retailers discontinue products that are no longer viable in the market and
customers who were devoted to those products are forced to move on. LUSH,
however, does something unique by offering its discontinued products (‘retro
products’), online. Customers can use the LUSH website to find retro products
and order them directly to their home.
Differentiation: As a shopping product, LUSH needs to make a
greater investment to differentiate it from other products; however, Bath bombs
are patented by LUSH (International Patent No.
A61K8/02, A61Q19/10, 2013). From the first
simple recipe to various splendid formulas of products, LUSH is continuously
investing to innovate new selections of bath bombs with distinct colors, innovative
designs and unique scents. The introduction of new products offers customers
constant freshness and new experiences. LUSH does not purchase animal-tested
ingredients, nor do they test on animals themselves. Bath bombs are 100 percent
free of packaging, totally vegetarian, and handmade making LUSH stand out in
the cosmetics industry.
its core values, LUSH is known for its uniquely quirky copywriting. The brand
has ramped up its efforts in this area with product descriptions becoming a
huge focus of its online store. LUSH’s product descriptions combine both puns
and rhymes with practical information. From ‘You’ve Been Mangoed’ to ‘Granny
Takes a Dip’, the brand names of the products range from the unusual to
ridiculous (Gilliland, 2016). And consumers eat it up.
is important to every company because it deeply impacts revenue and profit.
Elements of pricing include cost, demand, competition, and elasticity. There
are three types of bath bombs priced under $5, thirty-five types between $5-10,
and one type between $10-25. Products are priced by weight, which is usually
price includes costs and product overhead; For example, the price of one bath
bomb named “Snow Fairy” which weighs 180g is $7.95. We assume its cost is
$3.80, then the company retains $4.15. The bath bomb’s cost is higher than most
other company’s bath bombs because the ingredients of the product are organic,
ethical, and the product is handmade. When making pricing decisions for bath
bombs, LUSH seems to adopt a profit-oriented approach which looks to maximize
price based on the competition and perceived value as its price objective. So,
the price of LUSH bath bombs is higher than most of its competitors.
are two reasons for this – the first being command of the market. People care
about their health and the environment and the features of LUSH’s Bath Bomb
meet these needs. The second reason is that innovation and high quality of bath
bombs create a lot of brand-conscious, impulsive, and loyal customers. It can
be assumed that LUSH uses the prestige pricing strategy for its pricing. LUSH
tries to create a personal care line where consumers won’t be drawn to a
cheaper existing substitute. The plan is to provide high quality products for a
reasonable price keeping in mind the environmental influences to maintain a
reasonable price. LUSH products use 100% recyclable products and offers 44% of
the products package free, thereby allowing it to decrease its costs (Hong, 2017).
competitors such as The Body Shop offer products that range from $3-28. They
also offer a substitute to the Bath Bomb called “Milk Bath Float” which costs
$12 on their website. For our analysis, we decided that pricing penetration
would be the most effective method. With this strategy, the consumer will be
able to test the product and build an attitude or loyalty towards the product
at a lower price. Loyal customers have a lower sensitivity to price increases.
It will also benefit consumers who believe bath bombs are a single-use product,
therefore expensive compared to LUSH competitors, by increasing awareness that
a person can split up one Bath Bomb product into multiple pieces; increasing
its usability. By lowering prices, LUSH can invite new markets to test out the
bath bomb, building a solid customer base that will sustain price increases.
establishes its competitive advantage through its marketing channels and
distribution. It uses the multi-channel strategy via the utility of direct
channels. LUSH operates more than 900 retail stores worldwide and is continuing
to open new stores around the world (Burn-Callander, 2015). Most of LUSH’s
stores are in big cities with large populations which have higher turnover
potential. Through this direct channel, LUSH communicates with customers and
builds relationships with customers, receiving customers’ instantaneous, direct
feedback. It’s able to reduce costs and time by skipping the use of
also uses non-traditional distribution channel to sell its products by
retailing its products online and running a mail order operation (Kreuser, 2016). This gives
customers more flexibility and opportunities to product access, especially for