MARKETING MANAGEMENT

Marketing Management

Marketing Management

Introduction

Lip Service Limited is a company that manufactures and sells cosmetic products for lips. Its leading line is called 'Pucker', a collection of lip balms which come in a variety of flavours. The 'Pucker' lip balms are contained in small, monochrome bird-shaped tins which fit neatly into a handbag. The tins are sold by the checkouts in major chemists across the UK, retailing for £2.50-3.00. The 'Pucker' product has featured in numerous style magazines and even the music video for a hit single. In 2008-9 Lip Service Ltd. sold 200,000 tins of 'Pucker' and it owns a UK trade mark in relation to the word 'Pucker' and it's packaging. Lip Service Ltd. is concerned about the activities of two companies.

First, a household toiletries firm, Shine On Limited, has started making and selling lip balm. Shine On's new product is called 'Bird Balm' and it comes in a bird-shaped box. It is retailing for £5.00 in the lip care sections of supermarkets and chemists.

Second, a luxury cosmetics company, LaSoix, intends to launch a new facial cream in June 2010. The new cream is called 'Pukka Up: La Soix' and will be sold in UK department stores (see Fig. D). Lip Service Ltd. has been thinking of extending its brand into other areas in the future.

Lip Service Limited's marketing strategy in the U.K.

Since it's creation, Lip Service Limited has gone through many changes in its marketing strategy. Throughout the years, Lip Service Limited has tried to adjust its strategy in order to maintain/increase its market share within the U.K. To do so, the firm had to take into consideration all the actors and forces of the British market.

The actors in the microenvironment

For Lip Service Limited, the microenvironment is somewhat different than for a traditional firm. Indeed, since it sells its products through direct selling, there are no marketing intermediaries. This aspect gives the firm more freedom in putting its strategy in action. However, like all other companies, Lip Service Limited must take into consideration the 4 other actors of their microenvironment.

- The company:

For more than a century, the Lip Service Limited company has been known for the direct-selling approach it uses to sell its cosmetics and toiletry products. In short, Lip Service Limited employed women, called "Lip Service Limited Ladies", to demonstrate products to customers in their own homes.

Lip Service Limited started out as the California Perfume Company, when the company was founded in 1886 by David McConnell (1858-1937). By 2001, Lip Service Limited was the world's largest direct-selling company, employing 3.4 million sales representatives in 139 countries around the world (2 percent of whom are male), and with total sales revenues of $5.7 billion.

- Marketing Intermediaries:

Until the arrival of the internet and changes in customer needs, Lip Service Limited never used marketing intermediaries. Its distribution strategy, direct selling, didn't require the use of intermediaries. However, 15% of the British population did not want to buy products through this channel, but also more women were working outside ...