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Lush

Lush CCVTM
by

Oliver Gilpin

on 14 January 2013

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Transcript of Lush

Product Portfolio Health and Beauty Products
Bath - Body - Face - Shower - Hair - Gifts - Spa - Perfume Unusual selling style Tailored Service Different product levels: core benefits, actual product, augmented product 8 Product Classifications (Jobber and Fahy, 2009, p.146) BCG Matrix
It’s important for a company to manage the whole product portfolio to ensure they match the company’s values as well as the brand image (Jobber, 2010).

Brand values matched with natural ingredients and no animal testing

One New Product a Week

Discontinuing Unpopular products

Lead on to PLC Managing Products (Ahmed and Shepherd, 2010, p.92) Product Life Cycle Product Value
-Intangible benefits
-Tangible benefits

Service Value
-Store Service
-Online Service
-Customer suggestions
-Non-linear relationship Personnel Value
-MD Mark Constantine
-Happy Helpful Staff

Image Value 
-Branding
-Customer Self Perception
-Social responsibilities Total Customer Value Energy Cost
- Functional Website
- Many high-street stores
 
Psychic Cost
- Disposing of the product
- Few negative psychic effects
- Easy to Obtain
- Calming relaxing experience
- Low stress is switching Monetary Cost
- Cost based pricing strategy
- Competitive Pricing
- Low cost of switching
 
Time Cost
- Low time cost
- Helpful staff
- Functional Website
- Product Use is easy
- Low time cost of switching Total Customer Cost Lush have a high total customer value

Strong relationship between tangible and intangible value

Offers high Value and low Cost to the Customer

Bohemian look may reduce quality desirability Customer Perceived Value Customer Perceived Value Customer Perceived Value Brand name: “Lush” Reiterates the freshness of the products and the use of all natural ingredients.


Brand Marks: Apart from the logo there are no easily recognizable brand marks.

Descriptions of Benefits: The tagline, “Fresh Handmade cosmetics”. Transparent website. Tangible Assets of the Brand Trust / Reliability: Promote themselves as ethically sound, conscious and ultimately trustworthy. Honesty is a key value and reiterated in their mission and values.

Psychological Pay off: Customers can benefit from the feel good factor

Differentiation: Unique offbeat stores, creative products. Intangible Assets of the Brand Brand Assets External Factors Effecting Branding Brand Personality “The character of a brand described in terms of other entities such as people, animals and objects.” (Jobber, 1995)

Recently voted 2nd most exciting personality on the high street. Described as “cool, laid back and easy going”.

Brand's traits include:
Bohemian
Quirky
Independent
Good Natured- Trust / Reliability: Promote themselves as ethically sound, conscious and ultimately trustworthy. Honesty is a key value and reiterated in their mission and values.

Psychological Pay off: Customers can benefit from the feel good factor

Differentiation: Unique offbeat stores, creative products. Branding - Intangible Assets
Brand awareness
Shops nationwide
Well maintained social networking presence
No discernible advertising
Brand loyalty
No loyalty scheme

Brand Quality
Products are generally perceived to be of high quality. Potential danger of appearing gimmicky Perceived Brand Values Brand Associations: The company works alongside several charities. This could perhaps be publicized more than it currently is.

Dibb and Simkin (2000) Perceived Brand Values Brand extensions: Lush spas

Sub Brands: Gorrilla perfume, Bath Bombs, Luth Times

Parallel Co-Branding: Although Lush work with several charities, there are no branding/business partnerships that directly affect revenue. Strategic Branding Decisions Competition: Lush has to maintain its strong differentiation.
Changing customer preference: Should ultimately benefit lush. Possible threat from competitors looking to also exploit the fairtrade/ethical trend. Threats to the Brand Quelch’s elements for a successful global brand:
Consistent positioning
Focus on a single product/service category
CSR initiatives
Creation of a club/group for customers. (Quelch, 2007) Global Branding Lush adopts a mixed approach to global branding.

Standardized:
Core Values, Store layout, Brand Name, Products

Localized: Websites, Design of bags, marketing activities (naked packaging campaign) Standardized vs. Adaptive approach Quelch’s elements for a successful global brand:
Consistent positioning
Focus on a single product/service category
CSR initiatives
Creation of a club/group for customers. (Quelch, 2007) Global Branding Lush adopts a mixed approach to global branding.

Standardized:
Core Values, Store layout, Brand Name, Products

Localized: Websites, Design of bags, marketing activities (naked packaging campaign) Standardized vs. Adaptive approach Customer Engagement Value Innovation products are inventions that have been adopted by the marketplace (Smith, 2006)

Lush’s innovation in product development and business decisions

Lush is one of the UK’s leading innovative specialist companies within the health and beauty sector (Mintel, 2010)

Unique customer experience Innovation Innovation Brand extensions involve using an established brand on a new product in the same product field (Trott, 2008, p.372) Innovation Creation, Trade and Innovation Diffusion model (Ahmed and Shepherd, 2010, p.19) Forms of marketing used: in-store adverts, word of mouth, PR
Lushette Musical Ice Dancer Roadshow
High profile stunts supporting charities
Naked products or wrapping in a cloth after sale Marketing & Packing Competition Ethics v Innovation Price and Positioning Used to identify a company’s position in a market.
They are the characteristics that make a company different from its competitors and appealing to a customer base.

Kapferer, (2012, p.152) Pops and Pods Points of Parity:
Against animal cruelty
Recyclable packaging

Points of Difference:
Ethically produce, fresh, handmade and unpackaged cosmetics
Innovative design of stores
Sensory engagement of stores Based on their mission statement, Lush appear to use cost-based pricing.

Factors effecting pricing:

Price of raw materials
Importing goods
Environmental disaster
Transportation cost
Demand
How much the consumer is willing to pay “[Price is a] key element of the marketing mix because it represents on a unit basis what the company receives for the product or service that is being marketed. All of the other elements represent costs.” (Jobber, 2007, p.20) Pricing GE Matrix Based on their mission statement, Lush appear to use cost-based pricing.
“[Price is a] key element of the marketing mix because it represents on a unit basis what the company receives for the product or service that is being marketed. All of the other elements represent costs.” (Jobber, 2007, p.20) Pricing
- Price of raw materials
- Importing Goods
- Environmental Disaster
- Transportation Cost
- Demand Factors Affecting Pricing Companies need to ensure that they continue to innovate in order to remain competitive (Kapferer, 2012) Recommendations Repositioning Repositioning not currently needed Supply spa products to established spa’s Establish the brand for global success Create a loyalty scheme Parallel co-branding within the spa sub-brand Maintain brand differentiation to fight competition Monitor competitors who adopt ethical values too Internal Factors Effecting Branding Friendly, enthusiastic employees

Ethical screening process for suppliers Political
Inability to penetrate Chinese market
Fairtrade Foundation Standard

Economic
Falling sales
Slow expansion
Rising price of raw materials

Social
Consumers becoming more ethically aware
Demand for CSR Technological
Social media should continue to be maintained
Video Conferencing

Environmental
The sourcing of ingredients .

Legal
Lush relies on fairtrade law
Values are ‘enduring beliefs that a given behaviour or outcome is desirable or good.’ Hoyer and MacInnis (2007, p.361).

Company Perspective

Global values are the core values that an organisation holds. These are the most essential to the belief system of the organisation. Lush have two main global values; ethical and prosocial.

Ethical values:

No animal testing
Invention of own products and fragrances made fresh by hand
Little or no packaging
Organic
Use of only vegetarian ingredients Brand Values Prosocial values:

Behaviour that ‘does nice things for others.’ Hoyer and MacInnis (2007, p.363)

The customer is always right
‘Happy people’
‘We believe in long candlelit baths, sharing showers, massage, filling the world with perfume and in the right to make mistakes, lose everything and start again.’

Long candlelit baths- relaxing, calming, comforting attitude
Sharing showers- community, caring, unrestricted
Filling the world with perfume- hippy lifestyle, free
The right to make mistakes lose everything and start again- renewal Customer Perspective

Honest- Customers are aware of all the ingredients that are put into the products
Quality- Pure and natural ingredients
Unique- All products are handmade
Creative- Unusual products, wacky names, creative displays, in-store demonstrations
Great customer service- Employees are just as passionate as the customers

Value for the customer- the value the customer obtains from the company

Core benefit (intangible benefits)- alternative/creative cosmetics, natural products, original
Actual (tangible benefits)- natural products, quirky, smell, packaging (lack of), aesthetically pleasing- bright colours
Augmented (extra/additional value)- great customer service, helping the environment, ethical, involvement of customers Brand Values - Customer Perspective Customer Lifetime Value:
Profits of £37 million (2012) up 13% on the year 2010/11

Customer Referral Value:
Lush currently have no referral programmes, word of mouth is already prevalent without the need to reward customers if they refer or recommend a product to a friend.

Customer Influencer Value:
Lush spend no money on above the line advertising

Customer Knowledge Value:
- Lush encourage suggestions from their customers Respected brand and, with the growing popularity in ethical consumerism furthers appeal.
Innovative and ethical business approach provides differentiation against their competitors.
Lush has helped develop a strong, high value brand that customers are willing to pay for. Conclusions
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