E-Portfolio

1.    Introduction to Market Research

 

Market research is the process of collecting, analysing and interpreting marketing information regarding a particular product or service that is intended to be provided in the market (Twin, 2019). It includes looking at the historical and current and predicting future customers for the intended item. Other considerations made in market research include the spending habits, characteristics, place and the unmet needs of the market including the entire industry. In addition, there must be an assessment of the competitors in the target market.

2.    Market Research Process

The marketing research process is a systematic process that involves the definition of the market problem, coming up with an appropriate approach, research design formulation, and data collection, analysis of the data, interpretation and generation and presentation of the report (Hyman and  Sierra, 2015).

The basic market research process diagram is presented below.

• Application of the market research process diagram to your selected company.

Lush Cosmetics limited market research process starts with the identification of the problem and specification of objectives, the problem that was identified is that the demand for true organic (vegetarian/vegan) cosmetics is increasing but the supply is low. The market research objective would be “to find out the level of demand for pure organic cosmetics in Southampton’ and “to find the pure organic cosmetics supply gap in Southampton. After that, the research design is developed outlining the data collection tools and procedures, the target population and location, and sampling; for this case, the data collection tool is the questionnaire, the location is Southampton and the sample size can be 384 respondents. The next step is the preparation of questionnaires, then sampling and data collection. Data will then be analysed to understand the demand and supply situation in the market. Depending on the findings presented in the final reports, the company will decide whether to open a shop in Southampton or not.

1.    Questionnaire Design

A questionnaire is an instrument of research that contains a series of questions or prompts purposed to collect information from the respondents. In marketing, the respondents can be consumers or customers of given products or services.

The following is the market research questionnaire for Lush Cosmetics

1. Have you ever used organic cosmetic products?
2. yes
3. no

This question was used because the selected company deals with organic cosmetic products, hence it is important to the familiarity of the target population with organic cosmetics. Closed question was used because it does not require explanation

2. How was your experience with the organic cosmetic products?

This questions is a continuation of the first question for those who answer yes for the first question. It is important to understand their experience in order to know what different to add to the market. This is question is open-ended to allow the respondent to give more details regarding their experience with organic cosmetic products.

3. What do you expect when buying organic cosmetic products?

This an open ended question since the preferences and expectations of customers are diverse.

 

4. What is your view on animal testing in the process of developing products?

The company’s products do not go through animal testing and thus this question is important to know if this will be an added advantage to the company over competitors.

5. Have you ever heard about Lush Cosmetics?
6. yes
7. no

The purpose of this question is to help know how popular the company is in the market.

6. If yes in 5 above, from where did you hear about Lush Cosmetics?
7. word of mouth
8. social media

• mass media commercial

1. In community event
2. Others (specify)

The purpose of this question is to help understand which the best communication channel is for the company based on the target market’s experience.

7. Which of the following promotion methods mostly influences your purchase decision?

• Social media
• Word of mouth
• Commercials
• Others (specify)

The aim of this question is to know the feasible promotion strategy for the company in entering this market.

8. How often do you switch brands for cosmetic products?

• Always
• Most of the time
• Sometimes
• Rarely
• Never

The aim is to know if the target population is ready to switch from their current preferred cosmetic brand to Lush.  Also, it will help understand the probability of the target population becoming loyal customers to Lush Cosmetics

9. Which of the following influences you most to buy from one brand and not another?
10. Price
11. Responsiveness of the customer service

• Unique/exemplary features of the products

1. Convenience
2. Others (specify)

This question is meant to help the company know attract more customers.

 References

 Hyman, M.R and  Sierra, J.J. 2015. Marketing research process: Six stages. Business Outlook, 13 (4). Available at https://www.researchgate.net/publication/273760950_Marketing_research_process_Six_stages

Twin, A., 2019. What Market Research Tells Companies About New Products And Services. [online] Investopedia. Available at: <https://www.investopedia.com/terms/m/market-research.asp>

Page 2: Marketing Mix -Product:

Product is an item that is meant to satisfy the need or desire in the market. It can be a physical product or a service. A cost is incurred in producing a product and thus it is provided to the market at a price.

Companies need to know about the marketing of products because it determines the success of their products in meeting the customer needs, which consequently affects the growth and sustainability of the companies in the market.

The product marketing mix is the awareness of elements making up the product and those needed for selling of the product to be successful. The understanding product marketing mix is beneficial to companies because it makes them achieve a competitive edge over competitors. Also, it is through an understanding of product marketing mix, the companies can successfully determine and implement other elements of the marketing mix.

Application to the selected company (Lush Cosmetics)

Consumers evaluate every aspect of a product before they make a decision to purchase, this is called total product offer (Lumenlearning n.d). There are five levels of the product offer and three of them are: core benefit, which refers to the basic customer satisfaction need on buying the product; Basic or generic, which include the basic features of the product that allow it to perform its basic functions (Lumenlearning n.d).; augmented, which include the product’s non-physical parts, for example, customer service or any other features that make the product unique from the competitors (Lumenlearning n.d). Taking an example of a product from Lush, in the bath and shower categories, the shower bar soap. The core benefit of soap is to use in during showering. The basic product (shower soap) can be handheld with ease and it has a basic colour (blue). The augmented offer is free shipping for orders over $40, there are a wide variety of handmade soaps, and taking an example of Outback Mate it is augmented with lemongrass and peppermint oil alongside eucalyptus infusion.

 

Image 1: Outback Mate shower soap (source: https://www.lushusa.com/shower/bar-soap/outback-mate/9999906057.html)

Product development is the creation of a product from a new idea. It includes all stages from concept to making the product available in the market. Concerning product development, Lush identified that people are trying to avoid synthetic body soaps and that they are also concerned about animal testing, from this they developed the idea of making natural soap, that does not require animal testing, the soap was handmade and released to the market where it has got a positive reception.

Managing the product lifecycle refers to strategies used by management to handle a product as moves through its product life stages (Armstrong, Kotler and Opresnik, 2016). The stages are product development and introduction, maturity, and decline. Concerning Lush cosmetics it introduces a vegan soap in the market, initially, there is a slow uptake then it increases steadily due to referrals, it reaches a peak where people are used to it and customer base remains stagnant

Managing the Boston Matrix is the evaluation of strategic position of brand portfolio of a business and the potential that is has. Lush Cosmetics has wide portfolio of products including soaps, lotions, gels, scrubs, jellies, ”bombs” , shampoos , oils, deodorants among others. Under each of these are varieties with different names, but the overall brand is Lush. The Lush management therefore, used the Boston Matrix to assess the strategic position this extensive brand portfolio.

Image 2: Some of the Lush Cosmetics products (source: https://uk.lush.com/products )

Page 3. Promotion

Introduction to promotion

Promotion is the communication used by businesses in informing or persuading the target audience concerning the relative benefits of the product, brand, or issue (Faisal, 2016).

Companies need to know about the promotion of products because it helps them in understanding the reception of their product in the market. Furthermore, promotion increases awareness and creates interest of a product or brand in the market, consequently it leads to generation of sales or even creates brand loyalty.

Benefits to the business from developing the promotion marketing mix include attracting customers and persuading them to make purchases and eventually become loyal customers.

Application to your selected company

Promotion strategy includes planning and implementation of tactics aimed at increasing awareness and demand of a product or brand (Armstrong, Kotler and Opresnik, 2016). The strategy is characterised by target audience, budget, and the plan of action. Lush cosmetics applies social media and giving of samples in their promotion strategy

Lush Cosmetics can be using promotion tools such as sales promotion, direct marketing, and advertising. Direct marketing is the most suitable because it is not many people who are ready to buy products at premium prices without understanding the value and unique benefits of using the product. Hence, through direct marketing, it will be possible to convince the potential customers to purchase the products.

Page 4: Place

Introduction to place

Place refers to where a product can be found for purchase and to reach the final customer (Armstrong, Kotler and Opresnik, 2016). Companies need to know about the concept of place when developing the marketing mix because it is the one that determines their visibility and accessibility of their products. By developing the place marketing mix, the business is able to make its products visible and accessible by the customers.

Application to Lush

Place management refers to the process of handling the access and movement of product. It include managing the physical location of the company or product and online presence.  Concerning Lush Cosmetics, it has 931 shops and mall locations in 49 countries. The largest store is in London, the Oxford Street Store. In addition, the company has online stores and websites where customers can interact with its products and make orders.

The marketing function in the supply chain is balancing of procurement by providing important information about demand for improving supply chain efficiency.

References

Armstrong, G., Kotler, P. and Opresnik, M., 2016. Marketing. Pearson Education UK.

“Our History”. www.lushusa.com. Retrieved 18 March 2019

Page 5: Price

1. Introduction to Price

Price is the value of the product in the market. It is the only way that a company earns review through its products or services. The price needs to be competitive but reasonable for the company to make profit and remain in the market.

2. Application to your selected company

Objectives of pricing include providing a product or a service at the right price for the target market and for the company to remain competitive and profitable. The pricing objectives can also be described as the goals guiding a business in putting the cost of the product for the current and potential customers (Etzel, Walker and Stanton, 2007).  Some objectives of pricing include pure survival, increasing volume of sales, and profits maximisation. The pricing objective for Lush Cosmetics is profit maximisation since it sells at premium prices.

Pricing strategies are approaches used in determining price of a product or service considering factors such as the market conditions, customer segments, competitors and input costs(Chan, Jubas, Kordes and Sueling, 2015). Lush Cosmetics uses value-based pricing because it holds that it offers unique products (vegetarian, not associated with animal cruelty) that customers believe it is worthy to pay a premium price.

Pricing methods are the ways in which a business establishes the price of its products in the market (Chan et al., 2015). Lush Cosmetics uses perceived value pricing method since it relies on the demand of the vegetarian cosmetic products and given that they are not as common as non-organic products, they are perceived to be of high value and thus highly priced.

Pricing tactics are temporary initiatives aimed at boosting sales; they are influenced by shifts in demand, competition, and the stage of the product life-cycle. Examples of pricing tactics include psychological pricing such as £9.99 instead of £10 or offering discounts during a particular season. Lush Cosmetics uses psychological tactics, for example in its international online store it indicates free shipping for orders over $40.

References

Chan, K., Jubas, J., Kordes, B. and Sueling, M., 2015. Understanding Your Options: Proven Pricing Strategies And How They Work. [online] McKinsey & Company. Available at: <https://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/understanding-your-options-proven-pricing-strategies-and-how-they-work>

Etzel, M., Walker, B. and Stanton, W., 2007. Marketing. Maidenhead: McGraw-Hill Education.

https://www.lushusa.com/discover/bestsellers/

Page 6: 7Ps marketing mix

The 7Ps marketing mix is an extended version of marketing mix. Apart from the original 4Ps (Product, price, place and promotion), there are 3 more Ps – people, process and physical evidence. Initially, the 7Ps marketing mix was meant for service businesses but it can be applied to product businesses (Etzel, Walker and Stanton, 2007). The aim of this section of the portfolio is to outline the application of the 7Ps marketing mix in Lush Cosmetics and make recommendations for my live client. The live client’s initial objectives were understand how I would advise the company on its intention to open a new store in Southampton and how will the 7Ps marketing mix be applied for the entry to be successful.  The following are the recommendations for each of the Ps.

Product

The company should develop products of different varieties to meet the different tastes and preferences for their customers. Although, the company achieved this by having wide portfolio for each of its product lines, it has to take special consideration on the soaps that have a short life-cycle. In addition, “handmade” is the company’s method of production, which it states gives it a competitive edge. However, I would recommend that the company to consider mechanising some of its production line in order to lower the cost of production.

Place

Even though Lush cosmetics has been in operation for more than twenty years and has over 930 shops, it is not yet visible as it would be expected. The reason for this could be because the shops are located in high streets targeting premium customers. The company should try to re-segment its target customers in order to enter into the lower customers segment who could be wanting to use vegetarian cosmetics but they cannot afford them due to the attached premium prices. In addition, the company can develop a mobile app for it to be accessible by the majority of customers who have smartphones.

Price

Though the company should maintain premium prices because of the uniqueness of its products and the added value, it should sell at discounted prices when opening a new shop at Southampton to attract more customers and the increase the prices gradually as it gains loyal customers.

Promotion

Word of mouth or customer referrals is the most effective promotion method since they are likely to lead to loyal customer base. However, the company also needs to use mass media advertising to make the general customer aware of it products and where they can be found. The company should continue using social media influencers and celebrities to promote its production, but with a caveat since in case the celebrities get involved in a scandal it can affect the company negatively.

Another promotion method that the company should continue with is YouTube demos and content creation concerning its products.

People

These are the individuals involved in the company’s value chain and supply chain. With the advanced internet technology, the company may not require a lot of in-store workers since many customers can shop online. Nevertheless, the company should focus on hiring IT experts to manage their online platforms. In addition, their customer service personnel should be responding to customers’ complaints as fast as possible.

Process

Process includes the flow of activities that affect the customer experience with the company and its products. For example, at Lush cosmetics the customer visits the company’s website, go through different products it provides, then select what she wants, and places an order, and the company delivers the order accordingly.

Physical evidence

Physical evidence is the place or environment where the product is delivered or any tangible aspect to show the existence of the product. As earlier noted, Lush has over 260 shops and websites where its products can be found. However, when opening a new shop in a new city, it is recommended that it provides the potential customers with samples for them to be practically aware of what it is going to offer.

References

Etzel, M., Walker, B. and Stanton, W., 2007. Marketing. Maidenhead: McGraw-Hill Education.

“Our History”. www.lushusa.com. Retrieved 18 March 2019

 

Page 7: Critical self-reflection                                         

This academic year has been one of my most fruitful concerning academic experience and outcomes. However, it was not free from some challenges both related to academics and social life. Before delving further, I must that the current coronavirus pandemic situation has significantly affected business and that is something that marketing students should be concerned about because it does not only affect marketing today but also future perspectives regarding marketing in the times of a crisis.  Going back to creating my portfolio, it was the most interesting but also the most challenging part of my academic journey this year.

My portfolio gave me a chance to apply the different aspects of marketing that I had learned throughout the semester to a real-life company. Through the portfolio writing process, I have come to understand that it may look as if most of the market gaps have been sealed given the numerous companies in different fields and sectors. However, on the contrary, the market gap still exists. For example, the company that I had selected, Lush Cosmetics, has ventured in organic cosmetics, but because other companies are doing the same, it has focused on purely vegetarian or vegan products which are handmade. At the same time, there is a gap since the company mainly targets premium customers. Another positive aspect is that I have learned an in-depth application of the 7Ps marketing mix.

Notwithstanding, the portfolio has been very extensive and requires one to define each concept before applying it in the selected company. I feel that some definitions were unnecessary because one could have just been asked to apply the concept, which would have demonstrated their understanding. At the same time, developing the questionnaire using surveymonkey was the most challenging aspect of the portfolio as it requires some online survey skills. The interesting thing is that, despite being the most challenging, development of a survey questionnaire was one of the most important skills that I acquired. Moreover, it was gained company analysis skills concerning marketing mix and critiquing the strategies that a company has applied. Nonetheless, I need to improve on my video attachment skills because I was not able to attach any video in the portfolio. I know it is critical for marketers in this digital age to have digital skills including uploading marketing video. To address this problem I will keep doing practice and attending more tutorials.

Moreover, I developed my peer review skills by reading the guidelines of review and taking time to review the work of my colleagues. In addition, I reviewed my own works whenever I did one to understand areas that I am doing right and where I need to improve.

References

Armstrong, G., Kotler, P. and Opresnik, M., 2016. Marketing. Pearson Education UK.

Faisal, A., 2016. Marketing Strategies in Online/Digital Marketing. Account and Lumenlearning n.d. Principles of Marketing retrieved from

https://courses.lumenlearning.com/clinton-marketing/chapter/reading-defining-product/ Financial Management Journal,.