LUSH Fresh Handmade Cosmetics
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Second Year Undergraduate coursework presentation - Maria-Adriana Calugareanu https://uk.linkedin.com/in/maria-adriana-calugareanu-270143107 - Yordan Dimitrov | https://uk.linkedin.com/in/dimitrovy - Anna-Mariya Ivanova | https://uk.linkedin.com/in/anna-mariya-ivanova-06b153105 - Olga Lipa https://uk.linkedin.com/in/olga-lipa-34b12410b
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LUSH Fresh Handmade Cosmetics
- 1. ANNA-MARIYA IVANOVA | MARIA CALUGAREANU | OLGA LIPA | YORDAN DIMITROV Group 32
- 2. • Beauty specialist • Fresh handmade products • Founded in 1995 by Mark Constantine and Liz Weir • Unique customer approach • “We believe our product are good value, that we should make a profit and that the customer is always right.” (Lush, 2015) History
- 3. Customer needs • Quality • Price • Product differentiation • Availability • Good customer service • After sale services • Image
- 4. Differentiation • Unique marketing approach: -Handmade products -Original design -Instore display -Packaging • Corporate Social Responsibility: - Support for non-profit organisations (Save the Sharks, All Out) • Lush vs. Body Shop & Aubrey Organics: -Customer excellence
- 5. Segmentation Customer Segmentation Behavioural Psychographic Profile Benefits sought: A quality, non-chemical, ethical product. Higher level of service in store, in store explanation of products. Purchase Occasion: Mostly regular (daily basis); + special occasions i.e. Christmas, Easter, Halloween Purchase Behaviour: habitual/ brand loyal User status: Regular users, with a growing emphasis for new users User rates: Heavy user Perceptions and beliefs: Niche market –natural, green, ethical; Value all natural, organic products Geographic: mostly urban centres. Socio-economic: Middle to high SES Lifestyle: Achievers, strives and survivors, (healthy lifestyle) Personality: Brand conscious (price=quality consumers). Price conscious (best value for the money spent); Impulsive/Careless buyer (unworried about their expenses); Confused (about the choice of products/brand) Demographic: Women ages 18-45
- 6. Target consumer group Target: Like minded people interested in environmental and ecological issues, chemical free products, not testing on animals & fair trade sourcing of ingredients. (Thakkar et al.,2013) Strengths: Customer loyalty Product quality Means of testing the product Ingredient quality Privately owned company Weaknesses: Marketing & communication strategy Price: Expensive but high quality
- 7. Positioning • Product positioning - Anti-animal testing stance • Brand positioning: - Clarity - Consistency - Credibility - Competitiveness
- 8. Environmental Factors Political • Import & export regulations • Government legislation • New EU– Cosmetic Product Regulation (Key Notes, 2013) Economical • Economies of scale • Economic growth • Price competition lowering margins of the company Social • Trends • Consumer attitude • Campaigning for non-profit organisations Technological • Average shelf life cannot exceed 14 months • Contain chemicals that can prolong their shelf life (CPTA,2014) Macro LUSH Microenvironment Macroenvironment Social TechnologicalEconomical Political Suppliers Distributors Competitors Customers
- 9. Marketing Mix The four P’s: Product, Price, Place and Promotion are very important to Lush. • Product - Offbeat, differential - Unconventional names (Sex Bomb) - Relatable shapes • Price - Weight - Consistency - Competitive & varied • Place - Multichannel strategy (106 stores in UK) (Lush,2015) - Online - Store locations • Promotion - Word of mouth - Everyone is a marketer & everything communicates (Thakkar et al.,2013)
- 11. Reference list • CUOnline Moodle: 208MKT - Applied Marketing - 1516SEPJAN (no date) Available at: https://cumoodle.coventry.ac.uk/course/view.php?id=24194 (Accessed: 30 October 2015). • PHOTOS: LUSH (2014) ‘The experimenter’ in 4K (ultra HD). Available at: http://youtu.be/vPX1N7yGheo (Accessed: 5 November 2015). • LUSH: Fresh, handmade cosmetics (no date) Available at: https://prezi.com/xocm8fc6xjqg/copy-of-lush-fresh-handmade- cosmetics/ (Accessed: 29 October 2015). • LUSH-target market (with images) · kwilkison (2012) Available at: https://storify.com/kwilkison/lush-target-market (Accessed: 29 October 2015). • Lush (#10: Competitive advantage) (with images) · cherebear37 (2015) Available at: https://storify.com/cherebear37/lush-10- competitive-advantage (Accessed: 29 October 2015). • Lush fresh handmade cosmetics (no date) Available at: https://www.lush.co.uk/ (Accessed: 28 October 2015). • Lush vs. The body shop - why retail CEM is essential for CX (2014) Available at: http://www.nunwood.com/lush-vs-body-shop- retail-customer-experience-management-essential-customer-experience-excellence/ (Accessed: 30 October 2015). • Recycling our black pots (no date) Available at: https://www.lush.co.uk/article/recycling-our-black-pots (Accessed: 28 October 2015). • Renbarger, T. (no date) 5 reasons why lush has a cult brand following. Available at: http://info.elementthree.com/5-reasons-why- lush-has-a-cult-brand-following (Accessed: 29 October 2015). • Thakkar, M., Dalmazzo, M., Cretan, S., Singh, A., cardona, Tescari, E., Fan, E., Petersen, R., Kue, E. and Chloe, G. (2013) Cha Jin. Available at: http://www.slideshare.net/manalithakkar/lush-marketing-project (Accessed: 29 October 2015). • Topsy (no date) Available at: http://topsy.com/analytics?q1=%22Lush%22&q2=%22Body%20Shop%22&q3=%22Boots%22&via=Topsy (Accessed: 28 October 2015).
Editor's Notes
- Lush is a beauty specialist that operates on fresh handmade products by making their own fragrances and printing their own labels. Founded in 1995 by Mark Constantine and Liz Weir, for the past 20 years the company has achieved great success perhaps because of their unique customer approach. Product interaction is performed in stores as such (Now we are going to demonstrate the ‘Luxury Lush Pud’ which is very colourful).
- Lush success is based on the product deep connection its staff builds with the customers- they don’t simply sell, but ask questions to understand customer needs and advise on the suitable products. Lush products meet customers’ needs of: Quality- The company states that its products are 100% Vegetarian, 83% Vegan, 60% Unpreserved and 38%Naked (No packaging required), with no tests on animals (Beauty Retailing, 2015) Price- Lush wants their customers to enjoy effective and value for money products as they tend to charge per weight as opposed to unit. Product Differentiation- Lush offers own brand products for: face, body, hair, makeup and perfume, as well as spa and gifts. Availability- over 100 stores within UK, online shopping, delivery all around the country. Good customer service- Lush recruit its staff based on values and cultural fit. They recognise the customers need and work with them to solve it. After sale services- The Black Pot recycling scheme, where the customers can get a free face mask if they return 5 clean, used Lush black pots back to the shop. Image (Fun& Stylish) - Lush is using fun-sounding names for its products to make it fun. I.e. the jelly shower gel called ‘the big calm’. Also the products are sold with the names and cartoon-style faces of each product’s producer on the label.
- According to Datamonitor article from 2008, a key way Lush has been able to maintain its position as a successful independent personal care retailer is by unique marketing approach which is distinct from other chains. The company’s stores are laid out in the style of delicatessens. In this way, the company’s stores stand out from its mass market competitors and maintain an independent air. (Renbarger,2014) Lush’s products are designed to create differentiation on the marketplace, therefore everything is handmade in the Lush Kitchen. When it came to complete mail orders, the company goes as far as using recyclable potato starch to protect breakage during shipping (Storify, 2015) Corporate Social Responsibility is very important to Lush. In 2007, they started off with creating the ‘Charity Pot Body Cream product’ with which they raised money for charities and other goods. Last year they continued their tradition and gave £3.8m of their profits to non-profit organisations. They support charities like Save the Sharks. This year, they support the ‘All out’ campaign which aims to support LGBTs. (Lush, 2015) The Body Shop & Aubrey Organics are Lush’s main rivals. However, the fresh handmade brand stands out with being 4th for customer experience excellence in 2014, compared to Body Shop’s 38th position (Lush vs. The body shop - why retail CEM is essential for CX, 2014) In addition, there is a greater social media buzz about the Lush Cosmetics brand on twitter, accounting for 150k tweets for the past 12 months, whereas the Body Shop only got 20k users speaking. A successful mouth to mouth advertisement strategy which LUSH seems to have achieved. (Topsy analytics,2015)
- Is the market being segmented effectively in this case? Yes. The company has grown from having one store near bankruptcy 12 years ago, to over 100 now in the UK with the revenues in rise. (Thakkar et al. 2013)
- Based on the recent interest growth for environmental issues and S&W analysis, it can be said that the target market is comprised of people who are like-minded to the company’s environmental and ecological choices: chemical free products, not testing on animals, and fair trade sourcing of ingredients.
- A good positioning is based on clarity, consistency, credibility and competitiveness. Lush can be considered a company that has achieved clarity by sending a single message- to justify its higher prices. The brand is supported by the standardized ‘Lush Fresh Handmade Cosmetics’ logo which is recognizable and memorable. Consistency is achieved by maintaining the same positioning for decades. The position is credible as the customers do notice the campaign against animal testing, the freshness of the products, the ethical buying, the naked packaging as well as handmade products 100%vegetarian. This adds up to a differential advantage because the customers are increasingly taking an interest in the environmental issues. Therefore, Lush is highly competitive in its consumer and target markets.
- In terms of environmental factors, we first decided to focus on the macro-environment and in particular we did PEST analysis. Regarding the micro-environmental factors: Customers: The availability can be a problem as they launch products seasonally, which may lead to problems with customers who have enjoyed the particular product and all of a sudden that product becomes unavailable. Competitors: by keeping a low price they prevent themselves from price wars. Distributors: LUSH is the soul seller of the LUSH branded products unlike some companies that sell their products to other retailers (pharmacies or supermarkets). Suppliers: As a Fair-Trade company, they support small farmers therefore natural disasters can affect the production and in particular their natural ingredients e.g. cocoa butter
- Marketing Mix + Environmental Factors In terms of technological improvement, they can improve the duration of the product for longer than 14 months. Socially, they can increase their budget on promotion and in particular television and online advertising as the mouth to mouth approach does not raise high awareness among all consumer groups. Economically they can change their price range in an attempt to make the products more affordable for certain target groups like us (student) Politically, LUSH has a good strategy in placing their stores in central locations, having more stores will help them to raise more awareness on their campaigns and gain larger customer feedback or in the case with the petition for animal testing, get more signatures.