05 Feb. 2014. <

http://smartblogs.com/finance/2013/01/11/how-different-demographics-use-credit-cards/>.

“Girls Inc.” Girls Inc. |. N.p., n.d. Web. 06 Feb. 2014.

Leahy, Colleen. "Meet Lululemon's New CEO." CNNMoney. N.p., 10 Dec. 2013. 11 Jan. 2014. <http://features.blogs.fortune.cnn.com/2013/12/10/meet-lululemon-ceo/>.

“lululemon Athletica, Inc. - Annual Report." lululemon Athletica, Inc. - Annual Report. N.p., 21 Mar. 2013. Web. 06 Feb. 2014.

“Our History" lululemon Athletica, Inc. N.p., n.d. Web. 04 Feb. 2014.

Solomon. Marketing New Mymarketinglab With Pearson Etext Real People, Real Choices. N.p.: Pearson College Div, 2011. Print.