Consumer Behavior: Lush Cosmetics, Australia - Case Study Example

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. 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