Lush Cosmetics: Company Analysis

Introduction

Lush Cosmetics (Lush) has been on the market for a long time now, and it is no surprise that the company keeps expanding. New shops with enticing, colorful products always open, offering customers natural cosmetics of good quality. The ever-growing brand’s community cannot stop talking about the brand’s bestsellers and takes it to social media every day. A detailed analysis should be conducted to find out what makes this company so successful and unique.

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Target Market Strategy

The thing, which makes this company almost one-of-a-kind, is that it solely relies on no-ad policy; the brand strongly relies on word-of-mouth marketing. Lush Cosmetics hardly spends on traditional means of advertising like billboards, online pop-ups, or promotional videos. The company’s best advertisement is its customers. According to Godey (2016, p. 5836), “research shows that eWOM has higher credibility, empathy, and relevance for customers than marketer-created sources of information on the Web.”

The marketing strategy is successful because it is based on clear values, such as concern about the current environmental situation, strive for more clean products on the market, and producing less waste. Lush Cosmetics aligns its beliefs with those of many people throughout the world, and that is why company’s marketing strategy works.

Marketing Issues and Competition

The advertising tactics heavily pressure on Lush. The company has a substantial market share in North America and Japan markets, while emerging countries and Europe are reluctant to Lush’s products. Moreover, European customers are disjointed from the brand culture so that Lush is less engaged in purchasing new or heavily promoted items (Aronczyk, 2013). The emerging countries prefer cheap cosmetics, as the average income statements are significantly lower than in the U.S., Europe, or Japan.

From this perspective, it can be admitted that this challenge is the most crucial for Lush Cosmetics, as it impacts the strategic and financial sustainability of the company’s marketing campaign. Nonetheless, the communication and engagement with customers of all generations are the priority for Lush due to the urgency of new markets’ penetration and exploration (Hanlon, 2019). In return, the marketing issues can be resolved if the company finds a path to attract the younger generation or hold shares on the emerging markets.

Marketing Strategy and Tactics

The segment competition indicates that Lush is grounded in its core values. From one perspective, these values attract consumers by creating the premium and privileged groups of brand consumers. On the other hand, such conservatism assists rivalries to develop flexible approaches in engaging consumers and keeping suppliers and retailers close with its brands.

The company strongly believes in six policies that the brand has up on its website: fighting animal testing, freshest cosmetics online, ethical buying, 100% vegetarian, handmade, and naked packaging. Lush do not support animal cruelty, preferring to use herbal ingredients at most (Harding and Long, 2017). Lush Cosmetics supports Community Trade and Fair-Trade initiatives when buying the components. Another peculiarity of the company is its policies regarding limited product packaging. The brand encourages its customers to recycle; Lush can return the plastic jars from the products in exchange for a free fresh mask.

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One more tactic the company uses is a social commerce strategy, which is in direct connection with its beliefs and values. Lush’s social media profiles reflect everything Lush believes in, and that is what catches the attention of both existing and potential customers. Every post on its social media account is dedicated to the process of product creation, which goes according to the company’s standards (Heinze et al., 2016). That is what puts Lush Cosmetics in a position higher than that of its competitors’. Lush’s brand stories bring the company closer to its customers, who eagerly comment on the posts, becoming a part of the community. Therefore, the engagement rate is continuously high, and the brand’s authenticity also contributes to that.

Product Positioning and Branding

However, the company does not only focus on sales of its products; the brand’s more significant aim is to help the environment. Lush does so by keeping the quality of the ingredients for products in check, creating eco-friendly packaging, and recycling – and that is also reflected on its social media. With every post, the company forms a potential conversation among its followers, both spreading awareness of environmental issues and bringing people who share brand’s values (Hooley et al., 2017). Not only do the customers get the knowledge of the specific environmental problems and spread the news to other people, but Lush also contributes to the sales growth rate.

Another source that substitutes the ordinary advertisement is UGC or user-generated content. Excellent reviews from the customers on social media contribute much to the company’s reputation. To use it for the brand’s benefit, Lush Cosmetics creates different hashtags and encourages the followers to use those, posting pictures and information about the products. The company would use those posts in its feed to show that Lush values people’s opinions and are open to conversations and discussions (Hooley et al., 2017).

Both hashtags and user-generated content unite the customers, building a community with the same values and beliefs that the brand possesses. The company’s relationship with its consumers is friendly, and because of that, there is no need for forced advertising. The customers have an opportunity to try the quality of the products themselves and then spread the word about it online; that is the best promotion for the brand.

One more source of Lush Cosmetics’ low-key advertising is social media influencers. Vloggers that have millions of followers tell people about the quality of the products, doing reviews online. YouTube has become one of the largest platforms that are effective in terms of product promotion. The word-of-mouth strategy goes to another level with the help of content the influencers create, putting the product before the brand’s target audience.

The innovation within the marketing tactics and strategies is an integral part of organizational management and leadership. Most organizations tend to integrate learning approaches and working practices to engage employees in innovative and creative thinking, which enhances and sustains internal and external affairs (Felix, Rauschnabel and Hinsch, 2017). Therefore, the critical aspect, which makes innovations to work, is the workplace environment, which supports and contributes to the change intervention.

Ongoing Growth and Innovations

Lush’s approach toward innovations and employee engagement is constructed on the knowledge management framework. The organization invests in education and training programs, workshops, and field-related events to stimulate its employees to discover and propose new ideas regarding innovations and creativity (Davila et al., 2013). In return, the company gets feedback, which is tracked in efficiency, quality, and advancement of its operations and consumer relationships.

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Furthermore, Lush encourages active and healthy leadership approaches, which aim to understand employees’ needs, consumers’ expectations, and current issues within the organization. By listening to the stakeholders, Lush realizes the problematic fields and resolves it by giving employees and managers opportunities to contribute to organizational growth (Davila et al., 2013). This method is a driving force of any knowledge management and learning innovation framework.

What is more, the company also expands its presence in employees’ personal and professional growth. While the company expects high quality and excellence, it also delivers tools and resources for employees to manage the workplace at best (Davila et al., 2013). In this instance, the company obtains loyalty and involvement in crucial business questions. From this perspective, organizations should provide resources and tools for those who are expected to learn, disregarding manager or employee, to capture learning (Aronczyk, 2013). Also, the opportunities should be promoted and sustained to encourage knowledge and facilitated innovations. In return, such combination allows organizations to cultivate creativity, sustainability, and a continuous desire to learn among employees.

Implementing the omnichannel strategy is another step that Lush Cosmetics takes to achieve a more extensive customer base. Along with its website, Lush has successfully added shoppable Instagram posts to the list of options for making a purchase. What is more, the company created a smartphone app for the customers to get notifications about sales, promotions, and limited-edition products. It makes the shopping process much easier and more convenient.

Target Market Analysis

When it comes to defining the target market of this brand, it is essential to note that men are less likely to buy pampering products than women. Moreover, the company’s commitment to its values in terms of product making indicates that many people who are loyal to the brand may be vegetarian or vegan (Chaffey and Ellis-Chadwick, 2016). What is more, customers at the age of 30 or younger are more susceptible to buying products from socially responsible brands.

Lush also are more in favor of those companies that concerned with the current environmental problems and do everything in its power to help the planet. It might be safe to assume that the majority of the brand’s customers are women at the age of 30 or younger. Lush may be vegetarians or vegans, pro-socially responsible trade, and taking care of the environment.

Based on the Porter five force analysis, this is the current position of Lush Cosmetics.

  1. The threat of substitute products. As the market for cosmetic products has grown mainly over the last several years, there is a strong possibility of the substantiation of the products. Several competitors have taken leading places on the market, including L’Occitane en Provence, The Body Shop, and Ives Rocher. The strongest rival is The Body Shop, as Lush boasts practically the same number of followers and customers and are almost the same target demographic oriented. However, to this day, not a single brand provides a similar in-store experience that could be close to that of Lush Cosmetics’.
  2. The Threat of New Entry. The company has been a pioneer in the beauty industry with a focus on eco-friendly products. Even though new labels with the same mission and objectives are reaching the arena, Lush Cosmetics has already secured its position on the market.
  3. Bargaining power of suppliers. This power is medium, as there is no shortage of vendors that can provide the company with all the necessary ingredients. However, the price of the latter ones may fluctuate, and that can impact the cost of the final products.
  4. Bargaining power of buyers. It is rather high as many people are not willing to spend more money on all-natural products, and Lush continues to buy available products at a much cheaper cost. Nonetheless, the number of customers that incline towards eco-friendly cosmetics is growing every day, so the power of buyers may decline with time.
  5. The intensity of competitive rivalry. The intensity is rather low because even with The Body Shop as its main competitor, Lush has two entirely different types of customers. What is more, the prices at Lush Cosmetics are lower than at The Body Shop, but still above average. However, the customers are ready to pay for the products made with raw organic ingredients, as well as for the unique experience that Lush will get at the store.

While the company encompasses external analysis into its strategy, Lush also frequently reviews its risk management policies and procedures to ensure that all components of tactics and strategies are consistent and adhere to the corporate and market standards. Project risk identification is the identification of risks that can affect a project and the documentation of risk characteristics. It is necessary to have some background information and an idea of where the project risks come from to identify the risks (Aronczyk, 2013). Foremost, a description of the final product is needed, as the dangers depend significantly on the specifics of the project.

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Cost and timing estimates will allow the company to judge whether a given framework is associated with significant risk. An analysis of staffing needs will make it clear whether there are team members who find it challenging to find a replacement when needed (Sadgrove, 2016). An analysis of the supply plan will reveal the risks associated with the procurement of materials, as prices may change significantly (Godey et al., 2016).

Control forms are organized to give the process of risk identification that is structured by risk sources, include project environment, outputs of other methods, project products, technologies used, project team experience. At this stage, a lot depends on the experience of the project manager. It should be noted that risk identification (like other processes) is not a one-off procedure and should be repeated regularly as the situation changes.

Marketing Strategic Tools

Strategic planning aims at identifying the main activities and trends of project activity development over the longer term, which leads to the need to consider future risks that have a broader planning horizon and are therefore more uncertain (Felix, Rauschnabel and Hinsch, 2017). The necessary information, in this case, is obtained from experts and is mainly of high quality. Tactical planning is carried out at the level of implementation of individual sets of projects and aims to develop a feasible plan for the ongoing application (Kliem and Ludin, 2019).

It is essential to ensure that projects are completed on time, as practice shows that significant losses arise precisely from the early completion of projects, and the allocation of resources between and within each project. The implementation of projects is ensured by the operational management of them, which involves the organization, coordination, and regulation and provides the maintenance of the system (the organization executing many projects) on the planned trajectory and compensation for deviations from it.

Feedback Loop

The feedback loop is provided by accounting, control, and analysis functions. Accounting allows us to obtain information about the current state of the system, employing control the data distorting operational accounting information is removed, the analysis enables project managers to detect dangerous tendencies and to make the necessary stabilizing decisions regarding the project risks. If operational control fails to keep the system on a planned trajectory, then adjusting tactical plans is essential (Sadgrove, 2016). If deviations are very significant or the environment changes its parameters and behavior dramatically. It is necessary to change the strategy and, in some cases, to review the purpose of the system functioning.

Risk Management

The risk identification strategy and change intervention outcomes will initially analyze the project environment. “Risk Identification” is the definition of a risk sources’ list and potential events of risk. The list of risk sources should be as complete as possible, regardless of the likelihood and significance of the risk event (Kliem and Ludin, 2019). Sources of uncertainty include changing requirements, design errors, incorrect estimates of specific parameters, poorly trained staff. It is desirable to include various additional information in the description of sources of risk: a list and assessment of possible consequences and the expected timing of the occurrence of a risk event (Sadgrove, 2016). At this stage, the is carried out to identify the marketing risks:

  • identifying all the possible risks inherent in the campaign;
  • identifying external and internal factors that reduce or increase advertising efficiency;
  • a description of the identified marketing risks;
  • analysis of risk factors;
  • classification of risks and elements of influence on them;
  • analysis of the potential consequences of the risk negligence;
  • analyzing proposals to eliminate the identified threats;
  • the cost assessment of all measures aimed at minimizing campaign risks.

Social Media Content and Integrated Marketing Campaign

Lush Cosmetics has its safe niche on the market that ensures the growth of its profit and the constant flow of the customers. The brand successfully positioned itself higher than other companies similar to them because of the implemented differentiation strategy. Lush Cosmetics creates all beauty products without any artificial preservatives or animal fats (Komatsu Cipriani, 2017). Lush uses fruits, flowers, honey, carrier, and essential oils, along with beeswax and salt. The company does not tolerate animal testing and advocates for cruelty-free methods in terms of product-making. That is one thing that defines its differentiation from other brands.

Lush Cosmetics produces its widely famous bath and shower products with exceptional ingredients to which most of its rivals do not have access. The beauty world has become more focused on herbal products, hence the difference in positioning of companies that are on the market. Those brands, who are choosing organic and raw ingredients, were higher on the ladder in the current and future competition (SI, 2015).

Such a situation was a significant help for the brand to enlarge its customer base and achieve a higher position in the game with other companies. Also, it is well-positioned because it is manufacturing products that will potentially be of high demand in the future, as people are less interested in non-organic products (Komatsu Cipriani, 2017). That is, perhaps, the main reason why the company is so successfully differentiated, among others.

The brand is also a strict advocate of animal rights. This position went on with assisting Lush Cosmetics to strengthen its position on the market. The brand has boycotted using any ingredients of animal origin and has gone on to creating and supporting different campaigns aligned with animal protection. The company’s all-natural approach to beauty is supported by the fact that herbal-based products have medicinal properties and, therefore, are more productive and healthier (Vinerean, 2017).

What is more, being protective of the environment, the company became imaginative, limiting the amount of packaging for its products. Lush do so by making more solid products than liquids, reducing the number of plastic bottles and jars that eventually go to waste. Lush Cosmetics also gets creative with the other packaging, making containers of potato starch, which are biodegradable, hence eco-friendly.

The last factor that has made the brand’s position stable is the number of stores that have been opened all over the world and its one of a kind style. Lush Cosmetics has opened more than 800 stores in 51 countries. No other company has made outlets so instantly recognizable and loved among consumers. In return, the brand broadens its customer base, boost sales, and increase the annual profits all at the same time.

Reference List

Aronczyk, M. (2013). Market(ing) Activism: Lush Cosmetics, Ethical Oil, and the Self-Mediation of Protest. JOMEC Journal, 1(4), p. 1.

Chaffey, D. and Ellis-Chadwick, F. (2016). Digital marketing. 6th ed. Harlow: Pearson.

Davila, T., Epstein, M. and Shelton, R. (2013). Making innovation work. 1st ed. Upper Saddle River, N.J.: FT Press.

Felix, R., Rauschnabel, P. and Hinsch, C. (2017). Elements of strategic social media marketing: A holistic framework. Journal of Business Research, 70(C), pp. 118-126.

Godey, B., Manthiou, A., Pederzoli, D., Rokka, J., Aiello, G., Donvito, R. and Singh, R. (2016). Social media marketing efforts of luxury brands: Influence on brand equity and consumer behavior. Journal of Business Research, 69(12), pp. 5833-5841.

Hanlon, A. (2019). Digital marketing: Strategic Planning & Integration. 1st ed. London: SAGE Publications Ltd.

Harding, S. and Long, T. (2017). MBA management models. 1st ed. Aldershot: Gower.

Heinze, A., Fletcher, G., Rashid, T. and Cruz, A. (2016). Digital and social media marketing. 1st ed. Salford: Routledge.

Hooley, G., Piercy, N., Nicoulaud, B. and Rudd, J. (2017). Marketing strategy & competitive positioning. 6th ed. UK: Pearson.

Kliem, R. and Ludin, I. (2019). Reducing project risk. 1st ed. UK: Routledge.

Komatsu Cipriani, T. (2017). The emerging challenge of brand design and brand management in social innovations. The Design Journal, 20(sup1), pp. S3536-S3545.

Sadgrove, K. (2016). The complete guide to business risk management. 3rd ed. UK: Routledge.

SI, S. (2015). Social Media and Its Role in Marketing. Business and Economics Journal, 07(01), p. 203.

Todor, R.D., 2016. Blending traditional and digital marketing. Bulletin of the Transilvania University of Brasov. Economic Sciences. Series V, 9(1), p. 51.

Vinerean, S. (2017). Content marketing strategy. Definition, objectives and tactics. Expert Journal of Marketing, 5(2), pp. 92-98. Web.

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