The Rapid Growth of The Body Shop Brand - Essay Example

The rapid growth of The Body Shop brand The Body Shop Brand is a popular brand in the cosmetics industry and their products are natural products. The brand was formed by Roddick and Gordon Roddick in 1976 with the inspiration from a store in Berkeley of California, which was run by two entrepreneurs namely Jane Saunders and Peggy Short. This case study is an attempt to answer the two questions related with the growth and repositioning its brand. Answer to Question 1: Critically analyze the reasons for the rapid growth of The Body Shop brand in the 1980s and early 1990s. What according to you were the reasons for the decline of the brand in the late 1990s and early 2000s? The Body Shop (TBS) brand was in a top position in the market in 1980s and also in the beginning of 1990s. During this period the company was having a high growth rate because of the popularity of the brand name. This question is divided into parts for analysis purpose. First part deals with the reasons for the rapid growth of the Body Shop Brand in the entire 1970s and early 1980s. The second part explains the reasons for the fall in the brand image during the last quarter of 1990s and early 2000s. Reasons for the growth: There were different reasons behind the brand attaining the top position in the industry as well as for achieving a high growth rate in the early years of its inception. These reasons explained below:- a. Environment friendliness and Social Commitment: The company followed a policy namely “care for environment” which ensured that the products and the day to day business activities of the company do not affect the environment in a negative manner. Further the company was more socially committed. It participated in so many charitable activities as well as social welfare programs. It also sponsored several charity programs aimed to benefit the society. Roddick, the founder of The Body Shop brand, changed some corporate practices which were not friendly with the environment and made it environment friendly. The company established an alliance with Friends of Earth (FOE), which is a network of environmental organization worldwide. The company opposed the practice of testing of cosmetics in animals and campaigns were conducted against this practice. TBS practiced Community Trade, from which the society is benefited as the company bought ingredients of the products from the communities by giving reasonable price. All these resulted in the TBS brand becoming popular in the market and thereby achieving a higher growth rate. During that period the growth rate of the company was around 50 percentages. The customers will not directly walk into a store and buy a product. Before taking a decision to buy a product, most of the customers consider different factors like the company’s attitude towards the society, environment etc. As the company was having a positive stand with regard to these matters, it helped the company to gain more customers thereby achieving a high brand image. Because customers are the best brand ambassadors, the mouth-to-mouth advertisement by the customers is the best advertisement. b. The Pricing Strategy: The pricing policy that was being followed by the TBS was unique and attractive. Most of the customers are bothered about the price of the products. TBS offered its products to the customers with attractive discounts. It gave the company a competitive advantage over rivals. The company followed the policy of sell more at low prices which helped the company to acquire a substantial market share. c. Natural Ingredients in the products: The Company’s products were made with natural ingredients like jojoba oil, rhassoul mud and other materials from the nature. So the products of the company were skin-friendly. As the company use natural ingredients in its products, they do not have any side effects and the customers are attracted to the products. d. Brand Names of the Products: The company’s products were marketed in different brand names like Tea Tree Oil Facial Wash, Mango Dry mist etc. These brand names attracted the customers to buy the TBS products. e. Containers: TBS used urine sample bottles as containers as it was the cheapest, which resulted in cost reduction so that they could sell the products at lower prices. And also the company offered price for those customers who brought back the used empty containers. This also attracted the customers. The reasons for the decline of the brand in the late 1990s and early 2000s: By late 1990s, the brand image that the company was enjoying started to decline due to different factors, and the decline continued till the early 2000s. The report by John Entine, in the year 1994 caused serious damages to the reputation of the company and it resulted in declining the brand image of TBS. The report accused the company that it is practicing hypocrisy and it is making profit by projecting the social welfare activities in which the company participates. This report also states that, according to the records of charitable commission, the company did not contribute anything for the charity activities for the previous 11 years. Another point in the report which caused fall in the brand image of the TBS was that, the company’s products are not natural and they contained petrochemicals. In the year 1998 a website stated that, most of the claims by the company that it is environment friendly and is against the testing of cosmetics in the animals were false. The company was accused of not compensating the workers with reasonable wages and it was against the trade unions. Different analysis proved that its claim regarding fund raising was false and it was far away from the actual practices. All these led to the decline of the brand image of the TBS in late 1990s and early 2000s. Answer to Question 2: Why do you think TBS wanted to reposition The Body Shop brand to target the masstige segment? Discuss (pros and cons) the various initiatives taken by TBS to reposition the brand. The repositioning strategy of TBS was necessary for overcoming the damage on the brand power faced by TBS in the cosmetics market. The report of John Entine relating to the defaults of social marketing adopted by the company caused serious declining in brand image of the products among its customer base. Financial performance of the company also diminished compared to previous years due to the reduced customer acceptance. The factors that forced TBS to adopt repositioning of the brand were the diminishing market share and profitability in the existing sectors even though the company invested highly on the business expansion projects. The social marketing policy adopted by the company concentrating on products with natural ingredients was not capable of ensuring sustainable market growth and profitability. In order to overcome the competitive challenges from supermarkets, drug stores, and mass merchandisers involved in the cosmetics market, repositioning to the luxury sector of the cosmetics markets was highly needed by the company. In the masstige marketing, prestigious brand name is used for the marketing of low priced products in order to develop brand power in the market. Through this brand-based repositioning of the products, the products of the company got better position in the cosmetics market. The masstige marketing adopted by the company is effective for restricting the declining brand image of its products in the market. Provision of innovative products with attractive customer service helped the company to differentiate itself from the competitors. It can be concluded that the reposition strategy of TBS brand to target the masstige segment was highly essential for the company to ensure its survival in the industry with profitability and market share growth. Pros and Cons of different market repositioning strategy of TBS: New brand strategy adopted by TBS with innovative products, revised shop design and multiple channels of marketing helped it to strengthen the brand popularity among the customer base. Marketing campaigns and sales promotion efforts adopted by the company as a part of its repositioning strategy were effective for attaining increased rate of profitability and improved customer acceptance. In the internet age, the e-commerce is an important sector of marketing. The application of e-commerce in the marketing of products is highly essential for the company to attain effective brand positioning on a global basis. The repositioning activities helped the company to increase profitability. Compared to the previous year, it attained 76% growth in profit during the year 2003. The new store design strategy adopted by the company seems to be essential for creating loyalty customers through convenient purchasing environment on a global standard. It helped the company to strengthen the new brand identity among the customer base. New brand logo “MADE WITH PASSION” applied for the product was also helpful for attracting new customers. Direct marketing strategy named as ‘Body shop at Home’ and e-commerce based online marketing helped the company to attain larger customer base on a wider geographical basis. The direct selling facilitated the customers who prefer personalized services. The “Love Your Body” loyalty program was based on providing special benefits to the registered members. This recorded greater success in building the loyalty customers on a global basis. The home sales strategy adopted in countries like USA, UK, and Australia helped to attain positive growth. The critics point out that the marketing strategy of TBS was creating a feel of insecurity to the customers about their body and it really exploits the idealism of customers. They point out that the charity support from the company towards the society was only nominal when compared to industry average. Thus the value campaigns adopted by the company for fund raising towards charity purpose were of cheating in nature. Usage of animal tested ingredients and petrochemicals for its products are against the business ethics followed by the company. The CTP program adopted by the company is also criticized as it makes differentiation among the customer base. In order to keep the business ethics, TBS has to review its operational strategy by avoiding discrimination towards the customers as it is against its social policy. The company is required to keep honesty and trust in its value campaigns for maintaining its ethical image among its customer base and in the industry. (Purkayastha, 8-13). Works Cited Purkayastha, Debapratim. Body Shop Brand: Repositioning to Target the Masstige Segment and Impact of its Acquisition by L’Oreal: Case Study. ICFAI. (provided by customer). Read More