Lululemon: Corporate Misstep or Targeted Marketing

Corporate misstep or good marketing
Corporate missteps provide fodder for reporters and bloggers. There is something in human nature that makes it impossible to look away from a self-inflicted company train wreck. Some leaders, like Kenneth Cole, purposely create controversy to increase brand exposure and sales. It’s a viable marketing strategy that works for his company and customers.

The most recent viral misstep comes from Lululemon’s founder, Chip Wilson. Responding to complaints about fabric pilling, Wilson said, “Frankly, some women’s bodies just don’t actually work. It’s more really about the rubbing through the thighs, how much pressure is there over a period of time, how much they use it.” His words launched a flurry of anti-Lululemon online comments. He answered the commentary with an apology to his employees providing more fodder to the content hungry community.

Watching a company founder seemingly self-destruct is entertaining, but is it bad business?

Good Morning America reported the story with follow-up comments by the hosts. The commentary by Josh Elliott inspired this post. He said, “You know, this has got to be bad business. You would think. You can’t sell to part of the population. After 2005, the fact they’ve been in business this long, is no small miracle, I would argue.”

Is Lululemon’s business success due to a miracle or a well-planned marketing strategy? Frankly, selling yoga pants at a $100 a pop requires targeting a specific part of the population. Planning on everyone buying any product is a business model changer. Products marketed to everyone are generic commodities that compete on price points. The best business models clearly target and cater to a specific group.

The guys at Duck Dynasty understand this. Everything they do is designed to speak directly to their target group. Their marketing strategy is an excellent example of creating a community and providing content that keeps community engaged and waiting for more. They don’t have to send emails begging that people move their messages out of the Gmail promotions tab because they have created a strong connection with their subscribers. Their audience searches for the content and supports the company.

Lululemon has suffered some setbacks this past year. Product quality issues caused the company to pull almost 17% of its black Luon pants from the market. Poor quality derails companies. When people stop trusting the quality of the brand, they stop buying. High end product companies fail faster than their lower priced counterparts do because people expect more from them. The real Lululemon story is “how will the quality issues effect long-term loyalty?” Whether or not the apology was good is just entertainment.

For information on how to better target your market, email Debra at dellis@wilsonellisconsulting.com.



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