MARKETING MANAGEMENT CIA 3

By

Rutvika Kundagol

Register No.
2128148

Under the Guidance of

Dr. Barkathunissa

MBA PROGRAMME
SCHOOL OF BUSINESS AND
MANAGEMENT CHRIST (DEEMED TO BE
UNIVERSITY), BANGALORE

JANUARY 2022
INTRODUCTION
The global yoga mat industry is valued at 11.67 billion USD in 2018 and is projected to grow at
a CAGR of 5.8% from 2019 to 2025. The growing health consciousness and the popularity of
yoga in developed countries are some of the major contributors for the same. The COVID- 19
has also bought a new health culture globally, thus promoting the practise of yoga. Moreover, the
government schemes globally have considerably contributed for its popularity. North America
emerged as the largest regional market in 2018 owing to growing awareness about the health
benefits of yoga and number of yoga studios in the region. Here we will discuss the various
components of introducing a product into the market. The product shall be marketed under
Lululemon brand. Lululemon being a premium brand in the North American segment can thus
largely benefit from the market share.

PRODUCT STRATEGY
The product- ‘Health Mat’ters’- isn't merely a tangible offering. It's much more than a normal
yoga mat that you’d see in the market. Not only does it satisfy the wants of the customer, but
also caters to the customer’s latent needs.
Product Levels: The Customer- Value Hierarchy

While planning the products market offering, I have addressed five product levels, each of
which adds customer value and constitutes the customer value hierarchy. These are:
Core Benefit: This is the most fundamental level of the hierarchy and it constitutes the benefit
that the customer is buying. In the case of this product, the customer is essentially buying it for
“fitness” needs.
Basic Product: This is the second level of the hierarchy where the core benefit of the product
is translated into a basic product. Here, the fitness need of the customer is realized with the aid
of a yoga mat.
Expected Product: In the third level of the hierarchy, I have incorporated all the attributes that
a customer expects to see in a yoga mat. This includes basic features like high durability &
longevity, the right comfort & support, stability, portability, right traction & stickiness, great
texture, environmentally conscious material- Eco PVC (100% latex free) and perfect size of
26” x 71” and 6mm thickness.
Augmented Product: The fourth level lays down the features which are beyond customer's
expectation and Lululemon makes it a habit to exceed the customer expectations. With this in
mind, Lululemon introduced its interactive yoga mat product line- “Health Mat’ters”. The
interactive yoga mat is an ever-evolving mat that uses micro thin pressure sensors embedded
within a traditional style yoga mat which are linked up with the customers smartphone or tablet
to give a real time heat map of the incumbent’s yoga practice. The mat offers feedback on both
alignment and limb specific balance through micro corrections on placement which aids the
customer to deepen their practice through personalized instruction. The mat comes with an app-
‘Health Mat’ters App’ which helps the customer personalize the mat to the customers' needs
through a calibration process complete with data collection about the incumbent’s body,
physical limitations and yoga abilities.
Potential Product: The fifth level encompasses the potential growth for the product in the
future. ‘Health Mat’ters’, which is currently marketed purely as a yoga mat can be expanded in
the future to include other fitness models to cater to a larger crowd.

Product Classifications
The interactive yoga mat is classified as a Durable and tangible consumer product due to its
long product life and physical nature. Moreover, we see “Health Mat’ters” as a Speciality Good
as the product sports several unique characteristics which customers are interested in buying.

DIFFERENTIATION
Product Differentiation
The interactive yoga mat is first of its kind, where technology is seamlessly integrated with the
traditional practise of yoga using artificial intelligence and predictive algorithms.
Form
The yoga mat is available in the standard size of 26” x 71” and 6mm, however customized mats
are also available in size and colour adding artistic features. They are also available in kid sizes
and colours. Printed animal images are used in kid sizes to help them guide through poses.
Features
The integrated technology in the mat will enable the mat to be more customized depending on
the types of users like beginners, experts and advanced categories as well as kids and old aged
population. The mat is composed of piezo electric sensors embedded between the top and
bottom layers. This is achieved through the “Health Mat’ters” app.The real time alignment
analysis will guide the user through real time feedback and can also be customized self through
self-learning features of the algorithms used. The posture alignment is attained through real time
calibration. The kid’s version of the mat is also available and also has enabled yoga training
through gaming options. The eco-friendly construction through the eco-friendly PVC also
makes the buyers feel great about making a sustainable purchase. The guiding marks will also
enable seamless learning through sensors attached while making measurements on a real time
basis. A travel bag made available with the product will also enable advanced learners an added
benefit.
Customization
The customization for nonstandard sizes in the adult category is made available upon request.
However, most of the customization in the types of learner’s category is enabled with the help
of an “Health Mat’ers” app, which uses artificial intelligence to analyse the growth, learning
stages, gender and health conditions through sensors enabled in the mat.
Performance Quality
The mat meets the highest industry standards in the material used, i.e., eco-friendly PVC mat,
durable, nontoxic, better stretch ability and high density. The technology support is provided by
IBM in artificial intelligence and predictive analytics.

Conformance Quality
The conformance quality is achieved through ISO-9001 certification in material used and ISO
9126-3 and ISO 25000:2005 for the software used.
Durability
The mat made from eco-PVC has high durability and latex free and thus provides high durability.
Reliability
The technology used for facial recognition is the COMPUTER VISION used by Facebook
which is highly reliable. This is achieved through premium pricing. The mat used for use is also
of high standards thus conforming with reliability.
Style
The mat is available in 4 colours in the standard category and 10 colours with printed animal
images with artistic features all with a premium outlook.
Ordering ease and Delivery
The ordering for the product is made at ease through websites and apps, with customisation as an
added value upon required and also through the retail showrooms. The delivery is attained in 2-
week time upon order.
 Installation and Customer Training
The direct to home delivery is available for the customers and the free training is provided at
home for using the mat with app.
Customer consulting, maintenance and repair
Services are available upon pre booking through websites, apps or through nearby retailer
showrooms within two days. More advanced technical issues on maintenance and repairs are
resolved within two weeks. Online technical support option is also available through Health
Mat’ers app and issues can be fixed online too through running diagnostic software online.

PRODUCT ATTRIBUTES
Product attributes determine product characteristics, allowing you to characterize a product in a
specific way. They are extra features of a product. Product attributes can be options, properties,
extras, for example. Options provide product specifics, such as size and color. Details like brand
or material involve properties. Price, size, etc., provide extras.
Quality: One of the key reasons people want to purchase a product is because they
understand that it works. They have seen the results and purchased the brand for the
recognized consistency, or they have come to know the product through household use or
demonstration ads. Yoga mats are generally made of rubber, PVC, cotton, cork, etc. But
this Fitness mat is completely made with eco-friendly and biodegradable materials. This
promotes healthy, comfortable, and environment-friendly products and services, attracting
all fitness and yoga enthusiasts. To deliver biodegradable and eco-friendly solutions, our
company is divesting its investments into creating eco-friendly and lightweight yoga mats.
The company uses thermoplastic elastomer as an alternative to PVC to offer UV-resistance,
latex-free, recyclable, and phthalate-free yoga mats. Furthermore, water-proof and skid-
proof features are also supported by the integration of TPE components into yoga mats.
Claims: Consumers often put a high emphasis on the marketing statements of a product. Any
knowledge that can prompt a purchase from someone looking for a product that fits their
particular goals and needs is essential. However, false statements will rapidly diminish brand
loyalty. Companies should seek an independent laboratory to certify product claims and
confirm product effectiveness to make the market's best claims.
 A Yoga enthusiast mainly looks for few claims while buying this product for their satisfaction.

• Texture: It is the texture of the mat that matters the most when it comes to traction. This
mat has a non-sticky texture, which gives a good grip and helps hold the posture for
long without slipping or sliding.
• Thickness: If the yoga mat is too thick, it can damage the knees, but if it is too thick,
we cannot feel the contact with the floor, which is an essential requirement while doing
yoga. To avoid this, the mat has the thickness in between and a proper fit for every
person.
• Padding: The Mat is well padded and with extra foam, which helps the new yogi build
up strength and muscle.
• Price: The pricing of the mat is according to the features that the mat provides. Which
is in between the cheap version and the most expensive version.
Innovation Innovation is paramount in retaining the interest of an audience and generating new
clients. Design is also one of the most daunting things to be personally adopted by businesses, as
it needs product awareness at a fundamental level. This yoga mat is not just a regular yoga mat.
This smart yoga mat makes it incredibly easy without attending costly courses to build a personal
yoga practice. Yoga is friendly to do at home on your own, but if you're looking for guidance
from a video, the practice might not be suitable for your unique needs, and often your neck ends
up craning in uncomfortable ways to hold your eyes on the screen. The SmartMat addresses some
of these issues, acting as a mat that guides you personally through voice command practice. The
mat, directed by the sensors embedded in the mat, delivers audio commands through a smartphone
or tablet. This way, you can tell the hyper-sensitive mat where to place more or less weight or minor
changes that should be made to your position.
Safety: It is essential to guarantee customer protection and brand trust if a product is all- natural"
or "highly-flammable" safety testing and labeling. As our Mat brand is one of the trusted and
famous lululemon, it is completely certified with all the required safety measures. To identify
manufacturing failures, as in product recalls, the company also provide reformulation services
for goods that require formula revision and failure analysis services.
Competitor Comparison: All the qualities on this list concentrate on customers having to
be reliable and trustworthy for their purchased goods, none of which would matter if the
product of a rival is best in any way. This product claims to have more effective, brighter,
stronger, longer-lasting and many other aspects than other products in the market.

BRANDING
Today, a successful brand needs a personality that resonates in a synchronized way with its
audience, across all channels, from social media to billboards, to its packaging.

This product comes under the brand naming Lululemon Athletica, one of the topmost brands
that originated from Canada. This brand is entirely into fitness products and fitness wear. This
brand was initially known for women's yoga apparel. Still, by gaining more male customers,
adjusting its product and marketing strategies accordingly, and preparing to increase brand
awareness among males, it has now evolved. The business has been said to use "holistic guerrilla
marketing" to make clients believe they are part of a more significant group by wearing
Lululemon clothes.

PACKAGING
"Packing is the preparation of a product or commodity for proper storage and/or transportation.
It may entail blocking, bracing, cushioning, marking, sealing, strapping, weatherproofing,
wrapping, etc." – Business Dictionary.
The packaging provided for the mat ultimately defines the brand. As they say, people are
attracted to beautiful and attractive looking things, and have full concentration on that to make
this product look more appealing to the customers. Packaging also helps to keep the product safe
and secure. As this product is an advanced version in the mats with all the new technology,
sensors, etc. installed in it, utmost care is taken in the packaging content to keep it safe and secure.
The material used for the packaging is also eco-friendly and biodegradable products. It comes
in various colors and designs. All the eye-catchy designs, a lightweight bag that helps in easy
carry, water, dirt and sunproof, customized packaging, and many more per customer
requirements. As the product lines inside the packaging, we also make sure that customers
understand the product's necessary details through packaging. We also include the brand logo
in every packaging, irrespective of any style or design.
LABELLING
Labelling is the presentation of a product's name. The nature and degree of information given
by a label shall be regulated by the applicable laws on safety and shipping.
In the current era of high competition, it is very much important that we display our product
brand and all the information about it on the product. This helps the customer analyse the product
and decide whether to buy the product or not according to their priorities. There are four types
of brand labels. Let us see how this Yoga mat product is labelled according to types.
• Brand Label: Giving a specified name to our product, which is "Health Mat'ters"of
the famous "lululemon brand." The showcase of the brand that we put on the product
and the packaging defines the brand label.
• Grade label: A "grade label" is a designation on or on the product itself. A tag or mark
of a phrase or symbol implies a qualitative judgment of relative inferiority or superiority
on a graded scale attached to the product or its container. In simple form, it is like
grading all the information on the product. Most of the information on the Yoga mat is
in Grade A and Grade B. The quality of the product, branding, materials, usage, etc., is
all in brand A.
• Descriptive label: The descriptive label provides details about the product's purpose,
instructions, handling, protection, etc. The descriptive mark is used for items that cannot
be separated by grade. When the customer is buying such a high-end and technology-
based product like this Yoga mat, we make sure that they have a full description of how
to use it, the primary use, and how to secure it to avoid damage. The information of
"instructions to use," "usage," etc. on the labeling is known to be a descriptive label
• Informative label: The descriptive label offers general product information, while the
comprehensive label gives full product information, including its use, manufacturer,
etc. The product informative label consists of detailed and essential information about
the mat.
PRODUCT SUPPORT SERVICES
Customers also feel that they buy more than the physical item while making purchases; they
often have perceptions for the amount of post-purchase service the product brings with it. This
service can range from easy replacement of a defective item to complicated arrangements
designed to fulfill consumer needs over the product's entire useful life.
Not only the sales of the product but also the after service of that is also essential. This product
assures the best services for the customers—24/7 services with as soon as possible solutions.
Queries like product issues, service, usage, replacements, etc., are all handled best and fast. The
support services are also aspects of customer satisfaction, so we ensure to do the best.

PRICING STRATEGY:
Pricing strategy is a very crucial step to be followed in a business to price their products or
the services. It helps to choose the best possible price for the products to maximize the
revenues earned by considering various factors like revenue goals, brand positioning, target
audience, product attributes and also various external factors like competitor pricing,
economic trend etc.
The pricing of the “Health Mat’ers” is mainly done through a 5-step process which include
the following:

● Determining the pricing objectives:

This is one of the most crucial steps for strategizing the price of the product. This includes
determining the pricing to ensure longer survival of the product in the market. This is followed
by determining the potential customers to target in order to catch hold of a huge base of buyers
in the initial phase. Proper distribution strategies are then adopted for the appropriate marketing
of the product to have the maximum market share in the first place. This ensures a strong
product-quality leadership which helps to decrease competition of the product in the market and
increase the market share of it.

● Determining the demand of the customers:

After the objectives of the pricing has been achieved, the demand of the customers is addressed.
Various factors come into play while determining the demand of any product in the market.
 Price sensitivity is one such important factor. Here in the case of Health ‘Mat’ters, the price
sensitivity is quite lower in the market which has greatly increased the demand of the product
in the market. The price sensitivity of this product is lower because of the following factors:

► Health Mat’ters is one of a kind in the market which makes it a quite distinctive product as
compared to the ordinary mattress existing in the market. These smart mats provide assistance
on limb specific alignments of the customers during exercises. This innovative characteristic
has made it a product different from the other exercise mattresses and this in turn has helped to
attract a lot of potential health-conscious customers. So the price sensitivity has become lower
for the product.

► The product being entirely new in the market is still emerging and so it has not yet attracted
significant competitors in the market. Also, the comfortability and the durability of the product
is also unparalleled with the other existing products and so there are very few substitutes for
the product. This has also contributed to the lower price sensitivity of Health Mat’ters.

► Also, the pricing is done taking into consideration its first entry into the market so that it
becomes affordable to the maximum number of potential customers to catch hold of the market
rapidly. The cost of buying the product is only a small portion of the buyer’s total income with
an added advantage of getting to use the product for a long period of time based on a single
time investment.

► The AI-powered Health Mat’ters App is also an innovative characteristic which the
customers are finding useful. This also has reduced the dependence of the customers on the
other products.
These factors have led to a decreased price sensitivity of the product and has thus increased the
demand of the product and the price has also been set up accordingly to meet the affordability
of the customers and the maximization of profits simultaneously.

● Estimation of cost of manufacture of the product:

This step includes the various costs associated with the manufacturing of the product starting
from the raw materials up to the finished product. The costs include fixed costs, variable costs,
total costs and the cost of production at various levels of production. Apart from these the MRP
includes the following:
 ► MATERIAL COST which also includes the manufacturing profit.

► STATE TAXES AND THE LEVIS.

► WHOLESALERS/DISTRIBUTOR MARKUP which also includes the storage cost of

the product.

► PROMOTIONAL SCHEMES

► RETAILERS MARGINS.

● Analyse the pricing of the competitors:

Health Mat’ters being completely new in the market with distinctive characteristics and
features are yet to face competition in the market. This is because the features are innovative
and not many brands are found to adopt such features altogether in their products. But, still the
pricing strategy has been made keeping in mind the probable competition to be faced by it in
the near future.

● Selection of pricing method:

Based on the above considerations and the various production costs for the product, the base
price of the product has been fixed to $90. There is also an app-based service along with the
smart mats for the customers who purchase them. The pricing scheme of the usage of the
product and using the app service simultaneously has been done based on the Freemium
model.

Freemium Model: The Freemium is a combination of both free and premium method of
pricing scheme for the customers. In this model, the basic product or the package is given to
the customers for free of charge and money is charged for additional features or services which
provides an extended service in addition to the basic version of the product or service. Based
on the freemium model, the various versions of the app-based service as developed for the
customers are:

► Health Mat’ters BASIC:

60 days free trials for the customers using it for the first time.

► Health Mat’ters ADVANCED:

 ○ $18/month

○ Free watching of 20 yoga training videos.

► Health Mat’ters PRO:

○ $35/month

○ Watch unlimited yoga training videos

○ Live chatting with yoga training experts.

○ Get customized yoga routines based on your health.

Distribution Channel:

The chain of steps needed for a product or service to reach its end customer is a distribution
channel.
This chain may require few possibly multiple steps, and intermediaries may be offline and online
and may include distributors, wholesalers, retailers, or agents. It's classified as a direct or indirect
distribution channel, based on the number of users. it's not a matter of whether one is better or
worse than the other: it depends on only the Health Mat'ters and the targeted audience's goals.
A strategy for the distribution channel evaluates ways to improve products' positioning to boost
demand around them. To optimize the defined dimensions between products and customers and
make it profitable, the main objective is to find the ideal audience and areas of demand for Health
Mat'ters.
Channels of distribution:

Zero level or direct channel: The manufacturer sells, without intermediaries, directly to the
customer. The shortest but not always feasible route and might not be the most economical or
suitable.

Level one channel: Between the manufacturer and the customer, indeed a wholesale
distributor or, more commonly, a retailer, an intermediary is added.
 Level two channels: In the process, two intermediaries are needed; the seller, for example,
distributes the goods to a retail base through a wholesaler.

Level three or indirect channel: Either reach wholesalers or end consumers, the most trying,
as intermediary agents also participate.

Whereas an indirect distribution system can seem more expensive and complicated, it's still
kind of actually more expensive to maintain a direct distribution channel and does not
inherently guarantee an efficient distribution of products and services.

Direct and indirect delivery networks, always based on responding to a specific set of
customers' expectations, will be the most effective strategy.

Three types of distribution:

Intensive distribution: involves the addition of as many distribution channels as possible so

that the market is very broadly positioned for products or services. This is the most common
one.

Selective distribution: Products or services are distributed exclusively by channels selected.

For example, a brand that markets exclusively in a specific geographical area or delivers only
available goods through its mobile app.

Exclusive distribution: Products are only distributed in most specific channels and in a limited
way, such as their retail stores or a counter in a chain of department stores, to generate a high-
end brand image.

The distribution channel exclusively for Product Health Mat'ters is Selective distribution. The
current channel strategy is spread out primarily in a specific geographical area. The primary
focus is to distribute through retail stores, retail factory outlets at different locations in Canada,
and straight from their distribution centre, through online orders. We use FedEx and UPS to ship
our products by delivering products to each stand-alone store and the customer. We desire to
maintain a strong relationship with their customers, achieve those objectives, get our place to
teach, and have a face-to-face interaction to achieve those ongoing goals. In the future, we will
distribute our goods to wholesale companies, such as health clubs, fitness centres, and yoga
studios, in addition to e-commerce and digital purchases, as a way to improve
the product value. Also, Warehouse sales and sales through showrooms and temporary locations
are other sales avenues.

INTEGRATED MARKETING COMMUNICATION CAMPAIGN

The ideal integrated marketing communication campaign for the Lululemon Athletica's new
interactive yoga mat shall be formulated based on the multiple-vehicle, multiple-stage
campaign.

Before formulating the IMC campaign, it is crucial to develop a Segmentation-Targeting-

Positioning model.
Segmentation: The new interactive yoga mat "Health Mat'ters" shall be launched in Canada
given the Brand awareness exists there; thus, elucidating geographic segmentation. However,
since Yoga is practised by people of all age groups spanning from a two-year kid to an 80-year-
old person, the demographic segmentation of age for the same is broad. Furthermore,
Psychographic segmentation with regards to lifestyle and hobbies also plays a crucial role in
identifying the target audience, capturing the essence of Lululemon Athletica.

Targeting: Targeting based on Psychographic segmentation in Canada for the interactive

yoga mat seems ideal as 21% of Canadians practice Yoga, and the percentile is likely to rise,
making it a profitable option. By maintaining the integrity of the Lululemon Athletica approach
of segmenting people by a community with the common purpose of a healthier lifestyle, the
new interactive yoga mat "Health Mat'ters" will be able to form deeper connections with
customers. Since 1 in 5 Canadians love Yoga, they will be willing to splurge on the product
without thinking twice for the features it offers. Thus, the reluctance to try the new product on
launching is less, and the reach-ability in terms of customer acquisition costs shall be lower,
resulting in a profitable scenario.

Positioning: The product can be positioned by incorporating all the three-positioning factors
namely: 1. Symbolic wherein the AI-powered mats leverage on the app and help in correct
postures without any external guidance eventually enhancing self-confidence; 2. Functional
wherein customers irrespective of their age can practice Yoga accurately through the different
levels provided in the app; 3. Experimental wherein Lululemon Athletica's brand equity is
exploited to promote the product.

An integrated marketing communication campaign is crucial for the success of the product.
Lululemon Athletica is known for offering premium products with quality of world-class
standards. Lululemon's digital marketing techniques are soaring day by day evident by the
3.4 million followers on Instagram, nearly 2.2 million Facebook page likes, and
approximately 1 million followers on Twitter inclusive of social media strategies indulging
influencers providing paid advertisements, pop-up advertisements using business manager
tools on Facebook, and subscription emails. The existing marketing strategies can be carried
forth and leveraged on for the new interactive yoga mat "Health Mat'ters" product that shall
provide a better kick start rather than starting from the bottom.

The new interactive yoga mat "Health Mat'ters" can be labelled as the next generation of
instore yoga classes and fitness camps of Lululemon Athletica owing to the introduction of
a AI-powered freemium app for the same which guides effectively. The product segmentation
of Lululemon Athletica can be leveraged to build community emotion. Firstly, not many
people will be aware of how interactive yoga mat works and the market is new with a relatively
smaller radius. So, it boosts as an excellent opportunity to leverage on it.
On lines of Seth Godin's quotation of "People do not buy goods and services. People buy
relations, stories and magic", the new interactive yoga mat can be marketed by linking
emotions of a healthier lifestyle to better you in addition to the community feeling Lululemon
Athletica endorses.
A special edition of Lululemon Athletica's magazine focusing on the winning novice yoga
person's journey towards becoming yoga expertise and a healthier version of oneself through
the usage of the interactive yoga mat "Health Mat'ters", and the AI-powered freemium app
can be utilized to promote that Yoga is for everyone and is interesting as contrary to
traditional mindsets as a part of Public relation and publicity strategy. The magazine shall
include a discounted coupon code for purchasing the interactive yoga mat and a QR code
which, when scanned, invites the customer to download the interactive yoga mat app.
CONCLUSION
The interactive yoga mat "Health Mat'ters" with the tagline of "Yoga happens beyond the mat
and towards a healthier lifestyle" associates with the healthier lifestyle aim throughout the
campaign, ensuring consistency. Thus, Lululemon Athletica's brand image and relationships
with customers will enhance bringing in more revenue by the launch of an interactive yoga mat
"Health Mat'ters" as it surpasses its competitors in all fields.