The aim of this research proposal is to ascertain whether Lululemon Clothing’s brand could successfully enter the Chinese market. In order to effectively conduct this analysis, both the Chinese cultural background and the commercial viewpoints are going to be employed in analyzing this paper. This can be analyzed under the following discussions.
Analysis of the Chinese Cultural Background and the Commercial View points on Lululemon Clothing’s Entry in the Chinese Market
China’s current population is approximated at of 1.4 billion people. This provides a good market opportunity for Lululemon Clothing to utilize the population, and roll out their services. Being the second largest economy in the world, and also the fastest growing in terms of the manufacturing industries, China represents a better ground for business opportunities for an enterprising company in the country (Keegan, 2007). Therefore, it is believed that China has approximately fifty percent of its population in the rural areas and twenty percent of this population lives below the poverty line. Certainly, there is enough population in China to use the elaborate communication network. Therefore, this gives a great opportunity for products and services targeting different population needs.
China’s population is huge, the biggest in the world estimated at more 1.4 billion plus, and it has yet to reach its peak in 2030. Despite the low fertility rate because of its one-child policy, the tremendous population explosion maintains its population growth. Consequently, it resulted to a high population density per square kilometer, reaching to more than two thousand persons per square kilometer, in the most thickly inhabited counties and cities like Wuhan (Bussey, 2007). Therefore, China’s economic reforms have also started at a rapid rate in the urban centers. At the end, attracting migrants to work and live in the inner cities with consequent high-density. Despite all, there is a dilemma that undermines the well being of the residents and their children.
In making a marketing decision, the company has to look at the economic variables, such as inflation, Gross Domestic Products, industrial production, population growth and structure. A steady rise in the population may provide a good opportunity for putting investments. This is because of the availability of the threshold that has the capacity to utilize the services that the company may have. In addition, the company may also be convinced that, the economy of the country is stable due to the increase in the Gross Domestic Product and the Industrial Added Value.
Such would mean that people may have the ability to use the products and services of the company. However, the only worry that the management of the company might consider as a threat is the increasing rate of inflation in the country. According to the graph, the rate of inflation rose from 4.9 percent in 2010 to a margin of 5.4 percent in 2011 (Tong, 2011). This trend might not be healthy for a company. Despite this inflation, the company might negotiate with the government of China to allow it to operate assuming that the inflation would be short-lived. The company may not be interested in re-locating to another country, but only hope to convince the Chinese Authority to allow the company to operate in the country (Bass, 2006).
In order to device a global marketing strategy, the company needs to have a cautious and structured approach, because the risks are high and the process is quite complex. When the company transcends national boundaries, they face a host of constraints. While some of them are quite obvious, others are not. Differences in legal, economic, demographic, political, regulatory, and technological environment are easy to understand. However, understanding the cultural diversity is the biggest constraint for Lululemon’s crossing their geographical boundaries. In order to venture successfully in China, Lululemon Clothing also needs to embrace online marketing.
There is a need to know the characteristics of online customers, which begins with the understanding that, the customers` needs differ from the needs of traditional consumers. Online consumers seek the same trusting relationships: acquired through brand identification on the internet with the businesses they patronize. Various marketing strategies can help businesses identify the needs of their online clients and gain a better understanding of how to market to their needs. Conducting an internet market segment approach uses different online procedures to categorize possible or definite online customers into groups with comparable needs and characteristics. These tools allow marketing practitioners to plan their strategies accordingly to capture the attention of their target consumer (Merrihue, 2004).
Moreover, Lululemon Clothing would also need to focus on its brand and consumer relationship strategies so as to succeed in China. Consumer relationship with branding is one of the concerns that many marketers and scholars have contributed upon. Following the varying views on the matter, this research will also explore the relationship between the two issues as to whether they are directly related or not, and their importance to the Lululemon Clothing’s entry in China’s market. This entails whether the consumers have direct relationship based branding of different products. It is an interesting take because basically the two share certain relations given the specifications of the brand (Bass, 2006).
Consumer as the last person who uses the commodity will always associate the required product with its brand. This is because brand is the general design, name, symbol, name or the combination of the above with an intension of making the consumers identify the products in the market. Identification of goods and services is facilitated by this product brand. The brand enables the consumer to make judgment as to what extent the item is proffered in the market. These symbols also create more awareness on the company products and help to distinguish them from any other competing sellers around (Keegan, 2007).
Branding in a business helps in ensuring that customers or any other prospects sees Lululemon Clothing’s products as the real solution to their own problem. A good brand helps in achieving many issues in convincing the consumers about the product. The brand delivers a very clear message on the products. It also helps in confirming the credibility, ability to connect the target prospects in an emotional way, motivates any buyer, and it also strengthens the loyalty of the user so that the buyer will continuously buy the products. In order to be successful in branding, Lululemon Clothing must understand the needs and wants of the customers in China’s targeted market. This is entrenched through public contact at any given opportunity when a new product is launched into the Chinese market (Bass, 2006).
Based on the provided alternative products, which Lululemon Clothing would provide in the Chinese market, as its brands, the consumers could easily develop relationship with the company’s goods and services. In most cases, “the consumers will usually seek clothing products because cloth is one of the basic needs for the population” (Keegan, 2007). The presence of clothing products and services provider is very necessary because people would need to dress. Lululemon clothing product itself is a unique brand for the customers. It is appealing to customers to buy such products. The needs of the buyer are satisfied in the sense that the demand exists.
These kinds of brands are in the hearts and minds of the customers, prospects, and clients. The relationship in these brands can be influenced while in some like clothing products and services are not easily influenced. The perceptions vary because the clients find it necessary as a basic need that clothing must be given first priority. This is a brand that has been developed through sound marketing strategy and procedures. However, when considering the modern and appealing clothing design, this brand is majorly developed through effective marketing strategy so that the consumers are able to know the existence of such brands.
Indeed, there should be a presentation that there must be interdependence, which exists between the Lululemon Clothing’s partners as well as the potential Chinese stakeholders, and it ought to be evidenced. In addition, there should be complete acceptance in both sides for the type of brand and the clients or consumers. Finally, Lululemon should design a marketing procedure will be able to create the required brand, which consequently increases the company’s sales from the Chinese market (Keegan, 2007).
In conclusion, Lululemon Clothing will need to venture and remain in the Chinese market, but buy a small competitor to have local touch and acceptance. This would go a long way to continue its insistent pricing strategy and pull up its mind to work. Therefore, advertising and pricing are to be lowered by 20% on all possible means. The result might be to change policies to have good relations with the government to avoid the possible political interference. With this kind of information, the company can build products that suit such customers and bring them into the consumer group of the company.
Increasing the number of customers would also mean an increase in the information available, which can be used to come up with a new product that caters for specific target groups. Data captured in these systems can be used to analyze market demands and be used to create a new product for given groups or one that satisfies a given need. Such products would increase the revenue base of the company. Lululemon Clothing can collect information about users of different websites, which it can then use to target groups which visit such websites. Websites with high traffic such as social networking websites can provide information in certain target markets.