Corporate Social Responsibility of The Body Shop International PLC - Essay Example

Marketing Plan for Corporate Social Responsibility: The Body Shop International PLC Contents Introduction 3 Situational Analysis 4 SWOT Analysis 5 Porter’s Five Forces 7 Marketing strategy & objectives 9 Segmentation, Targeting & Positioning 10 Marketing Program 11 Control & Evaluation 13 Conclusion 13 Reference List 15 Introduction Marketing Plan is an integral part of overall marketing strategies. This includes comprehensive understanding of the market environment and adopting strategies that will be beneficial for the company to penetrate successfully in a new market or for sustaining comfortably in the existing market (Brady, 2010). In this paper, marketing plan of a societal marketing company, The Body Shop International PLC, will be discussed in terms of evaluating marketing environment and studying of detailed marketing activities and marketing system. The Body Shop PLC is a natural beauty brand with headquarters in England. The cosmetics company operates in 60 markets over the globe with 2,500 stores worldwide. The company focuses highly towards establishing social, environmental, ethical transparency in their business practices (Hoffman, 2000). In fact, it is the first international cosmetics brand which was recognized under Humane Cosmetics Standard for their “Against Animal Testing Policy” (Cole, 2003). Clearly, the brand puts large emphasis on Corporate Social Responsibility (CSR). Hence, planning and reviewing of marketing strategy for Body Shop will differ from any other profit oriented company. For better understanding of the requirement and application of marketing plan, Ansoff Matrix is considered to be one of the best strategic planning tools in Marketing Management (Cullen, 2011). It facilitates the management to understand the market condition and influence them for further strategy formulation to ensure future growth of the product. The matrix consists of four dimensions such that market penetration, market and product development and diversification. Market penetration includes launching new product as well as adding a modified product in the product basket of a company in order to capture a larger market share. Market development and product development involves entering into new, emerging markets in order to tap lucrative business opportunities and to create new product to satisfy the ever changing, complex customer need. Planning of diversification of product and services is also important in order to ensure long run growth possibilities (Finch, 2013). Figure 1: Asnoff’s Matrix for The Body Shop Plc Applying Ansoff’s Matrix for The Body Shop PLC, the company should understand the potential of the emerging markets like Brazil, Russia, India and China (BRIC) and penetrate in those markets. Body Shop can customize their products according to the needs of the target market. For, instance, they can introduce a range of newly designed sunscreens for the tropical zones of India. As product and market development involves considerable amount of risk factors, the company should analyse other factors of marketing plan as well, before arriving at any decision (Glowik and Smyczek, 2011). Situational Analysis Situational analysis of a company can be described as the evaluation of micro and macro economic variables prevailing in the environment in which the firm is operating as well as evaluating the internal and external factors of the firm itself and the effect of those factors into the company (Purkayastha and Fernander, 2007). In order to establish situational analysis for Body Shop, techniques such that SWOTS Analysis and Porter’s Five Force Model should be discussed. Macro economic variables include economic, social, political and technological, legal and environmental factors that may affect the business operation of the country indirectly whereas factors at micro level, such that customers, suppliers, shareholders and distributors directly influence business decision. SWOT Analysis of The Body Shop PLC will lead to analyse internal strengths and weaknesses of the company, and provide a better understanding regarding opportunities and threats those exists in the external environment (Finch, 2013). . SWOT Analysis Strength The globally recognized and respected brand image of Body Shop for their superior product quality and ethical production process in line with environmental regulations is the most important strength for the company. Varied ranges of natural and organic products attract existing as well as new customers to a great extent. Brand loyalty is very high, with a single brand in the portfolio; the company has maintained their position in the market due to their strong exercise of research and development. Apart from that, with a limited dependency on the retailers, distributors and franchises, the company practices high level of control (Glowik and Smyczek, 2011). Weakness In spite of having a strong brand visibility, the company inherits a no. of weaknesses. Body Shop concentrates on segmented promotional activities which results in losing of potential customers in other segments and in emerging markets. Factors like limited reach in the retail outlets, huge dependence on mature markets like US, UK and North America. In this region accounts for 70% of the sale for the products), lack of innovation and product diversification and ambiguous image of the parent company L’Oréal has raised credibility issues for Body Shop (Hitt, 2009). Figure 2: SWOT Analysis for The Body Shop Plc Opportunities Immense opportunities are there in the business environment in which The Body Shop Plc operates. As the company is lacking behind in terms of product innovation, it is expected that they will be provided significant resources interns of technological knowhow and financial support from their parent company L’Oréal, as a result of a successful merger. Opportunities are also there in terms of expansion of business in the developing markets and with the improved scope of online shopping. Concentration towards corporate social activities and sound ethical practices will also help the company to attract more customers in future (Glowik and Smyczek, 2011). Threats The company faces external threats such that merging with a negative brand LOréal, entry of a large no. of market players, losing of market share, dependency on a single brand, supply chain uncertainties and price competition in premium segment as well as economic downturn in European market. Porter’s Five Forces Porter’s Five Force Model is another tool that is extensively used for analysing a company’s marketing plan. The five forces can be attributed as, Threats of new entrants The company faces low level of threats from the new entrants. In terms of scale of production, access to distributors and franchises and established brand image, The Body Shop Plc enjoys huge competitive advantages as a result of their sustainability and goodwill years in the market. Threats of Substitute products The number of market players in cosmetics industry is very high. In the organic and natural cosmetics segment as well, Body Shop is facing high level of threats from substitutes. Launching of medicated products by Pharmaceutical companies, home based dermatological remedies and rising acceptance of herbal products is creating tremendous pressure on TBS Plc. Figure 2: Porter’s Five Force Model for The Body Shop Plc (Finch, 2013) Bargaining Power of Buyers As a result of growing superstores and online shopping options, all the competing brands are coming under one roof (Glowik and Smyczek, 2011). Hence, buyers bargaining power is becoming very high due to low switching cost as a result of concentration of buyers in such platforms as against Body Shop’s own outlets. Bargaining Power of suppliers The bargaining power of the suppliers is also very high due to the presence of a number of market players in cosmetics industry (Finch, 2013). Hence, switching cost is also low for them. In contrast to retail outlets, establishment of separate distribution channel increases cost for the company as well. Competitive Rivalry Though The Body Shop Plc exemplifies long run sustainability in the market, the company is not been able to grow at a rate the industry is growing, hence losing out their competitive balance (Finch, 2013). High exit barriers, involvement of huge fixed cost in production process and operating in a less profit oriented manner are creating huge threats for the company in upcoming days. Moreover, evolution of brands like Alliance Boots GmbH, Bath & Body Works, Llc and Sephora Usa, Inc. are forcing Body Shop to engage into competitive rivalry within the industry. Marketing strategy & objectives Without proper strategy formulation, it is impossible for any company to achieve their objectives (Finch, 2013). Similarly, attempt of making strategies becomes futile if the business objective is not clear to the company itself. Hence, the marketing division should take initiatives for translating their objectives into actionable steps through relevant strategies. The Body shop Plc which used to be a market leader has now become a market challenger as a result of expansion in market opportunities. This theory can be best explained through Porter’s generic strategy model which elucidates a company’s ability to achieve competitive advantage in a selected marketplace through their strategy planning. Figure 3. Porter’s generic strategy model for The Body Shop Plc (Kotler and Armstrong, 2008). The Body Shop Plc tends to choose offensive marketing strategy where it counter attacks the competitors who imitate their products through the natural and organic products developed by Body Shop. The company also pose their promotional strategies in a way such that competitors’ product appears to be inferior as compared to Body Shop’s products (Kotler and Armstrong, 2008). Segmentation, Targeting & Positioning From the above discussion, it is evident that The Body Shop Plc is experiencing severe business risk from internal and external marketing environment. Therefore, modification of marketing plan is of utmost importance for the company in order to restrict them from going out of business. Hence, as a result of changing demographics, customers’ preferences, improvement in lifestyle as well as per capita income especially in the emerging economies, The Body (Hill, 2002). Shop should aim at capturing this emerging market segment for alternative growth and profit opportunities instead of concentrating in the already exploited European market (Livesey and Kearins, 2002). After segmentation of the market, Body Shop should opt for multi segment targeting approach where they will be required to formulate different strategies for market structure. For instance, the company should formulate different strategies for European developed market and for the markets of developing nations in order to diversify their customer base. Positioning refers to placing the brand or the product into customer’s mind (Purkayastha and Fernando, 2007). Carefully chosen promotional activities may change the perception of the product into customer’s mind. Penetration in developing market will necessitate the company not only to place their product into premium customers but upper middle class service sector should also be addressed (Hill, 2002). Marketing Program Marketing Mix is a crucial technique that the management applies to determine the most appropriate marketing plan for a company (Robert, 2002). The concept tool involves 7 key attributes. These are, Product Though the products of Body Shop are distinct due to their secular environmental policy and development of organic product, there is a moderate chance for the company to introduce baby products and male products in order to expand their market share at least by 2% as diversification of their portfolio has become key requirement (Hitt, 2009). Price As the company operates in a responsibility model which gives emphasis on public goods, value based pricing should be appropriate for them. As the inherent value of the products will invariably attract premium customer segment, it will be easier for them to enhance their brand image by charging a price which depicts perceived value of the product into the customer’s mind. Such perceived value varies along the presence of substitutes in the market. Hence, presence of negligible or zero substitute products ensures proximity of this pricing strategy from the company’s perspective (Simerson, 2011). Place With the expansion of the scope of global marketing, it has become important for the company to expand their business in the emerging markets like Britain, Russia, India, China and South Africa (BRICS). Monitoring online merchandise in terms of product delivery, inventory control and creating good ambiance in the outlets are some of the areas where they should improve the existing business process (Hitt, 2009). Promotion Putting advertisements on fashion magazines, online promotional activities such that giving discounts, free shipping and delivery of product, sponsoring environmental activities, highlighting eco friendly business aspect and inclination towards corporate social responsibilities of Body Shop are the promotional strategies used by the company in order to attract more and more potential customers (Onkvisit and Shaw, 2004). Packaging Packaging should be made attractive for success of any product. As The Body Shop Plc is engaged into beauty products and cosmetics industry, their packaging strategy should be different. The company minimises the use of plastic for the purpose of packaging. Instead, the value based, environment oriented company uses wood bases paper and pulp for primary, secondary as well as in-transit packaging (Polonsky, 2007). In this way they practice their corporate social responsibility through plantation and protection of trees as well. Such practices help the company to gain huge comparative advantage into the targeted market segment (Baxi and Prasad, 2005) Positioning The Body Shop Plc should incorporate strategies that comprehend the value of their product into customers’ mind so that customers naturally tend to choose the product for betterment of their own lifestyle (Onkvisit and Shaw, 2004). People The Body Shop Plc highly values their internal as well as external stakeholders. Internal human recourses are well trained and always upgraded so that they can comply with the company’s core policies of ethical practices such that protecting human, animal and environmental rights. Exercise of such practice into the business process is reflected in their product quality and other operational activities (Schwartz, 2011). Control & Evaluation The Body Shop Plc exercises the provision for review and meetings on quarterly basis so that degree of implementation of the marketing plan can be monitored. Status of each implementation are analysed carefully to find out area of improvements. New trends and technologies are evaluated yearly. However, in order to measure the degree of control, Peter Druckers SMART Model should be discussed. SMART stands for Specific, Measurable, Achievable, Relevant and Time bound (Onkvisit and Shaw, 2004). The Body Shop PLC is specific in terms of their sustainability of their business process. (Kotler and Armstrong, 2008). The company always takes calculated risk. The management issues have never been so violent that it might harm their brand image or marketing opportunities (Zadek, Evans and Pruzan, 2013). In that sense, the company is measurable. TBS never adopts business objective that is unachievable. As a result, the company signifies result oriented approach for the taken initiative within the given time frame and always accomplishes their marketing plan and business objectives within that specified time period. Hence, TBS is relevant and time bound as well (Kotler and Armstrong, 2008). Conclusion The Body Shop Plc is a company exhibits moral and ethical practices. Hence, their business objective, motivation for profit making and strategies for expansion largely differ from any other companies operating in the market (Zadek, Evans and Pruzan, 2013). However, in order to ensure sustainability in the changing business dynamics, it is very important for the company to make relevant marketing plan. Hence, discussing the key constituents of marketing plan such that SWOT analysis, Porter’s Five Force Model, SMART Model etc from The Body Shop Plc’s perspective, it can be concluded that it will not be very difficult for the company to maintain their position for a one year time period in the competitive market if small alterations in their product diversification, positioning, pricing and targeted market can be introduced. The Body Shop Plc is famous for its value based product development and business operations and they will be able to sustain in their distinct market position, if they continue exercising such ethical considerations. Reference List Baxi, C. V. and Prasad, A., 2005. Corporate Social Responsibility: Concepts and Cases. Delhi: Excel Books India. Brady, D. L., 2010. Essentials of International Marketing. New York: M.E. Sharpe Inc. Cole, G.A., 2003. Strategic Management. Singapore: Cengage Learning EMEA. Cullen, P., 2011. Strategic international management (5th Ed.). Sidney: South-Western Cengage Learning. Finch, B., 2013. How to Write a Market Plan. London: Kogan Page Publishers. Glowik, M and Smyczek, S., 2011. International Marketing Management: Strategies, Concepts and Cases in Europe. Deutschland: Oldenbourg Verlag. Hill, W.L.C., 2002. International Business, Competing in the Global Marketplace: Postscript 2002. New York: McGraw Hill. Hitt, A., 2009. Strategic Management Competitiveness and Globalization. Edinburgh: Nelson Education Ltd. Hoffman, A. J., 2000. Competitive Environmental Strategy: A Guide to the Changing Business Landscape. Washington DC: Island Press. Kotler, P. and Armstrong, G., 2008. Principles of Marketing. New Jersey: Pearson education Inc. Livesey, S. M. and Kearins, K., 2002. Transparent and Caring Corporations? A Study of Sustainability Reports by the Body Shop and Royal Dutch/Shell. Sage Journals, 15 (3), pp. 233-258. Onkvisit, S and Shaw, J. J., 2004. International Marketing: Analysis and Strategy. 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