Combination of Success: the Blend of Marketing and Customer Value

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Table of contents

  1. The Concept of Customer Value
  2. The Link Between Customer Value and Marketing
  3. Conclusion

Marketing can be broadly defined as the communication channel linking a product or service to the targeted customers. Creation of value for customers is a critical task for marketers. From a customer's perspective, customer value is what they 'get' (benefits) relative to what they have to 'give up' (costs or sacrifices). Lululemon athletica, according to their website, is a technical athletic apparel company founded in Vancouver, Canada in 1998. Lululemon utilise various forms of marketing to communicate their products to their targeted customers. Fueled by a love for yoga, Lululemon shares its culture with the broader community as a subtle marketing device that is evident to have created an inner community within their brand name where people are brought together. This passion allows the company to continually grow on their ever-evolving journey through the pursuit of marketing.

The objective of marketing is to achieve personal, organisational and societal objectives by creating superior customer value for one or more market segments with a sustainable strategy. Four simple concepts of marketing can be defined and explained below:

  1. Product: it is essential that the product for sale is clearly defined before it can be successfully marketed. Lululemon appeals to their customer base as their products fulfil a need or want of the customers.
  2. Promotion: once a product is finalised it needs to be promoted in order to reach its target audience. Promotion includes elements like advertising, public relations, social media marketing, email marketing, search engine marketing, video marketing and more. Lululemon works on all of these platforms to spread the word of their new and existing products to attract potential buyers.
  3. Price: once a concrete understanding of the product is established pricing decisions can be made. Price determinations will impact profit margins, supply, demand and marketing strategy. Lululemon, while they may be more expensive than their competitors, have a strong sense of worth when pricing their products.
  4. Place: it is important to consider the locations where potential buyers will be converted to buy certain products. Lululemon considers the needs and wants of the customers when working on displays for their stores as well as intangible locations such as their online store and emails.

Correct means of marketing has many benefits for a company. When people know a business’ presence and become invested in the products offered to them, they’re much more likely to be converted from potential customers to customers. This can be seen when Lululemon releases a new product and existing customers feel obliged to buy it. This, in term, increases sales for the company thus increasing revenue. Successful marketing can too raise awareness towards a particular brand or product. Even if the customers are not converted to buyers straight away, they become part of an audience of potential customers who know about the business, what the business can offer and where to find the business. This can be seen when a potential buyer is drawn to the Lululemon website and is asked to sign up to their emailing list for further news and promotions. Even though they may simply be browsing at the time, later down the track they may be inclined to make a purchase when they receive a promotional email. Furthermore marketing is crucial because it creates credibility for a business. People want to purchase from a business that is reliable. It takes time to build credibility for a business but once trust is established with customers, client loyalty is created. A major form of marketing is word-of-mouth and people spreading their good experiences is a huge benefit to a company. Lululemon may have a customer who wears their activewear to yoga which sparks a conversation, resulting in a referral and a new potential customer.

The Concept of Customer Value

Holbrook, as stated in the Smith and Colgate article, defines customer value as an 'interactive, relativistic preference and experience'. It is a customer’s perceived desire for, and evaluation of, those product attributes, attribute performances, and consequences arising from use that facilities achieving the customer’s goals and purposes in use situations. Building on many previous Customer Value Frameworks such as Park, Jawarski and MacInnis’ in 1986, Sheth, Newman and Gross’ in 1991 and Heard’s in 1993-94, Smith and Colgate created their own Customer Value Framework that builds on the strengths of previous frameworks and mitigates the weaknesses to explore value.

  • Functional/ Instrumental Value

Concerned with the extent to which a product has desired characteristics, is useful or performs a desired function. As suggested by Woodruff there are three key facets:

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  1. correct, accurate, or appropriate features, functions, attributes, or characteristics (such as aesthetics, quality, customisation, or creativity);
  2. appropriate performances (such as reliability, performance quality, or service-support outcomes); 
  3. appropriate outcomes or consequences (such as strategic value, effectiveness, and environmental benefits.
  • Experiential/ Hedonic Value

Concerned with the extent to which a product creates appropriate experiences, feelings, and emotions for the customer. Some organizations, such as most restaurants and some retailers, focus on sensory value (such as aesthetics, ambiance, aromas, feel/tone). Companies, professional service organizations, and many business-to-business organisations, focus on social-relational value (such as relational or network benefits, bonding/connectedness, personal interaction, developing trust or commitment, and responsiveness).

  • Symbolic/ Expressive Value

Concerned with the extent to which customers attach or associate psychological meaning to a product. Some products (luxury goods, for example) appeal to consumer's self-concepts and self-worth that is, they make us feel good about ourselves either in possession (e.g., buying a new outfit) or in giving (e.g., giving diamonds to a spouse, as suggested by DeBeers).

  • Cost/Sacrifice Value

Concerned with these transaction costs. Retailers attempt to reduce the risk (personal risk, operational risk, financial risk, or strategic risk) perceived by customers in buying, owning, and using a product, through the use of guarantees, warranties, flexible return policies, and third-party endorsement.

Lululemon doesn’t simply focus on one type of customer value. It extends to fulfil them all in one way or another. Lululemon creates functional/instrumental value mainly by appropriate features and attributes including product quality, performance and aesthetic. They create experiential/hedonic value by leaving customers feeling fulfilled with their time in the store. When served in Lululemon stores the experience is individual and little measures are made to make customers feel welcome, such as writing their names on the doors of the fitting rooms and focusing on personal interactions. Lululemon creates symbolic/expressive value by heavily revolving their brand around sport, in particular yoga, to appeal to customers with a strong sense of self and worth. Lululemon activewear may, to some customers, provide a means of self-expression as well as make them feel good and thoroughly satisfied with their purchase. Finally, Lululemon creates cost/sacrifice value by offering a 30 day refund policy on all products that meet their requirements. This reduces the risk for customers when buying as if a change of mind occurs or the item is not exactly what they hoped they are covered and have the opportunity to get their money back.

The Link Between Customer Value and Marketing

Lululemon have been persistent and have strived to ensure their customers are put first. Their in-store experience is built on driving adoption and customer loyalty by putting emphasis on a sense of community and authenticity. This focus on community is core to the Lululemon Athletica marketing strategy, and it’s one they advertise and celebrate, creating an all-inclusive and consistent experience across their promotional materials, social media, web presence and stores. Everything from the way athletic achievements of individual people are celebrated on social media and the manifesto composed of inspirational slogans printed on their eco-friendly reusable shopping bags highlights their strong focus on community.

The company has made the decision to only distribute its products through company-owned stores to control the customer experience. Underpinning the Lululemon Athletica marketing strategy is a recognition that when people buy sportswear, they’re potentially buying much more than just gym shorts or a running top. These items could all signify anything from a new year’s resolution and a fresh start, to a return to exercise and athletics after an injury, or a new way to spend time with friends. Each experience is individual, just as each customer is individual and Lululemon recognise and appreciate that. Within the store, experience is largely driven by employees. As a result, the company has developed a rigorous employee hiring and training process, seeking to place highly enthusiastic employees that radiate “positivity” on the floor. Sales associate are termed “Educators” and the company’s operating culture highly encourages them to display the aspirational values of the brand. For example, employees post their one, five and ten year goals publicly in the store and are encouraged to attend group exercise and yoga sessions with their fellow employees, which are subsidised by the company. In this way, employees become enthusiastic advocates for the brand, both within and outside of the store, and that genuine enthusiasm and common-ground with customers drives a unique brand experience.

Conclusion

The importance of marketing and customer value, when combined, drive brands to success. When operated and managed correctly brands are seen to thrive. Lululemon, in their marketing strategy have been seen to include their customers and put their needs and wants first. They understand the company is fueled by consumers and have put in place many techniques to make their customers feel well assured in the brand. Customer value and security is important to customers when they’re giving up their hard earned money for luxury items. Lululemon does a good job of making people feel secure in their decision through their use of correct marketing.   

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