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Hervita Putri (90120160015)



19th, December, 2012

Table of Contents
Company Background.
Macro-environmental Analysis PESTL.
Political Factors.
Economic Factors.
Social Factors.
Technological Factors.
Environmental Factors.
Legal Factors.
Micro-environmental Analysis Porters Five Forces.
SWOT Analysis.
Segmentation Strategies.
Market Targeting.
Strategic Positioning.
Company Current Marketing Strategy.
Proposed Marketing Mix the 7ps.
Physical Evidence.
Effectiveness of the Current CRM of the Body Shop.

Current CRM Strategy.

Ineffectiveness of Current CRM.
New CRM Objectives.
How the objectives will be achieved.
Supporting the New CRM Strategy Using the 4Ps of Marketing Mix.
The Body Shop Marketing Plan.
Current Market, Customer, and Industry Trend.
New Market Objectives.
A Marketing Budget to Achieve the New Objectives.
Evaluating the Perfomance of New Marketing Objectives.
Works Cited.


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 LOreal, 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 companys 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 companys 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 peoples 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 companys 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 EUs 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 Porters 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 Shops 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).


There has been a previously considerable decrease in Body Shops 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).


The testing of different cosmetic products in 2007 established that they used

harmful Lead in their lipsticks. However, Body Shops 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).


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 LOreal acquired Body Shop, its animal

testing on products conflicts with Body Shops 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 3035, 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 Shops
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.
a. 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.
b. 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.
c. 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.
d. Promotion
Promotion of mens 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. Womens
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 7ps

Customer relationships are essential in the marketing strategy of companies.










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.
a. 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
b. 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.
c. 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.
d. Place
Exploring newer markets is essential for Body Shop to achieve its business objectives.
Investment in new markets will reduce the companys 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 months 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
e. 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
f. 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.
g. 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 companys 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
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


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


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 companys 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 Shops 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

companys 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 youthoriented. 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 competitors 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 customers 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 companys marketing strategies (Epstein & Yuthas,


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
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Service, Juta and Company, London.
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),




Epstein, M. & Yuthas, K 2009, Evaluating the Effectiveness of Internet Marketing

Initiatives, Management Accounting Guideline, pp. 1-40.
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