This is a marketing course

Please read this article, Lululemon: Indulging Customers at a Premium Price. The questions are Below: Please answer them.

1. mention 4 short term implementation from the case 2. mention 4 longterm implementation from the case 3. what is the control and feedback

4. what is the contingency

5. what is the company background

6. what is the medium term implementation from the case

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Company Case Lululemon: Indulging Customers at a Premium Price it's a warm summer evening in Brooklyn's Prospect Park the devotees of this 5,000-year-old practice. Over the past four Hundreds of yoga practitioners-commonly known as yogis years in the United States alone, the largely female population have turned out for a free class, arranged on the turf in a perfect of yogis has increased by 50 percent to more than 36 million grid, mats on the ground. Following the instructions of the class More than twice that many say they want to try it for the first leader, it's one long set of downward-facing dogs, half-moons. time in the next 12 months. They won't need to go far -- there and warrior Is, Ils, and Ills. While these New Yorkers come from are more than a dozen different types of yoga being taught and various walks of life, most of them have one thing in common practiced through classes in commercial studios, including hatha They're wearing outfits by Lululemon-the hottest yoga apparel yoga, acro yoga, iyengar yoga, power yoga, hot yoga, prenatal brand this side of India. The brand's dominance among attend yoga, and restorative yoga. Spending on classes, clothing, and ees shouldn't come as a surprise as Lululemon sponsors this free equipment has also shot up in the past four years, increasing weekly event, providing yoga-appropriate music and teachers 60 percent to a whopping $16 billion from local studios with names like Bend & Bloom, Prana Power As this fitness explosion began to take shape, Lululemon Yoga, and Tangerine Hot Yoga. But these Lululemon loyalists founder Chip Wilson took notice. Having developed a passion for have one other thing in common. They paid a premium price for technical athletic fabrics through 20 years in the surf, skate, and their outfits -and they couldn't be happier. snowboarding business, Wison was no stranger to the apparel Vancouver-based Lululemon has quickly risen to the top of a industry. But after taking his first yoga class in the mid-1990s, bustling market that it has played a major role in defining. With he was hooked. Convinced yoga's time had come, he put his approximately 400 stores around the world, Lululemon peddles efforts into developing alternatives to the standard cotton yoga its own brand of yoga-inspired apparel with its instantly recogniz Clothing of the time-a material that to him seemed completely able logo - an Iridescent lowercase a that resembles an omega inappropriate for sweaty, stretchy power yoga. But far more than clothing, this brand perpetuates an image and After establishing the company in 1998, Wilson began selling a lifestyle. The company exudes the philosophy capture by its Lululemon clothing through yoga instructors. In November 2000, manifesto: "We are passionate about sweating every day and we the first Lululemon store opened for business in a beach town want the world to know it. Breathing deeply, drinking water and near Vancouver. The original concept was for the store to sell getting outside also top the list of things we can't live without." In clothing while also serving as a community hub where the mental other words, this brand is active, healthy, and back-to-nature and and spiritual aspects of living a healthy and powerful life could Isn't shy about saying so. It's that Image complimented by a "no be taught and discussed But the popularity of Lululemon's discounts credo that has a fanatically loyal customer base will clothing made it impossible for employees to focus on anything Ing to buy everything Lululemon and not even blink at paying full other than seling clothing, People were drawn to the fabric, a premium prices. tour-way stretch blend of nylon and lycra. Sub-branded "Luon" the "sweat-wicking and cottony-soft" material is the company's Riding the Wave signature fabric While yoga has been practiced in the United States since the Since its first products, Lululemon has focused on innova- 1960s, over the past 20 years, it has emerged from a niche ac tive fabrics for every application, including Luxtreme, a version tivity practiced by devout New Agers to become part of the cul of Luon designed for the most hardcore workouts: Swift a tural mainstream. Yoga is all the rage now with everyone from strong and lightweight fabric designed for freedom of move- students to stressed-out young professionals to retirees among ment; Boolux, a blend of natural fibers designed for warmth and 354 PART 3 | Designing a Customer Vata-Etuen Strategy and Mx breathabity, Nullu, a buttery-soft and superlight version of Lon On top of perceptions of product quality, the Lulu att designed for a "naked feel and Vitasea, an ultraso blend of also point to the shopping experience. Like buying coffee at cotton, spandex, and seaweed-yes, seaweed. Starbucks, customers are drawn to the ambience that-when In addition to developing fabrics to enhance yoga workout, comes to buying the apparel-can only be found in a Lululemon also focused on style. With unique cuts and colors, Lululemon store, Stores are designed to be all at once warm Lululemon developed a full line of yoga appare including tot Inviting, eclectic, and accessible. Customers are pampered by length and crop pants, tanks, sports bras, underwear, and head educators and "hey leaders - Lulu-speak for sales associ- bands Women couldn't get enough of Lululemon, and the brand ates and supervisors." And Wilson's original retail vision has became a big driver of thisure-a fashion trend that takes come to fruition as community ambassadors-local experts who workout-designed clothing outside the workout into cast and get a 30 percent discount on Lulu merchandise and exposure for social occasions and even into the workplace Lululemon has their own businesses-provide in-store workshops and classes riddon this wave developing lines for running, swimming, and on various aspects of my living. More Victoria's Secret than training as well as clothing and accessories for getting to and Under Armour, Lululemon has full control over its retail experi- from the workout with a full line for men as well. Lalomon ence as the only vertically integrated retailer of athletic wear for has done a superbijob of giving devote something for every women. As one investment banker puts it. You can go to Sports occasion Authority to get stuff made by Nike for women, but you just don't foet indulgert there Where Price Is No Object There are many who have pointed out the irony of a brand As the brand's popularity skyrocketed. It quickly became a symbol that has become an icon of materialism based on selling cloth of status and cultural capital as a forture in the wealthiest counties ing for yoga-a practice rooted in the philosophy of avoiding of the country. Sald one Westchester local to a new move-in, it's al forms of self-indulgence. But the Lululemon fathul either fined you like Lukulemon, because that's all women wear up here" don't get the roy or don't care. Over the past four years, A Lululemon employee at its Boulder, Colorado, store reported, Lulmon's revenues have doubled from $1 billion to $2 bilion "Women would come down from Aspen and Vat in SUV-loads as it matains a healthy 13 percent profit margin. And while the They would drop $2.000 easy, saying like that top, take one company's stock price took a dive a couple of years ago amid In every color. And it isn't just the clothes. The company's re- various controversies, it has averted the lasting effects of such usable shopping bags-plastered with self-improvement Quotes as the value of its stock has recovered to nearly $10 billion. The like "Do one thing a day that scares you are used by women company certainly faces challenges as it fends of more and for all kinds of tasks, carried with pride as though they were Gu more competition in an already crowded field. Claiming it doesn't col With the brand on display, Luluheads--as they ve come to want to build more than 400 stores, it may also be reaching its be called and call themselves-wre letting people know they are peak But so long as Lukheads abound, Luulemon will be doing spiritual healthy and very flexible and can afford to pay $68 for upward-facing dogs all the way to the bank. their T-shirts Premium price is typically a hallmark of status brands, and t's no different with Lululemon. Its signature article is the Groove Questions for Discussion Pant priced at $98. While all the top athletic apparel brands 11-18 relate to customer value, explain customers willing have now umped on board with ther own lines of yogawear ness to pay premium prices for Lululemon's products. Luulemon is priced at the top of the heap. Nak to its most comparable version for $90, while Athleta (Gal. Under Armour 11-19 Based on principles from the chapter, explain how price affects Customer perceptions of the Lemon brand and Reebok sol theirs at $79. $60, and $50, respectively. Pricing for Lululemon's other appareitos compares to competitive 11-20 Could Luulemon have achieved the same level of suc offering in a similar manner. Widening the price gap between cess had t executed an tomative pricing strategy Lululemon and the competition even further is the brand's aver 11-21 Can Llimon continue to succeed by employing the sion to discounts. Products are rarely marked down in stores same premium-pricing Strategy? Explain Instead, the company tells unsold inventory at modes discounts through only 10 outlet stores or through the company website Sources: Based on normation from Murray Newands. "How under the section "We made too much. The fine prin stipulates, Lemon Made The Brand Iconic Forbes February 21, 2016, "No returns, no exchanges www.forbes.comstomewards 2015/02/21/ow.lululomon made ther-brand-iconic-an-interview-with-sp-of-brand-programs-oric p8602234, 2016 Yoga in America Study Conducted Expensive--but Worth it by Yoo Journal and Yoga Allance Reveals Growth and Benefits of The big question is are Lululemon's products worth the premium Padow January 13, 2016, www.mewire.comews price? As with any premium-priced product, numerous individu 2015-yogen-america study conducted by yogajournal and als have made their own comparisons and have broadcast their yogene reveals-growth and benefits-of-the-practice-300203418 opinions via social media. More official inquiries have been made Bart Ustadt Lust for Lulu New York Magune July 26, by the business and fashion press. These comparisons reveal dif- 2000. www.ag.com/shopping for 58082: Jon Aland Sara ferences across the brands. Fabric blends vary a bit, as do styles, She's How Lemon Yoga Pants Compare to Amnest rider, January 23, 2015, www.businessinsider fit, and features. But as with most appare items, perceptions of comyoge portion obok tetaprice value: 2015-1 Brittany quality come down to personal preference. Ask Lutheads and MCA mon Goes Beyond the In-Store Experience. Au they will tell you with conviction that Lululemon's products fit bet Mind. April 15, 2014. www.mind.com/articlemon goes beyond ter, feel nier, last longer, and are more lattering than any com store esperience and Information from www.info.mon.com/about peting goods and shopmon.com.accessed June 2016