GROUP 3

LULULEMON
Case Study
TEAM 3
 Introduction
Lululemon was founded in 1998 by
Chip Wilson in Vancouver, with its
first standalone store opening in
November 2000.

Lululemon peddles its own brand of

yoga-inspired apparel with its
instantly recognizable logo.

-> In other words, this brand is active, healthy, and

back-to-nature and isn’t shy about saying so.
 LULULEMON'S PHILOSOPHY
The company exudes the philosophy captured
by its manifesto: “We are passionate about
sweating every day and we want the world to
know it. Breathing deeply, drinking water and
getting outside also top the list of things we
can’t live without.”

CALVIN Mc DONALD
LULULEMON'S STRATEGIES
Mission statement is “to elevate the world from mediocrity to greatness.”
MISSION The mission statement comprises of these components: improving lives,
improving health, and exceeding expectations.

Vision statement is “to be the experimental brand that ignites a community

of people living the sweat life through sweat, grow and connect.” The
VISION
statement consists of the following components: exceptional brand, ignite
communities through sweat, and create connections.
 Focus on Shopping experience

When seeking athletic apparel, Lululemon stores are the exclusive destination.
The stores boast a cozy, welcoming, diverse, and easily reachable ambiance.
Financial
Performance
Public company traded on the NASDAQ stock
exchange under the symbol "LULU".

Known for consistent revenue and profit

growth, with a strong focus on e-commerce
sales.

Customer can find their latest financial

reports and investor information on their
website.
Sustainability
Efforts
Lululemon has sustainability initiatives in place.

Use recycled materials in some products and aim

to minimize waste.
Product Progress Lululemon has been incorporating recycled materials
into their product line in a few innovative ways.

Recycled plastic Recycled Nylon LanzaTech

bottles partnership

Product Lines
 Beyond yoga apparel, Lululemon offers a variety of athletic
wear for running, training, and other activities.
They also have a line of lifestyle clothing suitable for

Product Line
everyday wear.
Their "Ivivva" line caters to young girls, promoting healthy
living habits from a young age.

Clothing Accessories Shoes Travel gear

Brand Experiences
Brand Experiences
Lululemon stores are known for their
energetic atmosphere and focus on
customer service.
They offer in-store yoga classes and
events to foster a community feel.
Their online platform offers a seamless
shopping experience with features like
virtual styling consultations.
 Others
4%

Controversies
Men's wear
26%

Lululemon has faced criticism in the past for product

quality issues and some controversial marketing
campaigns.
Strived to improve their practices and maintain a
positive brand image. Women's apparel
Avoid excessively concentrating on products 70%

designed for women.

Marketing Strategy
Marketing Strategy
Grass-root Marketing and Local Ambassador

Experiential Retail and Community Building

Social Media

Influencers’ Partnerships
Swot Analysis
Relatively expensive Intense competition
Limited target audience Economic condition
Limited international Changes in consumers’
presence preferences
Extensive marketing Counterfeit product
STRENGTH OPPORTUNITIES

High product quality WEAKNESSES Expanding men’s THREATS

Strong research segment
Development Emerging market
technologies Product diversification
Unique product fabric Digital expansion and
E-commerce
Question 11-18
Relative to customer value,
explain customers’ willingness
to pay premium prices for
Lululemon’s products.
PRICING STRATEGY
Lululemon $98 Nike $90 Under Amour $60
Customer Value = Perceived Benefit - Perceived Cost
Lululemon products’
perceived benefit
QUALITY OF THE
PRODUCTS
Quality is the heart of who we are. Quality shows up in our
people, our conversations and of course, our product.

Farbics: Nulu, a buttery-soft and superlight

version of Luon designed for a “naked” feel;
and Vitasea, an ultrasoft blend of cotton,
spandex, and seaweed

Stubborn, resistant.
 SPECIAL CUSTOMER EXPERIENCE

Personalized Service Engaging in Inclusive Environment Loyalty Programs

collaborative
experiences with their
customers.
LULULEMON'S
TARGET MARKET
1. Specialized on both Men and Women
Ranging from 15 to 35. Although the company started as a women’s
brand, it now targets both women and men. In 2020, 30% of new
customers were men.
2. Attracting middle to upper class customers.
3. Yoga and/or fitness enthusiasts
LULULEMON'S REPUTATION
Quality products, innovative
designs

Presented as a frontrunner in the

industry.

Strong Brand Identity

Question 11-19
Based on principles from the
chapter, explain how price
affects customer perceptions of
the Lululemon brand.
 11 of 12

5 key points:
1. Customer Value Perception Model
2. Creation of New Demand
3. High-Quality Products at a High Price
4. Customer-Based Value Pricing

5. Innovative and Cutting-Edge Image

1. Customer Value
Perception Model
Prices higher than
competitors, staying
within the perceived
value range.
Targets demand
without exceeding a
price ceiling.
NIKE LULULEMON
2. Creation of New Demand
Introduces unique products
for niche markets.
Aims to generate demand in
previously untapped areas.
3. High-Quality Products at a High Price
Positions as a provider of top-quality products at a premium
price.
Aligns pricing with perceived value, emphasizing quality and
benefits.
4. Customer-Based Value Pricing
Prioritizes pricing decisions based on customer-perceived
benefits.
Focuses on customer value rather than production costs.
5. Innovative and Cutting-Edge Image
Aims for a cutting-edge image in the athletic apparel industry.
Focuses on staying ahead of trends for a modern and advanced
brand perception.
Question 11-20
Could Lululemon have achieved
the same level of success had it
executed an alternative
strategy?
LULULEMON’S CURRENT
PRICING STRATEGY
Customer Value-Based Pricing
Value-based
Minimal discounting
Offer functional garments at a high but
consistent price point
Target consumers’ awareness that they will
pay full price
Lululemon's Premium Pricing: Key Factors
Driving Success

Lululemon's adoption of premium pricing from its

inception proved strategic.

The uniqueness of Lululemon's products enables

differentiation through higher prices and a focus on
quality.
Lululemon's consumers perceive its products as
luxurious, offering exceptional quality, comfort, and
exclusive designs.

Setting higher prices serves as a significant barrier to

entry.

Lululemon's patented product features set it apart

Financial Projection | Annual Report | 2024
from competitors.
Q11-20

Conclusion
Lululemon's success can be attributed to its strategic use of a premium
pricing strategy.
This approach differentiated Lululemon in the market, created a
perception of luxury and value among consumers.
Therefore, an alternative pricing strategy likely would not have led to the
same level of success for the brand.
Question 11-21
Can Lululemon continue to
succeed by employing the same
premium-pricing strategy?
Explain.
Consumers seek the best prices, yet offering
discounts on your brand can impact profits
and sustainability. To maintain its:
Brand vision
Product quality
Innovation
Lululemon should explore additional
strategies that provide consumers with
compelling reasons to invest more in
purchasing their products.
Lululemon has achieved enormous success
by identifying the right audience,
understanding their needs and demands, and
creating products to meet those demands.
They understand their competitors well and
use this knowledge to build unique products
with distinctive characteristics.
They have built a brand with a meaningful
difference, always ensuring to instill in the
mindset of their consumers the perception of
the brand as premium and worth a higher
price.
In premium pricing strategy, the company aims to display
the quality and experience associated with a product,
setting it on a different dimension from its competition.
Changing their pricing strategy and moving away from
premium pricing would risk damaging the brand's image
and could affect its position, leading to a loss of trust in
the brand. Consequently, loyal consumers may start
shifting away from the brand. The consistency is key to
brand success.
THANK YOU
SO MUCH!