Lush: An Entrepreneurial Perspective

Charlie P Marples MAR07070172

BA(Hons) Advertising & Marketing

Entrepreneurial Marketing

MKT300M

Tutor: Dr Barry Ardley 1 Word Count: 1,889

Introduction In the words of Collinson and Shaw (2001) Entrepreneurial Marketing can be defined as: “Marketing focused on several entrepreneurial activities, e.g. the identification of new opportunities, the application of innovative techniques, the commercialisation of products, or the successful satisfaction of customer needs.”

In order for the entrepreneurship to be assessed within the Lush organisation I have used the Schinduette seven element model and the ICON matrix alongside various other primary resources: a questionnaire and a face to face interview with a Lush Manager.

Lush is a cosmetics company founded in the 1970’s by Mark Consantine, a qualified Trichologist who had established links designing cosmetics for Anita Roddick of Body Shop. He opened his own mail order business alongside this called “Cosmetics to Go” which after years of success failed in the late 70’s due to demand surpassing resource availability. After years of quiet development in 1994 Consantine reawakened his line of products in a pilot Lush store in Poole, UK, which is where Lush has subsequently grown from.

Entrepreneurial Analysis The Schinduette model has seven key elements on which to analyse the level of enterprise within a business: Customer intimacy, Value creation, Innovativeness, Resource leveraging, Pro-activeness, Driven by opportunity and Calculated risk taking. From research findings it seems that Lush has a higher intensity of four of these elements within its corporate structure: Customer Intimacy, Innovativeness, Resource leveraging and Value creation.

Customer Intimacy Lush has a unique approach to the development of customer relationships, described by Heidi Collum, Deputy Manager of Lush, Lincoln: “We never use the hard sell tactics; we approach customers in a conversational manner, using open ended questions on which to develop a relationship”.

Heidi goes further saying that this approach makes consumers relax within the Lush environment and be more open to an experiential visit to the store rather than just a quick “in and out” transaction. This conversational approach allows Lush employees to demonstrate their knowledge to the consumer concerning various in store products, Heidi credits this to increasing brand credibility among consumers, creating a positive brand perception. This is further advantageous to the company, as they don’t advertise in any medium, so by establishing positive relationships with consumers in store this heightens the potential of positive word of mouth promotion. This method also relates closely to the concept of Resource Leveraging.

Resource Leveraging Resource Leveraging is a big part of Lush’s ecological ethos as a company. Lush use as little packaging as possible, and that which they use is always made to be recyclable or reusable. Heidi states: “ The most popular and rewarding concept of resource leveraging with consumers is that the return of 5 empty lush pots gains the consumer a free face mask. Not only does the consumer then benefit 2

individually from the recycling, but also becomes personally engaged in the company’s ecological efforts” Another aspect of Lush’s resource leveraging process is the concept of deviant consumerism i.e. using products for a purpose that they were not originally intended. The Lush Times, Lush’s own newspaper/newsletter publication mentions the use of cat litter trays and mixing bowls as moulds for the blocks of soap seen in store. The Lush website states that this is a positive element to the company as it stands out as a unique selling point, and makes the consumer experience much more inquisitive and intriguing, with the unusual forms and shapes that are created that wouldn’t be seen in any other competing cosmetics store.

Lush also uses no advertising. Heidi believes this is a source of resource leveraging. She states that the intense, unique smell of the store is the localised advertising source.

“Due to the use of essential oils, the smell is naturally much stronger. The fact we use no packaging on many of our products means the smells can radiate even further, which draws people in from the high street, be this through attraction or mere beguile.”

Innovativeness Alongside their innovative form of “advertising” Lush have a backbone of innovation that flows throughout the company. The innovative use of patenting on the term “Bath Bomb” is used to secure a high brand positioning and integrity factor . The sheer range of different forms for wash products is an evident statement of innovation; products such as bath jelly’s and solid shampoos are not seen in any other competing stores product repertoire.

Adaptability also plays a large part in Lush’s innovative tactics for example Heidi states that one product in particular, the shower gel “Happy Hippy” uses Citrus oils within its ingredients and is used as a kitchen cleaning substitute by both consumers and staff. This adaptability stretches to the packaging techniques using the method of Japanese scarf folding (See Figure 1) to wrap gifts. The cotton scarfs used can be washed afterwards and be used as a fashion accessory by female consumers, meaning there are both recyclable and fashionable, reinforcing Lush’s ecological ethos.

This constant theme of innovation also secures Lush’s title of Market Drivers within the cosmetics sector, setting trends and establishing consumer tastes, that before introduced may not have even been regarded as evident in the market.

Value Creation Lush’s recyclability and ecological awareness can also lend itself to the development of value creation. Lush’s focus on the applicability of products to vegan tastes and the regard for popular allergies such as nut allergies creates a sense of value as the consumer can get products they would normally have to order specially, at a high street price and location. A further development on the theme of value within the customers perception of the company is that each product has a “made by” logo along with a sell by date (See Figure 2), making the relationship between the consumer and product more intimate and personalised, creating a theme of value and emotive consumer consideration.

3

Critique of Model Applicability Although the previous paragraphs would indicate that Lush is highly entrepreneurial, the applicability to the Schinduette model as an entirety is flawed by the company’s attitude to calculated risk taking. For example, Lush’s attitude to new product development can be regarded as rather haphazard, Heidi quotes: “In regard to developing new products the main aim is to have fun with the product, and if it doesn’t catch on it, it doesn’t catch on…”

This kind of attitude is much uncalculated, with the level of risk assessment being extremely low. It illustrates little consideration of what a failed product launch could have on brand credibility, profits and consumer perceptions. Making the approach almost polarized to that of an entrepreneurial process.

The ICON Matrix The ICON matrix, Berthon et al. (1996) is constructed as follows (See Figure 3). With the analysis of research it seems evident Lush would fall into the ‘Shape’ category.

Shapers are defined by Berthon as: “Where consumers may not have even been aware that they needed and/or wanted the benefits from a product until it became readily available. It is based on the principle that sometimes innovation defines Human needs.”

This kind of approach is evident with Lush’s intense focus on innovative and creative products, and the dismissive approach to potential risk. As stated by Heidi, there is little or no direct competition with Lush, which means the element of risk is not very high, as there are little similar alternative products for consumers to alternatively switch to.

A distinct example of this ‘shaping’ behaviour was raised by Heidi in our verbal interview where she illustrated how the release of solid shampoos has shaped the behaviour of consumers purchasing products for travelling and vacations: “The popularity of solid shampoo is mainly due to its versatility found by holiday makers. Instead of packing several tubes and sachets etc. one block of solid shampoo can be adapted to not only wash the customers hair but also be used for a shower gel substitute and washing clothes. We’ve found this to be particularly popular with festival goers because of these reasons.”

Similar to theory of shaping is the theory of Opportunity creation/discovery or recognition. In line with Lush’s role as shaper they would fall into the segment of ‘Opportunity Discovery ‘as their supply is determining consumer demand, as the previous example of solid shampoo proves.

However Lush could not be described as Shapers in entirety as its relationship to “Defining Human needs” is questionable. Heidi indicated that many of the ideas for new products are the outcome of customer involvement through online forums or the interaction between staff and customers in store. This quote therefore defects the application of the title ‘shaper’, as if some of the ideas are created by consumers they have their personal desires and needs at heart when conjuring up the concepts of new products, meaning the needs are pre-existing prior to product development.

4

Evaluation & Conclusions It is evident from the application of research findings that Lush is indeed a company with a clear entrepreneurial structure, from its humble beginnings as the side project of a Trichologist to a multinational company and respected brand.

Although there are kinks evident of an entrepreneurial outlook as a whole it is evident entrepreneurial tactics have been considered in the development of the organisation, such as the noticeable theme of innovation throughout every element of the business responsibilities. (Sheth, Sisodia and Sharma 2000) state: “The fundamental precepts of marketing remain unchanged, but more attention must be given to specific areas, such as customization and one-to-one approaches” This indicates that Lush’s intense focus on a customized, innovative product range and a dynamic approach to customer service in relation to a disregard for calculated risk taking, may not be haphazard or disregarding of external influences but merely revolutionary, postmodern and avantgarde.

However relevant the research has shown to be, it is important to recognise that the credibility of the analysis is wholly dependent on the authenticity and reliability of the sources on which the analysis was based. The wide range of sources used, from a corporate website, academic theory to personal interviews, the sheer variation verifies the validity of this on a large scale. The mix of secondary and primary resources also secures a guarantee of objectivity and professionalism in the analytic procedure.

The entrepreneurial approach taken on by Lush is one suited to their situation in the context of their individual market placement. However it is important for Lush to take into consideration the continually changing environment in which they are working, and the only way of maintaining their brand position, and admired innovative approach is continuous monitoring and research of their consumer base to avoid their position as a shaper becoming one of an isolator. Sheth and Sisoda (1999) summarise this need perfectly in the quote: “Marketing is context dependant, but the context is continually changing. Time, location, market or competition-centric law like generalizations and rule of thumb no longer apply.”

Conclusively, it is obvious Lush have an entrepreneurial structure, but maybe a little on a tangent from the straight and narrow of corporate, traditional marketing theory. It may not be that this is a negative but merely a hybrid of the traditional and postmodern in the development of a CounterIntuitive Marketing approach (Clancy & Krieg 2000), which is more suited to the quirky and individualistic organisation. Therefore indicating Lush use a theme of adaptation rather than deference from theoretically traditional and dated entrepreneurial tactics.

5

References Berthon, P, Hulbert, JM & Pitt, FL. (1999). To Serve or Create: Strategic Orientations Toward Customers and Innovation. California Management Review. 42 (1), 37-52.

Bjerke, B and Hultman, CM (2002). Entrepreneurial Marketing:The Growth of Small Firms in the New Economic Era. Cheltenham: Edward Elgar Publishing Inc.. 158-186.

Chaston, I (2009). Entrepreneurial Management in Small Firms. London: Sage Publications. 126-144.

De' Chernatony, L (2010). From Brand Vision to Brand Evaluation: The Strategic Process of Growing and Strengthening Brands. 3rd ed. Oxford: Butterworth-Heinmann. 257-293.

Kraus, S, O'Dwyer M & Gilmore, A. (2009). “Entrepreneurial Marketing�. ICSB World Conference 2009, 1-3.

Lush Online- http://www.lush.co.uk/. Last accessed 2nd Dec 2010.

Lush Times: Christmas 2010 Issue. Published November 2010.

Morris, MH, Schinduette, M, LaForge RW. (2002). Entrepreneurial Marketing: A Construct For Intergrating Emerging Entrepreneurship and Marketing Perspectives. California Management Review. 10 (4), 1-14.

Olins, W (2008). The Brand Handbook. London: Thames & Hudson. 44-46, 57-60, 104.

Schindehutte, M. Morris, M. Pitt, L (2009), Rethinking Marketing: the entrepreneurial imperative, Pearson Education.

6

Appendix Figure 1

Japanese Scarf wrapping aka.

“Furoshiki”

Figure 2

Examples of “Made By” Logos

7

Figure 3

The ICON Matrix Figure 4 A brief overview of elements covered and information found from the verbal interview undertaken with Heidi Collum of Lush, Lincoln.

The Audio document in itself can be found on the disk accompanying the assignment along with 2 electronic copies of the assignment (1 PDF, 1 Office Document.)

Notes from Verbal Interview        

Always use organic produce with no animal testing. 100% Vegan.

Don’t buy from businesses who test on animals Limit our packaging- ecological consideration Smell is from essential oils Recycle packaging- 5 pots free face mask Packaging style equates to deviant consumerism No official advertising- smell acts as advertising Fun attitude to new product development, due to nature of target market.

8

           

Was and is a family run business, now all over the world Patented the term “Bath Bomb” Ecological awareness heightens brand equity Have regular customers who always buy the same products Don’t hard sell, converse with customers to demonstrate knowledge and build relationships Use Japanese scarf wrapping to package products to demonstrate a cultural awareness and product quality.

Staff and producers are deviant consumers in themselves, cat litter trays, mixing bowls etc.

Deviant consumers- use happy hippy as kitchen cleaner, due to citrus ingredients First started in 70’s by Mark Consantine a Trichologist who worked for Anita Roddick Big focus on cultural awareness for value creation.

Have a database for direct communications with consumers Solid shampoo, one of most adaptable and versatile products use by holiday makers/festival goers to limit amount to carry.

Figure 5 Written Questionnaire: See overleaf for original documentation.

9