Position Statement
A company faces many challenges that it has to overcome to attain its successful position in the competitive market. There have been many cases previously where the company have made a series of mistakes and have degraded from their leading position. However, with a thorough business analysis and implementation of strategies accordingly have regained their position in the market (Hilton & Platt, 2013). The case study provided also shows some similar resemblance where a leading apparel company made a series of mistakes that lead them to fall from their former successful position. In the subsequent discussion, the careful analysis of the company’s problems would be done along with the appropriate action plans that will help the company to get back to its former position in the market.
Lululemon Athletica Inc. is a Canada based athletic apparel retailer founded by the Canadian business figure Dennis Chip Wilson (Townsend & Parmar, 2018). The company delivers a wide range of athletic wears ranging from yoga pants, accessories, performance shirts and so on. This Canada based brand expanded successfully on global context and made a respectable reputation in the market. The company was founded in the year 1998 and initially started off as a design and yoga studio. Later the company established its first athletic apparel store in the year 2000. As per the case study, provided the main vision of the company was to promote a healthy lifestyle for the people and spread a message for people to live longer and enjoy their life to the fullest extent. The business attained great success as the company took the advantage of a vacant position of athletic market among women. However, the company took a turn of events and made disastrous mistake in the public eye that downgraded the reputation of the company. The first challenge that arouse for the company was complaint from the customers regarding the degrading quality of their popular product named Luon Pants. Secondly, the customer service team failed miserably to tackle these complaints and neither the company could satisfy the customers with their products. The third major challenge that the company had to face was the poor communication from the former CEO and founder of the company Dennis Wilson whose comments on media evoked major backlash and raised questions for the company’s values and visions. In addition to this, the company further degraded from its position when the advertising department of the company made the mistake of intimidating window display where the tag line subtly threw a shade to a charity organisation. Over the degrading quality as well the major step was taken by the CEO Christine Day who resigned from her post due to lack of company’s incompetence to provide quality product (Post Media Inc., 2018). A series of these events lead the company to fall from its position and reputation as well (Prois, 2018). The company had to suffer from major backlash from the customers as well as from the media.
Proof of Diagnosis
Lululemon Athletica Inc. failed to provide customer satisfaction with the quality of their products along with that the response team and advertisement department failed miserably to tackle the complaints and promote the brand positively. Thus, the credibility of the company was badly hit and lost its position from the leading stage. The company in its attempt to respond towards the degrading quality of the products further complicated the situation and raised controversial attention towards the company. Such an attention proved to be a major hit for the company (Bednar, Boivie & Prince, 2013). The media was quick to glorify these controversial events that garnered more backlash from the customers. The results of these devastating incidents gravely affected upon the sales and have to go through major loss. All these self-inflicted mistakes of the company took a heavy toll upon its reputation as well as on its profits.
The primary cause of the problems was when the company suffered from quality degradation. In the case study, it was mentioned that one of the popular products of the company did not meet the standard quality as customers criticised about the sheerness of the luon pants. The company instead of responding to customers with logical and satisfactory explanation further created chaos as the return policy for the products were made to do with embarrassing actions for instance, the customers were asked to bend over to demonstrate the issue of sheerness (Mail Online, 2018). These failed attempts and degrading attempts from the staff and customer service are the key issues of the problems. Lastly, the founder’s lack of concern towards the quality of products further accelerated these issues to heavily influence the profits of the company to fall (Lustrin & Patinkin, 2018).
It is necessary to construct a strategic action plan that would help the company to cope with the difficult circumstances at the current moment (Theaker, 2017). For this particular case of Lululemon Athletica Inc. the company has suffered a lot regarding the reputation of the brand therefore, the initial action plan for this company would be to reinvent the brand image by carefully consulting a Public Relations consultancy. It would be suitable for the company to hire an external public relations consultancy since; the primary focus of the consultancy would be to reconstruct the negative image of the brand (Davis, 2013). The primary goal of the company would be to attain a positive brand image as the company has faced major backlash from the customers and media. In addition to this, the company has to focus its attention towards improving the customer service and response team of the company. The successful achievement of these goals will provide the company to rephrase its negative brand image and will give the company some positive reputation in the market (Awad & Fatah, 2015). Enhancing the customer service department of the company will enable the apparel company to provide customer satisfaction that could be termed as one of the key aspect in attaining success (Mithas, Krishnan & Fornell, 2016).
Action Plan
The following phase would be to implement these action plans into systematic steps. The Public Relations would start by putting out advertisements about the brand that does not body shame instead celebrates women of every shapes and sizes. In this way, the company will rectify its mistake where the staff of the company posted a degrading message that upset the customers. This step will also try to conceal the mistake that the founder of the company made in media. The next step in action would be to hold training programmes for the staff members of the company and train them with the knowledge of tackling customers’ criticisms. In this step, the involvement of customer service department will also be included for receiving training programmes. It is essential to provide training to the staff members of the company so that they are able to handle any circumstance efficiently without any difficulty (Lam & Mayer, 2014). The consecutive step would be to release an apology statement from the founder of the company Denis Wilson, as this major step will significantly put a positive impact on the company’s image and reputation. The response team for the company would have to be instant in providing customers with logical explanations and thus, create a strong bond between the brand and its customers. A loyal customer relationship with the brand appears to have a huge advantage for any business to be successful for the long run (Toufaily, Ricard & Perrien, 2013).
The action steps taken up by the Public Relations (PR) consultancy in improving the brand image of the company will affect upon the company for a short term. Since, once the initiatives taken up by the PR turns out to be successful the company have to continue its positive brand image through its functioning such as giving the customers quality product (Nezami, 2013). The advertisement and promotional campaigns would be for a short-term basis as well in order to regain the company’s name into a more positive direction (Buil, De Chernatony & Martinez, 2013). The training programmes provided to the staff members will be for a long-term impact on company’s reputation.
The implementation of the above discussed action plan could go wrong since, the company has faced major backlash not just from customers moreover has even faced backlash from the media as well. The implementation of positive brand image with advertisements promoting women of all shapes and sizes could contradict with the comments made by the founder of the company who degraded the body size of some women. However, in order to deal with this possible negative response the company especially the founder of the company has to initiate an apology statement publicly and then focus on the promotional campaigns. The company can still face backlash for the existence of employees that have in the first place garnered bad reputation for the customer service and response team department. Therefore, the company have to even initiate an apology statement on behalf of those employees. The response from the company regarding these issues have to be patient and not aggressive or defensive, as it would further worsen the reputation and situation.
References
Awad, T. A., & Fatah, S. M. A. (2015). The Impact of Social Media Branding on Developing Brand Advocates for Start-Ups. International Journal of Online Marketing (IJOM), 5(4), 37-59.
Bednar, M. K., Boivie, S., & Prince, N. R. (2013). Burr under the saddle: How media coverage influences strategic change. Organization Science, 24(3), 910-925.
Buil, I., De Chernatony, L., & Martinez, E. (2013). Examining the role of advertising and sales promotions in brand equity creation. Journal of Business Research, 66(1), 115-122.
Davis, A. (2013). Promotional cultures: The rise and spread of advertising, public relations, marketing and branding. Polity.
Hilton, R. W., & Platt, D. E. (2013). Managerial accounting: creating value in a dynamic business environment. McGraw-Hill Education.
Inc., P. (2018). Lululemon’s CEO resigns over issue of conduct. [online] Financial Post. Available at: https://business.financialpost.com/pmn/business-pmn/lululemons-ceo-resigns-over-issue-of-conduct [Accessed 23 Aug. 2018].
Lam, C. F., & Mayer, D. M. (2014). When do employees speak up for their customers? A model of voice in a customer service context. Personnel Psychology, 67(3), 637-666.
Lustrin, M., & Patinkin, F. (2018). Lululemon Founder Puts Blame on Women’s Bodies. Retrieved from https://abcnews.go.com/US/lululemon-founder-chip-wilson-blames-womens-bodies-yoga/story?id=20815278
Mithas, S., Krishnan, M. S., & Fornell, C. (2016). Research note—Information technology, customer satisfaction, and profit: Theory and evidence. Information Systems Research, 27(1), 166-181.
Nezami, P. (2013). The Reviewing the Impact of Marketing Mix on Brand Equity (Case Study: ETKA Stores). Journal of Novel Applied Sciences, 2(10), 517-521.
Prois, J. (2018). Lululemon Mocks A Domestic Abuse Charity, Then Offers Them Free Yoga. [online] HuffPost India. Available at: https://www.huffingtonpost.in/entry/lululemon-mocks-doestic-abuse-charity_n_4184281 [Accessed 23 Aug. 2018].
Theaker, A. (2017). What is public relations?. In The Public Relations Strategic Toolkit (pp. 17-27). Routledge.
Toufaily, E., Ricard, L., & Perrien, J. (2013). Customer loyalty to a commercial website: Descriptive meta-analysis of the empirical literature and proposal of an integrative model. Journal of Business Research, 66(9), 1436-1447.
Townsend, M., & Parmar, H. (2018). Terms of Service Violation. Retrieved from https://www.bloomberg.com/news/articles/2018-07-24/lululemon-looks-to-sephora-veteran-in-bid-to-maintain-momentu
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