Lululemon could add the following product features to improve their product and stand stronger against the competition: Based on our analysis to date, we propose that a great opportunity for Lululemon to increase sales in China is to target women in their 20s who are becoming more health-conscious and fit. We are off to a great start. As the brand started growing it continued to adopt a focused differentiation strategy based on its brand identity, however with the extended line of apparel athletic wear, its market segment started growing to target a wider range of user. According to CEO Calvin McDonald, modest selective price increases are planned from the second quarter onwards, impacting around 10% of styles. To further our reach with user-generated video content to showcase our product on real people we will create yoga challenges on short video platforms DouYin. We will also be creating short video ads to release through these platforms once a week. Lululemon uses a strict pricing strategy to create pricing awareness and maintain their luxury status using the following tactics. Based on the cultural values in China, we have created a persona for the typical customer for the Wunder Unders. Pricing strategy decision is also affected by market segmentation. Lululemon CEO Calvin McDonald joins "Squawk on the Street" in his first TV interview since taking over the company to discuss the company's strategy, pricing. Lululemon has since tried to recover its commitment to product quality, plus fix the medium term weaknesses in its inventory, commerce and management team. Costco is open only to members with either of these types of membership: Business, Abstract: Export pricing strategy is considered to be a fundamental tool for market growth, lack of literatures still exists. Another way that Tmall helps the distribution chain is by using a B2D structure (Export China, 2018). Lululemon pricing strategy has always been value-based.Their products are expensivein comparison to the other brandsofferingsimilar products,becausethe quality of their products is far moresuperior. The revenue of Lululemon as of 2020 was $170 million, which includes results from before $500 million acquisition of Lululemon. As picked up in this Forbes article, the company looks to include elements such as "virtual waitlists, mobile POS outside of store entrances, BOPIS at door or at the curb, appointment capabilities and online chat" as distinct elements to improve the overall customer experience. Today, the firm has more than six hundred numbers of warehouses, with more than twenty areas of operations around the world, including the more than four hundred warehouses in the United States, and there were more than 70 million cardholders and the annual revenue reached at $105.2 billion (Costco Wholesale Corporation, 2014). 2022 Sept 27 [cited 2023 Mar 3]. Lululemon Marketing Strategy and Plan written by Taylor Rawding, Jantien Sneyd, Tiffani Hamilton, Saroja Venkatesha, Jodie Holman and Zoe Ciarrocco as an assignment. 2023 EduBirdie.com. Lululemon Product and Service. 5 Luxury Marketing Strategies that Drive High-End Sales. Social Media Initiatives will be ongoing throughout the year on a consistent schedule established by the marketing and advertising departments. So how did Lulu do it? Could Lululemon have been as successful with a different pricing strategy? To achieve its goals, Lululemon uses three main strategies. Sign up to Insider Briefing. This will be done by adding around 20 new stores to China this year. Lululemon should expand their services online to grow their e-commerce sales in China. lululemon's Social Media Strategy. The community event team will be responsible for coordinating and planning all events in their designated district and liaising with local store managers, head office and the social media team. Lululemon sells all functional garments at a high consistent price point because of their quality and exclusivity. Another area of focus is sustainability. This is something Lululemon has executed from the get-go. We will use social media channels such as WeChat and Weibo to create an online community for young yoga enthusiasts. Terms of Use, Case Study of Lululemon: Analysis of Pricing Strategy., Case Study of Lululemon: Analysis of Pricing Strategy [Internet]. Lululemon prioritizes quality over quantity to provide value to their customers (Mission Statement Academy, 2019). I believe Lululemon should exploit more strategies to keep on designing and creating a difference in its brand vision, product and innovation, so it always gives its consumers a justified reason to spend more by buying lululemon products. The business also sees real potential for sales of on the move lifestyle garments, which McDonald believes is a completely open space for the brand. Based on principles from the chapter, explain how price affects customer perceptions of the Lululemon brand. Fair Use Policy or become aware of any violations, please do not hesitate to contact us via support@edubirdie.com. The paper relates that Lululemon's Yoga-inspired clothing is expensive, with hoodies going for $120, but its customers have demonstrated price insensitivity, driving the company's revenues from $269,942,000 in FY 2008 to $353,488,000 in FY 2009. They have almost doubled from $1.8 billion in 2014 to $3.3 billion in 2018 and net income has had a similar outcome (Dun & Bradstreet, 2019). These values promote a very positive and healthy image, something that customers can relate to and aspire towards. There are four main EduBirdie considers academic integrity to be the essential part of the learning process and does not support any violation of the academic standards. Innovation forever- they have a very active Research and Development department and are always looking to get new and improved products to their customers. On a two-year basis, the brands ecommerce sales grew by 50%. And that led to our confidence around the Mirror acquisition, which is really an opportunity for us to position it in that membership base as a means to drive loyalty and retention, said McDonald. Lululemon is passionate when it comes to initiating long-lasting changes in everyone that uses their products. Another idea is to open a womens only store. It has differentiated its brand from the majority of rivals using a distinct strategic pricing model. (n.d.). All customers feel comfortable while wearing or using Lululemon products. Lululemon should work with their designers to incorporate those features in their clothing lines. The design of all Lululemon products includes the key concept of comfort. Mirror sells a $1,500 (1,145) device that enables customers to join fitness classes at home, positioning Lululemon squarely in the same market as troubled at-home fitness company Peloton. Lululemon used the premium pricing strategy to establish its product as a high-quality product in the minds of consumers. To achieve its goals, Lululemon uses three main strategies. Our communication channel will focus on leveraging social media platforms to create an online brand community, customer engagement and product awareness online to ultimately drive traffic into our stores for customers to experience the product quality and the brand lifestyle. Now, let us see the revenue graph of quarters of Lululemon: A comprehensive advertising campaign is to follow later in the spring, as owner Britvic invests behind the brand to prevent loss of market share to private label competitors this year. Lululemon also reported Mirror, the fitness startup it acquired in June 2020 for $500m, is performing in line with revised expectations. These events will be covered through social media channels as well. Lululemon should create a new product line with bigger logos on leggings. They are hoping to introduce Wunder Unders into the Chinese Market. Lululemon also knows how to get its prices right, implementing a staunch strategy that refuses to budge even during a period of great disruption. Seasonal Wunder Under colours retail at regular price for 2 seasons and then enter a discounted rate of 450- 650 or 20%-30% off. The revenue from Lululemon stores rose by 47% compared to the same period last year, when many locations were under lockdown, and increased 3% on a two-year basis. Platform Names will include: LululemonChina, LululemonShanghai, LuluLemonHangzhou, LululemonGuangzhou, LululemonChengdu, LululemonShenzhen and LululemonBeijing to target specific communities. The number of items arriving and selling out in this space over the past three months has outpaced 2019 by 13% and 9%, respectively, while discounting remains flat compared to last year. Deciding how much to charge for each of your products or service requires evaluating how much customers value what they are buying. Heavy. McDonald claimed the business remains enthusiastic about the opportunities presented by hybrid fitness. The Successes and Failures of Lululemon Athletica Inc. Expensive machines and fabric developing techniques are used in the manufacture of Lululemon apparel. The following are some of the reasons this brand's products are so highly priced. We further defined the market for the following categories. Get your paper done in as fast as 3 hours, 24/7. They want to be perceived as high value. It also enables lululemon to charge higher prices and have merchandise that rarely goes on sale. Transcribed image text: Why are customers willing to pay premium prices for Lululemon's product? We further estimate that Lululemons market share is 2.7%. What is Lululemon pricing strategy? Lululemon has embraced "omnichannel" as a pillar of the strategy of the business. Although Lululemon has an e-commerce site and an ability to sell their products to those countries already, Lululemon sees more revenue when there is a store in place. Keeping the assortment tight is at the core of Lululemon, helping it maintain minimal discounting. Lululemon is known as the first professional sports brand in Canada. They sell their products in 440 company- owned stores in 15 countries. They also offer fitness- related accessories. Products from the company are meant to last for a long time and not show wear and tear through the times. While leggings make up 50% of bottoms currently stocked online in the US for women, it is only 3% for men whereas mens technical trousers equal 39% and shorts are 37%. No wonder their stock has shot through the roof! Based on our research we discovered that in 2019 Lululemon had doubled their amount of sales out of the North America region, making that share would 12% of its total sales. Analysts say this is why the brand has been successful, as its customers are not hooked on discounts and are more likely to pay full price.
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