Marketing Analysis And SWOT Of Body Shop Australia

Introduction and Background to the Company

The report aims at providing an overview on the marketing aspects of Body Shop. It represents a British skin care, perfume and cosmetics company found by Dame Anita Roddick in the year 1976. Presently, the company has a huge and diverse product range that it sells over various franchise stores located across close to 66 countries. The Body Shop Australia is a fully owned Australian company owned by Wise family that offers wide range of products like Brush on Bronze, Hemp Hand Protector, Born Lippy Gloss along with the Spa and wise ranges for the women through either stores, consultants and online (thebodyshop.com 2018). The initiation of the company took place in California that sold only naturally perfumed lotions and soaps under the guidance of Peggy Short and Jane Saunders. In the year, 1987, Anita Roddick purchased the shop from the initial owners first launched it in the United Kingdom under the name ‘The Body Shop’ which experienced a rapid growth of close to 50 percent on an annual basis.  The report will try to analyse the internal and external environment of Bodyshop Australia along with a SWOT analysis. The SWOT refers to the strengths, weaknesses, opportunities and threats. A SWOT analysis helps in the identification of the strengths and weakness within company as well the opportunities and threats outside the company. The report provides recommendations on the target market along with the recommended new product or services. The report will also provide an explanation on how the new service or product will provide value to the customers. There is also discussion on the strategies of the marketing mix variables for the new product.

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External Marketing Environment  

Political

The Australian economy refers to safer destination for any kind of investment due to the stability of the regulatory and political thereby providing the investors a higher degree of stability and confidence (Hattersley, Isaacs and Burch 2013).The adaptable aspect of the policy of the Australian government to the economic changes is commendable. In addition, the company has company open, transparent and efficient legal framework with lower corruption levels. This makes the country the most sought after destination in the regions surrounding the Asia Pacific

Economic

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Australia represents largest capitalist economy in the world and remains powered by service sector (Cooke et al. 2013).  The country stands in tenth position in ease of doing business due to lower unemployment, lower debt of the public, continued inflation, stable and strong financial system and presence of the open market structure with bare minimum restrictions. This provides motivation for the investor in coming to the region and The Body Shop is no different.

Social

The country has a social environment created by diverse people where the widely used language for communication is English (Benton and Redclift 2013). There is no such official religion of country and at the same time, the country experiences an enhanced level of education compared to before. Moreover, the women population thereby echoing the aspect of women empowerment shapes the national culture of the country. The persistence of a progressive and positive culture provides a positive impetus to investors like The Body Shop.

Analysis of the Marketing Environments

Technological

Australia experienced technological advancement in terms of automation, (Research & Development R&D) activities, rate of technological changes and the technology incentives thereby providing a platform for the investors for the creation of newer processes and products (Lea and Nicoll 2013). This provides a boost for the investors in making investments since the country would helps inn reducing cost, provide a lead towards innovation and improve quality.

Internal Marketing Environment

Strengths

Body Shop has a stronger brand image in the market and is known for its beauty products. The company makes use of natural ingredients for producing its varied range of products skincare, make-up, body care, fragrance and hair care. This makes the company a leading player in niche market thereby satisfying and targeting the customer needs (Cristea 2015). The product differentiation of the company earns it a higher loyalty from the customers. This also helps the company in building a stronger customer community. The Body Shop also has a vast franchisee network of close to over two thousand stores in over sixty countries. The strength of the company lies in its unique eight categories having more than 1200 products. The company was also a part of the Loreal brand that allowed it to take advantage of the efficiency and research methodology for developing and improving the existing products (Engeler 2014). The strength of the company also lies in its redesigned format of the store that not only helps in creating customer attraction but also enhancing an emotional connection. The Body Shop is also socially responsible due to the company’s engagement in philanthropic activities and the local charities. The company has thus achieved such a brand image that the loyal shoppers are even ready in paying more for the ethical product.

Weakness

The weakness lies in the fact that The Body Shop does not have a direct advertising or marketing department and hence it lacks creation of a stronger awareness amongst the public. The products of the company remains either in the decline or in the mature stage due to a higher or lower consumer demand (Rodrigues et al. 2015).  Due to the presence of the franchise system, the proprietors are unable to exercise enough control. The crowded location of the shopping centre as well as presence of inadequate personnel leads to slower service for the customers. The weakness of the company also lies in slower distribution due to the presence of the chemical legislation. The company also faces the problem of the unstable supply of materials and the ingredients. The newer legislation on the ban of animal test gives rise to the competition through marketing of the policy (Leist et al. 2014).   

Opportunities

The products of Body Shop made from the natural ingredients and material that helps in increasing the awareness about the organic and the eco friendly products. The increase in the number of the online tech savvy buyers who are ready to use the website portal of company for the sale and delivery leads to an increase in the market share of the company (Ramli 2015). The company has varied range of products ranging from skincare, body care, make-up, fragrance and hair care. Besides, the company has also introduced varied range of products for men that not only helped in satisfying the demand of this niche market but also enabled the promotion of sales. The company also has various anti ageing products with which they can not only target the ageing population and convince in buying their products thereby enhancing the market share (Sahota 2014).

Recommendation

Threats  

The Body Shop faces huge competition from brands like Yves Rocher, Lush, Weleda and L’Occitane, who also manufacture products on the similar line by focusing on the aspects of the natural ingredients and the environmental protection (Dionisio et al. 2015). Although the Maybelline New York is not a direct competitor but it poses a threat to Body Shop since it is gradually positioning itself against the aspect of animal testing for the purpose of the environmental protection. The products of the company make use of some of certain fine raw materials from around the world (Sánchez and Tovar 2015). The presence of harmful environment not only causes global warming and changes in the climate but also leads to an unstable supply of the raw materials. Economic downturn of the Australian economy remains a threat for the company thereby leading to the decrease in the sales turnover in overall market. Implementation of new legislation or the problems in the terms of the trade of the supplier countries has a huge impact on the company operations (Zakaria 2015).

SWOT Table:

Strength

1.  Huge network of franchise stores across 60 countries

2. Wide product range of close to 1200 varieties

3. Properly designed  store ambience and layout creating customer attraction

4. Possess higher brand value and engages in the philanthropic activities

5. Have a proper supplier network ensuring good sources of raw materials.

Weakness

1. Very little advertising of the products

2. Have little control of the proprietors due to a franchise system

3. Dependence of the sales volume on number of the retail outlets

Opportunities

1. Huge potential for growth due to manufacture of eco-friendly and natural products

2. The increased in the number of online buyers helps in increasing the market share

Threats

1. Impact of legislation or change in the trade agreements heavily influences the company’s operation.

2. Presence of competitors like Yves Rocher, Lush, Weleda and L’Occitane

3. Impact of economic downturn

 

Figure 1: SWOT Table

Source: (Cristea 2015)

a. Target Market 

Based on the geographic, demographic, psychographic and behavioural segmentation the target market of The Body Shop includes (Ammala 2013):

  • Well educated women between the age group of 18 to 55
  • Educated men with a higher income group between 30 to 35 years of age
  • People interested in environment friendly products
  • Customers willing for paying more for the quality beauty products

b. New Product 

Skin renewal and anti ageing remains the key proposition for driving the demand for the products related to skin care. The women closer to 35years of their age mostly seek these features. In Australia, the increasingly ageing population proved to be a natural source of growth engine for the propositions (Kulik et al. 2014). Hence, the constant growth of the traditional customer base in the form of the baby boomers is leading to the growth in demand for the anti ageing creams as this customer category looks forward in remaining attractive as well as active even between the age group of 50 and 60. Even the women between the age group of 20s and 30s are looking at measures for prevention of the early ageing signs. In addition, the advancement in the technology and the perceived benefits also provided motivation to the consumers for spending higher on the anti ageing products. Therefore, introduction of newer active ingredient that ensured better dramatic results would not draw consumer interest but would also result in better sales. Thus, The Body Shop can introduce a new product named Soothing Anti Ageing Tea Tree Eye Gel.

Tea tree is a tree in indigenous Australia having needle-like leaves and finds thorough application in the aromatherapy since on smashing the leaves releases essential oils that are differing in the constituents and the quantities (Pazyar et al. 2013). The oil is too powerful and needs dilution several before adding as an ingredient to the product. The best part is that even on dilution the oil retains its essential qualities.

The Anti Ageing Tea Tree Eye Gel would help in reducing the under eye dark circles and help in treating the under eye bags. The Tea Tree is an essential oil containing antioxidants that help fight ageing and wrinkles. The oil works through countering destruction of the skin collagen (Rose 2013). The oil also eliminates excess amount of water and toxins from the skin and provides a harder and fresher look.

Conclusion and Recommendation

SWOT Analysis:

Strengths

1. Innovative product: Soothing Anti Ageing Tea Tree Eye Gel is an innovative product and not offered by the competitors

2. Easy in Scaling Up: The franchise based model will allow the company in scaling up the product in its different stores over time

3. Monopoly: Bodyshop enjoys monopoly in respect to the product since it is the only company selling the product at the moment

4. Presence of Loyal Customers: The Bodyshop has a high base of loyal customers who are ready to test and trial each product introduced by the brand.

 

Weakness

1. Dependence on Workforce:  To manufacture the new product there is immense dependability on the workforce

2.Lower Profit  Margins: Although the new product is an outcome of  The Bodyshop brand but initially it have  lower profit margins due to lower acceptability amongst the customers

3. Raw Material Source: The source of raw materials for the brand depends on a lot of  factors and times might be challenging to find

4. Research & Development: Since The Bodyshop is an established brand so launching a new product requires immense research and development involving huge costs.

 

 

Opportunities

1. Growth Potential: Given the demand for the product of The Bodyshop , the product is expected to capture the market hugely. The raw material for the product is primarily tea tree oil that is comparatively cheaper.

2. Local Availability: The primary raw material for the product that is the Tea Tree Oil is available in abundance locally. 

3. Sponsorship: Advertising along with celebrity endorsements is able to widen the popularity and demand of the product

Threats

1. Competition: Although the product is a new product but might face competition from similar line of brands like  Yves Rocher, Lush, Weleda and L’Occitane

2. Slowing Economy: This will result in slowing of the business that has an impact on growth of the final product.

3. Recession: This leads to a reduction in purchase that might lead to reduction in price thereby influencing the overall profit of the company.

 

 

c. Marketing Mix for the New Product

Marketing mix refers to an essential theory for every product introduced in business industry (Huang and Sarigollu 2014). In fact, it is the foundation model for marketing. The marketing mix thus defined as the set of the marketing tools that the firms use for pursuing its marketing objectives. Thus, the marketing mix refers to the four broader marketing decision levels that included product, promotion, price and place. However, the marketing mix that the new product of Body Shop would put to use includes:

Product:  The product of the company is Anti Ageing Tea Tree Eye Gel. Tea Tree oil is the key ingredient of the product that not only have natural properties and are safe for using in skin (Hammer 2015). The oil is an extraction from the leaves of a tree named Melaleuca alternifolia which when added ensures the product with an organic value. The oil if used without essential preservatives has a shorter life span.  

Price – The current price of a 100 ml bottle of other eye products from the company sells at AUS $ 16.00. Therefore, the new product Anti Ageing Tea Tree Eye Gel is available in a similar price range. The price of Tea Tree oil products is lower to the competitors. The Body thus expected to keep the new product with natural properties within the affordable range.

Place – The Body Shop represents business to customer related organization in retail industry. The direct target market of the company is the consumers. The company undertakes distribution types that emphasizes on the mixture of the selective and the intensive distribution. The company runs its business in Australia through the retail stores on franchise basis.

Promotion – The Body Shop is against any kind of promotion and hence does not have a separate advertising and marketing department. The company however owns a website for its customers with adequate product information that allows either making a purchase decision or buying the product online. This also holds true for the new product. Most of the beauty products in the store are organic and have natural properties. The core values of the company are against the animal testing implying the protection of the animals.

Section 4: Conclusion and Recommendations

To conclude one can say that The Body Shop represents organic based cosmetic company that not only expresses concern about its people, the animals and the planets as a whole. The company mostly makes use of natural material that renders it a guaranteed safe and good quality brand. The business strategies of the company are not only able to satisfy the customer demand but also essentially render customer loyalty and satisfaction. The organization also aims at achieving employee participation that leads to greater achievement. The Body Shop also experiences different background and perception of the consumers across countries. The patterns and trends of the consumers are dynamic. The personal lifestyle of the consumers will ensure influencing the brand provided they are brand conscious. The brand is not only time bound and smart and stands strong in market. However, the brand needs to adopt visibility for creation of the public awareness. In the context of animal testing, the brand is not only vegetarian but also cruelty free. The company works sn with the Community Fair supplier for maintaining the loyalty of the clients. The environmental certification of the brand proves that the business believes in the ethical trading.

  1. The Body Shop must venture out in the untapped markets of Malaysia and China. Given its reputation, the company should ensure creating a worldwide online stores for the customers  with features like brand equity, easy accessibility, promotion of newer product range, tracking of consumer response to products and getting the necessary complaints, feedback, compliments and advice.
  2. The company should think of brand extensions. The Body Shop can however do this by starting a body and bath along with a skin care range for the kids. The company can also venture into the eco friendly apparels for the women with sources from the various communities across the world. The Body Shop can further venture into the department of the home accessories sourced from the having richer culture thereby leading to the preservation of ethnicity and putting across a means of livelihood.

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