Lush Cosmetics: International Market Strategy Analysis Report

This report provides a comprehensive analysis of Lush Cosmetics' international marketing strategy, focusing on its potential expansion into the Chinese market. It begins with an introduction to international marketing and Lush's business model, emphasizing its commitment to vegetarian recipes and handmade cosmetics. Section 1 delves into environmental trends within the cosmetics industry, utilizing PESTLE analysis to examine political, economic, social, technological, legal, and environmental factors impacting Lush's potential in China. Section 2 focuses on product and market focus, discussing Lush's product differentiation, basis of competition, and the challenges it faces, particularly regarding animal testing regulations in China. Section 3 outlines a global marketing strategy, offering recommendations for sustainable long-term success, including product adaptation, distribution, and promotion strategies. The report concludes with a summary of findings and suggestions for implementation, aiming to guide Lush in developing a successful global marketing strategy.

INTERNATIONAL
MARKETING

TABLE OF CONTENTS
TABLE OF CONTENTS...............................................................................................................2
INTRODUCTION..........................................................................................................................3
SECTION 1....................................................................................................................................3
Environmental Trends.........................................................................................................3
Market Structure...................................................................................................................7
SECTION 2..................................................................................................................................10
Product and Market Focus...............................................................................................10
Basis of Competition..........................................................................................................11
Challenges.............................................................................................................................11
SECTION 3..................................................................................................................................12
Global Marketing Strategy...............................................................................................12
Recommendations..............................................................................................................16
Implementations.................................................................................................................17
CONCLUSION.............................................................................................................................18
REFERENCES...............................................................................................................................1

INTRODUCTION
International Marketing describes the various activities of business
which are carried out for the purpose of planning, promoting and directing
the goods’ flow to consumers for the aim of earning more profit in more than
one nation. (Stokinger and Ozuem, 2018). Lush is a retailer company in UK
which deals in the production and selling of cosmetics such as soaps,
creams, shampoos and various cosmetics of hair, face and body only with
the use of vegetarian recipes.
The report will analyse all the market trends of the country in which the
operations of the company will be performed. It will also examine the factors
which fosters the company to develop and expand globally. The report will
also suggest some strategies to the company which can be implemented and
the benefits of its effective implementation in this emerging market of
Cosmetics.
SECTION 1
Environmental Trends
The industry of cosmetics is very vast. It not only includes the make-up
products but also products of daily needs like soaps, toothpaste etc. Its focus
is to improve the lifestyle of the people (Frue,2018). Every product is
produced for its own purpose. Besides this, the companies in this industry
have to analyse the market in which they want to be expanded because the
trends in that market impact the level of company's expansion.

Lush Cosmetics wants to perform its international marketing in China. For
that, it needs to have a thorough market research with the help of Pestle
Analysis and the external factors are as follows:
Political
These factors play an important role because the beauty industry
provides its services for skin-to-skin. So, it is mandatory to follow all the rules
of safety of product. As the Lush cosmetics wants its marketing to be
performed in China, it must keep in mind about the laws of China as well as
UK because the requirements of beauty ingredients is different in all the
countries. If the company contains some contents which are banned in
China, then it will become impossible to even introduce it. So, they must
follow all the political requirements which ensures the product safety.
Economic
The economic stability of the country decides the stability of the
product to be provided. Due to economic recession, people preferred the
products of their basic needs. But, nowadays, the cosmetics also became an
important part of people's lifestyle just like food and roof.
In china, most of the people are employed in these cosmetic related sectors
as barbers, massage therapists, hair dresses etc. So, they can realize the
need of beauty products and prefer spending money in these products.
Therefore, it is becoming easy for lush to expand itself in markets like China.

Social
These factors mainly influences the loyalty of the brands. It becomes
tough for the new entrants to create loyal customers. For example, if the
customers are satisfied with the shampoo they bought from Company A then
they will trust on its other products as well. So, it is necessary for the
company to satisfy the needs of the customers.
If cultural factors come in play, then the people in China mostly prefer the
green and organic products made from herbs. As the Lush produces the
handmade products, then it must do the marketing of green products in
China. This will attract more number of customers. It must also carry its
marketing activities through social media as the people there are socially
very active.
Technological
The beauty industry is mostly revolutionized by the internet. The
majority of the people in China does not prefer to go to the shops for buying
one or the other beauty product. So the company must provides the online
ordering and delivery of every product. But, the minority cannot be ignored.
Along with the online delivery, there must be shops establishes for the
people who trust on getting the products from the stores. The company must
also advertise its products using the advanced technology like networking
sites to reach maximum number of people.

Legal
The company dealing with the beauty products must keep in mind all
the laws before its production and delivery. For example, the laws like FDA
and FPLA are the main laws which are to be followed by all these companies.
The Lush must follow these laws for the ingredients monitoring and the
associated brand information. If some issues are generated, then the product
can be either banned or needs to be produces again.
Environmental
The company needs to keep a tab on the impacts of their product in
the environment because the people in China are environment conscious
and thus prefer the eco-friendly products. The reason behind using the
green products is the climatic change and increased air pollution. Lush
needs to produce the products in a clean and green manner along with the
environmental friendly packing and delivery method.
To attract the majority of the people, it needs to create a good image among
the country being an aware company towards the environment. The products
like deodorants and shampoos must be manufactured accordingly.
Market Structure
The market of China is extremely emerging especially in the case if
cosmetics industry. There are many companies which deals in the beauty

products (Ismail, 2018). But, as the Lush wants its marketing in China then it
must make itself differentiated in terms of product quality, price and many
other aspects. The age group using these products is mainly 20s — 30s.
The main advantage of Lush is that it manufactures the products itself and
the handmade products enhances its brand image. But, there are many
places in China where the people make these products at their homes. They
does not follow any laws and rules but just make products for their own use.
To expand the products in the market, the company must ensure that it does
not hurt any natural species like honey from bees, fruits, flowers etc. It must
be produced in raw form but by removing all the waste from it (Alexis, 2019).
It must keep in mind for approaching sustainability, natural cosmetics,
consumer needs and many other aspects.
Product's Geographic Spread
The demand for Cosmetics products is increasing day-by-day. It
becomes easy for Lush to expand the areas of marketing. It has been noticed
that the people of China are relationship-oriented so this can be a good point
for the company (Lin and et.al., 2018). They prefer to ask their friends and
relatives before consuming anything.
So, to target more number of people, the company must either open its
stores in different regions of China or they apply social-networking by
boosting it on different areas so that its products are accessible to majority

of the people. It can expand in areas having different climate also as it will
not impact the quality of the product.
Lush can target various regions of China like South-Central, South-West, East
China, North-East and many more. The target areas must be selected
according to the needs of the customers in that areas. The expensive
products must be targeted to the areas where people are financially stable
and certain areas to be selected where the sales can be increased.
Segmentation of Customers
The people in China have different taste and choices in cosmetics. So,
the company has to adapt the changes and produce products accordingly.
Some people in China prefer skin care products, some hair care, some bath
and shower while the others prefer make-up and deodorants (Patel, 2018). In
these products also, men and women have different preferences.
Along with this, some customers want to buy the products offline from the
stores while the others prefer them buying online to be delivered at their
doorsteps. So, the company must keep in mind the requirements of variety
of customers.
Some customers of Lush are attracted by its handmade natural products
made without testing on animals, some likes its innovation, some by its
quality, some by its tendency to advertise using online platforms and also by
its eco-friendly behaviour.

Competition
This is a major factor to be kept in mind when the business has to be
expanded in other countries. Its main competitors are Body Shape, the
Origins, L'Oreal, Shiseido, Kiehls, Too Faced, Clinique and Procter &Gamble
(Sheth, 2020). The company must be differentiated in order to compete in
this competitive market of China.
The company is making many strategies to be unique. As the people in China
are environment conscious, the company must not use plastics or non-
biodegradable materials in the production as well as packing. The company
must use both online and offline methods for targeting large number of
people.
As the L'Oreal is targeting the rural areas also, the Lush must not target to
those people because it is expanding its business so it is expecting large
profit margin. So, to compensate this, Lush must use vegan organic
ingredients in the products to improve its brand image. It must establish
more number of stores to facilitate offline marketing.
SECTION 2
Product and Market Focus
Lush is based on innovated products of superior quality. Along with
this, it follows ethnic values and fun side. Its products are freshly made with
raw organic contents. The products are 100% vegan and handmade as

compared to products of other companies (Paço and Oliveira, 2017 ). It also
provides healthy products to superior customers.
The unique thing about Lush is that being a company dealing with natural
products, the products are not at all tested on animals and the products are
produced keeping in mind the environment awareness among the
customers. Its main aim is to make the innovative products like bath
ballistics, massage bars etc.
The company uses recycled bags for packing which contributes positively to
the environment. The prices of the products are more than the average
prices so it targets the customers accordingly (Abd Hafiz and Ali, 2018). It
also carries its promotional activities using the advance technology
according to the convenience of the consumers. By implementing all these,
Lush can easily expand itself in the areas of China.
Basis of Competition
There are many existing competitors for Lush in China. The main
reason is there are many companies who sell cosmetics (Asseraf, Lages and
Shoham, 2019). So, the Lush has done overall market research and the
competitor's analysis to make strategic plans for its expansion. It took the
advantage of being natural and vegan. It produces brand new innovated
products.
It has many attractive stores which are adverted through social networking
sites. The brand is also trusted and ethical. It enhances public relations

which attracts more number of customers towards it. It took the advantage
of the public preferring green products by making all the products eco-
friendly which does not harm the environment as well as the skin of
consumers.
Challenges
When a company expands in other countries, there are many
challenges to be faced by it which has to be overcome. China, being a
country which supports animal testing, will not allow the Lush to deliver the
products without being tested on animals (Leung and et.al., 2019). But the
main aim of the company is not to hurt any natural being.
So this becomes a major challenge for it. To achieve its goal, it will produce
the natural products without harming the natural vegetation and will use the
loyalty of customers towards the brand as a competitive review.
Another challenge is to expand the products with higher price according to
the best quality. It has to target only those customers which are in a good
economic position to achieve its objective of increasing the sales thereby
increasing the profit margin without being in loss.
SECTION 3
Global Marketing Strategy
Global marketing strategy is the procedure of regulating the marketing
strategies of a company to adapt according to the international trends and

conditions of other countries. Global marketing can enhance the
effectiveness of products and services and increase consumer awareness of
the brand (Zaveri and Amin, 2019).It is used to create a strong competitive
advantage and expand internationally. Lush has a strong vision for its brand
that is, effective products which are natural, fresh and handmade. They have
set objectives - to make products for every need, become the topmost in
every category and begin a cosmetic revolution to save Earth.
Market entry methods:1. Direct Exporting: It is a well-established form to operate in foreign
markets. It refers to the marketing of products manufactured in one
country to other. Advantages include production is home based and
less risky than overseas and option to learn foreign markets before
investing and reduces potential risks. The main drawback is that it is
done at the mercy of overseas agents and there is lack of control.2. Franchising:It is an easy way to enter new markets. The process of
franchising includes taking the existing business model, find a
franchisee, and start operations. It helps in creation of successful
brand and opening of new branches of existing business. But at the
same time it is risky and if not popularized can result in losses.3. Licensing: It is the process of overseas operation where a firm agrees
to permit a company of another country to use trademark, processing
and manufacturing of Licensor. Benefits include capital not being tied
up in overseas operations and maximum attainment out of marketing

efforts. Drawbacks include limited form of participation and
considerable planning.4. Joint venture is a partnership between two companies where
investment is divided on a 50-50 basis and according to terms and
profits are split equally. The two companies are separate but work
together to attain success. Benefits are sharing risk and joint financial
strength. Disadvantage is tough recovery of capital.
5. Partnering up: To navigate and grip new potential markets, it is a good
option to partner up in a foreign country as they have pre-existing
knowledge of business operation in their countries. But not suitable for
maximum profitability achievement (Dinu, 2018).
The appropriate method of market entry in Asian countries like china is
exporting via a distributor. Lush can use a Hong Kong based distributor
where it already has established its product line. The more suitable way is to
Export via direct channels such as Foreign trading corporations which
eliminates the middlemen and will help to penetrate the Chinese market and
increase sales.
Porters Generic Model for developing Marketing Strategies
The strategies are devised to attain competitive advantage over
competing products and companies in a market (Julita, 2019). The strategies
are formulated on the basis of :

Cost leadership: This dimension of strategy formulation is used
 When the price of products among rival sellers is intense, the products
are majorly identical and suppliers are ready from several sellers. When buyers incur lower costs in switching purchases from various
sellers and have a significant power in bargaining prices.
Differentiation: This base is used when-
 There exist multiple ways to differentiate and segment the product line
and these differenced tend to be of value to customers and their needs
are diverse.
 Competitors are following a similar approach and technological change
is high-paced and rivalry is focussed on evolving features of products.
Illustration 1: Porter Generic Model
Source: Michael Porter's Generic Strategies, 2017

Focus: This base is used when-
 The target market niche is big, growing and profitable.
 The industry leaders do not consider the niche as crucial.
 Industry has multiple niches and segments which allows buyer to pick
a competitively attractive product line.
 A few rivals are attempting specialization in the same segment of
target market.
The adoption of differentiation as a primary generic strategy can allow
Lush to expand its customer base by stressing over unique product features
that might be needed in a country like china which already has a variation of
cosmetic products. Lush can offer a wide variety of preferences to match the
unique taste needs of Chinese consumers. It can utilize innovation as a tool
to offer augmented and differentiated products to delight the consumers and
increase their preference of Lush over other existing brands in the country.
The brand logo can be used to set the basis of differentiation by inducing the
concept of Britain manufactured brand. The distinctive brand logo can help
established a strong brand image in customers’ mind.
Recommendations
1. Using digitalization to provide beauty products online is one of the best
ways to increase consumer attention in a technologically advanced

country like China. Emotions of customers can be targeted by using
more graphics and pictures on Chinese social networking platforms.
2. Participating in beauty exhibitions and trade shows in China to attract
distributors' attention and gathering customers' awareness.
3. Knowing emerging trends like Organic beauty and skin care products
which are becoming a huge business in china and inculcate them in
differentiation strategy.
4. Use of domestic partnerships like locally preferred brands- to avoid
local competitions and getting updated with Chinese preferences at
the same time.
5. Hiring Key Opinion Leaders or KOLs to boost awareness and generate
leads for attaining an ideal customer base.
6. The CRM capacities of Lush can be used to differentiate target
customers and provide personalised services and customised make-up
items.
Implementations
 Understanding the key traits and behaviours of Chinese people through
data analytics tools and advanced marketing techniques to know their
tastes and preferences in order to design customised product line. It is
noted that they mostly prefer organic products, so introduction of a
new herbal lipsticks’ product line.

 Engaging in direct marketing through participation in beauty
exhibitions like Beauty Expo and Cosmoprof to gain customer
attention.
 Partnerships can be done with companies like Chioture, Maogeping and
Perfect Diary etc. which are well- established and highly preferred in
China.
 Chinese beauty bloggers have a wide reach to end consumers via
Instagram and social networking applications, and they can promote
Lush among the audience. Therefore, they can be hired for
implementing social media marketing strategies.
 Using Chinese media giants like Weibo and WeChat are good picks for
brand recognition and advertisements on these apps can be used to
launch campaigns for women by offering vouchers and coupons.
CONCLUSION
From the above report, it can be concluded that the international
trends are dynamic in nature and need to be addressed for an effecting
global marketing strategy. The external analysis of the market environment
was done using Pestle framework and market structure was determined. The
current competitive advantage was determined, customer segmentation,
geographical segmentation and Position of rival global players was
evaluated. The challenges in Chinese market were identified and

differentiation was adopted as a marketing strategy was devised for the
target customers using Porters generic strategies' framework.

REFERENCES
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