TABLE OF CONTENTS Executive Summary……………………………………………………………………….3 THE BODY SHOP Situational Analysis……………………………………………………………………….3 SWOT Analysis…………………………………………………………………………...7 Strengths……………………………………………………………………………….7 Weaknesses…………………………………………………………………………….7 Opportunities………………………………………………….……………………….8 Threats…………………………………………………………………………………8 Market Segmentation……………………………………………………………………...8 Positioning………………………………………………………………………………...9 Marketing Mix…………………………………………………………………………...12 Product……………………………………………………………………………….12 Promotion…………………………………………………………………………….12 Price…………………………………………………………………………………..13 Place………………………………………………………….………………………14 INTRODUCTION OF THE GREEN TEA LINE Objective…………………………………………………………………………………14 SWOT Analysis………………………………………………………………………….14 Strengths……………………………………………………………………………...14 Weaknesses…………………………………………………………………………...15 Opportunities…………………………………………………………………………15 Threats………………………………………………………………………………..15 Market Segmentation…………………………………………………………………….15 Positioning……………………………………………………………………………….17 Marketing Mix…………………………………………………………………………...17 Product……………………………………………………………………………….17 Promotion…………………………………………………………………………….20 Price…………………………………………………………………………………..21 Place………………………………………………………………………………….22 Customer Service and Relationships…………………………………………………….23 Recommendations And Conclusions…………………………………………………….24 APPENDIX 1- Survey…….……………………………………………………………..25 APPENDIX 2- Survey Results…………………………………………………………..27 APPENDIX 3- Positioning Maps………………………………………………………..28 Bibliography……………………………………………………………………………..30 Prominently renowned for developing a niche market sector for naturally-inspired skin and hair care products, The Body Shop has successfully created an image that is subtly distinct from its competitors in the cosmetic industry. The company vigorously has campaigned against human rights abuses, supported animal and environmental protection and has committed itself to challenge the stereotypes of beauty perpetuated by the cosmetics industry. During this process, The Body Shop has deservedly gained the support of a generation of consumers . To further extend our reputation and power in the market, we are introducing a new line for Green Tea products. Our goal is to generate more profit by expanding our variety and by targeting a different market sector. The following report will first analyse the current condition of the company, and the latter part will consist of marketing plans that we use to develop the new line. ________________________________________________SITUATIONAL ANALYSIS For the year ended February 2000, global retail sales of The Body Shop increased by 3% to £634.6 million. One of the principal drivers of the overall profit growth has been the performance in North America, where Canada itself accounts for a 5% increase in retail sales. The North American market continues to offer a significant opportunity for expansion as the world’s largest cosmetics market. In the UK, sales and profit have benefited from the increased number of company-owned stores, newer retail formats, and the continuing growth of The Body Shop Direct, a home selling program. The company is also well established in Asia Pacific, Europe & the Middle East.      The strategic objective for the past year was to shift the company’s resources to the retail end of its business. The company sold its Littlehampton manufacturing business to COSi Ltd last year, resulting in a greater focus on the creation of products, marketing and communications. In addition, the company completed the recruitment of its executive management team and reorganized its operating structure to create four regional business units responsible for managing the global retail activities.      This year, upon seizing the opportunity of developing its brand beyond the existing stores, the company continues to develop its regional operating structure and a multi-channel distribution system, the international development of The Body Shop Direct. For its product strategy, the company continues to focus on reinforcing its heritage brands and increasing its level of innovation. Campaigning for social environmental change continues to be an essential part of the company. The two major initiatives of the current year are: (1) The first Human Rights Awards – which recognizes outstanding achievements by organisations working for human rights around the world; and (2) A global campaign on ethical consumerism which will encourage consumers to use their purchasing power to affect global change. ________________________________EXTERNAL MACRO-ENVIRONMENT      With an increase in the senior population and the aging of the baby boomers generation, there is a growing demand in skin care products for mature skin and anti-aging purposes. Economic Conditions      According to the Monthly Economic Indicators of September 2000 prepared by Industrial Canada, the Canadian economy is expanding at a solid pace, supporting growth in personal income and corporate profits. Real GDP rose 9.7%. Exports advanced 8.5%, while imports have been rapidly rising at a rate of 10.2%. Personal income has increased sharply, resulting in an increase of 10.4% in labour income. Growth in corporate operating profits has recently curtailed. However, higher commodity prices and strong demand for manufacturing products continue to support profit growth. Due to a booming economy, retail sales are increasing. Competition      The Body Shop faces a very competitive environment in the cosmetics market. There are several players in the cosmetics and toiletries industry. Major competitors include Shiseido, Neutrogena, Oil of Olay, Elizabeth Arden, L'Oreal, H2O+, Estee Lauder, and Revlon. Nevertheless, the company is also in a niche market as it is distinct product through its naturally-based products and its environmentally friendly image. However, several companies such as H2O+, Rialto Naturals and Fruit Passions recently have entered into this sector, threatening The Body Shop’s hold on the market.      Another distinctive nature of The Body Shop is its commitment to ethical causes and campaigns. The company adheres to defined standards of human rights, social welfare and worker safety, environmental protection and wider ethical issues like animal protection. The company plays an active part in campaigning for positive change in the way the business world works. Winning the support of consumers on its campaigns, the company continues to lead the way for businesses to use their voice for social and environmental change. A Millennium Poll on corporate social responsibility carried out with 23,000 citizens in 23 countries placed The Body Shop as the 14th most socially responsible company on a global basis. Social and Cultural Forces      The awareness for the environment has brought influences in values, tastes and concerns to the market for skin care products. Witnessing the damage to the environment caused by certain technological and industrial changes, respect for the wisdom of world communities is growing in our society. Increasing skin damage caused by pollution and sun exposure has led to an increase in demand for skin protective products. Natural beauty is reappearing once again as a fashion trend, since more consumers are seeking for natural approaches to beauty. The Body Shop has recognized society’s concern for the environment. The company will implement products based on environmentally sensible packaging, the elimination of harsh, unnecessary chemicals, and using voluntary human testing rather than animal testing. As a result, The Body Shop carries products that provide ultraviolet protection consisting of natural ingredients, which instills calm and balance. Technology With the rapid development of the Internet, e-commerce has become a new, and popular way to engage in business. To serve their customers needs and to be more efficient, The Body Shop is starting the international development of The Body Shop Direct, which will demonstrate the benefits of a multi-channel strategy in raising the profile of the brand. In partnership with SOFTBANK Venture Capital, the company has developed The Body Shop Digital to create online shopping. In addition, it is continuing to build the mail order operation in the US market as future e-commerce activity becomes increasingly integral to businesses. __________________________________EXTERNAL MICROENVIRONMENT The Market      As indicated in Statistics Canada’s report of the Toilet Preparations Industry there is a steady continuous growth in demand for cosmetics products. In 1998, Canada’s domestic products manufactured by the industry were estimated to be $1.7 billion compared to the 1990 level of $1.3 billion. From 1990 to 1998, the Canadian market rose noticeably by 3.0% per annum.      Over the 1990 to 1998 period, imports in the industry jumped by 23.1% per year. In 1998, Canada’s total imports reached $1170.2 million, which represents a considerable jump of 19.5% from the 1990 level of $289.7 million.      The target markets of The Body Shop are teenagers, and young adults. The income level of the target markets is in the middle-range. Teenagers tend to have limited purchasing power, while adults have more purchasing power due to a higher participation in the work force. When making purchase decisions, consumers tend to consider relevant information about the products as well as the following attributes: price; quality; availability, and reputation. When the products are purchased as gifts, luxuriousness is a strong consideration. Consumers display preference to environmental-friendly products that have environmentally sensible packaging, are not tested on animals, and do not contain harsh and unnecessary chemicals. Suppliers      The Body Shop’s largest supplier is COSi Ltd, South Africa’s largest contract manufacturer of personal care and pharmaceutical products. There are more than 1,200 suppliers recorded on the company’s main supplier database. These include manufacturers, contractors and agents in raw materials, finished products, accessories, packaging, utilities and services. In addition, the company has built sustainable trading relationships with 37 communities in 21 countries that produce accessories and natural ingredients for its products. Marketing Intermediaries      The Body Shop International operates as the head franchisee in UK, USA, France, Germany, and Singapore. The remaining 43 markets are owned and operated by independent head franchisees. Furthermore, The Body Shop has developed its e-commerce activities and global Internet presence in partnership with SOFTBANK Venture Capital. ________________________________________INTERNAL ENVIRONMENT Production Facilities      Soapworks Limited is a subsidiary of The Body Shop based in Glasgow manufacturing soaps and related products. The Body Shop retains an in-house technical team who audit quality standards and ensure strict compliance with the company’s safety, ethical and environmental standards. Research and Development      The Body Shop has a highly innovative Research and Development department. It is renowned for its incorporation of natural ingredients and traditional recipes. All laboratory-based research and development are carried out by The Body Shop’s supplier base, COSi Ltd. Location      With its head office in the United Kingdom, The Body Shop reaches its customers through 1730 stores across 49 markets globally. Stores are in various retail formats such as factory outlets, railway stations, kiosks and retail shops. In the UK, the company runs a home selling program, The Body Shop Direct. Company Image      The Body Shop has successfully established its image as an ethical, campaigning, thoughtful, socially conscious, caring and environmentally aware company. Human Resources      The Body Shop has a well-established executive management, working cohesively to develop and manage its business. Anita Roddick, co-chair and founder of The Body Shop, is the creative inspiration behind the company’s style and image. Gordon Roddick, co-chair with Anita Roddick, is responsible for the strategic direction of the company. Patrick Gournay, former Executive Vice President of Danone’s North and
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South American Division, joined the company in July 1998 as Chief Executive Officer. He instigated a major reorganisation of the company in early 1999, preparing the company for the challenges of the upcoming millenium. Financial Resources As of September 2000, The Body Shop possessed net assets of £121.7 million, pre-tax profit of £31.5 million, and dividend per share of 3.8 pence. In addition, the Company has committed on a borrowing facility of £50 million, with an expiry date no later than July 23, 2002. ______________________________________________SWOT ANALYSIS Strengths The Body Shop is a publicly traded corporation and thus its ability to ...

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