This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Lululemon's Reaction to Yoga Pants Mishap: Brilliant Marketing

Wall Street expectations can really push a small company's "internal capacities perhaps way too far that mistakes creep up," says Brian Sozzi, chief equities analyst for independent research firm, NBG, and a contributor for TheStreet's sister Web site RealMoney.com.

But this is not a story about lululemon's supply issues, it's about how the company's swift and transparent action towards the yoga pant sheerness problem was a marketing win, experts say.

Dr. Baldwin's tweet gets to the essence of what's going on here: that if a problem is communicated effectively, it can be a win for the business.

"A recall can be a costly headache for a company, but if it is handled well, it can also be an opportunity to enhance the company's credibility and reputation. It's critical to be transparent and responsive to your customers during challenging situations. That is how you build a trusted and respected brand in the long run. People tend to remember how you made a tough situation right rather than the tough situation itself," says Annie Xu, U.S. general manager of Alibaba.com, a global e-commerce platform.

"I think what they're doing is brilliant," says Bernhard Schroeder, the director of San Diego State University's Lavin Entrepreneurship Center. "It's a hell of an FAQ. Very well done on their part and consistent messaging - [the] customer is No. 1. Ninety days from now you're going to see the stock price up and maybe even revenue trending up."

"They picked up on this quickly," Schroeder says, adding that lululemon was faced with two choices - either to quietly pull the product or do it publicly, reinforce the brand, its message of quality and hope for a big public relations hit.

"And that's how it's going down in my opinion," he says. "You couldn't script a better marketing move."

"This product 'didn't meet our quality of standards for our brand and so we decided that we may take a short-term hit, but in the long run it will be even better for the brand'. It reinforces for existing customers and all new potential customers" that quality is paramount, Schroeder says. "The way they are addressing it is such a perfect crisis-management move."
2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
LULU $65.18 0.00%
AAPL $126.44 0.00%
FB $87.28 0.00%
GOOG $523.40 0.00%
TSLA $280.02 0.00%

Markets

DOW 17,730.11 -27.80 -0.16%
S&P 500 2,076.78 -0.64 -0.03%
NASDAQ 5,009.2140 -3.9090 -0.08%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs