Mkt306 Marketing Strategy | Environmental Assessment Answers

Answer:

Part 1

Introduction 

Strategic marketing is the process that is used by a company to differentiate itself from other competing brands by developing its current and potential strengths so that it can offer better value to its targeted audiences than other brands (Banerjee, 2017). Under this process, organizations develop and implement effective marketing strategies so that they can approach their potential customers. The Body Shop is the organization that is chosen for this report. Body Shop is a UK based organization that offers facial and skin cosmetic products. Part 1 of the report includes the environmental analysis of company by using SWOT analysis framework. It discusses the current marketing strategy of Body Shop Company that helps it to attain significant competitive advantage over its competitors.

Furthermore, part 2 of the report introduces a new product in its range that will assist The Body Shop in attracting new customer base. There is a discussion about the potential targeted customers for this new product. Moreover, it includes the marketing mix strategies which can be used by The Body Shop Organization to promote its new products in the market and to attain its marketing objectives. It will aid the organization in its strategic marketing process and achieving its overall business objectives.

Company Description 

The Body Shop is an international brand that is officially named as The Body Shop International Limited. It is a skin care, beauty care, perfume and cosmetics company, which was established in the year 1976 by Dame Anita Roddick. Currently, it provides a variety of 1000 products which are offered under more than 3049 franchised and owned outlets internationally in 66 countries. It is based in East Croydon and Little Hampton, West Sussex. In the beginning, the organization was owned by a French cosmetics company L’Oreal between the year 2006 and 2017. Now, it is owned by Brazilian cosmetic firm Natura. In 2017, L’Oreal has decided to sell it to Natura for £880 million (The Body Shop, 2018).

The Body Shop is operating its business all over the world by developing a strong mission statement i.e. “to dedicate its business operations to the pursuit of environmental and social change”. This organization provides a wide range of products under cosmetic brand like shampoo, body gels, conditioners, bath treats, body oil, hand treatment and other cosmetic products. The products of this company are manufactured by using natural ingredients like Shea Butter, Hemp, Cocoa, Aloe Vera, White Musk, Nutriganics and Vitamin C etc. It offers the products by focusing on both male and female segments of market (The Body Shop, 2018).

Environmental Analysis 

Environmental analysis is the process that is used to analyze different external and internal factors which can affect the business and operations of an organization (Banham, 2010). These factors can be evaluated by using different strategic framework. Environmental analysis of Body Shop is discussed below:

Internal Analysis 

Unique Positioning

The products and services offered by Body Shop are produced by using natural ingredients which are safe for all types of skin. The packaging is done with the biodegradable material that makes it sustainable brand among customers. Positioning is the biggest strength of Body Shop Organization. This assists the firm to distinguish its products from competing brands.

Sustainability

The processes and products of The Body Shop reflect that company is very much focused on environmental sustainability. The founder of Body Shop is the champion of social and environmental issues. His values are shown in all the aspects of Body Shop’s corporate governance (López-Gamero and Molina-Azorín, 2016). From utilizing the biodegradable and renewable packaging materials to purchasing non-fossil fuel generated materials, the company has been real its Corporate Social Responsibility approach.

Focus on issues

More than just manufacturing the cosmetic products, this company has been looking for personal or skin care problems which women face. The products of the company are dedicated to solving these issues. It assists the Body Shop to connect better with their potential customers (Ni and Van Wart, 2015).

Weaknesses 

Pricing

The founder of Body Shop believed that people will be willing to pay a higher price for the items with organic and naturopathic ingredients. In the early years of company’s establishment, it was right. With the increase in competition, it confronted challenges due to higher prices and lost the business to competing brands (Keith, 2017).

Weak Performance

There is a significant decline in the profits and revenues of The Body Shop. Thus, there is weak position as the UK market has recorded weak performance than other markets. It led the Body Shop towards the decrease in market share.

Unable to match the changing customer needs

In the era of nineties, The Body Shop was very successful in cosmetics industry. But with the passage of time, competing brands like Boots developed similar products and new upgraded products. The company is not able to launch new product lines and attract the customers. It is not able to meet the changing needs and expectations of customers towards cosmetic products for their skin and hair.

External Analysis  

Opportunities 

International Expansion

International expansion is one of the major business opportunities that The Body Shop can have in this industry (Banham, 2010). This company can expand its business in neighboring nations of United Kingdom like Ireland, Denmark, Norway, Germany etc.

Increasing Anxiety of Health

Nowadays, internet is creating fear of the utilization of chemicals in beauty and hair care products. So, people are going towards using natural products in their routine life. It can be biggest opportunity for Body Shop that already offers cosmetics with natural ingredients.

Introduction of new range of products

The Body Shop can grab the attention of people by introducing a new range of products in both local and international markets. It can diversify its product range in different segments (Keith, 2017).

Threats 

Intense Competition

In the cosmetic product industry, there are various players which pose competition on The Body Shop Organization (The Body Shop, 2018). These players are such as Lush, Boots, Estee Lauder, Revlon etc.

Issues in Attracting customers

The market for cosmetics products is huge but the competition is copious with the result that it has become very difficult to entice and engage with the customers.

Problems related to raw materials

The products of Body Shop utilize some raw materials from all over the world. So, laws and legislations in business with the suppliers can affect the operations of company adversely.

Evaluation of current marketing strategy  

In order to promote its products, The Body Shop has implemented effective marketing strategies. These strategies assist the company to attract customers towards its products. The major objective of company’s marketing strategies is to identify the needs and desires of customers and attract them towards its cosmetic products. At Body Shop, their needs can be thought in terms of 4Ps i.e. product, price, place and promotion (Bewick, 2010). This company formulates its marketing and promotion strategies considering the strategies of competitors and customers’ needs.

About the marketing strategy of Body Shop, it can be stated that it relies on below-given six pillars:

• Providing a wide range of cosmetic products to its targeted customers.
• Using a customer-friendly edge.
• Mounting easily from small extent to large extent.
• Targeting the customers considering their needs and expectations.
• Setting the prices to maximize the profits and returns.
• Implementing and using effective marketing and communication strategies.

In addition to this, Body Shop is increasing its investment on marketing and promotional activities every year. The marketing strategy of this company integrates various targeted offline and online marketing channels like social networking sites, television advertising, newspaper, e-mail marketing, sponsored search and other many initiatives (Menon, et al, 2015).

Generally, the current marketing strategy of Body Shop is created on the basis of following principles:

• 4 Ps of marketing emphasizes on the product and promotion elements of the marketing mix. Providing more than 1000 beauty products all over the world, the product range of Body Shop is wide among other cosmetic brands. By targeting the upper class segments, it sells its products on comparatively higher prices (West, Ford and Ibrahim,2015).
• Targeting, segmentation and positioning are associated with focusing on higher income level group. The positioning of company is very strong that assists it to attract more people towards its cosmetic products.
• The Unique Selling Proposition (USP) of Body Shop includes a variety of products which are made of natural ingredients and its products are environmental-friendly. In its promotional process, the company never use popular models and celebrities to endorse its products. Both of these characteristics of Body Shop create the competitive advantage for the company. Unique selling points of Body Shop indicate that it overlaps with its competitive edge (The Body Shop, 2018).

Organizational Competitive Advantage 

From the above paragraph, it can be stated that company is using effective marketing and production strategies which assist The Body Shop to gain significant competitive advantage over its competing brands. There are various competitors like Lush, Boots and Estee Lauder which are competing with this cosmetic brand. In order to gain more competitive edge in UK cosmetics market, The Body Shop wants to enhance the quality of human’s life by offering natural and environment-friendly products. Moreover, the strong promotion of CSR via assisting many campaigns makes the brand’s positioning stronger as a globally green firm (The Body Shop, 2018). This unique selling proposition is leading the organization to gain more competitive advantage than its major competitors Lush, Weleda, L’Occitane, Estee Lauder, Yves Rocher etc. These cosmetic brans also focus on using natural elements and protection of environment. For Body Shop, Maybelline New York is not a direct competitor; it is a challenge for this as it has started to place itself against animal testing and for the protection of environment (Zieli?ska and Nowak, 2014). Furthermore, the company also makes efforts and utilizes the self-belief for right and reducing the basic self-belied in the values of company. These values would be used by the objective with which the company survives that is practicing competitive and social values which try and contribute to the competitive advantage of The Body Shop.

Estee Lauder is one of the biggest competitors of The Body Shop and it is headquartered in New York. The company offers makeup, skincare and hair care products internationally. By offering a wide range of products, the company is able to generate 29% of the Body Shop’s revenues. As of 2017, the revenues of Body Shop are US$ 1.4 billion and revenues of Estee Lauder are $326.1 million (The Body Shop, 2018).

Apart from this, another competitor of Body Shop is Lush that is considered as ethical cosmetic brand across the world. It sells its handmade cosmetics in 50 nations from 900 stores. In 2017, this brand has generated the revenues of £497.8 M (Smithers, 2011). By offering naturally made products, The Body Shop is able to gain effective competitive advantage over other cosmetic brands. Thus, market performance of this company indicates that natural ingredients in products contribute in its competitive edge but it should make focus on introducing more products in the cosmetic industry.

Part 2

Product rationale and specification 

As mentioned in the part 1, however, The Body Shop is offering a wide range of cosmetic products to its targeted customers but still it is unable to meet the expectations of customers. In order to overcome this weakness of company, The Body Shop is planning to introduce a new product in its product range i.e. natural baby cream. The skin of newborn is very sensitive and it is very common to get rashes in some years of birth. Nowadays, parents are very choosy about the products which are used for their face skin. They always prefer to purchase the products which keep their baby’s skin healthy and smooth (Voigt, Buliga and Michl, 2017).

Looking at this concern of parents, it can be seen that there is an increase in the needs and demands of natural and chemical-free face cream and lotions among both male and females segments. In facial cosmetics industry, there are various leading players which already offer baby facial products but some of them are avoided by customers due to the use of chemicals. Generally, customers prefer to buy the baby products which are non-irritating and mild and that are made of natural ingredients. Due to this, the cosmetics brands are making changes in their production and introducing herbal products for babies (West, Ford and Ibrahim, 2015).

Considering the above rationale, The Body Shop can introduce natural baby cream in its existing product range. It will assist the company to look at the current demands of customers for their babies. By offering this new product to customers, The Body Shop can provide various benefits to its targeted customers. These benefits are stated below:

• The baby cream will be naturally made that will assist in moisturising the delicate skin of babies.
• It will keep the baby’s skin smooth and healthy.
• Its natural ingredients will help the parents to keep their baby’s face skin moisturized throughout the day.
• The cream will suitable for chapped cheeks and tender noses.
• No irritation to the delicate and sensitive skin of babies
• It will be dermatologist tested (Draelos, 2015).
• Safety Assured product.

BCG Matrix 

BCG matrix is a tool for strategic analysis that evaluates the product portfolio of an organization as per their performance and categorizes them as star, cash cow, question mark and dogs (Granero, 2018). The product portfolio of Body Shop can be categorized in different dimensions that are presented in the below-given matrix:

In the future, the baby cream will be under the cash cow dimension as it will perform better. There is an increase in the demand of baby care products so this product will be successful for The Body Shop (The Body Shop, 2018). It will enable the organization to gain higher market growth in cosmetics industry.

Segmentation Targeting & Positioning (STP) 

When The Body Shop will be offering its new product range in the market, it needs to focus on STP practices i.e. segmentation, targeting and positioning. Market segmentation is the process that used to take the heterogeneous market and categorizing it into smaller groups where all the people same demands and needs and reacts similarly to a set of marketing initiatives (West, Ford and Ibrahim, 2015).

For its new product, the company will target the people considering their different segmentation characteristics like demographic, geographic, psychographic and behavioral characteristics. Under demographic segmentation, the organization will focus on the babies from 0 to 5 years and their mothers. Majorly, it will focus on the new born babies who need the naturally-made face cream as their skin is very much sensitive. Moreover, the company will focus on the parents from medium income groups as the prices of Body Shop’s products are higher than other competing brands. Geographic segmentation will enable the Body Shop to emphasize on nearby nations of United Kingdom (Ottman, 2017). It will offer its products in both the urban and rural areas. Moreover, the company will be emphasizing on psychographic characteristics of customers. Under this, it will target the mothers from upper and middle class families who prefer to purchase expensive and effective products for their babies. Under behavioral segmentation, Body Shop will target new mothers who want to take good care of their child’s skin.

After segmentation and targeting the most appropriate market, Body Shop will position it as a complete baby care cream. Starting from their birth to grown baby, it will keep their skin smooth and moisturized. In the positioning, the company will state the point of difference and point of parity clearly. For Body Shop’s baby cream, point of difference will be that it is made of herbal and natural ingredients. It can be used for other parts of body also. Point of parity is the soft, smooth and moisturizing skin to babies (Singhal, Rajput and Jha, 2017).

Marketing objectives and goals 

The Body Shop will establish some marketing objectives which will assist the organization to introduce new product in market successfully. The marketing objectives of the company are given below:

• To attract a large customers towards its products
• To increase the brand awareness among all the customer segments
• To increase the market share of company by 15% in next 2 years.
• To attain significant competitive advantage over other cosmetic players.

Specific

The marketing objectives of the company are very specific i.e. to increase its customers by selling more and more products. The specific goal of Body Shop is to fulfill the needs and demands of customers for their babies.

Measurable

The performance and objectives of the company can be measured considering the sales of new products. It will look at the number of customers which are new for the company (Schwartz, 2017).

Attainable

At Body Shop, there is nothing which cannot be achieved. The company will develop effective strategies to make the above objectives attainable. By offering quality and herbal products, the company will able to increase its customer base and market share in cosmetic industry.

Relevant

The objectives are related to company’s core strategies and objectives. These objectives will allow the Body Shop to attain its core business objectives i.e. to increase its profitability and gain competitive advantage over other brands.

Time based

The company will make efforts to achieve these objectives in the time frame of two years.

Marketing Mix Strategies 

In order to introduce its new products in the market, The Body Shop needs to make changes in its current marketing strategy. For its baby cream and lotions, the company will update its marketing mix strategies (Khan, 2014). These strategies will assist Body Shop to attract new customers and retain existing customers.

These marketing mix strategies are discussed below:

Product 

Currently, Body Shop is a global brand that offers 1000 products under its product portfolio. It provides the products for hair care, skin care, body gels etc. Looking at the changing needs and expectations of customers, the company should include baby cream and lotions in its current product range (Stark, 2015). The product should be made of natural and herbal products like butter, coconut, milk, olive oil etc. that can make the baby’s skin smoother and softer. Additionally, it should focus on improving the packaging of its products so that it can entice more people towards its products (Faull, 2016).

Price

Currently, this cosmetic brand is offering its products by adopting premium pricing strategy. The major reason behind higher prices is the use of natural and herbal elements used in the products. For baby products, the company should use an affordable pricing strategy so that it can offer them to middle income people also. Considering the competition in cosmetic industry, it should offer its baby cream on reasonable prices. It is recommended to The Body Shop that it should set its prices looking at the prices of competitors like Lush (Pappas, 2016).

Place 

Place is one of the most important marketing strategies under marketing mix framework as it helps the organization to deliver its products to final customers. Currently, Body Shop is offering its cosmetic products to targeted customers by using various distribution channels. Firstly, it should make efforts to develop strong distribution network which will facilitate bringing in raw materials and delivering final products to customers. It should offer its baby creams through its owned and franchised stores. For new mothers, it will be good to sell the products online so that they can avail their needed from their home. It should focus on making investment on developing virtual existence. In the future, online channels can support the Body Shop’s customers to buy baby products more easily and conveniently.

Promotion

Under marketing mix model, promotion is the most significant strategy that helps the Body Shop to attract customers towards its products and services (Ryan, 2016). To promote new products, the company needs to adopt different marketing policies so that it can market its brand name in consumer market. It should implement the societal marketing concept and increases the use of plant based ingredients (Chun, 2010). The company should use both online and offline modes of advertising. Under online marketing, it should promote the baby products on social networking sites like Facebook, Twitter, Instagram etc. Additionally, it should give the advertisement in newspaper and fashion magazines. It can promote its products by using its own website.

Thus, it is recommended to the organization that it should adopt and implement effective marketing strategies so that it can attain above-mentioned marketing objectives and establish a significant brand image in global cosmetic industry (Shanbhag and Nayak, 2015).

Conclusion 

Thus, it is hereby concluded that Body Shop can overcome its weaknesses and threats by developing new products in its product range. This is one of the popular cosmetic brands that are offering variety of products by targeting higher income group people. The environmental analysis of the company shows that it is not able to match the changing needs of customers. So, now company should offer baby products. It can enhance the brand awareness of company among a large population. Moreover, it is recommended that The Body Shop should implement more effective marketing strategies to attract and retain its customers. Thus, this introduction of new product will enable it to increase its sales over other players in cosmetics industry.

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