StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...
Free

Consumer Behavior: Lush Cosmetics, Australia - Case Study Example

Cite this document
Summary
This case study "Consumer Behavior: Lush Cosmetics, Australia" focuses on a cosmetic producing and marketing firm. The company’s name resulted from a competition that took place with fledgling firms. Deciding on Lush and Curiosity Mrs. Elizabeth Bennett and the team agreed on giving the name…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER92.5% of users find it useful

Extract of sample "Consumer Behavior: Lush Cosmetics, Australia"

Consumer Behavior Report Lush Cosmetics - Australia Lush is a cosmetic producing and marketing firm. The company’s name resulted from a competition that took place fledgling firms’ first catalogue and handmade newsletter. Deciding on Lush and Curiosity Mrs. Elizabeth Bennett and her team agreed on giving the firm the name. Lust has since then grew up to be an international company that believe is producing fresh, organic vegetables and fruit finest indispensable safe and oil synthetics. Lush believes in inventing its own fragrances and product by making them fresh by hand by use of no or little packaging or preservative utilizing use of vegetable ingredients indicating the date they were manufactured. Lush believe in the voice of the customer and therefore produces good, quality and profitable products that makes its organic and fresh product have meanings running beyond marketing. Lush is therefore still running different factories globally making it stay friendly and accessible by hand making fresh and organic products. The company progressively developed, and with time it bought back all the formulas and names from both Constantine and weir and Cosmetic to Go. Lush has since then promoted cosmetic industry steps without avoiding taking environmental responsibility. Following three years of growth, the firms first Spa Opened in London Kings Road and today, Lush have 650 stores with many factories in above 40 countries globally. The firm has also employed over 6000 employees working the firm in selling soaps in its outlets. The firm pride is one that is original, dynamic and progressive (Bateman, 2002). New Consumer Product or Service Lush products are categorized depending on its use; we have tooth tabs products, going son products, shower products, bathing products, face products, hair products and perfumes. Issues Facing Consumers in Adopting this New Product or Service Supply and Demand Issues Supply and demand law illustrates the connection that exists between demand, supply and prices of firms new and existing products. An increase in demand result to an increase in price. This relationship makes suppliers producing for such market not only to stabilize products prices but also keep healthy demand levels for consumer products. These variables affect consumer behavior since increase product price results to decrease for its demand (Bateman, 2002). Supply and demand is one of the issues that now days influence adoption of new products in the market. This research study have started by laying out the requirements and necessities that Lush cosmetic needs for successful introductions and operation of new products in the market. This involves analysis of new product business development strategies and models. Reliable and effective business development model comprises of ways in which the business operates, its foundations, its cost models, value of new product development process, creation and production components, distribution mechanisms and activities, financial flows and exchange activities. They also include potential benefits descriptions and revenue sources for varied strategic business units (Bateman, 2002). Adoption of new product in the market depends largely on its supply and demand, for this to be successful a basic business model should be put in place by the firm. Lush cosmetic basic element model should enable the firm to have revenue stream facilitating its survival and growth in the market. For this case a fundamental source should be consumers, advertisers, parent company products, ecommerce activities of the company operating new products and services as an extension of existing products and Services. Therefore Lush Strategic Business Supply and demand Model should be constructed in a manner that provides required revenue for its survival and growth (Bateman, 2002). Role of Top Management Lush Cosmetic urge investment in new products and service development corresponds a larger change in the firms’ management mindsets. These investment are extensive from the point of view that the of Lush cosmetic itself. Lush cosmetic is an Australia profit making project. Management failure to recover a large part of this huge investment could have a serious impact to this company’s products. As compared to other top involvement by top Management by CEOs of firms such as Venu Srinivasan of TVS and Ratan Tata of Telco, Lush cosmetic have been featured not to be a large investor in new product development in Australia. While the overall investment involvement is made up of top management, the important fact is the nature of the top management involvement (Klein, 2002). Customer’s feedback shows that shows that 80% of the product costs lifecycle are determined by top management decision on early stages of new product development. This shows that if top management is to contribute to project effectiveness management has to get involved early. This is the part that Lush Cosmetic top management has failed. At the same time, Lush Cosmetic top management has to abstain from second guessing the firms’ line managers who are more probable in better understanding of Australia’s domestic market (Klein, 2002). Lush Cosmetic managerial traditions of delegating authority and pushing the decisions made up the hierarchy contextually can be dangerous. Nature and size of Lush Domestic market One of the major barriers facing Lush cosmetic’s product development in Australia is the size of Lush’s domestic market. Domestic market is large in form of raw materials but several products are facing limited off-take due to high price sensitivity and limited purchasing power. Some materials are classier and hence expensive by the current prevailing standards and one can only get some affordable ingredients and machinery by hire or acquisition through the public institutions. Lush Cosmetics had in its initial stages managed to make do with the less sophisticated production materials even with lower investment but this has turned out to be faltering. One other Australian company attempted to make its way into the market by using vendors with moderate production processes as this could only incur a relatively low cost but this did not become fruitful as it also needed a better processing skill and equipment which in turn would cause the vendors to invest more. The vendors’ reluctance to make more investments affected most of the company processes. Since the firm had maintained a lasting relationship with its vendors, it was unwilling to continue in this direction. Improving the product development here proved futile (Maignan, 2001). Australian consumers have mostly been exposed to other similar global products with finer qualities and hence raised their expectations of the local product of the same kind. Sustaining this consumer satisfaction requires more input and more sophistication in the production processes. Understanding the user needs and expectations of the products will go a long way in assisting a company to meet its target market (Maignan, 2001). Management of Research and Design Subject to the provisions of the Act, the Organization has the authority to do all such things as are necessary, incidental that are conducive to the achivement the objectives of the Organization and shall be deemed to include, but without limitation: Raise funds, initiate and receive contributions, gifts and donations from Christian church Lush Cosmetics, individual Christians and the donor community at large to achieve its objectives (Mohr, 2001). To arrange and provide for or join in arranging and providing for the holding of lectures, classes, exhibitions, meetings, counseling and other appropriate community support services in furtherance of the objectives of the Lush Cosmetic or any of them. The printing and publishing of such leaflets and other documents as the Lush Cosmetic may think desirable for the promotion of the objectives of the Lush Cosmetic including literature on Christian teaching and values (Mohr, 2001). Procure contributions by personal or written appeals, public meetings or otherwise but no permanent or regular trading shall be undertaken. This section relates to the buying and selling of equipment required carrying out the function of the Lush Cosmetic. The loaning and raising of cash and securing the repayments of such monies in such manner as the Lush Cosmetic may think fit and to redeem and pay off any such securities as necessary. To invest and deal with the moneys of the Organization not immediately required upon such investments as are from time to time by law authorized for the investment of moneys held on trust and in such manner as may periodically be determined by the Board (Mohr, 2001). To open and keep open a banking account or banking accounts to be operated by such person or persons as the Board may occasionally determine and to arrange, maintain and repay any overdraft advances held by the Organization with any bankers. To appoint, employ and pay such full time, part time, permanent, temporary officers, employees and servants of the Organization, as the Board may deem necessary often to carry on the task of the Lush Cosmetic. To suspend or dismiss such full time, part time, permanent, temporary officers, employees and servants of the Organization as the Board deem necessary from time to time. To arrange, maintain and pay insurance on all of the property of the Organization whether real or personal and such contents, cash in transit, public and professional liabilities, building and contents, workers compensation and other appropriate insurances as the firm may find vital from occasionally. To give, donate or subscribe money or personal property of the Organization and provide profits to attainment of the objectives of the Organization (Mohr, 2001). Purchase, lease or in exchange hire or acquire any property and any rights needed for the promotion of the said objectives and construct, maintain or alter any buildings or erections necessary for its work. To enter into negotiations, contracts and engagements in relation to the conduct and management of the affairs of the Organization and any such contracts or engagements to rescind and vary and to carry out and do finish all such acts Mohr, Organization and powers of the Lush Cosmetic as specified in the foregoing provisions (Mohr, 2001). a.) All officers of the Lush Cosmetic are appointed by the Board as required from time to time, provided that officers with status less than that of the Chief Executive/Director shall be elect and recommend of the Director. Recommendations and Conclusion For Lush Cosmetic to create successful business and improve its viability in the market, the firm will need to employ the use of media and modern communication technologies even though it’s a more difficult exercise than mere development of good new products and services. It involves creating a business plan that will offer new and reliable products that are affordable and communicated to consumers through the right media and communication technologies. Cosmetic consumers need to be convinced since their behavior towards the firm’s products involves their time and money. If Lush Cosmetics new products are to become successful in the market globally, its commercial activities, services and its policy makers promoting these products should devote more attention and resources to the main and general consumers targeted in the market (Wang, 2012). The firm should recognize limits to acceptance of new promotional technologies and plan accordingly. Lush Cosmetics’ needs to target the groups of consumers in the market more selectively and persuade states to consider policies and regulations that respond to the market failure for new products and services that are more significant for political and social goals. There is great potential in new product development particularly when promoted using the modern ICT technologies; therefore Lush Cosmetics should realize that adopting to new technological environment and to view it realistically within the market economic constraints that are to be introduced to support organizations new products (Wang, 2012). The company has got to put more time and resources into research and industrial innovation. Studies have recognized a significant improvement in the product competitive advantage among countries that devote more resources into industrial innovation by smaller groups as well as by their local governments (Wang, 2012). References: Bateman, C. (2002). Framing effects within the ethical decision making process of consumers, Journal of Business Ethics 36, 119 Klein, G. et al. (2002). Why we boycott: Consumer motivations for boycott participation and Marketer responses. Working paper, London Business School, Centre for Marketing 24 Maignan , I. and Ferrell, C. (2001), Corporate citizenship as a marketing instrument - Concepts, Evidence and research directions, European Journal of Marketing 35, 457 Maignan , I. (2001). Consumers' perceptions of corporate social responsibilities: A cross-cultural comparison, Journal of Business Ethics 30, 57- Mohr, A. (2001). Do consumers expect companies to be socially responsible? The impact of corporate social responsibility on buying behavior, The Journal of Consumer Affairs 35, 45- Mowen, J.C. and Minor, M.S.: 2001, Consumer Behavior, Upper Saddle River Polonsky, J. et al. (2001). Consumer ethics in the European Union: A comparison of Northern and Southern views, Journal of Business Ethics 31, 117Rallapalli, Brooker, E. (2012). 'Innovation within the Australian outdoor hospitality parks industry', International Journal of Contemporary Hospitality Management, vol. 24, no. 5, pp 682- 700. Chernev, A. (2012). 'Customers Will Pay More for Less', Harvard Business Review, vol. 90, no. 6, pp. 30-31. Kaefer, F. Heilman, M. & Ramenofsky, D. (2012), 'The impact of a wife's budgetary and romantic attitudes towards luxury goods on their self-purchases and purchases made for them by their husbands', , vol. 19, no. 3, pp. 297-303. Ma, J. (2012) 'Young female consumers' intentions toward fair trade consumption', International Journal of Retail & Distribution Management, vol. 40, no. 1, pp. 41-63. Walters, G. (2012),'The Impact of Consumption Vision and Emotion on the Tourism Consumer's Decision Behavior,' Journal of Hospitality & Tourism Research, vol. 36, no. 3, pp. 366- 389. Wang, W. (2012). 'A Study on Consumer Behavior for Green Products from a Lifestyle Perspective', Journal of American Academy of Business, Cambridge, vol. 18, no. 1, pp. 164-170. Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(Lush Cosmetic - Creating a Successful Business and Improving Its Viabi Case Study, n.d.)
Lush Cosmetic - Creating a Successful Business and Improving Its Viabi Case Study. https://studentshare.org/marketing/2037529-mmk266-consumer-behaviour-research-report
(Lush Cosmetic - Creating a Successful Business and Improving Its Viabi Case Study)
Lush Cosmetic - Creating a Successful Business and Improving Its Viabi Case Study. https://studentshare.org/marketing/2037529-mmk266-consumer-behaviour-research-report.
“Lush Cosmetic - Creating a Successful Business and Improving Its Viabi Case Study”. https://studentshare.org/marketing/2037529-mmk266-consumer-behaviour-research-report.
  • Cited: 0 times

CHECK THESE SAMPLES OF Consumer Behavior: Lush Cosmetics, Australia

Consumer Behaviour

lush cosmetics is a company in Australia that deals with the production of cosmetics, which include body lotions, deodorants, body oils and skin tones.... lush cosmetics has developed men's lotion as a start of diversification of its product line.... Name of Student: Topic: consumer behavior Lecturer: Date of Presentation: Introduction consumer behavior can be defined as the study of decisions made by consumers with respect to when, where and how to purchase and dispose products....
5 Pages (1250 words) Assignment

Consumer Response to the Issues Identified

CONSUMER BEHAVIOUR Instructor University CONSUMER RESPONSE TO THE ISSUES IDENTIFIED: In order to identify the feasibility of the product line extension strategy of lush cosmetics, a primary research on consumer's response to the factors identified above is imperative.... ... ... ...
5 Pages (1250 words) Assignment

Body shop case study, part 2

BODY SHOP CASE STUDY -2 Executive Summary This paper represents detailed analysis of consumer behavior and consumer response on Body Shop.... consumer behavior regarding a particular product is one of the important factors to manage the brand.... Table of Contents Introduction 4 Data collection and analysis 5 Findings 6 Mind map analysis 8 Competitive market position 9 Brand extension 10 Marketing momentum in australia 11 Conclusion 12 Reference 13 Introduction Body Shop is an international beauty products brand....
12 Pages (3000 words) Assignment

The Changes in the Consumer Behaviour of Female Consumers in Regard to Online Shopping of Cosmetics

From the paper "The Changes in the Consumer Behaviour of Female Consumers in Regard to Online Shopping of cosmetics" it is clear that generally, female consumers are increasingly using the internet for shopping for their favorite cosmetic brand and products.... Females are mostly emotionally attached to cosmetic products and to influence them to make a purchase is the aim of the cosmetics industry.... With a market size of billions of dollars, the cosmetics industry and its retailers are essential to provide customers the product that they require....
20 Pages (5000 words) Essay

MARKETING COMMUNICATIONS REVIEW

If we analyze then we come to know that international marketing has become an extremely significant concept for businesses in the world where international deal is a common thing and that expanding trade outside the domestic market is the next rational step for prominent companies in today's trade norm for survival and success....
12 Pages (3000 words) Essay

Understanding consumer decision process

he consumer behavior ... The consumer behavior encompasses the practices involved in the sales of any products in the market.... ersonal items such as pharmaceuticals, cosmetics and perfumes are items that are widely available in the market.... To be able to better demonstrate the behavior of the consumer with regards to the choices made in buying any goods in the market, a certain product is chosen and studied.... In the study of the marketability of any products, an important focus is given to the behavior of the consumers....
16 Pages (4000 words) Essay

Cosmetics Market Analysis

The market is in Europe, the Americas, Asia, and australia.... This essay "cosmetics Market Analysis" presents Levi Strauss as a good presence in the apparel market.... nternationally, the cosmetics and fragrance market is the domain of the affluent and the middle class.... cosmetics and fragrance are products of personal preferences and the packaging is as important as the product.... onal cultures have a role in the preference for cosmetics and fragrance....
7 Pages (1750 words) Essay

When Brand Power Threatens Brand Extension

There are more than 300 companies in Virgin Group's portfolio and the operations are expanded to more than 30 nations across australia, Africa, Europe, North America.... he group has been targeting its goods and services to consumers in different geographic regions such as australia, Africa, Europe, North America and Asia....
10 Pages (2500 words) Case Study
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us