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Historical Analysis

The 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.

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Industry Analysis

Organic 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 well.

Competitor Analysis

Initially, 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

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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

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“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: SWOT

During 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

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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 Analysis

Before 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

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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 Profile

Modern-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

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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.

Objectives

One 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

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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 Strategy

Based 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.

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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.”

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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 Needs

Our 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.

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Product Decisions

During 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

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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 Decisions

The 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.

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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.

Conclusion

In 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 CWTV.com, 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.

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Sources

http://www.lush.com

Qualtrics® Survey

Interview: LUSH Union Square

http://jennyku.weebly.com/uploads/1/5/4/4/15443052/lush_marketing_plan_final.pdf

http://www.origins.com/index.tmpl

http://www.aubrey-organics.com

http://www.thebodyshop-usa.com

http://www.bathandbodyworks.com/home/index.jsp

http://www.cosmeticsdesign.com/Market-Trends/North-America-organic-cosmetics-drive-

booming-global-market

https://www.boundless.com/marketing/marketing-strategies-planning/steps-to-creating-a-

marketing-plan/conduct-a-situational-analysis/