Focus Group Research Lululemon Taylor Torcasso. Part A: Focus Group/Question Map

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1 Focus Group Research Lululemon Taylor Torcasso Part A: Focus Group/Question Map Research Question: What draws consumers to shop with Lululemon over other competitors in the market, and how can we expand our brand loyalty so consumers shop with us over the competition? Main Goals: To understand why consumers shop at other retailers over Lululemon How to better target these consumers to convert them to Lululemon shoppers by understanding their relationship with working out and being healthy Questions: 1. Do you exercise on a regular basis? a. How much do you workout? b. If you don t work out, why do you choose not to? 2. What s your favorite way to exercise? a. If you partake in fitness classes, which ones do you prefer? b. Why do you prefer those? 3. How much do you typically spend on exercise each month (i.e. gym membership, classes, etc.)? a. If you are spending money, is it your own personal money or do you parents fund it? b. Why do you choose to spend your money there? 4. What do you think of people who exercise consistently? a. Why do you feel that way? 5. How important is it to you that other people perceive you as healthy and active? a. Why do you care/not care? 6. Where do you buy your workout clothes? a. Why do you shop there? b. What do you like/dislike about shopping there? Why? 7. What is the most important thing you consider when purchasing athletic wear? a. Why do you care about that the most? b. How important is that your workout apparel is tailored to your specific exercise preferences (cycling, running, yoga, etc.)? Why? 8. In what situations do you wear athletic wear outside of working out? a. Why do you choose to wear them outside of working out? 9. What is the highest price point you would pay for quality active wear? a. How much would that be? b. For a pair of leggings? T- shirt? Accessories? 10. Have you ever purchased anything from Lululemon? a. Why did you/did you not purchase the item? b. Did you try on the item and get a feel for the quality?

2 c. What were your favorite qualities of the item? Least favorite? d. Was there a person who influenced your purchase? 11. How do you perceive the brand and people who buy it? a. Why do you think you believe that? b. Do you personally know people who wear the brand? c. What do you think about them? 12. What do you think about men wearing Lululemon? a. Why do you believe that? b. Do you think the company does that on purpose? Why or why not? Part B: Key Findings and Analysis People want to be perceived as healthy and active There was a common idea throughout the focus group that it was important for others to see them as physically healthy people who are active. Everyone in the focus group said that they try to exercise regularly, and each person had their own ways they liked to exercise, but almost everyone had the same reasons for working out. When asked why, everyone agreed to stay healthy, but some touched on the subject of working out to look good for a particular event or the summer, and some went as far to say they workout to look more attractive. It was noted that society is moving towards the idea that in order to be healthy, one must be exercising, and because of this, more people are starting to workout. The majority of the focus group agreed that it was important for people to perceive them as a healthy person who cares about exercise. One guy even brought up the fact that working out was a pressure issue for him. He said, I ve started to exercise more recently to get people off my back because I ve started to catch some negative attention and I want to be perceived as a healthier person. This data shows that people really care that others look at them as a healthy and active individual. Whether people find that working out makes them more attractive or appealing to others, or that it makes them be seen as a healthy person who cares about their body, people find that it is important for others to see themselves as fit and in- shape. Though nearly all agreed upon this idea, one guy stated that he does not care if people perceive him as healthy, as long as he considers himself healthy. That was interesting to me because with having only two males in the focus group, I think speaking with more males will make it possible to gather a better understanding of how males want to be perceived, and if that is different than how females want to be perceived. I really would like to get into more detail on this subject and dive a little further to see more emotional reasons for this motivation. The one guy who provided depth on his societal and peer pressure to be seen as healthy helped form an understand on that subject, but I would like to find out more about those who worked out to look more attractive and in- shape to see if that is from societal and peer pressures as well, or from a different, unknown reason. With more information on this subject, a strong understanding of people s relationships to working out and being healthy can be formed, which will allow for the opportunity of creating advertisements and public relations campaigns around this.

3 Price point of Lululemon is considered too high for many consumers Many of the consumers who stray from shopping with Lululemon shop with their competitors because they are normally cheaper. While the average price point for Lululemon is around $100 for leggings, $50 for tops, and $120+ for jackets, the average price points willing to be spent for athletic wear in our focus group ranged from $20 to $50 maximum. When asked to describe what the most important thing to consider when purchasing athletic wear, answers included, cheap but attractive, quality, and comfort and style, but all then agreed that a combination of comfort, style, quality and price were important when making purchasing decisions. Though a cheaper price is preferred, many agreed that they did not want to buy a cheap product that will fall apart after a few wears. When asked why they shop at the retailers they prefer, a majority claimed because the prices were cheaper than other brands. One girl said she preferred TJ Maxx, Marshalls, and other stores like those, because they have brand name items for cheaper prices. Another girl said she preferred Target because she goes there a lot, and though the prices can be mid- range, she still finds them cheaper than Lululemon and other brands. One guy said that if he worked out more often, he would spend more money on athletic wear, but because he does not, he opts for cheaper alternatives. When asked why they have never purchased clothing from Lululemon, one girl said she saw the price point and said Are you kidding me. I m not gonna spend $80 on leggings that are the same quality as Nike or Target. Though it was noted that she had not ever tried on Lululemon leggings to compare the quality. Another girl did not want to spend too much money on something that will get sweaty and gross. From the focus group, it seems like the main pattern is that people are shopping with other retailers because their price points tend to be a lot lower for something of the same quality. I believe a good step in moving forward from that is focusing strongly on the quality of the brand. Lululemon s prices reflect the quality of the material, and their signature fabrics and technology. In future advertisings, making the benefits of these qualities known and explaining how they are better than other retailers quality could help the brand get over the price barrier. I would also like to get a deeper understanding of how people compare the quality of Lululemon to other brands after trying on both options. Another campaign could do a blind try- on test to see which brand consumers prefer. The one man who really wanted quality athletic wear did not seem to mind spending more on Lululemon, but only really wanted to buy tops. I would like to better understand the differences between the price range of men and women when buying athletic wear. The only other man in our focus group claimed he did not really spend much on athletic wear, and did not really participate throughout the rest of the focus group. It would be beneficial to hear from more men. There was also a contradiction throughout the group of whether one would rather spend more money on a quality plain pair of leggings or unique design of leggings. The group was relatively split on that notion. Some claimed to rather spend more on a versatile black legging, but some would rather buy cheap black ones and spend on the unique pairs. Talking to more people on the subject would help clarify that.

4 People view the brand as an affluent and exclusive female brand Everyone in the focus group agreed that Lululemon attempts to cater narrowly to a wealthy female group, and likes to come off as an exclusive brand. Some of the first words mentioned when asked to describe the typical purchaser of Lululemon were private school moms, lives on granola bars and smoothies, white, blonde pixie cut women doing yoga, and country club mom who listens to NPR. The group agreed that they associated these words with the people they know who normally purchase it. A girl and guy in the group both from Charlotte, N.C., strongly felt the country club/private school mom stereotype because that was seen a lot in their hometown. The guy also claimed he had wealthy friends up north who were male and wore Lululemon a lot, but did not know other guys who wore it here. The others associated these ideas with the brand because of what they knew about the brand: price. One girl said, They obviously have enough money to afford $80 leggings, so I assume that they have an affluent background. Because Lululemon s price point is so high, people believe that only the wealthiest can comfortably shop there. The guy who had shopped in Lululemon once before noted that he was the only dude in the store. After digging deeper into how consumers perceive the brand, it was found that Lululemon comes off as trying to be elite. Combined with the high price point of the store, the actual stores themselves seem to be exclusive. One girl mentioned that when they opened up the store by her home, she did not know what it was because on the outside, the store had no windows to show off what they were selling and no advertisements, just the logo. Only when she understood what the logo was, did she realize what they were selling. The guy added onto that statement and said, It almost seems like they don t want you to come in if you don t know what it was. From this insight, Lululemon can either choose to stick with the exclusive and wealthy branding it currently has attached to the name and focus solely on those consumers, or it can opt to try and change the publics opinion on the brand and advertise to a wider audience, including more men and other demographics. I believe it is necessary to speak with other people from outside of North Carolina to see if the rest of the country feels as similar as everyone in our focus group felt. It was interesting to hear how the guy s friends in the New England area wore Lululemon more commonly, whereas everyone else felt that few males wore it here. If that was a difference in opinion there, it would be beneficial to see where else opinions vary between the north and the south, as well as other regions of the country. Lululemon could try different regional campaigns to reach out to the demographics that are being missed in each area, if it is found that there are strong differences between the regions. Part C: Analyze the strengths and weaknesses of your focus group Strength: Set up of questions and creating a comfortable environment I believe our strong organization of questions allowed us to create a comfortable environment and got people to gradually open up about deep subjects. By starting with the broad and less sensitive questions, we got to know our focus group members, and they were able to get on a calm level that allowed them to really get deep about things. The one male who described in strong detail the societal and peer pressures he felt about working out and being healthy really helped us get an understanding for some

5 motivations behind exercising. I feel as though everyone participated very openly and honestly, allowing us to get a really good understanding about other sensitive issues such as money, self- confidence and stereotypes. Weakness: Lack of depth in certain areas I, personally, really wanted to understand the relationship people had with working out throughout their lives, and while I feel like we did touch on the subject and were able to understand some things, we did not get into a deep enough discussion to understand the emotional side of the relationship. As far as motivational reasons for working out, we were able to pull out a few strong insights about that, but failed to ask the right questions to get a deeper sense of why people had these motivations, how they were developed and what emotions are attached to them. In the in- depth interview, I plan to get more personal with these reasons and delve deeper into the inter- personal connections with exercising, including family relations and peer pressure. I feel like in a group setting, most people would not feel very comfortable sharing these reasons, and that might be why we were not able to get a good sense of this.