The Body Shop Marketing Plan Analysis - Research Paper Example

?THE BODY SHOP MARKETING PLAN ANALYSIS By 19th, December, Table of Contents Table of Contents Company Background 2 Macro-environmental Analysis - PESTL 3 Political Factors 3 Economic Factors 3 Social Factors 4 Technological Factors 4 Environmental Factors 4 Legal Factors 4 Micro-environmental Analysis – Porter’s Five Forces 5 SWOT Analysis 5 Strengths 5 Weaknesses 5 Opportunities 6 Threats 6 Segmentation Strategies 6 Market Targeting 7 Strategic Positioning 7 Company Current Marketing Strategy 7 Product 7 Price 8 Place 8 Promotion 8 Proposed Marketing Mix –the 7p’s 8 Price 8 Product 9 Promotion 9 Place 9 People 10 Process 10 Physical Evidence 10 Effectiveness of the Current CRM of the Body Shop 10 Current CRM Strategy 11 Ineffectiveness of Current CRM 12 New CRM Objectives 12 How the objectives will be achieved 13 Supporting the New CRM Strategy Using the 4Ps of Marketing Mix 13 The Body Shop Marketing Plan  14 Current Market, Customer, and Industry Trend 14 New Market Objectives 15 A Marketing Budget to Achieve the New Objectives 16 Evaluating the Perfomance of New Marketing Objectives 17 Conclusion 17 Works Cited 19 Company Background Dame Anita founded the Body Shop Company, which is located in the United Kingdom, in 1976. Today, this company operates in 61 countries across the globe, with close to 2 500 outlets. The company mainly produces and sells a variety of beauty and cosmetic products, which total to approximately 1 200. The Body Shop mainly targets males and females of different age groups. In 2006, the ownership of Body Shop was transferred to L’Oreal, a French cosmetics company. The mission of this company is to impart self-esteem in their clients, protect the environment, be advocates against animal testing, while defending human rights, and supporting the community trade (Mennen, 2011). Macro-environmental Analysis - PESTL Political Factors Different factors in the external environment of Body Shop continue to affect its market operations. Most of these factors are beyond the control of this company, as it has less influence on its external environment. Two major political factors have affected the production and sale of beauty and cosmetic products by this company. First, political instability in Guatemala limits the company’s production of beauty products. Guatemala produces Aloe Vera used in manufacture of beauty products by the Body Shop. Political instability destabilizes major business processes and business transactions with foreign countries. Secondly, Peru is also faced with political instability, yet it is the major producer of the Brazil nut oil, used in manufacture of beauty products (Assenmacher, 2012). Economic Factors Body Shop Company utilizes the franchising policy as one of its strategies for growth. The decreasing interest today makes the company stands a better growth opportunity as this works in its favour. Secondly, the global trend exhibits a decline of financial institutions, even as countries are advised to brace for tougher economic times ahead. The Body Shop, being a player in the global economy, will also feel a pinch in case this happens in the future. In addition, the current exchange rate indicates a gradual decline of the pound. Therefore, continued weakening of the pound may result in increased prices on imports, including products and product ingredients (Assenmacher, 2012). Social Factors Most social factors work in favour of the company. First, there is increased awareness of the company’s fair trade, as well as the nature of products, which are natural, devoid of animal testing. Additionally, more men are concerned with their appearances, thus will go for beauty products. The company has registered an increase in the number of online customers, considering that in 2008; approximately 65 percent of British families had access to the internet. Finally, the willingness of the buy anti-ageing products is a boost to the company (Mennen, 2011). Technological Factors Dangerous chemical and acidic components such as Kojic acid used in beauty and cosmetics products may be harmful to people’s melanin count in skin. This is according to the Scientific Committee on Consumer Products. This makes preference for Body Shop products high, as they are natural. In addition, technological advances such as internet boost business operation and communication (Assenmacher, 2012). Environmental Factors The company ensures sustainable packaging of products and safely disposes or recycles by-products. Additionally, the company’s responsibility in the deforestation issue raises concerns, since their ingredients such as Brazil nut oil and palm oil are supplied from forests in conserved places (Mennen, 2011). Legal Factors The EU’s enactment of a chemical legislation in 2008, requiring all imported chemicals in Europe to measuring 1 tonne per year, undergo a registration with the newly set up body of European Chemical Agency (ECHA). Additionally, from March 2009, animal tested products were banned. This affects Body Shop differently (Assenmacher, 2012). Micro-environmental Analysis – Porter’s Five Forces The probability of new entrants in the market is low as there exists high barriers to new entries in the market. This is because of the existing beauty companies in the market, which are mature and strongly established. The suppliers to Body Shop are small and limited. These are mainly communities that engage in fair trade with the company for provision of company ingredients. There is considerable rivalry between Body Shop and other beauty companies. However, the main competitors include Johnsons and Johnsons, Doy Soaps, Loreal Kids Shampoo, and Himalayas Baby Care. These are mature markets, which are also niche players. Apart from its retail outlets and consultants, Body Shop has no specific group buyers. Finally, substitutes for Body Shop’s products are mainly the homemade and other non-organic beauty products (Kossowski, 2007). SWOT Analysis Strengths Niche positioning by Body Shop makes its products unique in the market, and this helps differentiate them from those of competitors. The company is also known for its ethical stand of against animal testing, as it aims at providing natural products to its customers. In addition, the diversified geographical presence is advantageous. This company has 61 branches across the globe. This is an opportunity for growth, even as market risks are minimized. Finally, by practising fair trade with the poor world communities, Body Shop incurs low costs of ingredients, while maintaining an ethical image to the public (Assenmacher, 2012). Weaknesses There has been a previously considerable decrease in Body Shop’s profits. Between 2006 and 2008, profits dropped from 9.4 percent to 8.5 percent. In addition, there is weak performance, as the UK market has in the past registered a weak performance as compared to other markets. This leads to a decrease in market shares (Assenmacher, 2012). Opportunities The testing of different cosmetic products in 2007 established that they used harmful Lead in their lipsticks. However, Body Shop’s products were purely natural, thus, boosting consumer trust in Body Shop. In addition, the online availability of Body Shop captures potential customers in a cost-effective manner, as more people today search online information on beauty products before buying (Kossowski, 2007). Threats Intense competition from other big and small cosmetics company has forced Body Shop to reduce product prices for favourable competition in the market. Clashing Ideology is another threat. Since L’Oreal acquired Body Shop, its animal testing on products conflicts with Body Shop’s stand against animal testing. This becomes confusing to clients. Finally, the global unpredictability of the economy forces people to cut on spending and save money for future use. This reduces companies’ market share (Assenmacher, 2012). Segmentation Strategies Body Shop bases its market segmentation on two main aspects, which include behaviour and demographics. Basing on demographic segmentation, market segmentation involves age. This therefore falls into two main categories of customers, including adults and young people. In behaviouristic segmentation, customers are categorized into two groups, including advanced users and beginners. Therefore, market segmentation results in four categories of customers, including young advanced users, middle-aged advanced users, young beginners, and middle-aged beginners (Pahlavanzadeh, 2011). Market Targeting Body Shop targets more females aged16-55. These should be well educated and with good computer skills. The kind of men Body Shop targets are those aged 30-35, with a stable income. Men in the cosmopolitan are also targeted due to their increased awareness of their physical appearance. Nonetheless, the targeted customers are those that are willing to spend more on beauty products, given Body Shop’s considerably high product prices. These target customers are also those that appreciate and show interest in beauty products that are environmentally friendly. In return, Body Shop donates a percentage of its profits to charity, and mainly construction of schools in India and Guatemala. Strategic Positioning The Body Shop uses various strategies to appeal to customers. Its stand against animal testing and support for fair community trade shows passion. The mission of the company to activate self-esteem, protect human rights and the environment bring out the company as responsible and natural, an appealing image to customers (Assenmacher, 2012). Company Current Marketing Strategy The Body Shop bases on its image of being natural and earthly to market itself. Therefore, the brand messages carry this information. Most of the marketing for Body Shop is done online as it is believes that most environmentalists do not subscribe to newspapers. Product Products include shaving, hair and body, face care, accessories, and Eau de Toilettes. The company conducts annual research on relationship between the product and market demand. These products come in packages, which are considerably big. Generally, customers are not given an opportunity to choose from a wider range of products, as these are not diversified. Price The prices of Body Shop products are considerably high because of the great differentiation and nature of branding, which is ethical and environmental friendly. The big packages of products contribute to their high cost. This is why the target market include the financially stable. Place The Body Shop mainly sells its products in its different physical outlets, at the Body Shop Home Scheme, and over the internet. However, this company has invested more in its virtual presence. Its online distribution channels help its clients to shop for products more easily. Promotion Promotion of men’s products is through monthly advertisements in different periodicals that target men. In addition, products for men are advertised for the whole year on Google Ads and other promotional sites with high male viewing. Women’s products are advertised through flyers and other channels with high female audience throughout the year. Additionally, promotion is through gifts and presents to specific females four times a year (Assenmacher, 2012). Proposed Marketing Mix –the 7p’s Customer relationships are essential in the marketing strategy of companies. Therefore, basing on customer relationships of Body Shop Company, recommendations on a more effective marketing matrix can be made. This new marketing mix could be effective, as the current one has not managed to achieve the sales and marketing targets of this company. Price For a better marketing mix for Body Shop, the prices of its products should be considerate of the present economic climate. Therefore, pricing should not be based on their branding, but be determined in relation to their competitors’ prices. High prices make customers shy away from buying products, considering the present harsh economy. Therefore, lower prices, with competitors in mind, will attract more customers. Product The company should consider product diversification. When products are diversified, customers will have a lot to choose from, thus eliminating limitation of their choice. In addition, region specific products will be highly appreciated in the market. For instance, producing and selling sunscreens in India will boost market shares of the company. Products in smaller packaging will attract more customers as they are easily affordable, compared to the big expensive packages offered today by the company. Promotion Body Shop should improve its online channels of distribution by venturing in the social media channels such as Face book, Twitter, and You Tube for advertisement purposes. The Body Shop should launch a page for each of these sites and invest more in social media advertisements. Promotions on the social media will increase product visibility as more people today spend a considerable time on Facebook, Twitter, and YouTube. Additionaly, teaming up with media channels such as MTV will help in the promotion of the existing products. Place Exploring newer markets is essential for Body Shop to achieve its business objectives. Investment in new markets will reduce the company’s operational costs, as the company will use the resources of the host country. In addition, the company should make its in-store experience for customers better. For instance, pictures in the stores should be replaced with new ones, billboards and posters showing the month’s theme should be introduced in the stores (Mennen, 2011). Enhancing the in-store experience for customers will make shopping to be an exciting procedure and not boring (Assenmacher, 2012). This new marketing mix could be effective, as the current one has not managed to achieve the sales and marketing targets of this company People First, the consultants and shop assistants working for the Body Shop are influential in the marketing process of the company (Pahlavanzadeh, 2011). These should therefore, be given adequate training and enhanced product information to deal with customers better. Process On the process, body Shop must ensure a reliable online presence. This is because most men prefer to shop for beauty products online and not physically. Currently, Body Shop does not have a big brand awareness due to its restrictive modes of public awareness creation. Its online distribution channels are limited. Therefore, to solve low brand awareness, further investment in its online presence is imperative. Physical Evidence Physical evidence for the company should include making the in-stores favourable to men by including more male staff. This serves to suit the needs of both genders. Additionally, the online-shopping experience should be made easier and more exciting for customers. Effective customer relationship management will retain customers and develop their relationships. Therefore, the recommended marketing mix ensures the integration of and balance between people, technology, and process. The inclusiveness of these will result in profitability and customer loyalty for the company (Pahlavanzadeh, 2011). Effectiveness of the Current CRM of the Body Shop Customer Relations Management involves the strategies used by a company to obtain customers and develop long-term relationships with them. Current CRM Strategy The body shop considers customer relations as one of the most crucial aspect in its operations. This is because the management has realized the long-term benefits of customer retention as well as customer commitment. The current body shop CRM aims at developing and managing the relationships between the company and the customers and other stakeholders. The strategies entail use of mechanisms such as technology in organizing and coordinating business processes particularly those involved in marketing of the products. The aim of the Body Shop CRM is to attract new customers, retain the existing customers, and entice customers who have ever used their products to start using them again. Moreover, the Body Shop hopes to make use of CRM in reducing its operational cost by decreasing the need for excessive use of other marketing strategies (Berndt & Brink, 2004). The company has realized that the loyalty of customers is critical for the success of their business. However, the company needs to dedicate their business to meeting the company's financial needs and the needs of the customers. Moreover, The Body Shop continues to protect the environment to ensure that the needs of the current society are met without compromising on the needs of the future generations. Other strategies that The Body Shop uses to acquire and retain customer include taking corporate social responsibility through its stand against animal testing, supporting community trading, defending human rights, and protecting the environment. The Body Shop follows three phases in implementing the CRM. The first phase entails acquisition of the customers. The Body Shop acquires new customers through use of strategies such as contact management, web-based CRM, selling of quality products, and fulfillment. The second phase entails enhancement. The Body Shop makes use of strategies such as web-enabled CRM and other customer service tools to enhance the quality of services. The company has hired sales representative and specialists in different specialties to enable them identify and meet the need of the current customers. Moreover, the company uses social networks such as Facebook to offer consultant services on their products (Berndt & Brink, 2004). The third phase entails retaining the existing customer. The Body Shop has CRM software and other databases that enable it to recognize and reward those customers who have remained loyal for a long period by giving those offers and discounts. The Love Your Body Rewards is one of the groups through which The Body Shop identifies and rewards loyal customers. Moreover, thee databases enable The Body Shop improve its target market as well as develop appropriate marketing initiatives (Berndt, & Brink, 2004). Ineffectiveness of Current CRM The Body Shop CRM is not working appropriately. Although the websites attract several users who eventually start buying from The Body Shop, The Company has not been making adequate profits especially in the recent past. This is due to excessive use of activities meant to enhance corporate social responsibility and excessive use of offers and discounts. Moreover, the websites lack important information that cosmetic customers seek for while deciding whether to buy a product. New CRM Objectives The current CRM requires improvement and alterations in some areas. One of the objectives should aim at improving the rewarding systems. The time sensitive offers by The Body Shop creates a notion that the company is manipulating its customers. Another objective should be improving on the time scale for the offers since the current period for the offers is at times too short. Moreover, the discounts are at times too high, and should be decreased to avoid the customers’ doubt the quality of the products. Another objective should focus on changing the communication strategies to increase the sales. Although The Body Shop has been using emails to inform their customers of their existing products, the descriptions given are too shallow. Moreover, their website lacks in-depth descriptions of products. Most cosmetic companies use their websites to teach different aspects on how the body functions, which has attracted customers. The several offer messages sent to the customers through the phones create a sense of desperation on the side of the company. How the objectives will be achieved The new of the company should focus on creating the idea of the unique effectiveness of their products. Moreover, the company should increase the use of media through advertisements. By enhanced use of emails, the company will be able to connect appropriately with the customers, identify their needs, and manufacture products that meet their needs. Using emails and websites to educate the customers will make them informed of the different products and increase their willingness to buy. The company can reorganize their offer schedules and make offers during certain periods such as festive seasons. (Lindgreen, 2004; Sumit & Chaudhuri, 2005). Supporting the New CRM Strategy Using the 4Ps of Marketing Mix The new CRM can be supported by the four Ps, which include Product, Promotion, Place, and Price. By using websites to demonstrate the effectiveness of their products, the Body Shop will be able to convince customers that the price of the products is worth. This is more so in India where people view the products as too expensive (Berndt & Brink, 2204). Product: The Body Shop should ensure that the quality of their product is retained. Moreover, the company should avoid overusing offers and discounts to market its products. This is because this strategy is creating a bad image of the company. People: The Company should thus focus on educating the customers about the products. This could be through use of their online consultants who can post materials related to the company’s products using simpler language (Lau & Seetner, 2011; Lindgreen, 2004). Place: The company can use google map to enable customers locate places where their shops are located. Promotions: Moreover, promotions should be used moderately especially in areas with much competition. The promotions should be strategic and aim at demonstrating the uniqueness of The Body Shop’s products as compared to those from competitors (Mennen, 2011). The Body Shop Marketing Plan  Business objectives can be defined as the stated and measurable goals that a company comes up to enable it achieve its aims. The business objectives depict the future of any company. Moreover, the objective should be measurable, specific, time specific, realistic and agreed upon by the major stakeholders in a company. The business objective of any company can be considered as its statement of purpose (Epstein & Yuthas, 2009). Current Market, Customer, and Industry Trend The objectives of The Body Shop are mainly asked on the conviction that the success of a business is determined by how a company treats the environment and people, especially the less fortunate (Sumit & Chaudhuri, 2005; Marsh, 2001). Currently, the marketing strategy focuses on the products as being natural and earthly. The major customers are women since most of the products serve the needs of women. However, there are some products meant for men. The cosmetic industry is becoming more diverse and competitive due to the increasing number of cosmetic shops in the market. Moreover, the number of men using cosmetics has increased. Most cosmetic companies are focusing more on retaining their customers as opposed to creating new ones (Marsh, 2001). One of the major objectives of The Body Shop is to involve itself in activities aimed at bringing change to the environment and the social lives of the society. This objective targets the society. Moreover, it will enable The Body Shop gain an image of a caring company. Current marketing objectives have not been very successful. New Market Objectives The new Objectives should focus on the 4Ps of the marketing mix. The company’s objective should be to meet the 4Ps in a way that attracts the groups targeted by its products. The company should consider if their products meets the needs of the target group. The company should focus on attracting young customers and retaining them. Therefore, the marketing strategies should be more youth-oriented. This is because the company is making plans to expand its market in addition to increasing the profitability of its business operations. The main objective here should be ensuring that the products manufacture reflect the needs of the consumers. The other objective should focus on the price. If product manufactured is of good quality, it will be easy for the company to fix competitive prices. The company should consider fixing the price depending on location of the store. Moreover, the company should identify the amount of money the target group is willing to pay and beware of the competitor’s price (Lindgreen, 2004; Berndt & Brink, 2204). The overuse of promotions has created a negative notion about the quality of The Body Shops product. Therefore, the company should consider marketing strategies that attract the target group, which are the Youths. The promotion should thus include activities such as sponsoring beauty shows and sporting activities. Social Network is another marketing strategy that should be used to attract young people. Moreover, their websites should be more detailed to orient the customers to different products. Additionally, advertisements using bill boards television and magazines should be enhances (Lau & Seetner, 2011). In the franchised shops, the company should enhance selective distribution. Different people from different regions prefer varying products. Therefore, the company should identify the varying needs of the customers in different localities. Moreover, the company should carry out a study to find out the distribution of their customers and locate their distributors appropriately (Berndt & Brink, 2204). Hence, the company requires improving on the strategies of making offers to avoid it appearing too desperate. The offers should be reasonable and should last for longer periods to ensure the customers enjoy them. Currently, the offers are short lived and most customers complain that such offers are unreasonable (Lau & Seetner, 2011). A Marketing Budget to Achieve the New Objectives To achieve the new objectives, The Body Shop should consider altering its budget. The company should spend about 4% of its gross income on the development and maintenance of the IT including the websites, telecommunication, and databases. The databases should be used to collect customer’s feedback. The company should consider reducing its spending on offers and environment renovation programs. Though corporate social responsibility is an appropriate tool for Marketing, The Body Shop has been overspending on its projects aimed at improving the environment. The company should thus spend about 3% of the gross revenue. Moreover, some of the projects that are ineffective should be disregarded. The promotions should be more logical. For example, the company can use a strategy such donating about 1%, for every purchase made at a certain price to the charity and environmental organizations. This will enable the company make profits and conduct community projects (Cathy & Caryn, 1999). This is because customers will be willing to buy when they realize that their purchase contributes to donations. This campaign should cost the company about 2% of the gross revenue. Other forms of marketing should include billboard advertisements, advertisements through the magazines, social networks, television and sponsoring of activities should take about 3% of gross revenue. Therefore, the company should focus on marketing strategies that benefit both the company and the stakeholders (Pahlavanzadeh, 2011). During the sponsorship activities such as sports, the company should use banners. The company should also consider organizing conferences to create awareness on the environment, a method that should not take more than 1% off gross income. Moreover, their website should include educative articles on the environment. This will reduce the cost use in environmental issues. The total revenue use in marketing should not exceed 10% of the gross revenue (Berndt & Brink, 2004; Epstein & Yuthas, 2009). Evaluating the Perfomance of New Marketing Objectives After implementing a marketing strategy, it is important to measure its effectiveness and make changes where necessary. The monitoring and evaluation should entail analyzing the sales and comparing the changes in sales with the marketing cost. The effectiveness of the new marketing strategy can be assessed using various strategies. One strategy should be through measuring determination of change in sales following implementation of the different marketing strategies. Measurement should entail comparison of the performance with the different marketing strategies. Moreover, the management should collect data and analyzing it. Analysis of the performance can also be done through numerical counting and reporting. This can be through determining the number of people visiting the company websites and the different stores. Moreover, the performance can be measured through comparing data on the number of people visiting the store and the sales made on daily basis. To assess the online sales, the company can install software to analyze data through comparison of the number of visit and the number of online purchases. Moreover, the company can carry out online surveys to find out the number of customers who are triggered to make purchases by the different company’s marketing strategies (Epstein & Yuthas, 2009). Conclusion Customer Relations Management entails the strategies used by a company to obtain customers and develop long-term relationships with them. Currently, The Body Shop Mainly depends on offers to attract and retain customers. However, overuse of offers has created a negative attitude about this company. The new marketing objectives should focus on other strategies of attracting customers without appearing desperate. Such strategies include positioning of their franchises, advertisements, and customer education. The company can continue giving offers but they should be logical and reasonable. This will make the customer realize that the products are of quality and worth the price. The Body Shop marketing budget should be considerate to ensure the company does not continue reducing its profits. Moreover, focusing on creating environmental awareness using online techniques such as websites will enable The Body Shop spend fewer funds in conducting corporate social responsibility and increase profits. Works Cited Assenmacher, K 2012, The Body shop - An Analysis of the Company ?s Actions towards Sustainability, GRIN Verlag, London. Berndit, A & Brink, A 2004, Customer Relationship Management and Customer Service, Juta and Company Ltd, New Jersey. Cathy, L. H. & Caryn, L. B. 1999, Marketing strategies and the search for virtue: A case analysis of the body shop, international, Journal of Business Ethics, 20(3), 249-263. Retrieved from http://search.proquest.com/docview/198112887?accountid=45049 Epstein, M. & Yuthas, K 2009, Evaluating the Effectiveness of Internet Marketing Initiatives, Management Accounting Guideline, pp. 1-40. Kossowski, A 2007, Strategic Management: Porter's Model of Generic Competitive Strategies – Theory and Analysis, GRIN Verlag, London. Lau, C. & Seetner, E 2011, The Body Shop, Available at: http://www.slideshare.net/ChesterLau/the-body-shop-marketing-campaign [Accessed 19 Dec 2012]. Lindgreen, A 2004, The design, implementation and monitoring of a CRM programme: A case study, Marketing Intelligence & Planning, 22(2), 160-186. Available at http://search.proquest.com/docview/213130431?accountid=45049 Marsh, H. 2001, Has the Body Shop lost its direction for good? Haymarket Business Publications Ltd, London, United Kingdom, London. Mennen, M 2011, The Body Shop: Strategic Business Management, GRIN Verlag Pahlavanzadeh, S 2011, ‘A Critical Analysis of Customer Relationship Management from Strategic Perspective’, IPEDR vol.3, no. 1, retrieved 19 December 2012 Sumit, S. & Chaudhuri, K 2005, The Body Shop: The Ethical Beauty Retailer's Growth Strategies, Case Development Centre, Available at, Online: Available at http://www.ibscdc.org/Case_Studies/Corporate%20Social%20Responsibility/CSR0015.htm. Read More