Communication
Activewear market continues its growth of the ‘athleisure’ trend. More and more customers are ready to adopt a healthy lifestyle. It is not strange to see a person wearing gym clothes beyond the gym today (Petro G., 2015). That is why all sportswear companies are eager to change their marketing strategies in order to meet the expectations of their customers. Lululemon was one of the first companies to see the opportunity to sell activewear. But they were not the only one. The main competitors of lululemon are Nike inc., Gap, Under Armour, and Victoria’s Secrets who entered the market with the same yoga cloth but with lower prices and friendlier attitude (Eileen Meng Lu, 2014).
Currently, lululemon is represented as a high-quality brand in the narrow target market. From the very beginning, the company has centralized its attention on a certain pattern of women. Lululemon chose a sophisticated and educational woman who challenges her life trying to find a balance between work and family, and of course, she wants to find her inner control. Such campaign made them popular and raised their sales. Still, this pattern noticeably narrowed their market (Garner T., 2014).
In order to raise the sales, lululemon needs to broad the target market. It is clear that they made their reputation based on the fixity of the target audience, but it will make them capable of competing with other companies in the broader market.
Today, the company has more than 218 stores worldwide and also an online store. (Kowitt & Leahey, 2013) In 2012, the brand value of the lululemon was at $3.245 billion, it increased by 292% in 2010. The company was one of the top 10 brands in Canada by estimated brand value (Krashinsky, 2012). But, 2013 was a hard year for the company as it lost of about $67 million. It was the result of a production fault and 17% of their black yoga pants were recalled off the shelf (Hsu, 2013).
This allowed Nike and other competitors to reach a stronger position in sales of yoga pants. Still, after a certain period of time lululemon restarted the sale of ‘Luon’ yoga pants. It raised their sales and gave lululemon a chance to recover its reputation. That is why in February 2013 the income of the company increased by 34% to $762.8 million and revenue increased by 37% to $1.4 billion (Clifford, 2013.)
Lululemon chose quite an interesting approach to advertising. There are two main ways of advertising the products – a central and peripheral route. Through the first one company show the advantages of their products directly. They can emphasize the quality, low price, particular features of the product, etc. The peripheral route involves and evokes the emotions of the customers. Here we can see the usage of popular music in the background, an attractive voice of a presenter, or well-known celebrities (Petty et al., 1987).
Lululemon doesn’t do advertisements. The marketing is done in a word-of-mouth way. Lululemon has adverts only in ‘Yoga Journal’ and ‘Runner’s World’ ("4 Tactics Lululemon Uses To Leverage Word-Of-Mouth For Their Brand - Word-Of-Mouth And Referral Marketing Blog"). Also, one of the tactic lululemon uses in advertising is their staff. The store employees are more like your yoga or gym friends that will talk to you about exercising and goals-setting more that about the products. This approach makes people feel free and relaxed during their shopping and it makes them return again, even simply to talk to the shop assistants. Also, they are dressed as they are ready to work out. It enables customers to see the products not on the mannequins, but on a person in flesh and blood.
Some of the stores host free yoga classes and running clubs. And finally, they work with fitness coaches and athletes as brand Ambassadors. They host classes of yoga in stores or support different sport events planned by lululemon ("4 Tactics Lululemon Uses To Leverage Word-Of-Mouth For Their Brand - Word-Of-Mouth And Referral Marketing Blog").
Lululemon has quite a strong advertising campaign without actual advertisements on TV. Here, it is a clear example of the peripheral route of advertising. It does not emphasize on the product itself, but evoke the customers’ desire to engage in sport and practice yoga (Petty et al., 1987).
As for the future plans, lululemon is going to expand international trade. It didn’t face up to investors’ expectations. The company expects to earn $ 0.35 to $ 0.37 per share in its fiscal third quarter, which differed with $ 0.43 per share figures that investors expected. Nevertheless, the company remains enthusiastic about their prospects ("Lululemon Athletica Inc. Announces Third Quarter Fiscal 2015 Results (NASDAQ:LULU)", 2015).
The new campaign should be created in order to raise the number of sales and to change people’s attitude towards lululemon politics. This definitely will make the company competitive. As to the new campaign it would be better to leave only one thing unchanged. This thing is lululemon’s tendency towards yoga and running. It is the strongest points of the whole company and the truth is that lululemon can beat Nike and Gap in this field. Lululemon succeeded in marketing a certain lifestyle rather than simply the product. And to win the competition lululemon needs to concentrate on the most promising segments. Obviously, the thing lululemon lacks is a broadening of the target market. The company should take some steps towards the new campaign:
The first step is to introduce a men’s line of running cloth and shoes. Men’s line of cloth should be developed and presented better. It can be presented with the help of the male celebrity. Men have not practiced yoga as often as women do. Still, they run a lot. Either way, the company should announce that they want to broad their market for men.
The second step is focusing on Hispanic millennials. Multicultural customers are the core of US population. And as they continue to grow lululemon need to integrate multicultural consumer into its business strategy. Hispanic millennials are the consumers that are often ignored. And they are really important. Santiago Solution Group said that Hispanic spending power varies between $1.5 - $1.7 trillion annually (Loehr, 2015). Still, to bring the market to Hispanic millennials lululemon has to pay attention to cultural peculiarities of them:
A celebration of the culture should be the main idea of the new media campaign. The best idea will be to ask a Hispanic celebrity to advertise the product to the target market. This will underline the support of the diversity and cultural identity of the Hispanics.
They pay attention to the quality, not to the price. The value is important and people who are 45 and older look for it.
They care more about personalization. While other people care about free shipping Hispanic millennials need to receive a personal message (Glenn Humble, 2013).
Gerry Rojas, a director of Hispanic marketing said that it is better to develop a whole program of sales, especially for Hispanic millennials. It will take time but it is much better than just sell a product and leave. If the company shows that it cares about their demographic it will earn loyal customers. And the most important part is to forget about stereotypes. The use of stereotypes won’t ever lead you to success. It only shows the lack of good ideas, creativity, and sense of humor (Loehr, 2015).
The third step is to make the company viral. At first, lululemon chose the word-of-mouth strategy which is good, but with the development of the Social Media viral marketing becomes a good substitution. Viral marketing is a system of delivering a quick message to the customers. It is an email, a video, or a post in Social Media which contains something memorable in order to increase brand awareness among people. Viral marketing depends on the recipient that is why all the peculiarities of the target audience should be maintained. The core of viral ad is its content. One of the ways to make a viral advert is to make it fun. People spread it not because of the brand or the product, but because the way it is presented. Today, posts on Twitter or Facebook and videos on YouTube are better than advertising on TV because people are obsessed with the Internet and Social Media. Some ways to make viral campaign are:
Make it funny. Here lululemon can use the incident that happened in 2013 (Scharon Harding, 2013). The founder of lululemon, Chip Wilson, tried to apologize on YouTube. Different TV shows (Jimmy Kimmel’s late-night talk show) started to talk and discuss it even more (Beth Kowitt, 2013). YouTube made the scandal viral. This is how it works. Lululemon can turn this situation in favor of the company just by making a joke out of it.
Start a competition. As lululemon is a sportswear company it can start some running competition or a marathon in order to show their product.
Chain of mail.
Show the benefit to the customer.
The main point of a new campaign is to get the attention of the Hispanic audience. Their spending power will give the company a great new income. That is why we have to get their attention. Also, the campaign directed straightly on the Hispanic Millenials will provide an advantage for lululemon. There is no company that builds their campaign around only one cultural group. In order to get the attention of Hispanic ethnic group, the best strategy will be to ask Hispanic sportsmen to introduce the product. Sportsmen of different age groups and from different kinds of sport will get the attention of a broader scope of customers. For example, Alex Rodriguez is a great candidate to present lululemon’s new campaign. He is a professional baseball player who is considered to be the greatest talent of the history (Encyclopædia Britannica, 2016). People, all over the USA, know his face and also he is a Hispanic sportsman. This gives an opportunity to raise the sales in the field of new men’s line and among the Hispanic audience, at the same time. Another sportsman should be Maritza Correia, who is the first black representative of the U.S. swims team. She is from Puerto Rico. That is why her person will get the attention of Hispanic Millenial and provide lululemon major support among them.
Taking into the consideration the past income of the company and some of the issues with target market it will be better for lululemon to re-examine the politics of the company towards the friendly attitude and broadening of the target market in order to raise the competitive power and to increase the sales number. If the Lululemon Athletica Inc. takes into consideration this 3-step plan it will definitely raise the sales numbers, the competitive capacity, and the number of customers. The marketing campaign of lululemon is out-of-date and they should make it more up-to-date in order to make a difference.
Works Cited
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