Lululemon's Segmentation Strategy

Lululemon uses a segmentation strategy that customizes or segments its products into categories designed to appeal to customers based on their functionality needs and gender. For example, Lululemon makes atheletic apparel for both men and women and more specifically to customers based on their activity of choice (i.e. yoga, training, to-from, swimming, and running). Companies who use the segmentation approach typically spend more on delivery and costs of production, and have difficulty achieving economies of scale. To address higher costs, Lululemon charges its customers a higher premium than its competitors. In fact, Lululemon’s yoga pants run anywhere from 50-70 dollars more than similar yoga pants found at GAP Inc’s Athletica. To drive demand,