marketing audit
pmie
AS1LushAuditexample1_assignmentsample.pdf
Faculty of Business & Law
Student Name
Student ID
MKTM028
Strategic Marketing
Lecturer:
Table of Contents
1.0 Introduction ............................................................................................................. 4
2.0 Macro Analysis ........................................................................................................ 5
2.1 PEEST ................................................................................................................ 5
2.1.1 Social .......................................................................................................... 5
2.1.2 Environment ............................................................................................... 6
3.0 Micro Analysis ......................................................................................................... 7
3.1 Markets ............................................................................................................. 7
3.2 Customers ........................................................................................................ 8
3.3 Competitors ..................................................................................................... 8
3.3.1 Porter’s 5 force Analysis .......................................................................... 8
3.3.1.1 Bargaining Power of Suppliers .................................................. 9
3.3.1.2 Threat of New Entrant ................................................................. 9
3.3.2 Competitor Perceptual Map ..................................................................... 9
4.0 Internal Analysis .................................................................................................... 10
4.1 Strategy review .............................................................................................. 10
4.2 Functions review ............................................................................................ 11
4.3 Productivity review ......................................................................................... 12
5.0 TOWS and Strategic Analysis ............................................................................. 13
5.1 TOWS .............................................................................................................. 13
5.2 Strategic Analysis .......................................................................................... 14
i. References ............................................................................................................... 15
ii. Appendices ............................................................................................................. 19
Appendix 1: Company Overview ........................................................................ 19
Appendix 2: Macro Analysis: PEEST ................................................................. 20
Appendix 3: Micro Analysis: Customer Segmentation, 5 Forces and Competitor
Perceptual Map ..................................................................................................... 21
Appendix 4: Internal Analysis: Marketing Capabilities, Marketing Assets, 7Ps
and CBBE Model ................................................................................................... 23
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1.0 Introduction
This purpose of this assessment task is to audit the marketing performance of Lush
Cosmetics Limited by focusing on Fragrance sector in the United Kingdom market only
(Full company overview is provided in Appendix1). The report will analyse the external
and internal factors to identify the key strategic for the company. By examine the macro,
micro, internal environment and then providing a TOWS summary and key strategic
challenges insights.
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2.0 Macro Analysis
2.1 PEEST
A Full PEEST analysis is provided in Appendix2. With this section will be discussed only
social (S) and environment (E).
2.1.1 Social
Nowadays, customers are concerning more about ethical and moral of the company
before buying the products which is opportunity for the company. Figure 1 shows there
are 47% of customers says that brand ethicality is a major factor when buying beauty and
personal care products (Mintel, 2019a).
For the reason of opportunity, Lush is the most ethically brand in the market as shown in
Figure 2. For the fragrances, they are 100% natural and some are made up of 60% natural
oils, resins and absolutes (Lush, 2019a).
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2.1.1 Environmental
Plastic pollution is also an opportunity to the company, as it is one major of environmental
concern. In Figure3 shows 51% of customer is interesting in plastic-free stores and there
are 43% who interesting in stores which is packaging-free (Mintel, 2018a). Mostly of Lush
products are naked product or packed with nothing (Dang,2018). Moreover, the company
has launched the first naked shop in Manchester, UK which is selling product with no
plastic packaging (Lush,2019b)
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3.0 Micro Analysis
3.1 Markets
The market trend now is an opportunity for the company as Figure4 shows that fragrances
market in 2018 was at 1.48 billion pounds, and it was estimated to increase in 2023 to
1.51 billion pounds which means that the demand of customer is increasing (Mintel,
2018b).
Moreover, Fragrances is the most recent market growth according to the growing trend
of unisex and a need for natural ingredients of customers has given an environmental
company became a leader, while others get left behind as shown in Figure 5. (Mintel,
2018b)
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3.2 Customers
There is a threat to the company as the main target customers is a niche demographic
which focuses on women who has age between 16-24 years old as shown in Figure 6.
Moreover, the company target on a person who born in Generation Y and Baby Boomer
which have creative and fun personality and vegetarian lifestyle.
However, there is also be an opportunity as their customers are concerning more on
health problem such as non-chemical products (Lin et. al., 2018). When they are buying
product through stores, they want high level of services and explanation from salesperson
and they love to experience the product before buying. In Lush shops, salesperson is
willing to help and provide how to use the product and customers can tested them whether
they like it or not which it can be an opportunity for the company (Please see more details
in Appendix3A).
3.3 Competitors
3.3.1 Porter’s 5 force Analysis
A Full Porter’s 5 force is provided in Appendix3B. With this section will discussed only
bargaining power of supplier and threat of new entrant.
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3.3.1.1 Bargaining Power of Suppliers
The bargaining power of suppliers is Low, it is an opportunity to the company as Lush
have a wide range of suppliers in many countries and the company can adapt their
product formula according to any circumstance. Moreover, they are investing in growing
of their own raw materials for long term benefit. (Lush,2018a)
3.3.1.2 Threat of New Entrant
The Threat of new entrant is high for the fragrance industries which is threat to the
company. According to market growth and low capital of investment, it is easy for other
competitors to come in the market and make the market become more competitive
(Mintel,2018b).
3.3.2 Competitor Perceptual Map
According to Appendix 3B, the positioning map shows the direct competitors that offer
similar products and position which are The Body Shop and Origins.
The Body Shop was operated under L’Oréal brand which offers natural ingredients and a
large product mix. It has the highest sales among others even though it has a smaller
number of shops than Origins. Origins is operated under Estee Lauder brand which
focusing on environmental manufacturing process. It has highest number of shop but
sales are lower than The Body Shop.
On the other hand, Lush has the smallest sales and the minority number of shops which
it can be threat to the company. However, Lush tried to differentiate from others by
providing story about their products. It creates Lush Kitchen where customers can easily
get information about the products and able to buy a limited product (Vizard, 2014).
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4.0 Internal Analysis
4.1 Strategy Review
This section will explain the strength and weakness of the company by using marketing
capabilities and marketing assets models. The full models are provided in Appendix4A
and Appendix 4B.
The company has significant strength which is strong brand positioning that focusing on
100% vegetarian brand, against animal testing and the company is also a packaging free
product and stores. Moreover, the company has high quality of salespersons as they have
knowledgeable and kindness which makes the company has strong relationship with
customers.
On the other hand, the company also has some weakness which they have focus on a
specific group of customers and the product has short lifetime.
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4.2 Function Review
This section will explain the strength and weakness of the company by using marketing
assets and 7Ps models. The full models are provided in Appendix 4B and Appendix 4C.
The company has an important strength which is superior quality and innovative products
and the company also has a strong relationship with customers according to high quality
of salespersons.
However, the company has some weakness which is the price of products are high and
the company has lower shop than other competitors. Furthermore, the company provides
less promotion to customers.
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4.3 Productivity Review
According to CBBE model in Appendix 4D, the company was positioned as an ethical
company with vegetarian and freshest handmade products which it can be threat to the
company as it is focus to specific group of customers and the product lifetime is short.
However, after customers use the products, they will feel modern and fashionable
according to the creativity and innovative of the product, it is a strength of the company.
Moreover, they will perceive the brand as a high-quality product and they would love to
be a part of helping society by using the products that are no animal-testing.
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5.0 TOWS and strategic analysis
5.1 TOWS analysis
This section provides the linking between opportunities, threats, strengths and weakness.
External Opportunities 1. The increasing demand of vegan,
ethical and environmental products (H)
2. Plastic Pollution concern (M) 3. The number of buying online is
increasing (L) 4. Customers concern more on
services of salesperson (L)
External Threats 1. The market is competitive and
arrival of competitors (H) 2. Niche geographical (M) 3. Social Media Network trends (The
company do not have social media channel except company website) (L)
4. Growing trend of Unisex 5. Competitors have higher shop and
sales
Internal Strengths 1. Ethical brand and
100% vegetarian (H) 2. Superior quality and
innovative products (H)
3. Strong customer relationship (H)
4. Good quality of salesperson (Knowledgeable and Friendly) (M)
5. Good at public relation (L)
Strengths-Opportunity strategy
• (S1, S5, O1, O2) Develop more on brand awareness to make customer know and trust about their ethical products by doing more advertising and doing more on public relation
• (S3, O3) Offer more promotion for existing customer and new customer if they are buying online such as free delivery or free gift if the it reached minimum order.
• (S4, O4) Encourage salesperson to satisfy customer needs
Strengths-Threats strategy
• (S2, S3, T1, T4) Try to develop the quality and creativity of product to retain customer relationship and get more new customers
• (S4, T2) Encourage salesperson to attract customers not only interested customer but also everybody
• (S5, T3) Doing more public relation to create word of mouth instead of advertise through social media channel
Internal Weakness 1. Specific group of
customers (M) 2. High price (M) 3. Lower Stores than
competitors (M) 4. Lifetime of product is
short (L) 5. Provides less
promotion
Weakness-Opportunity strategy
• (W1, O1) Promoting more on product that position in ethical and vegan to catch the interest from customers
• (W2, W4, O1, O2) Present that the product price is reasonable with the quality of ethical products and acknowledge customers that the freshest product will have a short life time
• (W3, W5, O3) Providing more promotion and campaign on online shopping and continue development online channel
Weakness-Threats strategy
• (W1, T2, T4) Expand more product line to get more customers such as fragrance for unisex or men
• (W2, T1) Develop the quality of product in order to remain the high price without creating the price war with competitors
• (W3, T3) Expand more stores to create brand awareness and doing more events
Remark: H = High significant, M = Medium significant, L = Low significant
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5.2 Key Strategic Challenges
1. Brand awareness: Develop brand awareness by doing more advertising and
public relation to become the most ethical brand that help to develop the society.
The company should collaborate with a well-know charity or hiring a famous person
to promote their brand.
2. Quality and creativity: Maintain the quality of products and try to create new
attractive and interesting product for customers. The company should differentiate
design of products by hiring a creative designer.
3. Promotion: Doing more promotion for online shopping such as free delivery or
discount for bulk buying. Moreover, the company should develop company website
to be more interesting for attractive online customers.
4. Product line: Expanding more product line to get more customers such as
fragrance for men or unisex according to the increasing trend of unisex
5. Salesperson: Developing salesperson to keep relationship with customers and
able to close the deal with interested customers by providing more training and
giving some incentive to their salespersons.
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References:
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https://www.bbc.co.uk/news/technology-47871948 [ Accessed 20th October 2019].
Dang, B. (2018). EU competitor benchmarking of cosmetic primary packaging in rigid jar
form. Case company: Sulapac.
Williams, D. (2019), Lush store investments and innovations bring strong year results.
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network.com/news/lush-store-innovations-results/ [ Accessed 20th October 2019].
Elca (2018), 2018 annual report, elcompanies [online]. Available from:
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October 2019]
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Lin, Y., Yang, S., Hanifah, H. and Iqbal, Q. (2018). An Exploratory Study of Consumer
Attitudes Toward Green Cosmetics in the UK Market. Administrative Sciences, 8(4), p.71.
Lush (2018), Lush Cosmetics Limited Annual report year ended 30 June 2018.
companieshouse [online]. Available from:
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October 2019]
Lush (2019a), Perfume, Lush [online]. Available from:
https://uk.lush.com/ingredients/perfume [ Accessed 27th October 2019].
Lush (2019b), Lush Naked Shop: Inside the packaging-free cosmetic stores, Lush
[online]. Available from: https://uk.lush.com/article/lush-naked-shop-inside-packaging-
free-cosmetic-stores [ Accessed 27th October 2019].
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Lush (2019c), Animal Testing: Our policy, Lush [online]. Available from:
https://uk.lush.com/article/animal-testing-our-policy [ Accessed 20th October 2019].
Lush (2019d), Charity Support, Lush [online]. Available from:
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2019].
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iii. Appendices
Appendix 1: Company Overview
20
Appendix 2: Macro Analysis
21
Appendix 3: Micro Analysis
Appendix 3A: Customer segmentation
Appendix 3B: Competitor Model: Porter’s 5 Force Analysis
22
Appendix 3C: Competitor Model: Competitor Perceptual Map
Data Table
23
Appendix 4: Internal Analysis
Appendix 4A: Marketing capabilities
Appendix 4B: Marketing assets
24
Appendix 4C: 7Ps
Appendix 4D: CBBE Model
