Marketing Strategies for Lush: Evaluation and Introduction of New Product

This report evaluates the marketing strategies of Lush and introduces a new product for the company. It includes an environmental analysis, evaluation of current marketing strategy, and organizational competitive advantage. The new product is a natural face cream for babies.

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Executive Summary
The paper evaluates details about the company Lush and its marketing strategies. The part one of
the report explains the description of the company, level of competition present in the industry. It
also explains the internal as well as external analysis of the company. The second part of the
report explains the introduction of new product for the company. Lush aims to inaugurate natural
face and body cream for new born babies. It explains the placement of the product in front of
right type of customers in the market. Thus, Lush should make use of good promotional
strategies and expansion strategies to promote the product in the market.
Content

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s
Introduction.................................................................................................................................................1
Company Description..................................................................................................................................1
Environmental Analysis..............................................................................................................................2
Strengths.................................................................................................................................................2
Weakness................................................................................................................................................3
High Cost of Retailing........................................................................................................................3
Low Volume.......................................................................................................................................3
Unable to match up.............................................................................................................................3
External Analysis....................................................................................................................................3
Opportunities......................................................................................................................................3
Threats................................................................................................................................................4
Evaluation of Current Marketing strategy...................................................................................................4
Organizational Competitive Advantage.......................................................................................................5
Part 2...........................................................................................................................................................6
Product rationale and specification..............................................................................................................6
BCG Matrix.................................................................................................................................................7
Segmentation, Targeting and Positioning....................................................................................................9
Marketing objectives and goals...................................................................................................................9
Marketing Mix...........................................................................................................................................10
Product..................................................................................................................................................10
Price......................................................................................................................................................11
Place......................................................................................................................................................11
Promotion..............................................................................................................................................11
Conclusion.................................................................................................................................................11
References.................................................................................................................................................12

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Part 1
Introduction
Strategic marketing refers to a tool that is used by companies to differentiate their business
functions from other competitors present in the international target market. The process of
strategic marketing helps the business in increasing its effectiveness by depleting the level of
competition from the market and developing potential strengths as well. Under this process, the
company aims to initiate competitive advantage in the target market by gaining sustainable
competitive advantage in the target market (Ottman 2017).
Lush is a UK based organization that deal in beauty products. The company is a cosmetic retailer
that was founded by Mark Constantine and Liz Weir. The two people met at a beauty salon and
few years later, they decided to open their new brand for selling natural hair and beauty product.
The company is a private limited company that was founded in the year 1995. Products served
by Lush are creams, shower gel, soaps, scrubs, shampoo, lotions etc. All the Lush products are
made using vegetarian recipes. Further, the part 1 of the task evaluates the environmental
analysis of the company Lush using SWOT framework. It also includes the current marketing
strategy of the company Lush that helped them to attain competitive advantage in the target
market. Further, part 2 of the report evaluates introduces a new product in the company that will
help them to attract a new customer range in the market. The second part also discusses about
targeting the new customers and marketing mix strategies of the company. More details about
the report are discussed below:
Company Description
Mark Constantine, a herbal trichologist and Elizabeth Weir, a beauty therapist met at a beauty
salon who further decided to start a company that offer original and natural beauty and hair
products to the customers in the target market. Lush is a privately owned company with a small
number of shares presented on the basis of invitation only. The company works with a no
advertisement policy under which they do not invest in TV campaigns or brand endorsement
activities. Products of the company are endorsed using random act of kindness. The usual target

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market for the company is women between the age group of 18-45. All the products of the
company are handmade and natural that provides a pleasant experience to the customers. The
management of the company is efficient enough that it makes the stakeholders happy that are
inside as well as outside the company (Lush 2018).
Environmental Analysis
Environmental analysis of an organization helps the company in analysing different factors
present in the internal as well as external business environment of the company that can helps
them to grow. Environmental analysis of Lush is discussed below:
Internal Analysis
Strengths
Differential Positioning
The products and services offered by the company Lush are formed is using vegan and natural
products that are healthy for skin types. The bright coloured products are packed using natural
and biodegradable products only. The colour and shape of the products attracts the attention of
customers (Ismail 2018).
Sustainability
The company is a highly sustainable brand that work with an aim to sell completely organic
products in the market. The company works in a responsible manner along with minimal waste
policy and no testing of animals as well.
Real handmade
The products served by the company are made by human beings and not machines. The strict
diversity policy of the company enables them to hire people from different parts of the world
having diverse culture, religion, gender etc.
Ingredients

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The fact is discussed above that the company makes cosmetics using natural ingredients that are
suitable for all skin types. The company does not uses any chemicals or preservatives in the
product. The product of lush are very different like solid toothpaste, bath bombs etc. (Moraes
2018).
Weakness
High Cost of Retailing
The expense of retailing is increasing day by day as the brand has started focusing on improving
their in store experience. Various overhead expense like lighting expense, product display racks,
employee charges etc. are affecting the profit margin of the company. These expenses have
started to increase which is ultimately resulting in the high cost of production for the company.
Low Volume
The products offered by Lush are present in malls and different regions. The traffic present in the
malls has started to reduce and the prices of the company serves only to the premium customers
present the market. The margins present in products are very low along with the low volume of
sales as well. This has acted as a huge loss of company in the market (Ramli 2017).
Unable to match up
Lush Cosmetics serve products to the customers that are differential in the market due to which
there is less competition for Lush in the market. Further, it should also be noted that the makeup
product needs have started to increase due to which, the customers have also started demanding
different products from the company. However, the company is facing problem in matching the
demand of the customers in the market (Lundberg, Geel, and Hornebrant 2018).
External Analysis
Opportunities
Increasing Fear of Chemicals
The involvement of chemical substances in the makeup is increasing the concern for the
customers in the market. Also, the companies have started practicing dangerous testing in

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animals like pigs, rats etc. However, Lush is an eco-friendly organization that do not performs
such activities. This aspect increases the attention of the customers (Feng 2016).
International Expansion
International expansion acts as one of the best opportunity for the company to grow in the
international market. The products offered by Lush are demanded in the international market but
the company is not having its outlet in different parts of the world.
Threats
Competition
There are many competitors of Lush present in the market like, Estee Lauder, The Body Shop,
Revlon, Sephora and Shisheido.
Difficulty to attract customers
Makeup and cosmetics belong to such a category that highly demands the loyalty of the
customers in the market. Resulting to which, once the customers is attracted towards the products
of other brands, then they start to use such product only irrespective of other circumstances
(Nagasawa, and Kizu 2012).
Evaluation of Current Marketing strategy
With an aim to promote the products of the company, Lush has initiated effective marketing
strategy. Such strategies organized by the company helps them to attract customers towards the
products. The main objective of the company is to identify the requirements of customers and
attract them towards their products as well. At Lush, the needs of products can be seen through
the marketing mix strategic analysis of the company. The main aim of the organization is to
formulate the promotional and marketing strategies for the company so as to strategize the need
of competition and customer’s needs as well. The marketing strategies of Lush depends on below
mention six aspects (Wiedmann, and Hennigs 2013).
 Providing different types of cosmetics products to the target people
 Making use of consumer friendly edge

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 Growing adequately from small to large aspects
 Targeting customers on the basis of their expectations from the products.
 Adopting the price range to increase profits and returns.
 Executing and making use of effective marketing and communication strategies.
Apart from this, the company Lush is aiming to start investing more in the field of marketing and
promotions so as to increase the brand positioning of the company. The marketing strategies of
Lush targets many online as well as offline marketing channels like social media sites,
newspaper, television advertisements, sponsored searches, e-mail marketing and many other
different initiatives as well (Wakefield-Rann 2017). The current marketing activities of the
company Lush are based on the following principles that are discussed below:
 4Ps marketing mix strategies of the company focuses on the product and promotion
aspects. The company provides a varied range of beauty products worldwide, the
products of Lush are very diverse and attractive to customers in the market. The company
targets the higher class segment present in the market.
 The process of targeting, segmentation and positioning are linked focusing on the
premium customers present in the market. The brand positioning of the organization
helps them to attain the concentration of the skimmed customers in the market (Komatsu
Cipriani 2017).
 The Unique Selling Proposition (USP) of Lush Cosmetics includes a wide range of
products that are made of natural and vegetarian products and the process is
environmental friendly as well. In order to promote the brand, the company never make
use of brand image of celebrities and models to increase the sales of the company. These
aspects combine together to help the company to gain competitive advantage in the
market. The Unique Selling Proposition of the company overlaps with their competitive
advantage as well (Chun 2016).
Organizational Competitive Advantage
From the above mentioned stanzas, it can be clearly seen that the company Lush is making use of
effective marketing strategies to gain a significant position in the target market. The Unique
Selling Proposition of Lush helps them to gain power over the competitors in the market. Some

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of the brands like, The Body Shop, Revlon, Sephora and Shisheido etc. compete with Lush in the
market. The company works to increase the quality of life of their customers in response to
which they offer environment friendly, natural and vegan products to the customers (Khan
2014). These aspects also increase the competitive advantage of Lush in the market. In addition
to this, CSR activities of Lush assist various campaigns as well in order to make the brand more
strong globally. The Unique Selling Proposition of an organization helps to compete in the
international market as well. Thus, the USP of Lush to offer natural and organic product helps
them to easily deal with competition in the market. Most of the companies do not act as a direct
competition for Lush as the company itself faces challenges in controlling the process of animal
testing to protect the environment (López-Gamero, and Molina-Azorín 2016).
Further, it should be noted that the values of the company also helps them in enhancing brand
positioning. The values and social practices of Lush also contribute in the promoting the business
functions activities of the company.
Estee Lauder is recalled as one of the biggest competitor of the company Lush. The company is
centred in New York and provide skincare, makeup and hair care products to the customers in
the target market. As the company provides a wide variety to product in the market due to which
they easily attract the sales of Lush as well. Total revenue of Lush in the year 2017 was £497.8
million and Estee Lauder earned $326.1 million (Lush 2018).
Further, another competitor of Lush is The Body Shop that also deals in skincare, perfumes and
beauty products. The company was formed in year 1976 and current serves more than 1000
products in 66 countries worldwide. Revenue served by The Body Shop in the year 2017 was
US$ 1.4 billion. However, Lush might come behind in terms of numbers due to its placement in
less countries but it is certainly not behind in terms of competitive advantage and demand of
customers in the market. Thus, it should be noted that the company should to expand the
products in the international market base and introduce new product stream as well (Ni, and Van
Wart 2015).

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Part 2
Product rationale and specification
Part one of the report elaborates the description about the company, its competitors and ways in
which it earned competitive advantage in the market. Although, the company Lush provides a
wide range to differential products in the market but still there is scope of improvement so as to
adequately target the customers present in the international market. The company Lush is aiming
to introduce a new product line of natural face cream for babies in the market. The skin of newly
born babies is very soft and sensitive and they get allergic to almost everything. Due to which,
the product introduced is formed using natural and vegan ingredients that helps in protecting the
babies skin. Parents nowadays have started taking more care about the products that they use for
their babies (Ryan 2016).
Also, it should be noted that the environment nowadays is getting polluted due to which babies
get rashes on their skin. After analysing the increasing concern of the parents, the company Lush
introduced a natural cream specially designed for the soft skin of babies. It is a handmade cream
that is made up of all natural and chemical-free substances. This cream can be used by both baby
boys and girls. Looking at the market, it can be seen that there are already many companies
present that deals in baby product but they do not serve natural, handmade cream in the market.
Generally, parents prefer to buy products that are made using less toxic chemicals and are least
reactive to skin and they protect skin as well (Schwartz 2017). Thus, the natural face cream
introduced by Lush helps in making the skin of babies more soft and are purely natural as well.
The product introduced by Lush will directly attract the customers due to the increasing demand
of natural products. The benefits of new product line introduced by Lush are discussed below:
 The baby cream will be made up of ingredients that are natural and vegan; cream will
also provide adequate amount of moisture to the babies skin.
 The cream will maintain adequate amount of nourishment
 Safety Assured Product
 It is made use of natural ingredients and will keep the babies skin healthy for 24 hours.
 The cream will cure chapped cheeks and tender nose (Singhal, Rajput, and Jha 2017)
 Does irritate the skin or provide rashes

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 Dermatologically tested
BCG Matrix
BCG matrix tool is a strategic analysis tool that helps in evaluating the product portfolio for the
organization according to the performance. The tool also differentiate the product on the basis of
star, cash cow, dog and question mark. All the four aspects have their own significance (West,
Ford, and Ibrahim 2015).
Market Growth Rate
(Cash Usage)
High
Relative Market Share
(Cash Generation)
High Low
Stars Question Marks
 Lush Skin Fresh Cleanser
 Fresh Face Mask
 Shampoo Bar
 Bath Bomb
 Therapy Massage Bar
 Serum Bar
 Toothy Tabs
Low
Cash Cows Dogs
 Hand and Body Lotion
 Toner Tab
 Rose Lip Balm
 Ocean Salt Face and Body Scrub
 Cream Hair Conditioner
 Baby products
 Bubble Bar
 Eyeliner
 Lipsticks

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Post introduction of the baby creams, the product will come under the dimension of cash cows as
the product will raise demand in the market. The baby care products are highly demanded in the
market so this product will also show successful results to the company in the target market. It
will also help the company to gain higher profits in the target market (Zielińska, and Nowak
2014).
Segmentation, Targeting and Positioning
In order to be successful in the target market, Lush needs to target the customers using STP
process. Segmentation, targeting and positioning refers to the process that helps the company to
target the right type of customers in the market. Segmentation refers to the process that helps the
organization in organizing the market into smaller groups according to the demand, preferences,
lifestyle, geographical aspects of people. This group is further segregated and targeted by the
company to present the product in the market. For the natural baby cream, Lush is going to target
people on the basis of their geographical, behavioural, psychographic features. In the
demographic segmentation, the company is going to target babies from 0-7 and their parents as
well. The product is specifically designed for the new born babies using natural face cream to
prevent rashes. As the product target new born babies so the company will focus on convincing
the parents to purchase the products from the company (Busatlija, Land, and Mathieu 2014).
Further, on the basis of geographical segmentation, the company is going to target people living
in UK or nearby. The company will circulate its products in both rural as well as urban areas. On
the basis of psychographic segmentation, the company will target the people from upper middle
class families who invest their money on expensive as well as hygienic and real products. Lastly,
under behavioural segmentation, the company Lush will target new parents and new
grandparents who want to take care of their child’s skin (ZHANG 2017).
After initiating the process of segmentation, the company will look forward to the process of
targeting the appropriate group in the market. Presenting the product right in front of the
adequate target customers will adequately position the product in the market. Further, while
positioning the product, the company will clearly differentiate the point of difference and point
parity. The point of difference for the product would be that it is handmade up of natural and

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vegan products. Further, point of parity is moisturizing, soft and lustrous skin of babies (Zentes,
Morschett, and Schramm-Klein 2017).
Marketing objectives and goals
The company will also create some marketing objectives that will help them to new product
appropriately in the target market. The marketing objectives of Lush are discussed below:
 Attain competitive advantage over other non-herbal cosmetic player present in market
 Increase brand awareness among customer segments
 Increase market share of company by 20% in upcoming 2 years.
 Attract large number of customers for the products
Specific: Marketing objectives of Lush are very specific as they aim to increase the customer
base by selling more and more products in the market. The specific goal of Lush is to comply
with the need of customers for their babies (Sahota 2014).
Measurable: The objectives along with performance can be looked after through the sales of the
new product and with the number of customers coming to the company as well.
Attainable: The company is already working in a differential and effective manner so there is no
aspect that the company cannot achieve. Further, Lush will initiate efficient strategies to make
the above objective attainable. By offering baby care products, the company will easily increase
the customer base as well.
Relevant: The objectives defined by Lush are related to the core strategies of the company. These
goals will help Lush to capture the core business objectives that is to initiate competitive
advantage and along with profitability (Nava-Martinez 2017).
Time based: The company aims to achieve the given target within the give time frame of two
years only.

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Marketing Mix
Product
The products of Lush are defined by customer using three simple words that are fresh, verdant
and green. The company produces 100% vegan items that are good for the body of people.
Further, looking at the changing environment, the company needs to introduce baby cream to the
customers in the target market. The new product should be made up of 100% natural ingredients
like lavender, rose, coffee, butter etc. These products will enhance the quality of skin of babies.
The company should package the cream in an eco-friendly manner (Pappas 2016).
Price
The company currently target the premium range customers through its prices in the market. The
product of Lush are costly because they are manually made up of natural and herbal ingredients.
For the new product line, the company should set adequate price so that middle income people
could also buy the product. This aspect will also reduce the level of competition present in the
market. Lush should its prices considering the prices of other competitors present in the market.
Place
Place is very important for the business because it make the product closer to reach of customers
present in the market. With an aim to introduce a product line in the business, the company
should also aim for expansion in the international market. Currently, Lush uses various channels
for distributing its products in the market but it is still not up to the mark because they are unable
to meet the demands (Schwartz 2017). So, the company should aim to open various outlets in the
market that will adequately help them to supply the products to the customers.
Promotion
Promotion plays a significant role in helping the companies to succeed in the target market. The
company Lush highly uses word of mouth marketing channel to increase the sales of the
company. However, apart from this, it should also make use of other channels to increase the
sales of the company and promote the new product in front of the customers as well (López-
Gamero, and Molina-Azorín 2016).

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Conclusion
Thus, in the limelight of above mentioned events, the fact should be noted that the company
Lush can easily overcome its weaknesses and threats using the new product range developed in
the target market. Lush is one of the best beauty and hair care brand that is known for serving
handmade, natural and vegan products to the customers in the target market. The environmental
analysis of Lush explains that the company is unable to fulfil the demand for the products present
in the market. Introduction of new product line in the market will help the company to attract
more customers in the market and increase competitive advantage as well. This will also initiate
the expansion strategies of the company.

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