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Transcript of Lush Cosmetics
Industry/Market Economic Trends Competitive Trends Competitive Trends
Economics Industry/Market Trends The United States is recovering from one of the worst recessions in recent history At the end of 2010 the United States returned to the same GDP level that existed before the recession. Thus we expect to enter expansion. Estimating a 3.3% growth in U.S. GDP for 2011 Six straight quarters of growth. United States Economy National median household income levels have been slipping since 2006. With the economy recovering, and now expanding we predict this trend to reverse. Prime Interest Rate Current prime intertest rate in United States is 3.25% Predictions:
Prime interest rate to rise to 4.25% by end of 2011.
Reach 5.25% by end of 2012. Sharp decline from 2006-2008. Since then rate has remained stable. Thus incentives for businesses to expand will be expected to decrease over the next few years. Consumer Confidence Median Household Income
The Consumer Confidence Index currently stands at 60.6%. This is an increase from a December dip to 53.3%. These levels have been the norm over the past two years. However, the economy is currently in an upward trend creating a short term outlook that is relatively positive. Consumers have shown signs of slowly gaining trust in the U.S economy, but still remain far from the confidence levels experienced throughout 2006. Brand Competitors The Body Shop
Clarins Kiss My Face Focus on natural and effective products
2,000 world wide stores
Products include body washes, scrubs, moisturizers, and shampoo. Dedicated to animal rights
Products include body lotion, body sprays, and facial cleaners.
More expensive Focus on healthy, natural, organic products
Products include shower gels, shampoos, toothpaste, sunscreen etc.
Does not use any artifical coloring Origins Generic Competitors Dove
Oil of Olay
St. Ives Total Budget Competitors Clothing
Shoes Sudden increase in demand for organic cosmetics since 2004. Companies focusing on natural ingredients Relatively new industry, yet already valued at over a billion dollars. Sales stemming primarly from North America and Europe, followed by Japan. Organic industry has sales approaching $10 billion worldwide. Original market was created from small companies, now major market leaders taking an active role. Major companies acquiring small organic cosmetic organizations Todays consumers are focusing on products that are healthy for the environment Political Trends Cosmetic industry must adhere to the United States Food and Drug Administration However, must only stay within limits of administration, approval for products not needed. Thus industry operates under style of self regulation. CFTA, a national trade association, attempts to maitain the bridge between the cosmetics industry and the government. Successful lobbying to keep certain raxes and tariffs out of the cosmetic industry. Recent trend suggests CTFA is losing group and self regulating is coming to an end due to concern over certain chemicals being linked to cancer. Product Competitors
Yes to Carrots
Dedicated to "The Natural Standard"
Products are 99% natural
Desire low environmental impact products
Consumer inspired all natural products
Blend organic fruits with innovative "elixir" obtained from Dead Sea
Four exclusive collections
Products aim at skin and hair needs
Goal of highperformance skincare fueled by nature
Use organic plant ingredients and natural essential oils
All products proven by team of scientists
All manufacturing done using renewable resources External Analysis
Political Issues Analysis Opportunities Brand loyalty New openings Product Innovation High value Stiff competition Unstable economy Brand Loyalty Customers tend to stay loyal Clients relate to Lushs' pursuit of environmental friendly products Customer base often described as evangelical Repeat purchases represent majority of company revenue Opportunity Acquisitions Reverse the threat of a hostile takeover Allows for more effective use of factory resources Generate increased revenue to compete with industry giants Opportunity Explore Marketing Strategies Coupons Customer Rewards Sponsorships Product Sampling Bundle Selling Competition The Body Shop L'Oreal Revlon Burts Bees Origins Recent increase in involvement with organic cosmetic market Purports to have the most natural products Product Innovation New products keep high brand loyalty Commitment to constantly release new products Representatives are sent around the globe to find the newest and freshest organic possibilities Aids in keeping strong word of mouth advertising Creates true core competency New Stores Over 600 locations Located in 43 countries 94 U.S.A.
locations Between 2000-2010 470 new stores opened. Products more available than ever More than a
in company size! High Value Customers can expect high value products Made with all natural ingredients Fair pricing Hand made Organic products Unstable Economy United States still recovering from detrimental recession Recovery has been slow and outlook remains questionable Unemployment rate remains high at 9.4% Future inflation rate remains uncertain Raw material prices continue to rise Rising oil prices could lead to an increase in shipping and production costs Target Market Women ages 25-55 Care about product safety and environmental effect Secondary Market Girls and young
women ages 14-24 Aware of how decisions they make
effect the world around them Just under 64 million women ages 25-55 in the United States Just under 21 million women ages 14-24 in the United States Goals Objectives Increase product awareness among primary and secondary target markets Increase product awareness among primary and secondary target markets Obtain customer feedback to generate new and improved product ideas. Ensure that potential consumers are aware of Lush Cosmetics "creative and innovative solutions to make a positive impact on the planet" Maintain affordability in order to continually produce a high sales volume Maintain Lush Cosmetics commitment to a policy that refuses testing products and ingredients on animals Contniue to utilize Lush Cosmetic's "innovative marketing strategies and product development approach" Promote the benefits of using natural products in cosmetics rather than artificial preservatives Promote Lush Cosmetic's ethical campaigns such as, "Save our Seals", "No Nukes", and "Saving Sharks Around the World" To increase sales of Lush Cosmetics (by 15%) among the target market through marketing campaigns such as providing free samples at Lush shops in 2012 To gain consumer trust in the product by promoting the benefits of fresh handmade products on all items in 2012. To establish 40% more shops within the United States by 2013. To have 10 million products bought by 2014. Action Plans Biodegradable totes Offer free to Lush customers (with $25 purchase) Objective: Promote Lush's strong belief in recycling and sustainability. Target Market: Environmentally concious consumers Cost: $4.39 per bag Promotional Postcards Cards will be biodegradable Objective: Inform customers about Lush events. Target Market: Current Lush customers Cost: $0.035 per card "Click to Save the Rainforest" Free Sampling Bundle Selling Customer Rewards Coupons Objective: Gain customer loyalty through environmental friendly promotions Target Market: Consumers striving to make a difference in the world Objective: Increase awareness of environmentally friendly cosmetic products produced by Lush Target Market: Potential customers unaware of all that Lush has to offer Cost: $.25-$.50 depending on product being sampled Objective: To increase revenue through increased quantity sales Target Market: Consumers loyal to a current Lush product Cost: Various sales discount Objective: Encourage repeat purchases and marketing by customers Target Market: Current Lush customers Measurement: Determine increase in sales and new clients resulting from program Objective: Be able to better control demand and raise awareness for specific products Target Market: Current Lush customers Cost: Minimal paper costs as well as possible opportunity costs involving discount Full sponsorship of program Will increase word of mouth advertising Increased purchase incentive Implement a customer rewards program Offered through several mediums Jason Axley