The Body Shop Marketing Analysis
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Introduction
The Body Shop International PLC is one of the largest cosmetics companies in the world with 2,600 stores run in 66 markets. It offers a wide range of more than 1,200 products made from original and natural ingredients for body, face, hair and home. The company was founded by Anita Roddick in 1976 after her visit to a local shop in California and has retained an annual growth of 50% in sales during the next ten years of operation. In March 2006, LOreĢal made a Ā£652 million agreed takeover of The Body Shop and de-listed The Body Shop from the London Stock Exchange. This acquisition has been an important step in the LOreĢal Corporate strategy since The Body Shop has emphasized its support for a wide range of issues around the world. In 2008, the leader and inspirational figure of The Body Shop, Anita Roddick, passed away, but her legacy and beliefs continued.
Throughout its development of more than 30 years, The Body Shop has grown from a local shop to a multinational company. Its successful performance in the cosmetics market and the superior experience its products have brought to the customers helped establishing its high global reputation. Besides, its focus on social and environmental issues earned supports from the public, which significantly contributed towards the companys rapid growth. Starting with the “Save the Whale” campaign in 1986, The Body Shop has been launching various campaigns on various issues throughout the time, with special focuses on the five core values: Support Community Fair Trade, Defend Human Rights, Against Animal Testing, Activate Self-Esteem, and Protect Our Planet.
This paper aims to analyze The Body Shops marketing environment and the marketing mix, which has led to its current outstanding performance. It is also going to summarize the key elements that will contribute to and sustain its future success. Since The Body Shop is such a globalized company, information and data in all markets will be included in the analysis.
The Marketing Environment
Unlike some other companies who wait for the marketing environment to change and adapt to it, The Body Shop has been taking proactive steps rather than reactive stances toward the changes in marketing environments. Its special focus on company values allows it to keep growing as a leading force in the industry, retain considerable growth in sales and earn high reputation among the public. The microenvironments include internal factors within the market that affect the companys performance, such as the company, suppliers, marketing intermediaries, competitors and customers.
As mentioned above, The Body Shop business has sustained growth throughout the 35 years of operation. Although it is now a part of the LOreĢal family, The Body Shop operates independently and reports directly to the CEO of LOreĢal. It has also retained its own values and identities after the acquisition. Recent rumors say LOreal intends to sell The Body Shop due to its underperformance and misfit with LOreĢals strategy. However, it seems The Body Shop had a fairly strong performance last year as the company reported for its last years figures that pre-tax profits was Ā£49.3million (up from Ā£45.6million in the previous year) and a increase in Turnover by 3.8 per cent to Ā£420.5million. LOreal chief executive Jean-Paul Agon also said in September this year: “I very often receive very strong offers to buy The Body Shop, which means that its a kind of treasure.” Therefore, no judgment can be made before further information. The way The Body Shop develops the products is first by doing market research and collecting customer feedbacks. Once it has a specification of the product, it looks for the best way to produce and market it while considering both cost and ethical issues. Additionally, the company has set up a framework to ensure healthy working environments for the employees according to its value on Defend Human Rights. This framework allows the company to put its value into action.
The Body Shop now works with over 120 suppliers all over the world. It sources its products and ingredients by having a group of specialist buyers looking for potential community suppliers that meet
its ethical, social and quality standards. When having a possible supplier, it analyzes the cultural, social, technical and economic issues within the local community and determines the price it offers. Through the Ethical Trade program it launched, it audit the working conditions and environment of their suppliers and workers regularly to ensure the suppliers are improving the working conditions. Besides the Ethical Trade, The Body Shop has been supporting Community Fair Trade since 1987. Last year, 80% of its products contain one or more ingredients from the Community Fair Trade suppliers. The aim is to source from small local and community groups while paying with a fair price in fair conditions and increasing employment in those communities. This particular program also allows the company to gain access to some of the finest natural and rare ingredients in the world, for example Babasuu, Tea Tree and Maurula. By now, there are 25 Community Fair Trade suppliers for the company, such as India, Kenya and Brazil. This approach has helped The Body Shop establishing strong long-term partnerships with the suppliers. Moreover, it secures the natural ingredients and fair prices for its products to outperform its competitors in terms of both quality and pricing.
The main marketing intermediaries for The Body Shop are company owned stores and franchisees.