Download Lush Run Under the Sun Sunscreen Marketing Plan

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
Logo Modified by Miguel Zuleta
Copyright©Wei-Chen Wu & Stephany Treadway 2009
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.
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.
Copyright©Wei-Chen Wu & Stephany Treadway 2009
Lush Marketing Plan – Run Under the Sun Sunscreen 4
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.
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
Copyright©Wei-Chen Wu & Stephany Treadway 2009
Lush Marketing Plan – Run Under the Sun Sunscreen 5
40% Do not
apply
sunscreen
28% Reapply
after 2 hrs
QuickTime™ and a
TIFF (Uncompressed) decompressor
60% apply
are72%
needed
to see this picture.
Do
sunscreen
not reapply
at all
Source: Centers for Disease Control (CDC). May, 2007.
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
Copyright©Wei-Chen Wu & Stephany Treadway 2009
Lush Marketing Plan – Run Under the Sun Sunscreen 6
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
 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.

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.
Copyright©Wei-Chen Wu & Stephany Treadway 2009
Lush Marketing Plan – Run Under the Sun Sunscreen 7

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 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
Copyright©Wei-Chen Wu & Stephany Treadway 2009
Lush Marketing Plan – Run Under the Sun Sunscreen 8
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.
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
Copyright©Wei-Chen Wu & Stephany Treadway 2009
Lush Marketing Plan – Run Under the Sun Sunscreen 9
o Attract Lush’s loyal customers that are willing to try new products offered by Lush.
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 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:
Copyright©Wei-Chen Wu & Stephany Treadway 2009
Lush Marketing Plan – Run Under the Sun Sunscreen 10
 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/
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
Copyright©Wei-Chen Wu & Stephany Treadway 2009
Lush Marketing Plan – Run Under the Sun Sunscreen 11
 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 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
Copyright©Wei-Chen Wu & Stephany Treadway 2009
Lush Marketing Plan – Run Under the Sun Sunscreen 12
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:
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 13
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
Sales
2008
$12,824,000
Lush Yearly Sales Forecast (US, USD)
2009
2010
2011
$13,593,440
$14,680,915
$16,149,007
Sources: Hoovers, Wei-Chen Wu & Stephany Treadway
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 14
Table 2 US Product Yearly Sales Forecast
Lush Run Under the Sun Sunscreen Sales Forecast (US, USD)
Sales
2009
2010
2011
Sunscreen-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
$1,450,000
$1,591,000
$1,815,820
Direct Cost of Sales
Sunscreen-for adults
Sunscreen-for children
Sunscreen spray
Spray Refill
2009
$30,000
$20,000
$25,000
$10,000
2010
$31,200
$20,800
$26,000
$10,400
2011
$32,760
$21,840
$27,300
$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
2011
Website 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 Expense
Percent of Sales
Contribution Margin
Contribution Margin/Sales
$98,000
6.76%
$1,267,000
87.38%
$102,900
6.47%
$1,399,700
87.98%
$113,190
6.23%
$1,609,810
88.65%
Sources: Wei-Chen Wu &Stephany Treadway
Copyright©Wei-Chen Wu & Stephany Treadway 2009
Lush Marketing Plan – Run Under the Sun Sunscreen 15
Table 4 Milestones
Milestones
Marketing Plan Completion
Website Update
Mail Order Catalogue Completion
Ad Campaign 1– Print Ad in Magazines
Ad Campaign 2– Product Placement Campaign
Ad Campaign 3– Sporting Event Campaign
Milestones Expense Budget Plan (US, USD)
Start Date
End Date
Budget
Department
03/09/09
04/20/09
$0
Marketing
04/30/09
05/05/09
$900
Marketing
03/10/09
03/30/09
$35,000
Marketing
05/05/09
06/30/09
$250,000
Marketing
07/01/09
08/31/09
$200,000
Marketing
09/01/09
11/01/09
$50,000
Marketing
Total
$535,900
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

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.
Copyright©Wei-Chen Wu & Stephany Treadway 2009
Lush Marketing Plan – Run Under the Sun Sunscreen 16
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 17
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%20
Strategies-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/lushcosmetics
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%2Fww
w.stephenherman.com%2FKAH_01.ppt&ei=kJv0SdG9LaTyswPVxZzQCg&usg=AFQjCNHaFrMG
nQ-rFVo427bx2PGXGHgUUQ&sig2=ugxsdRND3ZylBsm42EqEMw
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_A
bout_Skin_Cancer.asp
Copyright©Wei-Chen Wu & Stephany Treadway 2009