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Lush Company is a retail store that is based in the United Kingdom. The company was started in 1994 by a husband and his wife whose names were Mark Constantine and Mo Constantine respectively.
Its first store was named Cosmetic House and was opened in Poole. The company sells beauty products such as gels, soaps, shampoos, and hair conditioners.
The company has positioned itself in the market such that it has been able to take a strategic competitive position. Lush has adopted a competitive strategy theory that highly favours it.
This article will analyse the strategy used by the company, its positioning, as well as its market segmentation.
Key differentiation/positioning for Lush Company
Differentiation is a strategy that has the ability to give business organizations a competitive advantage ahead of their rivals. It helps an organization position itself well over others in terms of competition (Jobber, 2012).
Lush Company has been able to position itself ahead of its rivals due to its differentiation strategy. The company produces all its beauty products using vegetation and fruits. Lush uses honey, flowers, synthetic oils, essential oils, as well as bee wax in its production.
It does not use animal fats, neither does it perform animal testing unless in the case of volunteers. This method of production defines its differentiation. Most beauty products, especially gels and oils, are produced using animal fats. There are people who do not like products made from animal fats.
In addition, production using animal fats is relatively expensive compared to vegetarian recipes.
The difference is because at times an animal has to be slaughtered for the fat to be accessed, meaning that the company has to buy the animals that are quite expensive compared to plants. This helps in profit maximization by lowering the cost of production.
Differentiation is all about doing things in a different way from others (Heacox, 2009). Lush Company produces its products using different ingredients from most of its competitors.
The world is turning to herbal products, thus any company producing herbal products is better positioned for the current and future market competition. The positioning of Lush Company has been excellent. The company has been able to open over 800 store outlets across 51 countries.
This has helped the company to expand its consumer base and boost its competitive position. Further, the company is well positioned to face the future marketing challenges by producing products whose demand is likely to increase significantly in the future.
The company has offered exceptional services to the beauty industry to an extent that it was awarded The Most Excellent Order of the British Empire (OBE) in the year 2010.
This is an award given by the Queen to an individual or an organization that has exhibited exceptional services that are seen to bring a positive influence or change in the society. The award further strengthened the company’s positioning in the market.
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Why the differentiation/positioning has been successful
It is possible for a company to produce differentiated goods or services, yet fail to achieve much success (Wormeli, 2007). However, the differentiation in the case of Lush Company has been effective to the extent that it has given the company great success in its marketing.
One of the major reasons why this differentiation has been successful is its use of herbs in its production processes. As mentioned earlier, many people prefer herbal products. This has been an advantage to Lush Company. Lush is an advocate of animal rights.
This has further helped it strengthen its position. The company has been involved in campaigns that advocate for animal rights and fund groups that are engaged in such campaigns.
Another factor that has strengthened its position is the many outlets that it has opened across nations. This helps the company expand its consumer base, increase its sales, and increase its profitability.
Marketing theory applied in the discussion
The marketing theory that is applicable in Lush Company’s analysis is the Porter’s generic strategy. This is the strategy that entails differentiation, cost leadership, and focus. The company’s success has been mostly due to its differentiation strategy.
Lush has been able to produce its beauty products in a different way from most of its rivals. Production using vegetarian recipe has been vital to its differentiation strategy (Eldring, 2009).
It is important to note that herbal products are said to be of more value in terms of nutrition compared to animal products. This is a factor that has led to many people preferring the products produced by Lush Company.
Most of the herbal products have a medicinal value, thus they usually affect the skin positively. The products help in addressing some of the skin problems. They also have a better impact on hair growth compared to animal products.
On cost leadership, the Lush Company’s products are well positioned compared to most competing products because plant ingredients are cheaper compared to animal ingredients (Kossowski, 2007).
This lowers the cost of production for the company and the price charged to consumers for the products. Consumers are always willing to pay less and get quality products. Lush fulfils this consumer want and increases their satisfaction in terms of cost.
Finally, focus strategy is also applicable in the marketing of products made by Lush Company. Most cosmetic products are targeted to the ladies. The company, therefore, focuses on females for the sale of its products.
Females buy cosmetics more compared to men, giving the company a competitive advantage. In addition, Lush products can be sold to people with high income, middle income, as well as low income earners.
Segmentation, Targeting and Positioning
Lush Company sells its products mostly to the ladies. It has segmented its market depending on gender and income level. The company has products that are affordable to all income level earners. In addition, it has products for both men and women.
Therefore, market segmentation for Lush Company is based on the level of income for customers, on top of gender. The company targets women mostly since they are the majority buyers of cosmetic products.
Therefore, its major target market is ladies, although it also has products for men in addition to those of women.
Finally, the positioning of the company in the market has been excellent. It is imperative to note that the beauty industry has many players in the market, thus it is highly competitive.
It is, therefore, important for the Lush Company to ensure that it positions itself strategically to win the competition battle. The company has been able to establish a strong position in the market based on its differentiation strategy and its cost leadership (West, Ford, & Ibrahim, 2009).
Lush is well positioned ahead of most of its competitors. It has operations in many locations. This further strengthens the company’s position by increasing the consumer base. Therefore, Lush is a leader in the market in terms of position.
Eldring, J 2009, Porter’s (1980) generic strategies, performance and risk: An empirical investigation with German data, Diplomica-Verl, Hamburg
Heacox, D 2009, Making differentiation a habit: How to ensure success in academically diverse classrooms, Free Spirit Publishers, Minneapolis, MN
Jobber, D 2012, Principles and practice of marketing, McGraw-Hill Publishers, New York, NY
Kossowski, A 2007, Strategic management: Porter’s model of generic competitive strategies – theory and analysis, GRIN Verlag GmbH, München
West, DC, Ford, J, & Ibrahim, E 2010, Strategic marketing, Oxford University Press, Oxford
Wormeli, R 2007, Differentiation: From planning to practice, grades 6-12, Stenhouse Publishers, Portland