The Body Shop is a British multinational cosmetics, perfume, and skin care corporation with operations in 66 countries and about 22,000 employees (Thebodyshop.com 2018). The company was established as a socially and environmentally conscious firm in 1976 by Dame Anita Roddick, an environmental and human rights activist. Over the years, the corporation has remained true to its core value of manufacturing products that are not harmful to the environment and ensuring that its activities enhance societal wellbeing. The Body Shop operates in a highly competitive and lucrative industry. According to IBIS World (2018), the global cosmetics manufacturing industry has registered strong growth in the last five years. This growth has mainly been driven by the manufacture of widely accepted skin and personal care body products. Although the cosmetics manufacturing sector is mature in most industrialised nations, it is highly innovative especially regarding organic and luxury products. Revenue growth in the industry is determined by consumer spending. The Body Shop, therefore, aims to gain a competitive advantage in the market and increase revenue generation manufacturing and selling products that appeal to the tastes and preferences of consumers.
This marketing report examines the needs, wants, and demands of The Body Shop consumers to identify the current marketing orientation of the corporation and why the company should consider it essential to meet consumer needs, wants, and preferences. The report also explores the corporation’s marketing environment to determine how social and environmental factors impact on the company’s business operations. It further conducts a competitor analysis to determine how The Body Shop can improve its competitive advantage in the marketplace. The report also investigates the corporations marketing mix using the 7p’s framework to establish how the company is positioning itself in the marketplace to appeal to consumer needs and preferences and gain a competitive advantage.
2.0 Needs, Wants and Demands
2.1 Importance of understanding Customer’s Needs, Wants and Demands
Needs, wants, and demands are key elements of marketing concepts. They are all interrelated, therefore, making it important for business organisations to take all of them into consideration when developing marketing strategies (Armstrong 2009). Needs are defined as basic requirements that human beings cannot survive without. In Maslow’s hierarchy of needs, basic needs are often found at the lowest level of the hierarchy. It means that individuals must meet these needs before any other needs. While basic needs do not change, wants often change. A want is something that is desired (Solomon 2009). It transforms into a demand when a consumer is willing and able to pay for it at a given price.
It is important for The Body Shop to understand consumer needs, wants, and demands to develop effective value propositions that can appeal to consumers. The company can only develop successful marketing strategies when it positions itself as the ideal firm to meet these needs, wants, and demands. It can increase demand for certain wants by employing marketing communication strategies that appeal to the desires of consumers. These desires include tastes and preferences. Without understanding what consumers need and want, it would be difficult for the company to increase demand for its products in the marketplace.
2.2 Marketing Orientation
A marketing orientation of a business enterprise is the approach taken by the firm to meet consumer needs and wants through a product mix that satisfies these needs and desires. A marketing orientation is essentially used by business organisations to gain a competitive advantage in the market by appealing to the tastes and preferences of consumers (Hair Jr and Lukas 2014). It is a consumer-focused approach to product design that aims to differentiate a business organisation from its competitors by putting the desires of customers first during product development. Research indicates that marketing orientation has a significant impact on the performance of an organisation and its performance against rivals (Huang and Sarigöllü 2014). The five marketing orientations are production orientation which focuses on low-cost products, the product concept that focuses on quality, the selling concept that concentrates on distribution and sales, the marketing concept that focuses on smart and intense marketing, and the societal marketing concept that aims to improve societal wellbeing.
The Body Shop adopts a societal marketing concept because it aims to improve societal wellbeing even as it achieves profit goals. The company uses sustainable production strategies to enhance environmental conservation and mitigate the exploitation of various stakeholders along the supply chain through ethical sourcing. Corporate social responsibility is a critical issue in the contemporary business environment. Kuhlman and Farrington (2010) argue that consumers tend to prefer to purchase products from companies that are not only determined to maximise profits but are also concerned about societal wellbeing.
3.0 Marketing Environments
3.1 Importance of Marketing Environmental Analysis
Business organisations do not conduct their activities in a vacuum. They are affected by both internal and external business environmental factors. External factors are beyond the control of the organisation and management can only seek to exploit opportunities in the external business environment while mitigating challenges (Issa, Chang and Issa 2010). Internal factors, on the other hand, focus on the resources and capabilities of an organisation. A marketing environmental analysis, therefore, examines both external and internal business environmental factors to determine who the organisation can achieve success in the marketplace by exploiting opportunities and overcoming challenges. Analysing both the external and internal business environments, therefore, enables an organisation to develop effective marketing strategies. According to Kotler and Armstrong (2010), a business organisation performs better when it understands threats and opportunities that exist in the external business environment and how it can use its strengths to gain a competitive advantage while overcoming internal weaknesses.
3.2 Macro Environment
The macro environment is the external business environment of The Body Shop. A key social issue in the macro environment is growing consumer concern for sustainable business practices. Most consumers in the contemporary business environment are keen to ensure that they only deal with business organisations that engage in the ethical pursuit of profits. An organisation that achieves profit goals in an unethical manner is viewed negatively by many consumers (Furlow 2011). This trend has made it necessary for business organisations to embrace sustainability practices to gain a competitive advantage. It has provided an opportunity for The Body Shop to gain a competitive edge by positioning itself as a company that embraces sustainability practices through ethically produced products.
Environmental factors also impact on the activities of business organisations. Climate change is a major environmental factor that poses a significant threat to the future of The Body Shop. Destruction of the environment through deforestation and the use of fossil fuels has contributed to climate change. Most governments have moved to implement laws aimed at enhancing environmental conservation by encouraging business organisation to engage in green practices (Jay Polonsky 2008). Loss of habitat and climate change threaten the future of the supply chain of The Body Shop (Thebodyshop.com 2018). The company, therefore, seeks to ensure that its suppliers engage in environmentally sustainable practices to conserve forests and mitigate climate change.
3.3 Competitor Analysis
One of the biggest threats that organisations face in the market is the threat from competitors. Organisations operating in highly competitive industries must develop strategies that give them an edge of the competition to achieve profit goals. A competitor analysis enables an enterprise to gauge the performance of its competitors in the market against its own in order to develop strategies that give it an edge over its rivals (Jobber and Ellis-Chadwick 2012). The Body Shop must conduct a competitor analysis to establish areas in which it has been outperformed by the competition in order to review its business strategies and gain a competitive advantage.
3.4 Analysis of Three Key Competitors
The Body Shop has various competitors in the UK. The three key competitors of the company in the UK are Lush, L’Occitane, and Yves Rocher. These firms pose a direct threat to the business of The Body Shop. Figure 1 is an analysis of the three major competitors.
Competitor Analysis
Attributes
Weight
The Body Shop
Lush
L’Occitane
Yves Rocher
Sustainability
15%
5.0
4.0
4.0
3.0
Quality
30%
4.0
5.0
3.0
4.0
Price
25%
4.0
3.0
4.0
4.0
Customer Awareness
20%
4.0
4.0
3.0
2.0
Number of Stores
10%
5.0
4.0
3.0
1.0
Score
4.25
4.05
3.4
3.05
Figure 1. Competitor analysis
Rating (Scale = 1-5: 1 poor, 5 excellent)
From the competitor analysis, it is clear that Lush poses the most significant threat to The Body Shop. Both of the companies have focused on sustainability issues to ensure that their products are manufactured ethically. Lush does not test products on animals just in the same way that The Body Shop does not test its products on animals. On an industry level, Lush and The Body Shop have a competitive advantage over rivals on issues relating to sustainability. Growing consumer awareness of the need for cosmetic companies to produce beauty products ethically has made it essential for firms in this sector to ensure that their operations adhere to sustainability principles. L’Occitane and Yves Rocher also avoid testing products on animals. The Body Shop, however, scores highest in this category because it has employed societal marketing orientation to gain a competitive advantage. The Body Shop must work on improving its product quality to continue performing better than Lush in the market. Lush manufactures products with alluring aroma better than The Body Shop (Smithers 2011). The firm must move to improve the quality of its products to overcome the competitive threat posed by Lush in the market.
4.0 Marketing Mix
Marketing mix refers to the combination of actions that a company uses to promote its products and services in the marketplace (Goi 2009). A company must identify the right marketing mix to ensure that its marketing strategy results in an increase in sales and profits.
The Body Shop offers a variety of products and services to meet the tastes and preferences of its target market. The company has categorised its products into face, body, hair, makeup and fragrance. Face products are mainly for customers looking to eliminate acne and scars and improve the quality of their skin. The face is a sensitive part of the body. Most female customers find it difficult to find the right products to improve the health of facial skin. The company targets this segment with its products. The company also targets both male and female customers with its fragrance and body products. However, the makeup category primarily targets female customers. The company has also developed line of products for vegans. This is an indication that The Body Shop aims to match the tastes and preferences of its customers.
The Body Shop has both low-cost products and premium products. It adopts a flexible pricing strategy because it caters to both high-end customers and price-sensitive consumers. The company often offers discounts to increase sales in certain product categories by attracting price-sensitive consumers through low prices. The company also employs bundle pricing to encourage customers to purchase items in bulk. According to Ellickson and Misra (2008), this strategy is mainly used for popular products.
The company has established several retail stores to ensure that consumers can acquire products conveniently. Store location is a major determinant of the performance of a company in the market because most customers prefer to shop at convenient locations. The company has also established an online shopping platform to enhance shopping convenience. According to Bridges and Florsheim (2008), changing lifestyles have made it important for business organisations to invest in online stores to increase shopping convenience. The company aims to use ecommerce to improve its market reach and increase sales.
5.0 Conclusion
This report shows that marketing is a critical management function. The Body Shop has managed to perform well in the market over the years because of effective marketing strategies. In order to gain a competitive edge in the market, business organisations must identify consumer needs, wants, and demands to determine how to meet them and increase customer satisfaction. The report also determines that companies must understand both their internal and external business environments to achieve success in the market. Factors in the internal and external business environment can hinder an organisation from realising its performance targets when it does not mitigate challenges and exploit opportunities. The report further establishes that having the right marketing mix plays an integral role in improving the competitive advantage of an organisation in the marketplace. It is, therefore, essential to develop product, place, and pricing strategies that differentiate the company from competitors and appeal to consumers in the target markets.
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