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Historical AnalysisThe creators of LUSH, trichologist Mark Constantine and beauty therapist Elizabeth Weir met in Poole, England where they decided to launch and sell natural hair and beauty products. In the mid-1970s, Mark and Liz began creating herbal/natural beauty products for both the skin and hair. In the early 1980s, Mark offered The Body Shop? some of their products and founder Anita Roddick, made a starting order of ?1,200. From this moment on, Mark and Liz began developing more phenomenally unique products for The Body Shop?, thus becoming the company’s biggest supplier for over 10 years.In the 1990s, The Body Shop? bought Constantine & Weir’s product formulas for ?11 million because they decided that they did not want another company to own the formulation of many of its products. As a result, Mark and Liz established a mail-service business called Cosmetics-To-Go (CTG), which lasted approximately 5 years. After the failure of CTG, in 1995, they bought fresh fruits and vegetables, which they used to make products by hand. They launched a competition in which participating customers created a name for the company, and the name LUSH is born.In 1996, Canadians Mark and Karen Wolverton take LUSH international for the first time opening a store in Vancouver, along with a factory close by. Following this success, in 2003, the first store in U.S.A. opens in San Francisco. In 2006, LUSH offers to buy The Body Shop?, but the company refuses and instead sells to L’Oreal. As of today, there are over 150 LUSH stores in North America and more than 800 stores in over 45 countries. LUSH has been recognized as an impressively unique organic cosmetic manufacturer because of its innovative products. With a central focus on natural/raw products, LUSH maintains a corporate social responsibility ethos.Industry AnalysisOrganic skincare products focus primarily on using raw ingredients in product development, ecofriendly production strategies, and non-animal testing. The organic skincare industry is growing rapidly worldwide. People in general are becoming more health conscious and are more involved with environmentally friendly products. Consumers are becoming more concerned about the chemicals used in the productions of creams, make-up, body soaps, and fragrances. These consumers are increasingly demanding organic/natural skin care products in compliance with this rise in green awareness. The skin care product segment continues to grow due to wider distribution means and new products. As a result of the growth of this industry, several companies are opting for the merging and acquiring strategies and other companies are creating organic product segments.According to the U.S. Census Bureau, the cosmetics industry had sales of over $6.7 billion in 2002. The Transparency Market Research firm projects that by 2015 the cosmetics market will approach sales of approximately $19.2 billion in the United States alone. It is very likely that this industry will outperform this growth rate in the near future. Andrew McDougall states that the U.S. and Europe are the ones with the most potential in value and volume in this industry. However, there is significant future growth expected in Asia as a result of the aforementioned increase regard in personal health and hygiene. Transparency Market Research mentions that owing to the role of Internet, there is an expected increase in the market in Brazil, India, and Russia as petitor AnalysisInitially, LUSH did not have many competitors because there were few manufacturers within the organic cosmetics industry. However, in response to the rise in demand, competition has also risen. Main competitors of LUSH include The Body Shop?, and Origins Natural Resources, Inc. These companies produce organic personal care goods that extend out to differentiated consumer needs. All are heavily marketed in comparison to LUSH. Non-organic cosmetic manufactures pose a threat to the organic cosmetic industry since they are able to reduce the quality of their products and henceforth the overall cost of the products. LUSH’s former carrier, The Body Shop? is its main competitor. The company sells natural personal care products such as cosmetics, fragrances, hair essentials, and skincare for women, men, and babies as well. The Body Shop’s positions itself as “Natural, inspired by nature, ethically produced beauty products.” The prices of several similar products are lower in The Body Shop? than in LUSH. They also have a wider variety of products. Another crucial characteristic is that The Body Shop? actively embraces corporate social responsibility (CSR) and has a foundation that combats human rights abuse and animal testing/cruelty. They have active campaigns to protect the planet, activate self-esteem, and support community fair trade. They sell products globally in more than 2,500 stores and have dense promotion strategies including special discounts, membership cards, and an entertainingly descriptive website. The Body Shop? has a few weaknesses such as high trading costs. One significant weakness is that many natural products are not as organic as they could be in comparison to the industry and LUSH.Origins Natural Resources, Inc. was founded in the late 1980s by a team of beauty chemists and plant scientists. They combined the power potent plants to resolve irregularities of the skin with advanced scientific technology. As a result, they developed high performing skincare products that were made with natural ingredients. Since its emergence in 1990, Origins formulates its products with natural certified organic materials and essential oils. Their mission is “to create high performance natural skincare that is powered by nature and proven by science.” Origins also promotes a profound commitment to beauty and wellbeing through nature. The advantage over LUSH is that Origins is a brand of Estée Lauder and has a broad market range, therefore, it is more popular and customers would incline more towards their products. However, their products are notable higher priced than those of LUSH.Situation Analysis: SWOTDuring this research LUSH’s situation analysis was approached through identifying the company’s strengths, weaknesses, opportunities and threats (Exhibit 1). LUSH skincare products are very popular abroad. The company’s ethos against animal testing and pro-environmental production of skincare products distinguishes the LUSH brand from other cosmetics manufacturers. The scents and fragrances of the products sold are uniquely created by LUSH. Therefore, the essences are not available anywhere else. The company’s corporate social responsibility campaigning attracts consumers due to the humanitarian image of the brand.LUSH’s weaknesses commence with the fact that there is low brand awareness in the United States, as well as in other areas with potential consumer bases. Currently, LUSH is targeting mid- to-upper class markets, which means that many products are not affordable by potential lower class customers. In addition to this, because LUSH’s products are as fresh as possible, the product life is short; therefore they have early expiration dates in comparison to other cosmetics.One of the great opportunities for this company is that the increase in “green awareness” and health consciousness induces growth in the organic personal care industry. There is an increase in demand for natural skin-safe products that are fabricated under environmentally protective conditions. As a result, LUSH has the opportunity to expand successfully with such exclusive products.Unfortunately, although organic cosmetics industry growth is an opportunity, it also poses a threat because other cosmetics companies, alike LUSH, have the chance of dominating in the industry. LUSH’s brand awareness status also allows others, The Body Shop ? and Origins, to maintain current customers loyal to their brand. This is a greater threat because both competitors and LUSH have coinciding missions and formulations. Another threat is that skincare consumers in general may prefer customary (non-organic) cosmetics over eco-friendly ones because of their prevailing attractiveness.Market AnalysisBefore performing our survey (Exhibit 2 of Appendix), we determined that the most rudimentary drive of consumers to purchase LUSH Bath Bombs would be the basic need to stay clean. Consumers also need to relax and enjoy private, personal “me-time”. Furthermore, some consumers use bath items and fragrant bath soaps for romantic settings. To gauge more detailed information about our consumers, we conducted a survey to analyze the thought process of buying an everyday bath product and we evaluated our audience’s desire to take part in Eco-friendly products and companies. Exhibit 3 of the appendix illustrates that the awareness of the LUSH brand name is very low, yet many seem quite compatible with our product. 48% of the audience that had taken our randomly conducted survey had never heard of LUSH before; only 3% have used LUSH products before. However, despite the low awareness of LUSH, over 70% are against animal testing. In the chart below, you can see that there is a direct correlation between the awareness of LUSH and the dislike of animal testing. 100% of the regular users of LUSH products are against animal testing. 82% of the audiences who are familiar with LUSH products are also against animal testing. 94% of the audiences who have a small awareness of the LUSH brand name are against animal testing. Even 63% of the audiences who have never heard of LUSH before, are against animal testing. In addition to the data aforementioned, our survey results shown in Exhibit 4 illustrate that the most important aspects of a bath product that consumers take into consideration during purchase are scent, price, and the effect of the product on the skin (i.e. smoothness/moisture). Moreover, based on our findings, 54% would be slightly interested in attending an environmentally friendly event and 46% are somewhat likely to consider the effect a product has on the environment before purchasing said product. We also found that about 70% of our audience is female, 92% college-educated, and 75% in their 20s. Therefore, we have developed a target market of a young, educated, woman who cares deeply for the environment. Consumer ProfileModern-urban, Ashley is 27 and lives in her highly expensive apartment in the Upper East Side of New York City (Exhibit 5). She is a high-powered, driven, businesswoman who dedicates well over 50 hours a week to the business world. She is college educated and was President of her University’s Eco-friendly club. Because she is constantly under such high pressure, the only way to de-stress is by taking a relaxing bath. When she isn’t working, she is with her friends running marathons and dedicating her free time to environmentally driven charities and events. She has a monthly subscription to Cosmopolitan Magazine as a guilty-pleasure. Ashley does not get the daily newspaper as an attempt to cut down on wasteful use of trees and rather gets all of her news from sources online. She is very tech-savvy and often uses her tablet and smartphone versus a pen and paper. She never has time for TV and accesses reruns through TV channel websites (i.e. CWTV). However, she would rather spend her time working and planning environmentally friendly events. She often plants trees in her community and attends protests against animal testing. On the weekends, she is often found in Central Park, taking in as much nature as possible. She orchestrates events to clean up the park from trash. She owns a Prius so she can visit her family in Upstate New York on regular occasions. She is already at the prime of her career and is extremely hard working. She isn’t planning on settling down and getting married any time soon as she only has the time to take care of herself using only the best and most organic products for her body.ObjectivesOne of our objectives is to create brand awareness, and thus requires unique tactics. The company goes for a retro feel, yet a modern look so it is attractive to young adults. The colors of the products are vibrant and quite interesting; eye appealing. The uniquely shaped items and the scents are all original. The creative names are available to pick one with a personality that best suits you or your mood to make a bath more enjoyable.LUSH is known for its fresh handmade cosmetics and hopes to change the consumer’s beliefs when purchasing a product. Every aspect of the company, from the factory to when the product is in the consumer’s hands, is eco-friendly. All ingredients are vegetarian, preservative-free and only buy them from companies that do not test on animals. The products are made with little-to-no preservatives. No plastics are used if a consumer decides to buy the product “naked” which is safe for the environment going for the “green” packaging decision. Being eco-friendly, one is protecting society, animals and the planet. Everything is recyclable within LUSH, even in the factory and transportation of the products is at max efficiency. To persuade those to buy the products that are safe, we keep the consumers educated on how the company achieves these goals. The benefits to buying LUSH products are there are various options one can choose from, a large variety or scents, consumers are definitely getting their money’s worth, and the fresh ingredients makes your body feel fresh and clean like no other product.Another objective is to influence the purchaser’s intent. To satisfy this, we will focus on actual behavior rather than attitudes. For example, LUSH can market that the consequences of not using our products to the purchasers to influence them to purchase our items. Examples include “your face might break out” or “you might smell bad” if you do not use our products.Our last objective is to encourage brand switching, which is especially common in cosmetics because people typically get sick of products or the products no longer work as well compared to the first few times. For instance, the body might become immune to the products. Therefore, to discourage brand switching, and to gain loyal customers, the products must be beneficial at all times and must provide temporary alternatives that work just as well. We come out with new products all the time to prevent from products to become unusable for that reason and possibly our consumers switch to our competition. Also, we do not what to become dull and which to maintain loyal customers. Marketing StrategyBased on our company’s four objectives, influencing purchase intent, encouraging brand switching, creating and maintaining brand awareness, and changing consumer beliefs or attitudes, we are implementing Market Penetration with a focus on pricing tactics. Pricing tactics are used by firms in order to attract customers to a new product or service. In LUSH’s case, the bath bomb will be offered at a promotional price for a limited time in order to attract customers to us and away from competitors. By successfully carrying out this strategy, we will be able to cover the bases of our four objectives. Our strategy of Market Penetration coupled with pricing tactics, allows us to influence purchasing intent with the strategic position of having lower prices than our competitors while having equal or better product quality. In turn, this will encourage brand switching and further expand our customer base. Moreover, LUSH’s new customer base will increase the volume of sales and continue promoting the brand in a beneficial cycle. This will facilitate a change in the beliefs or attitudes of new customers over time. Most people believe that in order to use high quality eco-friendly products they would have to pay a premium price. In our promotions we plan to convey the fallacy in this consumer belief, by letting our customers know that they have better options. All of the products that we carry, are of an equal if not higher, environmental friendliness and quality than our top two competitors as we hand make all of our products in house; and best of all, we’re cheaper, making our Pricing Tactics that much more effective. With reference to our competition perceptual map (Exhibit 6), we believe that this is the best marketing strategy to employ for the position and space we occupy relative to our competition, Bath & Body Works, The Body Shop, Aubrey Organics, and Origins.We use the Societal Marketing concept, as we use only the safest ingredients in our products with little-to-no chemicals, in order to be as environmental friendly as possible. When we do use chemicals, it is the mildest ones we can find; and when coupled with our strict no animal testing policy, and minimal-to-no packaging on our products, it makes us one of the most environmentally conscious companies around.The Brand Attitude that we are trying to instill in our customers is, “LUSH, a company that’s “Green” to the Core, a Company that cares, not only about its customers, but about its environmental efforts as well.”The Brand Personality Structure that we’re associating with our brand is in the category of “Excitement.” which portrays our company as Trendy, Imaginative, Independent, and Young, in order to market to our target market of young educated women in their 20’s, who care deeply for our environment.The Brand Archetype that we’re associating with our brand is the Care Giver, whose goal is to help others. Based on this, our brand identity is associated with nurturing and helping families.The Value Proposition is one of Self-Concept Attachment, as further explained in the Consumer Needs section below; it fulfills Maslow’s hierarchy of the self-actualization needs of the environmentally friendly individual. Consumer NeedsOur consumer’s main needs include the need to stay clean and to be environmentally friendly. The need to stay clean falls under Maslow’s physiological needs as it is a daily need to stay clean and fresh which helps an individual stay as part of society. Furthermore, the need our marketing strategy focuses highly on is the self-actualization need of being a “green” individual. LUSH is an extremely Eco-friendly Brand that has zero waste in its product use and recycles 100%. Therefore, LUSH would fulfill the consumer need of “I am environmentally friendly because I use fresh, handmade, organic products.” Furthermore, when you purchase an item from LUSH, the 100% recycled bag they place your item in, boldly states “Fight Animal Testing”, so as a consumer walks around with a recently bought product, it broadcasts that the consumer is environmentally friendly, thus fulfilling the self-actualization need of an Eco-friendly individual. Product DecisionsDuring our research we found that LUSH bath bombs are a unique product that offers special features to its consumers. Its luxurious quality, wide variety of scents, colors, and flower pedals contribute to set the mood the consumer desires. Whether it is a tropical, fresh, or floral, LUSH bath bombs help fulfill the needs of our customers to make their bath time worthwhile. The product LUSH Bath Bombs are very distinct; the product differentiation is that the products are handmade and completely organic. Not only does LUSH offer high quality products, but we also are caring and ecofriendly. We are 100% against animal testing and provide our customers with fresh products. The price strategy of LUSH is to create a beauty care line where our consumers won’t be drawn to a cheaper existing substitute. Our plan is to provide high quality products for a reasonable price keeping in mind the environmental influences to maintain a reasonable price. LUSH products use 100% recyclable products and offer about 44% of the products “naked”, meaning no packaging allowing the price to be less and create a more eco-friendly product. Our competitors such as The Body Shop offer products that range from $3.50 - $28. They also offer a product that could be the substitute of our product which is called “Milk Bath Float” which costs $12 on their website. Aubrey Organics offers products such as Bath Emulsions, bath bars and Bath soaps that price from $4.46 - $11.21. For our product pricing we decided that pricing penetration would be the most effective method. With this strategy the consumer will be able to test the product and build an attitude or loyalty towards the product at a lower price, and if needed when the price is raised, the loyal customers will remain. In stores currently, bath bombs range from about $4 - $8, we propose using discounts and special promotions in order to gain awareness of our product. It will also benefit consumers who believe bath bombs are a single use product, thus thinking it is highly expensive compared to our competitors, where in reality you can split up one Bath Bomb product into multiple pieces, lasting for many baths. By lowering our prices, we invite new markets to test out the bath bomb, become more loyal and then once brand awareness is achieved and we have attained a solid customer base, we raise our prices back to normal, or possibly higher, to meet demand. Promotion DecisionsThe promotion strategies that we devised include the following:Printed advertisements mainly in magazines such as Cosmopolitan (magazines that target mainly women between 20 and 40 years of age) and on the sidelines of websites of TV channels that target women like CWTV, Lifetime, and Oxygen. Exhibit 7 is a sample of a printed ad that will promote LUSH’s bath bomb. The tag line “bring luxury to boring baths,” specifies the intent of the bath bomb. It indicates our target consumer that Commercials will also be another of our tactics by setting a romantic scene to display a bath bomb in use creating the visual experience that will allow our consumers to understand how the product is used rather than seeing it as a random ball shaped object. Most people usually see simply the ball but don’t know what it does and how it works therefore a simple and short commercial to display how the product works will benefit our objective of brand awareness. Finally, we would create an environmentally themed event (or be a vendor at a pre-established event) such as a marathon or tree-planting event, which will encourage people to participate and feel proud of their contribution to the environment. This event will attract the eco-friendly market, which is our target market, while we have a booth set up to show and advertise our slogan/mission, “Fresh Hand Made Cosmetics” while handing out samples that will increase the awareness of our brand and products. We will be using Reasons-Why Ads to provide the consumer with information on our product. This will allow them to learn about our 100% no animal testing policy, handmade products giving them “permission to buy” the product. Our Societal marketing strategy will provide the consumer with good feelings of being eco-friendly and supporting no animal testing. Our main advertisement promotions are “Happy people making happy soap” or “Fresh Organic products”. The appeals used to persuade the consumers will also be: Organic fresh products, 100% not tested on animals, 100% vegetarian, 81% vegan, 69% preservative free, and 44% unpackaged. ConclusionIn conclusion, our surveys and interviews led us to believe that women who have a deep care for the environment were our target market. However, LUSH is basically unknown. To appeal to our target market, we would focus our strategy on market penetration with a concentration in pricing methods. By doing this we attract our target market away from our competitors by spreading brand awareness through print ads in magazines and on social sites such as Facebook or , our commercials would display to potential consumers how a Bath Bomb is used, and finally, by giving out free samples at an environmentally friendly event, we have the opportunity to spread knowledge of our product to our target market. Sources? SurveyInterview: LUSH Union Square ................
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