STRATEGIC MARKETING MANAGEMENT
Contents:The Body Shop
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STRATEGIC MARKETING MANAGEMENT 1. Company Background................................... Background.......................................................... .............................................. .......................................5 ................5 2. Situation analysis............................................. analysis.................................................................... .............................................. ......................................5 ...............5 3. External analysis........................................... analysis.................................................................. .............................................. .........................................6 ..................6 a !oli !oliti tica call "ac "acto tors rs # Economical "actors c
Soci Social al "act "actor orss
d $ec% $ec%no nolo logi gical cal "act "actor orss e
En&i En&iro ronm nmen ental tal "acto "actors rs
"
'egal "act actors
(. External )nalysis- *icro En&ironment................................ En&ironment....................................................... .......................................12 ................12 (.1 +ndustrial )nalysis a $%re $%reat atss o" o" ne, ne, entr entran ance ce # $%reats o" su#stitute products c Barg Bargain ainin ing g po,er po,er o" cust custom omer er d Bargai Bargainin ning g po,er po,er o" supp supplie lier r e Comp ompetit etito ors 5. *arket Segmentation..................................... Segmentation............................................................ .............................................. .......................................1 ................1 a Cons Consum umer er mark market et # !roducts c Comp ompetit etito ors
The Body Shop
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STRATEGIC MARKETING MANAGEMENT d Brands
6. +nternal )nalysis........................................... )nalysis.................................................................. .............................................. ......................................21 ...............21 6.1 esources analysis........................................... analysis.................................................................. .............................................. ............................21 .....21 a !%y !%ysica sicall eso esour urce cess # /inancial esources c 0uma 0uman n eso esour urce cess d +nta +ntan ngi# gi#les les 6.2 Competences and capa#ilities a *arket # *aterials c *en d *oney e *ac%ines . S...$ )nalysis........................................... )nalysis.................................................................. .............................................. .....................................2( ..............2( 4. *arketing !lan............................................ !lan................................................................... .............................................. .........................................26 ..................26 4.1 #ecti&es 4.2 Strategies
The Body Shop
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STRATEGIC MARKETING MANAGEMENT 4.3 ap )nalysis 4.( eneric Strategy 4.5 )nso""7s *atrix 4.6 Competitor *arketing Strategy 4. *arket !ositioning !ositioning Strategy 4.4 +nstitutional Strategy 4. +mplementation !lans........................................... !lans.................................................................. .............................................2 ......................2 a !roduct # !rice c !lace d !romotio tion e !eople " !rocess g !%y !%ysical sical E&id E&iden ence ce
. Budget Breakdo,n....................................... Breakdo,n.............................................................. .............................................. .................................38 ..........38 18. *onitoring and Control...................................... Control............................................................. .............................................. ............................31 .....31 18. )ppendix.................................. )ppendix......................................................... ............................................... ............................................... ..............................32 .......32 11. e"erences.......................... e"erences................................................. .............................................. .............................................. .....................................(3 ..............(3
The Body Shop
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STRATEGIC MARKETING MANAGEMENT
1. Compa Company ny Back Backgr grou ound nd
1.1 *ission Statement Statement •
$o dedicate t%e #usiness to t%e pursuit o" social and en&ironmental c%ange.
•
Crea Creati ti&e &ely ly #ala #alanc ncee t%e t%e "ina "inanc ncial ial and and %uma %uman n need needss o" t%e t%e stake stake%o %old lders ers:: employees9 customers9 "ranc%isees9 suppliers and s%are%olders.
•
Ensure t%at t%e #usiness is ecologically sustaina#le9 meeting t%e needs o" t%e present ,it%out compromising t%e "uture.
•
*ean *eanin ing" g"ul ully ly cont contri ri#u #ute te to t%e t%e loca local9 l9 nati nation onal al and and t%e t%e inte intern rnat atio iona nall commun communitie itiess #y adopti adopting ng code code o" conduc conductt ,%ic% ,%ic% ensures ensures care9 care9 %onesty %onesty99 "airness and respect.
•
Campaign Campaign "or t%e protection o" t%e en&ironment9 en&ironment9 to de"end %uman rig%ts and agains againstt animal animal testin testing g ,it%in ,it%in t%e cosmetic cosmetic indust industry. ry. ;alue ;alue eport eport99 288 288 -2818
rgani
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STRATEGIC MARKETING MANAGEMENT $%e Body S%op %as a %ierarc%ical structure. $%ey %a&e departmental %eads spread all o&er t%e ,orld. $%e Body S%op encourages open-door policy and t,o-,ay communication ,it%in t%e company. $%ey %a&e a strong #elie" in t%e company &alues ,%ic% creates a #ound #et,een t%e employees. ur !eople9 288-2818
1.2 !roduct=*arket ange !roducts: /acial skin care products9 make-ups9 #at% > #ody products9 %air products and "ragrance products. *arket: estern Europe9 ?ort% )merica9 )sia9 Eastern Europe9 'atin )merica9 )"rica9 rient and !aci"ic.
1.3 Customer $arget !ro"essional stylists9 non-pro"essional stylists9 t%ese mainly include "emales clients.
1.6 /inancial !ro"ile Since @une 28869 $%e Body S%op is ,%olly o,ned #y '7real t%ere"ore it is no longer a listed company. )#out As9 288-2818 •
;olume sales o" $%e Body S%op in 288: 26 million units.
•
$otal sales '7real #y di&ision in 288: 16925 million units.
•
?et !ro"it o" $%e Body S%op in 288: 5( million9 ,eig%t 2.19 gro,t% #ased on pu#lis%ed sales D(4.(9 percentage o" sales .(. )nnual eport9 2882818
2. Situation Analysis The Body Shop
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STRATEGIC MARKETING MANAGEMENT
)ccording to Blyt%e 2885 *arketing )udit is a reassessment o" t%e "irm7s current o#ecti&es9 strategies9 organi
$%e marketing audit is a summary o" ,%at is %appening in t%e company at present9 %ence t%is type o" analysis %a&e to #e carried out on a regular #asis9 taking into consideration a#out t%e time and money t%at can #e in&ested #y t%e company.
3. External Analysis/Marco Environment
$%e macro en&ironment includes maor "orces9 t%e en&ironmental "actors t%at %a&e an impact on t%e organisation on a &arying scale @on%son9 Sc%oles9 > %ittington9 2884. $%e main element o" macro en&ironmental is t%e !ES$E' "rame,ork ,%ic% identi"ies t%e maor dri&ers o" c%ange. $%e macro en&ironments a""ecting t%e core #usiness o" t%e organi
a !olitical "actors "AC#$%S
&M!AC# $' C$SME#&C &M!+&CA#&$'S &'()S#%*
$errorism
estriction to carry personal Signi"icant impact on care and "ragrance products in t%e
The Body Shop
sales
o"
t%e Page 7
STRATEGIC MARKETING MANAGEMENT %and#ags a#road.
E-commerce
,%en
tra&elling cosmetic retail stores at
ecision
?e,s t%e airport and t%e %ig%
*edia S)S9 2888-2818
streets.
AF industry and go&ernment
ro,ing
#acked trust mark sc%emes. demand Cosmetic announces9 288
num#er "or
o"
online
products and lose o" loyal customers.
Employment
ue
to
t%e
recession @o#less
num#er
#usinesses "ind in di""icult to outgro,s sur&i&e in t%e market.
positions
a&aila#le.
Conclusion: )n opportunity arises on expanding an online purc%ase ser&ice "or customers. $%reats to t%e industry arise "rom t%e unsta#le economic and security en&ironment ,%ere a contraction in demand is &isi#le.
, Economical "actors "AC#$%S
E""EC# $' C$SME#&C &M!+&CA#&$' &'()S#%*
Exc%ange rates
/luctuation in t%e exc%ange aise rate against t%e pound and in countries companies
t%at
t%e
cost
o"
import o" ra, materials
supply t%e or "inis% products "rom ,it%
ra, t%e rest o" t%e ,orld.
materials. earden9 288 +ncrease in ;)$
AF7s ne, c%ancellor eorge $%is ,ill increase t%e s#orne announced on 21 st price
o"
daily
*ay 28189 t%e %ike on tax to
commodities
,%ic%
28 #y next )pril. Clark9
,ould lead to restrict
2818
customers
to
#uy
cosmetics. irect selling The Body Shop
)llo,s customers to #uy Better
customer Page 8
STRATEGIC MARKETING MANAGEMENT products
outside
t%e relations%ip9 "irms can
traditional retail enterprise. keep t%e cost lo, and sa9 288-2818
a&oids expenditures on product promotion.
0ig% unit la#our cost
0ig% l a#our c ost i n AF %as
Company
le"t a gap in producti&ity as
cannot #e pursued to
compared to t%e counter parts
t%e "ullest extent.
like
)merica
and
strategies
@apan.
*ail nline9 2818 il !rices
+ncrease in oil prices. *ail Can a""ect promotion9 nline9 288
sale and distri#ution as ,ell as demand and purc%asing po,er.
Conclusion: ue to t%e recession pro"its o" t%e company can #e a""ected9 as t%e demand "or t%e product ,ill reduce and due to c%anges in t%e exc%ange rates ,%ic% could a""ect product manu"acturing.
c Social "actors "AC#
%$E""EC#
$'
#-E &M!+&CA#&$'
C$SME#&C &'()S#%*
emograp%ics
)ccording to t%e ""ice "or +ncrease in t%e sales o" ?ational
Statistic
in
)pril t%e
anti-aging
28189 t%e percentage o" Britis% The Body Shop
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STRATEGIC MARKETING MANAGEMENT pu#lic aged "rom 65-45 is products. gro,ing and as o" no, t%e "igure s%o,s a gro,t% o" 1.5 million. *cCraddie9 2818 Cultural C%anges
Ase o" natural ingredients in C%anging #e%a&iour o" t%e
manu"acturing
o" t%e customer to,ards
cosmetics #y some "irms. Cosmetic $esting
t%e natural product.
Companies using animals "or )""ects #rand image. t%eir product testing. Sil&a9 2882
AF
cosmetic
industry AF7s cosmetic industries are )""ect #rand image.
risk to tiger "orests.
#uying product made out o" talc
"rom
illegal
destructi&e
mines
,ildli"e
in
and "rom +ndia.
En&ironmental +n&estigation +ndustry9 2883 'ondon lympics 2812.
+ncreased num#er o" tourists pportunity in t%e country.
"or
promotion and increase a,areness.
Conclusion: i&ersi"ication o" culture t%at c%anges t%e #uying po,er o" t%e customer ,ill a""ect greatly t%e company9 ,%ic% ,ill depend on "actors like promotion9 &alue and et%ics.
d #ecnological "actors "AC#$%S
E""EC# $' C$SME#&C &M!+&CA#&$' &'()S#%*
esearc% > e&elopment
Cosmetic companies in&est a Brand recognition. lot on > so t%at t%ey can
The Body Shop
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STRATEGIC MARKETING MANAGEMENT de&elop ne, products to suite t%e c%anging trends o" t%e customer.
lo#al
+nsig%t9
288 !ulse per"ection
AS #ased companies %a&e Competiti&e de&eloped automated mascara ad&antage. t%at
coats
las%es
e&enly.
'Greal9 2818 oll on true matc%
Cosmetic
company
%as
de&eloped a roll on tec%niHue to
spread
t%e
*ore options "or t%e customers.
"oundation
e&enly on t%e "ace. 'Greal9 2818 *ulti- purpose products
e&elopment o" products suc% Customers looking "or as
t,o-in-one
s%ampoo
"ace
,it%
,as%9 consolidating
t%e
conditioner. #eauty #udget.
'Greal9 2818 E-commerce
Secure met%ods o" payment ,it%
security
code
orking
clients
or #uying more and more
pass,ord. 'ondon Boroug% products online. " ic%mond Apon $%ames9 288-2818
Conclusion: Competiti&e ad&antage may #e ac%ie&ed and gro,t% in t%e market.
e Environmental "actors "AC#$%S
E""EC#
$' &M!+&CA#&$'
C$SME#&C &'()S#%*
?atural !roducts
ro,ing
trends
en&ironmentally The Body Shop
o" Bene"its t%e companies t%at
"riendly Page 11
STRATEGIC MARKETING MANAGEMENT products.
o""er suc% products.
En&ironmental
o&ernment to cut car#on +t ,ill #e a necessity "or
!ollution.
emissions. 0ar&ey9 2818
companies
to
"ollo,
regulations.
Conclusion: Companies t%at are not socially and en&ironmentally conscious ,ill #e a""ected in its per"ormance and reputation.
+egal "actors "AC#$%S
E""EC# $' C$SME#&C &M!+&CA#&$' &'()S#%*
Certi"icate standards "or +S 2216 sa"ety standard cosmetic products.
Builds
con"idence
in
certi"icates pu#lis%ed on 15t% customers and makes t%e /e#ruary
2818
pro&ides organi
keen
on
resources to organisations to supporting t%eir #usiness at select
t%eir
speci"ications. domestic
Cosmetic esign9 2818 +nternational !olicy.
$rade Companies
import
all
and
international
le&el. its $%e
company
%as
made
products "rom o&erseas any strategic plans to look "or c%anges ,ill %a&e an e""ect
alternati&e sources o" supply.
on cost.
Conclusion: Companies %as to a#ide #y t%e rules and regulations set #y go&ernment.
0. External Analysis/Micro Environment
The Body Shop
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STRATEGIC MARKETING MANAGEMENT $%ese are t%e internal "actors o" t%e company t%at %as direct impact on t%e organisations strategy. $%ey include customers9 employees9 suppliers9 s%are%olders9 media and competitors. $%ere are t%ree "actors to #e looked upon ,%ile carrying out t%e analysis9 credi#le alternati&e "uture9 impro&ing t%e organisational learning and e&aluating and de&eloping strategies "or eac% situation. @on%son9 Sc%oles9 > %ittington9 2884
$o analyse t%e company9 it s%ould #e considered !orter7s "i&e "orces.
The Body Shop
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STRATEGIC MARKETING MANAGEMENT
Source: @on%son9 Sc%oles9 > %ittington9 2884
a #reats o 'e Entrants "AC#$%S
+EE+ $" #-%EA#
&M!+&CA#&$'
Scale and experience
'o,
!roducts
o"
$%e
Body
S%op are natural unlike ot%er cosmetics. $%ey are a,are
o"
a&aila#le
t%e "or
resources t%eir
products. ?e, companies The Body Shop
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STRATEGIC MARKETING MANAGEMENT try to copy #ut ,ill take t%em
a
considera#le
amount o" time and money. Capital eHuired
'o,
$%e capital reHuired to set up a #usiness like Body S%op is o" great scale.
)ccess
to
supply
or *edium
distri#ution c%annel.
Eac%
o"
products
t%e
cosmetic
is
di""erent
depending on t%e #rands in store. But "or companies like $%e Body s%op t%ere is less possi#ility to mix t%em ,it% ot%er #rands. !roduct i""erentiation
0ig%
Cosmetic
products
are
uniHue in t%eir #rand name #ut9 t%ey can #e more appealing #y promotion. S,itc%ing Cost
'o,
Cost ,ill di""er according to t%e #rand name9 i" t%ere is a nic%e market t%an t%ere ,on7t #e any ne, entrant in t%e market.
Brand +dentity
'o,
$%e Body S%op %as #een esta#lis%ed since 16 in AF and since t%en %as expanded ,it% strong core &alues o" natural products.
Cost )d&antage
'o,
i""erent met%ods
skills o"
and
production
%a&e gi&en $%e Body S%op an edge o&er t%e ot%er competitors. 0ence can set The Body Shop
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STRATEGIC MARKETING MANAGEMENT its price.
Conclusion: 'ooking at t%e "actors a#o&e t%e possi#ility o" a ne, entrant entering in t%is industry is "airing ,eak.
, #reats o Su,stitute !roducts "AC#$%S
!rice
and
+EE+ $" #-%EA#
per"ormance *edium
ratio
&M!+&CA#&$'
Su#stitutes can o""er t%e similar product "or
t%e
same or %ig%er price. $%e di""erence depends upon t%e per"ormance ad&antage t%e customer7s &alue. Extra industry e""ect
'o,
*anagers o" t%e company s%ould look outside t%eir o,n industry to look "or t%reats9 #ut in case o" $%e Body S%op its less.
Su#stitute products
*edium
+nexistence o" su#stitutes.
Conclusion: )s t%ere are no su#stitute "or eac% #rand o" cosmetic product t%e t%reat o" su#stitutes is ,eak.
The Body Shop
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STRATEGIC MARKETING MANAGEMENT
c #e !oer o Buyer "AC#$%S
+EE+ $" #-%EA#
&M!+&CA#&$'
Concentrated Buyer
*edium
Buyer po,er increases i" t%ere are large retailers %a&ing
di""erent
#rands
under one roo". i""erent to $%e Body S%op as t%ey %a&e t%eir o,n stores. 'o, S,itc%ing Cost
0ig%
)s #uyers can easily s,itc% #et,een suppliers "or a competiti&e price.
Buyer Competition $%reat
*edium
Cosmetic
companies
supply to t%eir large retail #uyers like Boots so t%e possi#ility o" setting up t%eir
o,n supply c%ain
direct to t%e customers is lo,9
,it%
certain
exceptions.
Conclusion: 'ooking at t%e a#o&e analysis #uyer po,er is considera#ly at an a&erage.
The Body Shop
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STRATEGIC MARKETING MANAGEMENT
d #e !oer o Supplier "AC#$%S
+EE+ $" #-%EA#
&M!+&CA#&$'
Concentrated Supplier
0ig%
Suppliers %a&e to "ace t%e competitors in t%e market ,%ere all t%e #rands are sold #y one large retailer.
0ig% S,itc%ing Cost
*edium
Buyers %a&e t%e po,er to negotiate t%e deals ,it% t%e supplier as t%ere are a lot o" #rands in t%e cosmetic industry.
Supplier
Competition
'o,
$%reat
ue to e-commerce t%e customers can directly #uy t%e products "rom t%e main supply o" t%e company.
Conclusion: Supplier po,er is relati&ely lo, in t%is case as #uyers %a&e a ,ider range o" options.
e Competitive %ivalry "AC#$%S
+EE+ $" #-%EA#
&M!+&CA#&$'
Competiti&e Balance
0ig%
$%ere is a&erage gro,t% in t%e cosmetic market and t%ere is a lot o" competition among t%e #ig players.
+ndustry ro,t% ate The Body Shop
0ig%
ue to sti"" competition Page 18
STRATEGIC MARKETING MANAGEMENT among
cosmetic
#rands
t%ere is a risk o" altering t%e price o" t%e products. Exit Barrier
0ig%
Exit #arrier "or #ig players in t%e cosmetic industry is %ig%9 as t%ey are lack o" alternati&e. *ore use o" t%e assets.
0ig% /ixed Cost
*edium
0ig% cost in importing ra, materials
"rom
ot%er
countries ,it% t%e import duties. 0a&e to keep t%e cost %ig% to co&er up t%e expenditure. 'o, i""erentiation
0ig%
Similar products a&aila#le in t%e market in"luence t%e customer not to #e loyal to one particular #rand.
Conclusion: $%e competiti&e ri&alry ,it%in t%e cosmetic industry is strong as t%ere is no great product di""erentiation in terms o" cost9 Huality9 per"ormance and &ariety. $%us t%e exit #arrier is &ery %ig%.
$aking into consideration t%e a#o&e analysis t%e cosmetic industry can #e rated at II out o" "i&e industry. +t is a great market "or $%e Body S%op to operate in as t%e c%anging trends and s%i"ting attitude o" t%e customer to mo&e on to natural and en&ironmental "riendly products is gro,ing in t%e industry.
The Body Shop
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STRATEGIC MARKETING MANAGEMENT
Market Segmentation
) market segmentation ta#le o" t%e company can #e "ound on )ppendix (
a Customer *arket •
$%e Body S%op creates a product di""erentiation market9 its customer7s are usually single "emales "rom t%e age group o" mid t,enty7s or early "orties pro"essionals ,it% good Huali"ication and a "ocus on en&ironmental issues. +t also targets men #ut is not as expanded.
•
So t%ey %a&e to increase t%e promotion o" male products.
# !roducts $%e Body S%op %as en&ironmentally "riendly products t%at are made up natural ingredients. $%e Body S%op deals ,it% t%e "ollo,ing products:
/acial skin care products. *ake-up. Bat% > Body products. 0air !roducts. /ragrances. )ccessories.
The Body Shop
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STRATEGIC MARKETING MANAGEMENT
c Competitor )nalysis Being a cosmetic company $%e Body S%op %as a range o" competitors9 #ut #y analysing t%e !erceptual *ap t%e competition #et,een product ,it% %ig% Huality and lo, price is relati&ely %ig%. +n t%is case companies rein"orce in t%eir customers ,it% #rand et%ics and &alues.
$%e !erceptual *ap. 0ig% Juality
0ig% !rice
The Body Shop
'o, !rice Page 21
STRATEGIC MARKETING MANAGEMENT
'o, Juality Source: 'am#9 0air9 > C9 2884
d Brand $%e Body S%op "rom t%e #eginning "ocused on en&ironmentally "riendly products9 ,%ic% created a #rand image a#out t%e product among t%e customer ,%o really care a#out t%e en&ironment. $%e Body S%op also gi&es t%e customers an exceptional experience in store ,it% t%eir personal care products. $%e Body S%op9 288 - 2818
$%e Body S%op did not use animals "or testing t%eir products and t%ey #elie&ed in "air trading ,%ic% %elps t%e people to earn t%eir daily income ,%ic% ,ill ena#le t%em to create a #etter "uture.
4 &nternal Analysis
6.1 esource )udit
a !%ysical esources The Body Shop
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STRATEGIC MARKETING MANAGEMENT
•
esources are sourced "rom t%e Body S%op community trade programme ,%ic% includes oli&e9 soya9 cocoa9 sugar and sesame "rom parts o" Bra
•
Community $rade no, ,orks ,it% o&er 38 suppliers in more t%an 28 countries.
•
2588 stores in 68 countries around t%e ,orld.
# /inancial esources Since @une 28869 $%e Body S%op is ,%olly o,ned #y '7real t%ere"ore it is no longer a listed company. $%e Body S%op 288 K 2818 •
;olume sales o" $%e Body S%op in 288: 26 million units.
•
$otal sales '7real #y di&ision in 288: 16925 million units.
•
?et !ro"it o" $%e Body S%op in 288: 5( million9 ,eig%t 2.19 gro,t% #ased on pu#lis%ed sales D(4.(9 percentage o" sales .(. )nnual eport9 2882818
c 0uman esources $%e Body S%op employs o&er 189888 people across t%e ,orld.
d +ntangi#les $%e Body S%op is an original9 natural and et%ical #eauty #rand.
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STRATEGIC MARKETING MANAGEMENT
4.2 Competencies and Capa,ilities
See )ppendix 5.
Competencies: $%res%old capa#ilities $%ese are needed #y an organisation to meet t%e necessary reHuirement to compete in t%e gi&en market @o%nson9 Sc%oles9 > %ittington9 2884. $%e Body S%op %as created a nic%e market #y "ocusing on de&elopment o" natural cosmetic products9 no, it is also entering t%e c%anging trend market #y introducing anti-aging products due to t%e gro,ing aging population in AF.
AniHue resources and core competencies $%e Body s%op uses natural resources "or t%eir products ,%ic% cannot #e
easily copied #y t%e competitors. $%e core competency o" $%e Body S%op #usiness is t%eir &alues ,%ic% are9
against animal testing9 support community trade9 acti&e sel" esteem9 de"end %uman rig%ts and protect our planet. $%ese make t%e company di""erent "rom ot%ers.
Core Capa#ilities: $%e Body S%op supplies its customers ,it% natural products ,%ic% are
en&ironmentally sa"e. $%is creates a competiti&e ad&antage o&er t%e ot%er cosmetic companies in t%e market. $%ese types o" products are not easily de&eloped9 as a result o" ,%ic% $%e
Body S%op %as created a nic%e ,it%in t%e cosmetic industry.
The Body Shop
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STRATEGIC MARKETING MANAGEMENT $%e Body S%op di""erentiate t%eir competitors #y t%eir met%od o" sales and promotion95 *7s can #e used to analyse its competences and capa#ilities. a *arket $%e Body S%op is t%e leader in en&ironmental "riendly products #ut no, companies like 0er#al9 'us% %a&e come on #oard to compete ,it% t%e similar type o" product9 But t%e Body S%op %as maintained t%eir image "or a long time ,%ic% ,on7t a""ect t%e sales.
# *aterials &er t%e past "e, years $%e Body S%op %as in&ested setting up ne, stores across t%e country ,it% uniHue design. $%ey %a&e also introduced merc%andises t%at contri#ute to,ards c%ildren.
c *en !lease re"er to 0uman esources 6.1 K c
d *oney !lease re"er to /inancial esources 6.1 K #
e *ac%ines !lease re"er to !%ysical esources 6.1 K a
The Body Shop
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STRATEGIC MARKETING MANAGEMENT
5 S6$# Analysis 7see Appendix 4 Strengts
+evel o &mplication
+n&estment in >
0ig%
/inancial esources
*edium
e&eloping ?ic%e market
0ig%
Brand 'oyalty
0ig%
?atural !roducts
0ig%
)cHuisition #y '7real9 entry in t%e glo#al
*edium
market.
6eaknesses
+evel o &mplication
)cHuisition #y '7real damaged t%e #rand
*edium
image. 0ig% cost o" operation
0ig%
/ranc%isee issues
*edium
*arket Competition
0ig%
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STRATEGIC MARKETING MANAGEMENT
$pportunities
+evel o &mplication
e&eloping )nti-ageing products
0ig%
Ba#y !roducts
*edium
!u#licity o" t%e company at 'ondon
0ig%
lympics 2812 ecognition o" e-commerce to de&eloping
0ig%
countries ,ill #oost sales. *ale cosmetic market Eco-"riendly
"as%ion
*edium e,ellery
> *edium
accessories.
#reats
&mplication
t%er Cosmetic companies
0ig%
+ncreased sales #y competitors
0ig%
Expensi&e resources
0ig%
Similar natural cosmetics
'o,
)lt%oug% $%e Body S%op ,as acHuired #y t%e cosmetic giant '7real in 28869 t%eir et%ics remain t%e same and t%ey operate separately as a separate unit ,it%in t%e '7real group. $%is ,ill not %a&e an impact on $%e Body S%op7s #rand image. ussel9 288
$%ey can "urt%er de&elop some product "or people "rom t%e age group o" 58-659 as t%ere is a demand anti-ageing product in t%e market. +ntroduction o" cosmetic product "or men also %as to #e introduced in a ,ide range.
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STRATEGIC MARKETING MANAGEMENT
8. Marketing !lan9
See )ppendix 3
4.1 Company7s #ecti&es 1. $o launc% a ne, a ne, range o" #a#y products #y )ugust 2812 in AF. 2. $o expand t%e male cosmetic market #y 2 #y @uly 2811. 3. ),areness o" natural cosmetics "or males in $%e Body S%op stores9 'ondon underground9 promotions on t%e ,e#site.
4.3 ap " )nalysis
*arket S%are $arget sales K 5.5 Current Sales- 3.5
The Body Shop
Sales gap - 2
Page 28
STRATEGIC MARKETING MANAGEMENT
/orecast K 1.5
1yr
•
$ime
)ccording to analysis $%e Body S%op %ad 3.5 market s%are in 288 $%e Star nline9 288.
•
+ncrease in t%e market s%are #y 2 #y expanding t%e male cosmetic market #y 2811 ,ill #e 5.5.
•
+" not%ing is done to increase t%e market s%are it ,ill go do,n to 1.5 i.e. t%ere ,ill #e a gap o" 2 in t%e sales.
4.( !orter7s eneric Strategy
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STRATEGIC MARKETING MANAGEMENT
!orter7s t%ree eneric Strategies *c?air9 2884: 1. i""erentiation K $%is strategy is "ollo,ed #y t%e Body S%op as t%ey deal ,it% natural cosmetic products ,%ic% separate t%em "rom t%e competitors and t%e products are sold at a premium price.
4.5 )nso""7s *atrix See )ppendix
The Body Shop
Source: Ansoff
Page 30
STRATEGIC MARKETING MANAGEMENT 1. Existing products in t%e existing market - $%e Body S%op use o" di""erent promotion tec%niHues selling di""erent types o" products as a package 2. ?e, product in t%e existing market- +ntroducing a ne, range o" cosmetics "or #a#ies #y )ugust 2812. 3. Existing product in t%e ne, market- +ncreasing sales o" cosmetics "or men #y promoting t%e product. (. ?e, product in a ne, market - $%e Body S%op does not %a&e any interest in de&eloping suc% a strategy due to t%e o#ecti&es set.
4.6 Competiti&e *arketing Strategy ""ensi&e Strategies: Bypass attack- +" t%e competitors attack $%e Body S%op #y imitating similar type o" products t%an t%e company7s positioning s%ould "ocus on t%e natural products de&eloped #y $%e Body S%op. Strategy e&elopment o" ne, products and promotions o" existing products at in"erior price t%an competitors.
4.. *arket !ositioning Strategy $%e Body S%op used to #e t%e market leader ,it% expanding markets and demand "or t%e products and a strong o""ensi&e and de"ensi&e strategies. ?o, it %as mo&ed to #ecome a market c%allenger ,%ere it does selecti&e targeting to an appropriate age group and attacks t%e ri&al competitors ,it% t%eir natural cosmetic range o" products.
4.4 +nstitutional Strategy
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STRATEGIC MARKETING MANAGEMENT $%e Body S%op %as maintained its et%ical #elie"s and corporate culture e&en
t%oug% t%ey ,ere taken o&er #y '7real. +t operates as a separate unit ,it%in '7real #ut is o,ned #y it. $%e Body
S%op9 288 - 2818
+nstitutional !lans See )ppendix 2 *edia !romotions )d&ertise in t%e "as%ion maga
a !eople +.$ K $o en%ance t%e s%opping experience online9 and encourages ne,
user #y online promotional o""ers. Sales epartment K $o increase sales and make t%e customers a,are o"
t%e di""erent range o" products to t%e customer. perations epartment K $o monitor all t%e stock mo&ing "rom eac%
store. > K $o de&elop a ne, range o" #a#y cosmetic products.
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STRATEGIC MARKETING MANAGEMENT *arketing epartment K $o set targets #y implementing marketing
plan9 to keep a track o" promotions and monitor i" t%e strategies are "ollo,ed correctly.
# !rocess o
)ppropriate so"t,are "or t%e #illing process.
o
eturn policy K Exc%ange=return t%e product i" not according to t%e taste.
o
$o keep a track o" time taken to deli&er product purc%ased online.
c !%ysical E&idence *onitor time taken to deli&er an online product. Stock c%ecks s%ould tally ,it% t%e in&entory stock. ood am#ience %as to #e de&eloped in stores to attract potential
customers. Sample o" eac% product s%ould #e a&aila#le "or t%e customer to try.
: Budget Breakdon
L *illion The Body Shop
Page 33
STRATEGIC MARKETING MANAGEMENT &erall cost is L3.4 *illion
!romotion K 68 estimated cost
L 19 889888
!roduct K 14 estimated cost9
L369888
!eople K 4 estimated cost9
L(169888
!%ysical E&idence K 2 estimated cost9
L18(9888
!rocess K 5 estimated cost9
L2689888
!lace K estimated cost
L36(9888
$otal Cost
L 348888
Product People Physical Evidence Process
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STRATEGIC MARKETING MANAGEMENT 1;. Monitoring and Control
Juarterly meetings ,ill #e %eld ,it% t%e %ead o" marketing department regarding ne,
implementations o" marketing plan to remain sta#le or gain pro"it. antt c%art ,ill #e "ollo,ed to dra, conclusions a#out t%e cost in&ol&ed in
implementation and %o, muc% time ,ould it take to complete it. eports o" implementation plan ,ill #e gi&en to all t%e #oard mem#ers to s%o, t%e
status o" eac% implementation. ?e, trends and tec%nology reHuired "or t%e ne, product de&elopment ,ill #e
discussed a"ter e&ery 3-6 mont%s.
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STRATEGIC MARKETING MANAGEMENT
Appendices
)ppendix 1: +nternal )nalysis=;alue C%ain )nalysis !orter9 14
!rimary )cti&ities +n#ound 'ogistics: t%is deal ,it% t%e recei&ing9 storing and distri#uting inputs o" product. $%e Body S%op recei&es its ra, materials "rom 38 suppliers ,orld,ide The Body Shop
Page 36
STRATEGIC MARKETING MANAGEMENT ,%ic% are normally s%ipped to AF. +" t%ese resources are stopped or discontinued "rom t%e "oreign countries t%en t%e company needs to t%ink a#out some alternati&es.
perations: $%e Body s%op products are against animal testing9 t%e packaging used "or t%e products can #e "ully recycled. E&eryt%ing in t%e store is en&ironment "riendly9 e&en t%e #ags used to pack during direct sales.
ut#ound 'ogistics: $%e distri#ution is done to all t%e retail Body S%op stores in t%e AF ,%ere t%ey are "urt%er categorised into di""erent types.
*arketing > Sales: $%e Body S%op is a socially acti&e organisation ,%ic% supports communities9 di""erent c%arities t%at support c%ildren and ,omen. $%e #rand image as a supplier o" en&ironmental products makes people a,are o" t%e company.
Ser&ice: $%e Body S%op %as created a nic%e market t%at sells natural #eauty products.
Support )cti&ities !rocurement: $%e Body S%op supports community trade "rom ,%ere t%e ra, materials are sourced.
$ec%nological e&elopment: $%e Body S%op %as in&ested a lot in > in t%e past to make t%eir product as natural as possi#le. E-commerce %as also contri#uted in t%e direct sale o" t%e product.
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STRATEGIC MARKETING MANAGEMENT 0uman esource *anagement: ecruiting at $%e Body S%op AF is done online9 "urt%er t%e managing9 training and de&eloping is done t%roug%out t%e carrier pat%. $%ey also recruit people t%at can ,ork "rom %ome as consultants.
/irm +n"rastructure: $%e Body S%op %as o&er 2588 store o&er 68 market segments9 as t%ey %a&e #een acHuired #y '7real all t%e "inancials are done under t%emM Huality control is monitored closely "or Huality.
)ppendix 2: +mplementation !lan
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STRATEGIC MARKETING MANAGEMENT $opics !eople
Strategy
$actics
$o
impro&e
•
$raining
>
customer ser&ice #y
de&elopment "or t%e
84=18 in sta"".
sta"" %as to #e done ,it%in 2 mont%s
$o educate t%e sta""
a#out
sales7
•
tec%niHues
*oti&ate sta"" ,it% di""erent > regular c%eck
%as
to
#e
undertaken. !roduct
By 8=18 en%ance
•
By 11=18 +ntroduce
t%e sales o" male
packages
o"
products
di""erent
products
clu##ed toget%er
By 11=18 impro&e
t%e appearance o"
•
t%e stores in AF
By 81=11 %a&e to c%ange t%e ,%ole looks o" t%e s%ores
!rice
By 18=18 introduce
&alue
"or
pack
until
•
money
By
keeping
product
t%ey
t%e on
introductory
#ene"it.
discounts.
By 11=18 "orm a
•
+ntroduce
,ell planned cost
di""erentiation
strategy.
pricing
a"ter
market
t%e
demand
rises. !lace
By 86=11 open ne,
store in Scotland. By 8=18 de&elop
sc%emes The Body Shop
o"
"ree
•
Start
looking
"or
entrepreneurs interested
in
t%e
#usiness
in
3
Page 39
STRATEGIC MARKETING MANAGEMENT deli&ery o&er t%e
mont%s.
sales o" 28 pounds •
Start
pricing
t%e
products tactically. !romotion
En%ance
t%e sales
•
Start promotions on
o" male cosmetics
ta#loid ne,spapers9
#y 8=18 in AF.
'ondon underground
By 8=12 introduce
stations9
a ne, range o" #a#y
#uses9
trains.
cosmetics. •
!romote
on
maga
By 8=18 de&elop
so"t,are
•
'et
t%e
+$
"or
department de&elop
customer %istory "or
it #y t%e next 2
mem#ers
mont%s.
o"
t%e
loyalty group. •
By 18=18 "orm a
t%e progress o" sales
promotional strategy
"or
/rom 86=18 c%eck
o" eac% product till ne,
18=18 and "orm a
product launc%.
competiti&e
price
"or t%ose products. !rocess
By 83=11 de&elop
online
learning
course
"or
•
t%e online ,e# link on
employees.
out tills in store.
The Body Shop
t%e
,e#site
company "or
employees.
By 82=12 de&elop
sel" ser&ice c%eck
By 8=18 organise
•
By 82=11 introduce sel" ser&ice tills "or
Page 40
STRATEGIC MARKETING MANAGEMENT sa&ing
time
>
money.
The Body Shop
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STRATEGIC MARKETING MANAGEMENT
)ppendix 3:
Segmentation9 positioning and planning
Market Segmentation 1. Identify customer needs and segment te market. 2. !e"e#o$ $rofi#es of resu#ting segment.
%arget marketing 1. &"a#uate attracti"eness of eac segment. 2. Se#ect target segment.
Marketing 'ositioning 1. Identify differentia# ad"antage for eac segment. 2. (ormu#ate marketing mi).
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STRATEGIC MARKETING MANAGEMENT
Marketing '#anning 1. !e"e#o$ marketing $#an eac segment. 2. !e"e#o$ marketing organisation.
Source: oyle > Stern9 2886
)ppendix ( Bene"it Segmentation o" t%e Body 'otion *arket Segment
!rinciple
emogr Special
Brands
!ersonality
'i"estyle
name
#ene"its
ap%ic
Be%a&ioural
disproportionat
c%aracteristi
c%aracteristi
soug%t
Strengt%
c%aracteristi
ely "a&oured
cs
cs
li&e "la&our
Sel"
cs +ndepen
'o, cost
dent
orkin
0ea&y user
g men
K ;alue
-
automony
oriented
Socia#ility
)cti&e
0ig%ly
Conser&ati&
Sensiti&e
es
segment Socia#le
Scent > Noung
?ormal
Satsuma
"eel
skin
"la&our K Citrus
people9 teens
orrier
Skin care
*ot%ers and kids
Sensory
/la&our
The Body Shop
C%ildre
scented So"t skin
Butiri Ba#y
Ase o" "ruit @apanese c%erry Sel"-
0edonistic Page 43
STRATEGIC MARKETING MANAGEMENT segment
o"
t%e n
product
"la&oured lotions
#lossom
in&ol&emen t
)ppendix 5 Core Competency *odel.
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STRATEGIC MARKETING MANAGEMENT
Source: +*S9 2818
)ppendix Anso matrix
The Body Shop
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STRATEGIC MARKETING MANAGEMENT
MA%
!%$()C# (EE+$!ME'#
*
- E;E'!*E?$ / ?E )?E
*
$)E$ ?E *)FE$ )? +*!;E SE;+CES
MA%
*
E?$E +?$ $0E A?$)!!E
/ B)BN !AC$S
(&E%S&"&CA#&$'
*
SC+)' SE;+CES
*
+?CE)SE C!)$E SC+)'
*)FE$ / *)'E CS*E$+CS +?AS$N
*
ES!?S+B+'+$N
*
)ccording to )nso"" matrix analysis9 $%e Body S%op %as ne,ly entered in di""erent sectors in market penetration9
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STRATEGIC MARKETING MANAGEMENT *
)nd as t%ey are leader in t%e cosmetic industry and are looking "or,ard to en%ance t%e male cosmetic market.
*
$%ey are also looking to get di&ersi"ied in sectors like "inancial ser&ices9 products9 retail #usiness9 social ser&ices9 et%ical ,el"are.
!roduct +ie Cycle9=
Source: 'uck9 2884 !roduct li"e cycle s%o,s t%at gro,t% o" a company is staring "rom a "ix position9 +n t%e #eginning company don7t make any pro"it ,%en t%ey launc% t%eir product in t%e market9 t%ere are c%ances o" loss or make pro"it9 $%e Body S%op %as already %as a good reputation in t%e
The Body Shop
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STRATEGIC MARKETING MANAGEMENT market i" t%ey launc% any ne, product t%ey don7t need to do #e%a&e like ne, entrance #ecause people trust t%is #rand and t%ey ,ill #uy t%eir product.
)ppendix 4 esource !lan: )cti&ities
@)?
/EB
*) )!
*)N @A?E
@A'N )A esources
Enrolment
*anager
Structure
Executi&e
)ppro&al
*anagement
!roduct
0
)d&ertisement
*arketing
istri#ution
0
Sales
*arketing
The Body Shop
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STRATEGIC MARKETING MANAGEMENT
Bi,liograpy About Us. +2009*2010,. -etrie"ed une 04/ 2010/ from %e ody So$ Internationa# tt$.teodyso$.comenser"icesaoutusmedia*centre.as$) Annual Report . +2009*2010,. -etrie"ed une 05/ 2010/ from rea# tt$.#orea#* finance.comengannua#*re$ort #ark/ %. +2010/ une 24,. Business. -etrie"ed une 24/ 2010/ from %e :uardian tt$.guardian.co.ukuk2010;un24udget*2010*tom*c#ark*ana#ysis Cosmetic announces. +2009/ Stern/ '. +2006,. Marketing Management and Strategy. &ng#and (inancia# %imes. !sa. +2009*2010,. Direct Selling Association. -etrie"ed une 12/ 2010/ from !irect Se##ing egis#ation tt$.dsa.org.uk#egis#ation.tm &n"ironmenta# In"estigation Industry. +2003,. =? osmetic Industry -isks %iger (orests. Media Briefing / 1*9.
The Body Shop
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STRATEGIC MARKETING MANAGEMENT :i##igan/ ./ > @i#son/ -. +2009,. Strategic Marketing lanning. :reat ritain Macmi##an 'u#ising So#utions. :#oa# Insigt. +2007,. A Study of te &uro$ean osmetic Industry. !"e ower of erspecti#e / 1*22. Bar"ey/ (. +2010/ une 08,. $inancial !imes. -etrie"ed une 10/ 2010/ from %aget for emissions cut to e e)ceeded tt$.ft.comcmss0e45a4450*7332*11df*ae73* 00144feadc0.tm# onson/ :./ Sco#es/ ?./ > @ittington/ -. +2008,. %&ploring Corporate Strategies. &ng#and (inancia# %imes. onso/ ./ Sco#es/ ?./ > @ittington/ -. +2008,. Marketin Audit. In . onso/ ?. Sco#es/ > -. @ittington/ %&ploring Corporate Strategy. &ng#and (inantia# %imes. ?ot#er/ './ ?e##er/ ?./ rady/ M./ :oodman/ M./ > Bansen/ %. +2009,. Marketing Management. &ng#and 'earson &ducation imited. am/ ./ Bair/ ./ > / M. +2008,. !"e %ssentials of Marketing' (t" edn. anada
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