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Transcript of 49634784-LUSH
Lush Marketing Plan – Run Under the Sun Sunscreen 1
Lush Run Under the Sun Sunscreen Marketing Plan
Stephany Treadway
Wei-Chen Wu
Notre Dame de Namur University
BUS 4400: Marketing Planning & Analysis
Dr. Warren Brown
April 29th, 2009
Copyright©Wei-Chen Wu & Stephany Treadway 2009
Lush Marketing Plan – Run Under the Sun Sunscreen 2
Product Logo
Copyright©Wei-Chen Wu & Stephany Treadway 2009
Logo Modified by Miguel Zuleta
Lush Marketing Plan – Run Under the Sun Sunscreen 3
Executive Summary
Lush Cosmetics was founded in 1994 and is an organic cosmetics and
skin care company headquartered in Poole, England. The company prides
itself on the core beliefs of making effective products from fresh, organic
materials, essential oils and safe synthetics. With the increasing health
concern regarding safe skin protection from harmful sun rays Lush is in a
prime position to enter the fast growing organic sunscreen market. The
introduction of a new product line named Run Under the Sun Sunscreen
will allow Lush to compete in a developing market and increase their
customer base within the United States as well as globally.
Introducing a new product in a quickly advancing market will include a
great deal of market research, a concentrated focus on Lush’s strengths,
weaknesses, opportunities and threats, and clear marketing objectives.
Positioning of the new product and marketing strategies will play an
essential role in the success of this new organic sunscreen product. The
initial roll out of the new product line will start in the United States to a
mass target market; anyone who plans to spend time in the sun.
Strategies deployed will include POP display promotions at retail stores as
well as sporting events, celebrity endorsements, and print ad
advertisements in fashion and fitness magazines. Utilizing a push strategy
aimed at channel distributors and a pull strategy aimed at customer
segments.
Copyright©Wei-Chen Wu & Stephany Treadway 2009
Lush Marketing Plan – Run Under the Sun Sunscreen 4
Incorporating necessary controls to monitor monthly and annual sales
(by channels), monthly and annual revenue, customer satisfaction, and
R&D of new product development will play a key role in keeping Lush’s
competitive advantage. Having a contingency plan will allow Lush to
continually grow in this emerging market.
Situation Assessment and Analysis
In 1994, Mark and Mo Constantine started the Lush Cosmetics brand
which offers all natural, organic skin care and make-up products. One issue
with many cosmetic and skin care products is they are manufactured by
companies utilizing animal testing in their product development process. Due
to Lush’s core belief of promoting non-animal tested products has kept Lush
out of the organic sunscreen market. As consumer demand for more organic
and natural products has increased over the last decade more manufacturers
are looking into alternatives to product testing other than the use of animals.
This shift has opened a door for Lush to enter and compete in the quickly
progressing organic market.
In addition to the testing practices of many manufacturers,
environmental factors play a role in the increased organic market demand.
The slow depletion of the ozone layer has incited a spotlight on sun safety
and skin protection. The increasing awareness has prompted the new
product offering for Lush to gain a foothold in this rising market. In May 2009
Lush Cosmetics will introduce a new line of skin care products called Run
Under the Sun Sunscreen targeted beyond their current loyal customer base.
Copyright©Wei-Chen Wu & Stephany Treadway 2009
Lush Marketing Plan – Run Under the Sun Sunscreen 5
The Run Under the Sun Sunscreen product offers a safe alternative to
sun protection versus the traditional chemical sunscreen formulas. Much
research has shown the potential harmful affects on human DNA of the
chemical based sunscreens which is a driving factor in the consumer demand
for organic sunscreen ingredients. The Centers for Disease Control (CDC)
reported in 2007 that 72% of Americans do not reapply sunscreen after the
initial application. Further, the CDC reported that a staggering 40% of
Americans do not apply sunscreen at all. These statistics as shown in figure 1
below shows a great opportunity for Lush to gain a greater market share in
this industry.
Figure 1 2007 American Sunscreen Use Statistics
QuickTime™ and aTIFF (Uncompressed) decompressor
are needed to see this picture.
Source: Centers for Disease Control (CDC). May, 2007.
Copyright©Wei-Chen Wu & Stephany Treadway 2009
72% Do not reapply at all
28% Reapply after 2 hrs
40% Do not apply sunscreen
60% apply sunscreen
Lush Marketing Plan – Run Under the Sun Sunscreen 6
Market Summary
This marketing plan is focused on targeting a mass market. Outlined
below are the target markets, market demographics, market needs,
market trend, market growth, SWOT analysis, product offering and
keys to success.
Target Markets
Lush customers who usually wear sunscreen
Customers who search for ‘green’ products for their skin
Customers who are attracted by the features or functions of the
product: convenient and intended for the whole family
Sunscreen users don’t reapply sunscreen two hours after first
applying (72% of Americans, according to CDC, 2007)
People who don’t apply sunscreen (40% of Americans, according
to CDC, 2007 )
Market Demographics
This marketing plan categorizes Lush’s customers into three
categories: geographic, demographic, and behavior factors:
Geographic
The initial product launch will be in the United States; the market size
is approximately 306 million people. After the first year, we will
introduce the product to other 500 retail stores in over 50 countries.
Demographic
In general, about 70% of Lush’s customers are female
Copyright©Wei-Chen Wu & Stephany Treadway 2009
Lush Marketing Plan – Run Under the Sun Sunscreen 7
Female customers’ ages range from 18-50; the 35-50 year
age group is growing rapidly
Metro sexual men account for approximately 25%; age
range is 25-45 years old
Behavior Factors
Lush’s customers tend to be sensitive to fashion such as
reading cosmetics magazines and looking up to fashion
celebrities.
Customers are willing to pay more on facial products
Customers like outside activities and/or are used to
wearing sunscreen
Market Needs
The idea of the new product came from the sunny California
climate. Because of the consistent sunshine and dryness in
California people need to become aware of UV protection and
healthy moisture options for their skin. The Run Under the Sun
Sunscreen offers the following benefits:
Adequate SPF index and moisture benefit. The formula of Lush’s
sunscreen not only provides the right natural essential oils and
organic ingredients that protects users from UV ray sunburn but
also moisturizes their skin at the same time.
Copyright©Wei-Chen Wu & Stephany Treadway 2009
Lush Marketing Plan – Run Under the Sun Sunscreen 8
Available for adults, children, and the entire family. There are
three different kinds of sunscreen one is designed for adults, one
for children and a spray for the family. The strength of the
sunscreen for adults is not suitable for children.
Convenient, not messy. Families who use Lush’s product don’t
need to bring the different bottles of sunscreen on their trip.
They can just put on the sunscreen (adults and children should
put on the different kinds of sunscreen) before they leave the
house. Whenever they need to reapply sunscreen while they are
away from home, they can simply use the Run Under the Sun
sunscreen spray. Easy, portable and convenient not to mention
they will have the necessary sun protection immediately.
No animal testing. Lush is strongly committed to non-animal
testing for all of its products. The actions to refuse purchasing
ingredients from companies that perform animal testing
practices gives you an idea about Lush’s integrity and care for
the environment.
Natural scents. From organic fruits, all scents of the sunscreen
are natural and unique; including strawberries, cherries, oranges,
and green apples.
Market Trend
According to http://www.cancer.org, “[m]ost of the more than 1 million cases
of non-melanoma skin cancer diagnosed yearly in the United States are
Copyright©Wei-Chen Wu & Stephany Treadway 2009
Lush Marketing Plan – Run Under the Sun Sunscreen 9
considered to be sun-related. Melanoma, the most serious type of skin
cancer, will account for about 59,940 cases of skin cancer in 2007 and most
(about 8,110) of the 10,850 deaths due to skin cancer each year.” Moreover,
because of the climate change and the damage of the earth’s ozone layer,
UV rays penetrate directly into people’s skin. Consistent penetration of UV
rays causes extreme damage to people’s skin. There are people who still
choose not to apply sunscreen before they go out into the sun, or they are
unaware of the extreme impact from sunburns. Lush can educate consumers
by introducing the advantages of their new Run Under the Sun sunscreen
product offering.
Market Growth
By 2010, the sunscreen market will be worth $1.25 billion. Additionally, we
estimate there will be more people who will opt to use more organic products
for themselves and their families. This is a great opportunity for Lush to
introduce this innovative product nationwide.
SWOT Analysis
Strengths
This marketing plan focuses on the strength of the new product – Run Under
the Sun Sunscreen. This product is different from other sunscreen brands
currently on the market today as noted by the following points:
o 100% all organic. It is made from essential oils, natural minerals, and
fruits.
Copyright©Wei-Chen Wu & Stephany Treadway 2009
Lush Marketing Plan – Run Under the Sun Sunscreen 10
o It contains antioxidant ingredients and has a natural scent from fruits.
o Contains the appropriate amount of sun protection factor (SPF) for
customers’ skin.
o The product protects both adults and children.
o Less packaging and environmentally friendly bottle design.
Lush has loyal customers and a solid reputation for helping sustain the
environment. Lush also has over 500 shops all over the world. Focusing the
product in countries that emphasize the importance of UV protection (e.g.
Asian countries) will definitely increase the organization’s sales.
Weaknesses
o Unable to attract customers who don’t care that much about
purchasing environmentally friendly products.
o Reaching consumers unaware of Lush skin care products.
o Difficulty raising awareness of UV protection to customers.
o High budget for promotion and R&D.
o Minimal channels of distribution.
Opportunities
o Attract Lush’s loyal customers that are willing to try new products
offered by Lush.
Copyright©Wei-Chen Wu & Stephany Treadway 2009
Lush Marketing Plan – Run Under the Sun Sunscreen 11
o Attract customers that want environmental friendly and organic
products.
o Capture the media’s attention and emphasize promotions to broadcast
Lush’s core beliefs.
o Cooperate with other corporations who are working to sustainability
and remedying the environmental crisis (e.g. Starbucks or Apple
Store).
o International growth potential
Threats
o Many competitors range from high-end brands to generic brands. Most
possible brands would be: Alliance Boots, The Body Shop, L'Occitane,
Burt’s Bee, and Bath & Body Works. (Homogenous stores)
o Competitors in other countries.
o Duplicate or knock-off products in other countries.
Substitutes of sunscreen (umbrella, hats, long-sleeve shirts...etc)
Product Offering
The primary sunscreen products for adults, children, and a sunscreen spray
for reapplication while on the go.
Keys to Success
Run Under the Sun Sunscreen is a unique sunscreen product and
exemplifies Lush’s mission statement and core beliefs. Lush will continue to
provide a percentage of their profits to their charity partners such as
Copyright©Wei-Chen Wu & Stephany Treadway 2009
Lush Marketing Plan – Run Under the Sun Sunscreen 12
Opportunitas Aequa, Sea Shepherd, Clean Ocean Action to name a few.
Giving back to the community demonstrates Lush’s corporate social
responsibility. The moral actions for a better community and their strong
core beliefs will lead Lush to success.
Marketing Strategy
Lush consistently lives and breathes their mission and core beliefs:
We Believe in making products from fresh organic fruit and vegetables,
the finest essential oils and safe synthetics.
We believe in buying ingredients only from companies that do not
commission test on animals and in testing products on humans.
We invent our own products and fragrances; we make them fresh by
hand using little or no preservatives or packaging, using only
vegetarian ingredients and tell you when they were made.
We believe in happy people making happy soap, putting our faces on
our products and making mums proud.
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.
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.
Source: http://www.lushusa.com/about/
Copyright©Wei-Chen Wu & Stephany Treadway 2009
Lush Marketing Plan – Run Under the Sun Sunscreen 13
Marketing Objectives
The objectives of the Run under the Sun marketing plan will provide
disseminate awareness of sun protection to the public and introduce them to
use Lush’s sunscreen products. Further, Lush will provide education on how
to use the new sunscreen products they are offering. It is important to
propagate Lush’s mission to consumers through marketing activities. Attract
potential new customers to all of Lush’s products.
Financial Objectives
The financial outcomes this project plan hopes to bring for Lush are:
Increase the product margin by 3% per quarter
Reach 13% growth from the first month of the launching year (May,
2009) to the end of 2010.
Maintain R&D budget to introduce more sunscreen products, e.g. safe
sunscreen for infants
Product Introduction
We will introduce Run Under the Sun Sunscreen in major cities across the
United States initially. With the revenues from the initial sales we will supply
other Lush retail stores located in other countries. We estimate approximate
three billion potential customers in over 50 countries for Lush to reach.
Positioning
Run Under the Sun Sunscreen is positioned as a sunscreen product that is all
organic, safe for consumers, and environmentally friendly due to a reduction
in the packaging and use of 100% recycled material for the bottles. The
Copyright©Wei-Chen Wu & Stephany Treadway 2009
Lush Marketing Plan – Run Under the Sun Sunscreen 14
product is also very functional and convenient. It is also important to raise
awareness of sun protection and health/skin protection.
Strategies
We will use different strategies in different countries.
General strategies (to all countries):
o Celebrity endorsements of the new Lush product
o Advertisement in local and national cosmetics magazines such as
Vogue, Fitness Magazine, GQ, or Cosmopolitan
o Have Lush sales associates to talk to customers about the
features of their sunscreen product
o Product placement marketing on popular TV shows and talk
shows
o Online advertising with online media, such as Facebook,
Myspace...etc.
o Sponsor sporting events, such as the volleyball or track events
o Push-pull marketing strategy: Promote Lush’s product to retailers
such as Macy’s, Target, Whole Foods, and Trader Joe’s to create
a consumer demand for Lush’s sunscreen. Also, by utilizing
pulling marketing strategy, Lush customers can be directed to
major retailers to purchase Lush products or through online
ordering.
International strategies:
Copyright©Wei-Chen Wu & Stephany Treadway 2009
Lush Marketing Plan – Run Under the Sun Sunscreen 15
o POP (point of purchase) display promotion at beaches, tanning
salons, gyms, and parks in North American and European
countries
o Nude campaign in metropolitan areas in European countries: a
nude marketing campaign to publicize the awareness of minimal
packaging and natural products
o In Asian countries, marketing campaign to show consumers
differences in wearing Lush’s and other brands’ sunscreen to
emphasize the superiority of Lush’s sunscreen.
Marketing Mix
Product: Run Under the Sun Sunscreen
Price: (US)
o For Adults: $25
o For Children: $20
o Sunscreen Spray: $25
o Spray Refill: $20
Place (Channels of Distribution):
o Online Store: to existing and potential customers
o Retail Stores: to existing and potential customers
o Mail Order: to existing customers
Promotion:
Copyright©Wei-Chen Wu & Stephany Treadway 2009
Lush Marketing Plan – Run Under the Sun Sunscreen 16
o Purchase three Run Under the Sun Sunscreen products for a
discount price
o Bundling discount (e.g. free shipping) to customers who buy the
products online and through mail order.
o Membership discount to our existing customers
o Providing coupons to the supporters of our every charity partners
o Distribute samples and product sheet in department stores and
retail stores
Marketing Research
Lush has monthly sales figure in the United States. Since Lush hand-makes
most products, they can stop making anything that doesn’t sell without a big
financial loss for wasted inventory. Lush also receives instant sales feedback
from retail shop managers. Sending mystery shoppers is also a marketing
research strategy used by Lush. The secret shoppers are volunteers from
Lush’s online customer forum.
Financial Projections and Analysis
Product Yearly Sales Forecast & Yearly Revenue Forecast:
Table 1 United States Lush Revenue Sales Forecast
Lush Yearly Sales Forecast (US, USD) Sales 2008 2009 2010 2011
$12,824,000 $13,593,440 $14,680,915 $16,149,007 Sources: Hoovers, Wei-Chen Wu & Stephany Treadway
Copyright©Wei-Chen Wu & Stephany Treadway 2009
Lush Marketing Plan – Run Under the Sun Sunscreen 17
Through examining the revenue sales forecast, a projected forecast for Run
Under the Sun sunscreen product yearly sales forecast covers three years
(2009-2011) as shown below in table 2
Copyright©Wei-Chen Wu & Stephany Treadway 2009
Lush Marketing Plan – Run Under the Sun Sunscreen 18
Table 2 US Product Yearly Sales Forecast
Lush Run Under the Sun Sunscreen Sales Forecast (US, USD)
Sales 2009 2010 2011Sunscreen-for adults $500,000 $565,000 $666,700 Sunscreen-for children $300,000 $324,000 $362,880 Sunscreen spray $400,000 $432,000 $483,840 Spray Refill $250,000 $270,000 $302,400
Total Sales$1,450,00
0 $1,591,00
0 $1,815,82
0 Direct Cost of Sales 2009 2010 2011Sunscreen-for adults $30,000 $31,200 $32,760 Sunscreen-for children $20,000 $20,800 $21,840 Sunscreen spray $25,000 $26,000 $27,300 Spray Refill $10,000 $10,400 $10,920 Subtotal cost of Sales $85,000 $88,400 $92,820
Sources: Wei-Chen Wu & Stephany Treadway
Expense Forecast
The expense forecast plans include monthly expense budget and milestones
expense forecast, as shown in table 3 and 4. Marketing expense budget plan,
as shown in table 3, will be used to control and monitor our marketing
activities. It will also be the indicator when the correction is needed for the
implementation of our marketing plan.
Table 3 Marketing Expense Budget
Lush Run Under the Sun Sunscreen Marketing Expense Budget (US, USD)
Budget 2009 2010 2011Website Update $1,000 $1,050 $1,155 Advertisements $50,000 $52,500 $57,750 Mail Order Catalogue $35,000 $36,750 $40,425 In-store printed material $12,000 $12,600 $13,860 Total Sales and Marketing $98,000 $102,90 $113,19
Copyright©Wei-Chen Wu & Stephany Treadway 2009
Lush Marketing Plan – Run Under the Sun Sunscreen 19
Expense 0 0 Percent of Sales 6.76% 6.47% 6.23%
Contribution Margin$1,267,
000 $1,399,
700 $1,609,
810 Contribution Margin/Sales 87.38% 87.98% 88.65%
Sources: Wei-Chen Wu &Stephany Treadway
Table 4 Milestones
Milestones Expense Budget Plan (US, USD)
MilestonesStart Date
End Date Budget
Department
Marketing Plan Completion 03/09/09 04/20/09 $0Marketin
g
Website Update 04/30/09 05/05/09 $900Marketin
g
Mail Order Catalogue Completion 03/10/09 03/30/09 $35,000Marketin
g
Ad Campaign 1– Print Ad in Magazines 05/05/09 06/30/09$250,00
0Marketin
gAd Campaign 2– Product Placement Campaign 07/01/09 08/31/09
$200,000
Marketing
Ad Campaign 3– Sporting Event Campaign 09/01/09 11/01/09 $50,000
Marketing
Total $535,90
0 Sources: Wei-Chen Wu & Stephany
Treadway
Control and Evaluation of Effectiveness
Controls
This marketing plan serves as a guide for the Lush Cosmetics. The following
areas will be monitored and responded to immediately if any problems arise:
Monthly and annual sales (by channels)
Monthly and annual revenue
Customer satisfaction
Copyright©Wei-Chen Wu & Stephany Treadway 2009
Lush Marketing Plan – Run Under the Sun Sunscreen 20
R&D- new product development
Implementation
The milestone expense budget plan shows the strategic plan of key
marketing programs that need to be implanted. They are required to be
controlled within the indicating budget. Table 4 shows the start and end
dates of each program.
Marketing Organization
XYZ Marketing Agent will be in charge of the Run Under the Sun Sunscreen
marketing activities.
Contingency Plan
A contingency plan is developed to deal with the existing competitors
and potential competitors. This may occur when a major competitor launches
a low-pricing marketing strategy. Another possibility for the contingency plan
to be implemented is when a potential competitor introduces a
homogeneous product with low-cost technology. We will initiate a short-term
low-cap bundling shipping discount for online and mail order customers.
In addition to the discount promotions, a concentrated campaign
focused on Lush retail stores will focus on educating customers of the
importance of sunscreen protection. The campaign will provide consumers
direct access to skin care experts or doctors for a question answer
educational session in Lush retail stores around the country. Based on the
outcome of these two promotions, we will revise the marketing plan as
needed.
Copyright©Wei-Chen Wu & Stephany Treadway 2009
Lush Marketing Plan – Run Under the Sun Sunscreen 21
Copyright©Wei-Chen Wu & Stephany Treadway 2009
Lush Marketing Plan – Run Under the Sun Sunscreen 22
References
Lush Cosmetics, 2009. Lush’s Mission. Retrieved Mar 23rd , 2009 from
http://www.lushusa.com/about/
ICMR Center of Management Research, 2009. Innovative Marketing
Strategies of Lush Fresh Handmade Cosmetics. Retrieved Mar 23rd ,
2009 from
http://www.icmrindia.org/casestudies/catalogue/Marketing/Innovative
%20Marketing%20Strategies-Lush%20Fresh%20Handmade
%20Cosmetics-Case%20Studies.htm
Ray Stern, 2008. Lush Cosmetics' Nude Promotion Draws Heat From Police In
Boston Area, But (Fortunately) Not In Scottsdale. Retrieved Mar 23rd ,
2009 from
http://blogs.phoenixnewtimes.com/valleyfever/2008/08/lush_cosmetics
_nude_promotion.php
Lush Cosmetics. Retrieved Mar 23rd , 2009 from
http://www.docstoc.com/docs/4992865/lush-cosmetics
Karl A. Harris, 2005. SUNSCREENS. KAH Specialty Products, LLC. Retrieved
from http://www.google.com/url?
sa=t&source=web&ct=res&cd=1&url=http%3A%2F%2Fwww.stephen-
herman.com
%2FKAH_01.ppt&ei=kJv0SdG9LaTyswPVxZzQCg&usg=AFQjCNHaFrMG
nQ-rFVo427bx2PGXGHgUUQ&sig2=ugxsdRND3ZylBsm42EqEMw
Copyright©Wei-Chen Wu & Stephany Treadway 2009
Lush Marketing Plan – Run Under the Sun Sunscreen 23
J F. Nash, P.R. Tanner, T.L. Grosick, M. Zimnawoda, M. Ryan, 2004. Sunscreen
Market Analysis: The Evolution and Use of UVA-1 Actives, The Procter &
Gamble Company. Retrieved from http://sunburntgel.com/?q=node/6
American Cancer Society, 2007. Skin Cancer Facts. Retrieved from
http://www.cancer.org/docroot/PED/content/ped_7_1_What_You_Need_
To_Know_About_Skin_Cancer.asp
Copyright©Wei-Chen Wu & Stephany Treadway 2009