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Lush Cosmetics

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Toni Brown

on 27 March 2014

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Transcript of Lush Cosmetics

Lush Cosmetics
Company Background
Lush Ltd is an international handmade cosmetics company and was first established in 1994

Lush operates in over 850 stores in 51 countries

5816 employees

Operate through franchises and partnerships

Invents products from fresh fruit and vegetables and use little or no packaging when selling the products.
Internal Analysis
Industry Analysis
The UK cosmetics manufacturing market has been forecast to increase at a compound annual growth rate (CAGR) of 0.6% over the next five years, increasing from a value of £2.25 billion in 2013-14, to reach a value of £2.32 billion in 2018-19.
Neo-tribalism relating to Lush
Latin approach applicable

Northern thinking relevant
External Environment Analysis
Import and export regulations

Government legislation

New EU legislation - Cosmetic Products Regulation

Political uncertainty in markets

MC6010 - Marketing Planning and Strategy
This presentation will:
Porters 5 Force's
Viktoria Balogh - 11016170
Joseph Botham - 11005696
Jake Boulton - 11067839
Toni Brown - 10005008
Amir Kifai - 11030139

Thank You
Any Questions?
Floor, K. (2006). Branding a store: How to build successful retail brands in a changing market place. Philadelphia. Kogan Page Publishers.

Asda, 2013. Nail Polish. [online image] Available at http://direct.asda.com/George-Quick-Dry-Nail-Polish/GRGQKDRYNAILMASTER,default,pd.html [Accessed 10th December 2013].
Lush, 2013. Nail Polish. [online image] Available at https://www.lush.co.uk/product/5966/Passionate-[Emotional-Brilliance] [Accessed 6th December 2013].
Moxie Reviews, 2013. Lush Logo [online image] Available at http://moxiereviews.com/2013/02/05/lush-cosmetics-valentines-day-2013/. [Accessed 6th December 2013].

Cova, B & Cova,V. (2001) Society Marketing in 2002 and Beyond in European Journal of Marketing. Paris. Vision Marketing.

Key Notes, 2013. Green and Ethical Consumers. [online report]. Available at http://0-www.keynote.co.uk.emu.londonmet.ac.uk/market-intelligence/view/product/10854/green-%26-ethical-consumer/chapter/7/fashion-and-beauty?highlight=lush [Accessed 2nd January 2014].
Key Notes, 2013. Toiletries - 2013. [online report] Available at http://0-www.keynote.co.uk.emu.londonmet.ac.uk/market-intelligence/view/product/10767/toiletries/chapter/9/league-tables?highlight=animal%20testing#nohref. [Accessed 5th December 2013].
Key Notes, 2013. Cosmetics and Fragrances - 2013. [online report] Available at http://0-www.keynote.co.uk.emu.londonmet.ac.uk/market-intelligence/view/product/10860/cosmetics-%26-fragrances?highlight=lush&utm_source=kn.reports.search. [Accessed 5th December 2013].
Mintel, 2013. Beauty Retailing - UK - January 2013. Available at http://0-academic.mintel.com.emu.londonmet.ac.uk/display/651638/. [Accessed 3rd December 2013],

(Lush, 2013.)
Provide a background on the company Lush;

Conduct an external environment analysis;

Conduct an internal company analysis of Lush;

Conduct a cosmetics industry analysis;

Relate neo-tribalism Lush;

Provide recommendations for a future strategy.

(Yahoo Finance, 2013).
Lush achieved top spot for the Cosmetics and Toiletries category in Which Magazine June 2013.

(Lush, 2013).
(Mintel, 2013).
Threat of new entrants
Threat of substitutes
Competitive Rivalry
Power of buyers
4000 companies in EU

Prevalence of supermarkets

Switching costs of customers

Barriers to exit market
Availability of materials

Ease of substituting products

Power of supplier
High buyer power

Customer retention

Ethical label

EU cosmetics regulation

Costs of R&D

Research costs

Switching costs are low = high risk of substitution

Substitute product is cheaper = high risk of substitution

Asda - £2.50

Lush - £12.50

Lush's product is higher inferior = low risk of substitution
During economic crisis, customers opt for cheaper substitutes

Price competition lowers the margins of the company

Prices perceived as too high in slumping economy

Social factors favorable for Lush

Focuses on environmental responsibility

Raises charities for good causes

Competitors present cheaper non-organic products

Manufacturers of natural cosmetics emerging

Average shelf life cannot exceed 14 months

Contain chemicals that can prolong their shelf life

Company Values
"We believe our products are good value, that we should make a profit and that the customer is always right.

We also believe words like 'Fresh' and 'Organic' have an honest meaning beyond marketing."
(Lush, 2013.)
(Mintel, 2013).
(Moxie Reviews, 2013.)
(Lush, 2013.)
Innovative products.

Hand made using little or no preservatives.

Passionately against animal testing.

Dedicated employees = share passion with customers.

Uncompromising ethical stance.

Unforgettable customer service.
Niche market = limited customer base.

Imperfect target market.

Natural products create a short expiration date.

Lack of store accessibility.

Rising public concern of environmental issues

Increasing demand for healthier products

Product and service expansion

Feast days, holidays
Ongoing economic uncertainty

Rivalry within the market

Highly competitive industry

Mainstream brands


(Key Notes, 2013).
(CPTA, 2014).
(Key Notes, 2013).
(Key Notes, 2013).
(Key Notes, 2013).
(Key Notes, 2013.)
(Key Notes, 2013).
Asda, 2014. Nail Polish - George. Available at http://direct.asda.com/Nail-Polish/AD01010704,default,sc.html. ' [Accessed 5th January 2014].
CTPA, 2014. Key Facts about the Cosmetics Industry. Available at http://www.ctpa.org.uk/content.aspx?pageid=295 [Accessed 6th January 2014].
Lush (2014). Fresh handmade cosmetics. Retrieved from https://www.lush.co.uk/
Lush Facebook, 2013. Company Background. Available at https://www.facebook.com/freshlush/info. [Accessed 3rd December 2013].
Yahoo Finance, 2013. UK cosmetics manufacturing market to be worth £2.32 billion in 2019. Available at http://uk.finance.yahoo.com/news/uk-cosmetics-manufacturing-market-worth-000000133.html. [Accessed 3rd December 2013.]
(Asda, 2013).
(Lush, 2013.)
Lush to promote and expand into department stores

Increase Brand Awareness
Increase Product Awareness
Wider Target Market
Damage Brand Image
Damage Sense of Community
Full transcript