Strategic Management The Body Shop

STRATEGIC MARKETING MANAGEMENT
Contents:The Body Shop Page 1

1. Company Background.................................................................................................5 2. Situation analysis..........................................................................................................5 3. External analysis...........................................................................................................6 a # c d e " !olitical "actors Economical "actors Social "actors $ec%nological "actors En&ironmental "actors 'egal "actors
(. External )nalysis- *icro En&ironment.......................................................................12 (.1 +ndustrial )nalysis a # c d e $%reats o" ne, entrance $%reats o" su#stitute products Bargaining po,er o" customer Bargaining po,er o" supplier Competitors
5. *arket Segmentation...................................................................................................1a # c Consumer market !roducts Competitors
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d Brands
6. +nternal )nalysis........................................................................................................21 6.1 .esources analysis..............................................................................................21 a # c d !%ysical .esources /inancial .esources 0uman .esources +ntangi#les
6.2 Competences and capa#ilities a # c d e *arket *aterials *en *oney *ac%ines
1. S.2.3.$ )nalysis.......................................................................................................2( 4. *arketing !lan............................................................................................................26 4.1 3#5ecti&es 4.2 Strategies
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4.3 6ap )nalysis 4.( 6eneric Strategy 4.5 )nso""7s *atrix 4.6 Competitor *arketing Strategy 4.1 *arket !ositioning Strategy 4.4 +nstitutional Strategy 4.- +mplementation !lans........................................................................................2a # c d e " g !roduct !rice !lace !romotion !eople !rocess !%ysical E&idence
-. Budget Breakdo,n...............................................................................................38 18. *onitoring and Control.........................................................................................31 18. )ppendix...............................................................................................................32 11. .e"erences.............................................................................................................(3
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1. Company Background 1.1 *ission Statement $o dedicate t%e #usiness to t%e pursuit o" social and en&ironmental c%ange. Creati&ely #alance t%e "inancial and %uman needs o" t%e stake%olders: employees9 customers9 "ranc%isees9 suppliers and s%are%olders. Ensure t%at t%e #usiness is ecologically sustaina#le9 meeting t%e needs o" t%e present ,it%out compromising t%e "uture. *eaning"ully contri#ute to t%e local9 national and t%e international communities #y adopting code o" conduct ,%ic% ensures care9 %onesty9 "airness and respect. Campaign "or t%e protection o" t%e en&ironment9 to de"end %uman rig%ts and against animal testing ,it%in t%e cosmetic industry. :;alue .eport9 288-2818
3rgani<ational Structure
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$%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. :3ur !eople9 288--2818
1.2 !roduct=*arket .ange !roducts: /acial skin care products9 make-ups9 #at% > #ody products9 %air products and "ragrance products. *arket: 2estern Europe9 ?ort% )merica9 )sia9 Eastern Europe9 'atin )merica9 )"rica9 3rient 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 '73real t%ere"ore it is no longer a listed company. :)#out As9 288--2818 ;olume sales o" $%e Body S%op in 288-: 126 million units. $otal sales '73real #y di&ision in 288-: 169251 million units. ?et !ro"it o" $%e Body S%op in 288-: B5( million9 ,eig%t 2.1C9 gro,t% #ased on pu#lis%ed sales D(4.(C9 percentage o" sales 1.(C. :)nnual .eport9 288-2818 2. Situation Analysis
)ccording to Blyt%e :2885 *arketing )udit is a reassessment o" t%e "irm7s current o#5ecti&es9 strategies9 organi<ation9 company per"ormance and acti&ities. $%e main o#5ecti&e o" t%is analysis is to %ig%lig%t t%e strengt%s and ,eaknesses o" t%e company9 so t%at t%ey can #e impro&ed "or t%e "uture.
$%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 ma5or "orces9 t%e en&ironmental "actors t%at %a&e an impact on t%e organisation on a &arying scale :@on%son9 Sc%oles9 > 2%ittington9 2884 . $%e main element o" macro en&ironmental is t%e !ES$E' "rame,ork ,%ic% identi"ies t%e ma5or dri&ers o" c%ange. $%e macro en&ironments a""ecting t%e core #usiness o" t%e organi<ation are identi"ied #elo,:
a !olitical "actors "AC#$%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
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sales
o"
t%e
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%and#ags a#road. ,%en :Eecision tra&elling cosmetic retail stores at ?e,s t%e airport and t%e %ig% streets. o"
*edia S)S9 2888-2818 E-commerce
AF industry and go&ernment 6ro,ing num#er #acked trust mark sc%emes. demand :Cosmetic announces9 288"or
online
products and lose o" loyal customers.
Employment
Eue
to
t%e
recession @o#less a&aila#le.
num#er positions
#usinesses "ind in di""icult to outgro,s sur&i&e in t%e market.
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#&$' &'()S#%* Exc%ange rates /luctuation in t%e exc%ange .aise t%e cost o"
rate against t%e pound and in import o" ra, materials countries t%at supply t%e or "inis% products "rom companies ,it% ra, t%e rest o" t%e ,orld. materials. :2earden9 288+ncrease in ;)$ AF7s ne, c%ancellor 6eorge $%is ,ill increase t%e 3s#orne announced on 21st price o" daily ,%ic% to #uy *ay 28189 t%e %ike on tax to commodities 2818 customers cosmetics. Eirect selling
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28C #y next )pril. :Clark9 ,ould lead to restrict
)llo,s customers to #uy Better
customer
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products outside t%e relations%ip9 "irms can a&oids expenditures on product promotion. 0ig% unit la#our cost 0ig% la#our cost in AF %as Company strategies
traditional retail enterprise. keep t%e cost lo, and :Esa9 288--2818
le"t a gap in producti&ity as cannot #e pursued to compared to t%e counter parts t%e "ullest extent. like )merica and @apan. :*ail 3nline9 2818 3il !rices +ncrease in oil prices. :*ail Can a""ect promotion9 3nline9 288sale and distri#ution as ,ell as demand and purc%asing po,er.
Conclusion: Eue to t%e recession pro"its o" t%e company can #e a""ected9 as t%e demand "or t%e product ,ill reduce and due to c%anges in t%e exc%ange rates ,%ic% could a""ect product manu"acturing.
c Social "actors "AC#$% E""EC# $' #-E &M!+&CA#&$'
C$SME#&C &'()S#%* Eemograp%ics )ccording to t%e 3""ice "or +ncrease in t%e sales o" ?ational Statistic in )pril t%e 28189 t%e percentage o" Britis%
anti-aging

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 t%e natural product. cosmetics #y some "irms. Cosmetic $esting
Companies using animals "or )""ects #rand image. t%eir product testing. :Sil&a9 2882
AF
cosmetic
industry AF7s cosmetic industries are )""ect #rand image. #uying product made out o" talc ,ildli"e +ndustry9 2883 "rom illegal mines in and "rom +ndia. destructi&e
risk to tiger "orests.
:En&ironmental +n&estigation
'ondon 3lympics 2812.
+ncreased num#er o" tourists 3pportunity in t%e country. a,areness.
"or
promotion and increase
Conclusion: Ei&ersi"ication o" culture t%at c%anges t%e #uying po,er o" t%e customer ,ill a""ect greatly t%e company9 ,%ic% ,ill depend on "actors like promotion9 &alue and et%ics.
d #ec.nological "actors "AC#$%S E""EC# $' C$SME#&C &M!+&CA#&$' &'()S#%* .esearc% > Ee&elopment
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Cosmetic companies in&est a Brand recognition. lot on .>E so t%at t%ey can
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de&elop ne, products to suite t%e c%anging trends o" t%e customer. 2881 !ulse per"ection AS #ased companies %a&e Competiti&e de&eloped automated mascara ad&antage. t%at coats las%es e&enly. :'G3real9 2818 .oll on true matc% Cosmetic to spread company t%e %as *ore options "or t%e :6lo#al +nsig%t9
de&eloped a roll on tec%niHue customers. "oundation e&enly on t%e "ace. :'G3real9 2818 *ulti- purpose products Ee&elopment o" products suc% Customers looking "or as t,o-in-one ,it% "ace ,as%9 consolidating t%e s%ampoo conditioner. #eauty #udget.
:'G3real9 2818 E-commerce Secure met%ods o" payment 2orking ,it% security code pass,ord. :'ondon Boroug% products online. 3" .ic%mond Apon $%ames9 288--2818 clients
or #uying more and more
Conclusion: Competiti&e ad&antage may #e ac%ie&ed and gro,t% in t%e market.
e Environmental "actors "AC#$%S E""EC# $' &M!+&CA#&$'
C$SME#&C &'()S#%* ?atural !roducts

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6ro,ing
trends
o" Bene"its t%e companies t%at

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en&ironmentally
"riendly

products. En&ironmental !ollution. o""er suc% products.
6o&ernment to cut car#on +t ,ill #e a necessity "or emissions. :0ar&ey9 2818 companies regulations. to "ollo,
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 +S3 22116 sa"ety standard Builds cosmetic products. /e#ruary select 2818 con"idence keen in on
certi"icates pu#lis%ed on 15t% customers and makes t%e pro&ides organi<ation resources to organisations to supporting t%eir #usiness at t%eir speci"ications. domestic and international le&el. company %as made :Cosmetic Eesign9 2818
+nternational !olicy.
$rade Companies import all its $%e
products "rom o&erseas any strategic plans to look "or c%anges ,ill %a&e an e""ect alternati&e sources o" supply. on cost.
Conclusion: Companies %as to a#ide #y t%e rules and regulations set #y go&ernment.
0. External Analysis/Micro Environment
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$%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 > 2%ittington9 2884
$o analyse t%e company9 it s%ould #e considered !orter7s "i&e "orces.
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Source: :@on%son9 Sc%oles9 > 2%ittington9 2884
a #.reats o/ 'e1 Entrants "AC#$%S Scale and experience +E2E+ $" #-%EA# 'o, &M!+&CA#&$' !roducts o" $%e Body S%op are natural unlike ot%er cosmetics. $%ey are a,are o" t%e resources a&aila#le "or t%eir products. ?e, companies

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 Eac% o" t%e is cosmetic di""erent
distri#ution c%annel.
products
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 Ei""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 1-16 in AF and since t%en %as expanded ,it% strong core &alues o" natural products. Cost )d&antage 'o, Ei""erent met%ods o" skills and
production
%a&e gi&en $%e Body S%op an edge o&er t%e ot%er competitors. 0ence can set

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 ratio and +E2E+ $" #-%EA# per"ormance *edium &M!+&CA#&$' 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" $%e Body S%op its less. Su#stitute products *edium +nexistence o" su#stitutes.
Conclusion: )s t%ere are no su#stitute "or eac% #rand o" cosmetic product t%e t%reat o" su#stitutes is ,eak.
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c #.e !o1er o/ Buyer "AC#$%S Concentrated Buyer +E2E+ $" #-%EA# *edium &M!+&CA#&$' Buyer po,er increases i" t%ere are large retailers %a&ing di""erent #rands under one roo". Ei""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 $%reat *edium Cosmetic companies
supply to t%eir large retail #uyers like Boots so t%e possi#ility o" setting up t%eir o,n supply c%ain direct to t%e customers is lo,9 ,it% certain exceptions.
Conclusion: 'ooking at t%e a#o&e analysis #uyer po,er is considera#ly at an a&erage.
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d #.e !o1er o/ Supplier "AC#$%S Concentrated Supplier +E2E+ $" #-%EA# 0ig% &M!+&CA#&$' 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 $%reat Competition 'o, Eue to e-commerce t%e customers can directly #uy t%e products "rom t%e main supply o" t%e company.
Conclusion: Supplier po,er is relati&ely lo, in t%is case as #uyers %a&e a ,ider range o" options.
e Competitive %ivalry "AC#$%S Competiti&e Balance +E2E+ $" #-%EA# 0ig% &M!+&CA#&$' $%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 6ro,t% .ate
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0ig%
Eue to sti"" competition

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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, Ei""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.
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3 Market Segmentation
) market segmentation ta#le o" t%e company can #e "ound on )ppendix (
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.
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
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'o, !rice
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'o, Juality Source: :'am#9 0air9 > C9 2884
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

.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<il to Samoa9 Eaa#on in Colom#ia. 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 $%e Body S%op is ,%olly o,ned #y '73real t%ere"ore it is no longer a listed company. :$%e Body S%op :288- K 2818 ;olume sales o" $%e Body S%op in 288-: 126 million units. $otal sales '73real #y di&ision in 288-: 169251 million units. ?et !ro"it o" $%e Body S%op in 288-: B5( million9 ,eig%t 2.1C9 gro,t% #ased on pu#lis%ed sales D(4.(C9 percentage o" sales 1.(C. :)nnual .eport9 288-2818
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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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 > 2%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% $%e Body S%op %as created a nic%e ,it%in t%e cosmetic industry.
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$%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 3&er t%e past "e, years $%e Body S%op %as in&ested setting up ne, stores across t%e country ,it% uniHue design. $%ey %a&e also introduced merc%andises t%at contri#ute to,ards c%ildren.
*en !lease re"er to 0uman .esources 6.1 K c
*oney !lease re"er to /inancial .esources 6.1 K #
*ac%ines !lease re"er to !%ysical .esources 6.1 K a
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5 S6$# Analysis 7see Appendix 4 Strengt.s +n&estment in .>E /inancial .esources Ee&eloping ?ic%e market Brand 'oyalty ?atural !roducts +evel o/ &mplication 0ig% *edium 0ig% 0ig% 0ig%
)cHuisition #y '73real9 entry in t%e glo#al *edium market.
6eaknesses
+evel o/ &mplication
)cHuisition #y '73real damaged t%e #rand *edium image. 0ig% cost o" operation /ranc%isee issues *arket Competition
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0ig% *edium 0ig%

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$pportunities Ee&eloping )nti-ageing products Ba#y !roducts
+evel o/ &mplication 0ig% *edium
!u#licity o" t%e company at 'ondon 0ig% 3lympics 2812 .ecognition o" e-commerce to de&eloping 0ig% countries ,ill #oost sales. *ale cosmetic market Eco-"riendly accessories. "as%ion 5e,ellery *edium > *edium
#.reats 3t%er Cosmetic companies +ncreased sales #y competitors Expensi&e resources Similar natural cosmetics
&mplication 0ig% 0ig% 0ig% 'o,
)lt%oug% $%e Body S%op ,as acHuired #y t%e cosmetic giant '73real in 28869 t%eir et%ics remain t%e same and t%ey operate separately as a separate unit ,it%in t%e '73real group. $%is ,ill not %a&e an impact on $%e Body S%op7s #rand image. :.ussel9 2881
$%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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8. Marketing !lan9 See )ppendix 3
4.1 Company7s 3#5ecti&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 2C #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 6ap :" )nalysis
*arket S%are $arget sales K 5.5C Current Sales- 3.5C Sales gap - 2C
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/orecast K 1.5C
1yr
$ime
)ccording to analysis $%e Body S%op %ad 3.5C market s%are in 288- :$%e Star 3nline9 288- .
+ncrease in t%e market s%are #y 2C #y expanding t%e male cosmetic market #y 2811 ,ill #e 5.5C.
+" not%ing is done to increase t%e market s%are it ,ill go do,n to 1.5C i.e. t%ere ,ill #e a gap o" 2C in t%e sales.
4.( !orter7s 6eneric Strategy
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!orter7s t%ree 6eneric Strategies :*c?air9 2884 : 1. Ei""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 1
Source: Ansoff
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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#5ecti&es set.
4.6 Competiti&e *arketing Strategy 3""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 Ee&elopment o" ne, products and promotions o" existing products at in"erior price t%an competitors.
4.1. *arket !ositioning Strategy $%e Body S%op used to #e t%e market leader ,it% expanding markets and demand "or t%e products and a strong o""ensi&e and de"ensi&e strategies. ?o, it %as mo&ed to #ecome a market c%allenger ,%ere it does selecti&e targeting to an appropriate age group and attacks t%e ri&al competitors ,it% t%eir natural cosmetic range o" products.
4.4 +nstitutional Strategy
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$%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 '73real. +t operates as a separate unit ,it%in '73real #ut is o,ned #y it. :$%e Body S%op9 288- - 2818
- +nstitutional !lans :See )ppendix 2 *edia !romotions )d&ertise in t%e "as%ion maga<ines. 'ocal ta#loid ne,spapers. Anderground train stations9 Buses9 /erry7s. +n store promotion "or #ot% men and ,omen cosmetics not 5ust ,omen. )d&ertising on t%e tele&ision.
!eople +.$ K $o en%ance t%e s%opping experience online9 and encourages ne, user #y online promotional o""ers. Sales Eepartment K $o increase sales and make t%e customers a,are o" t%e di""erent range o" products to t%e customer. 3perations Eepartment K $o monitor all t%e stock mo&ing "rom eac% store. .>E K $o de&elop a ne, range o" #a#y cosmetic products.
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*arketing Eepartment 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.
!%ysical E&idence *onitor time taken to deli&er an online product. Stock c%ecks s%ould tally ,it% t%e in&entory stock. 6ood 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 Breakdo1n L *illion


3&erall cost is L3.14 *illion
!romotion K 68C estimated cost !roduct K 14C estimated cost9 !eople K 4C estimated cost9 !%ysical E&idence K 2C estimated cost9 !rocess K 5C estimated cost9 !lace K 1C estimated cost
L 119 889888 L-369888 L(169888 L18(9888 L2689888 L36(9888
$otal Cost
L 3148888
Promotion Product People Physical Evidence Process Place
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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. 6antt 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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Appendices
)ppendix 1: +nternal )nalysis=;alue C%ain )nalysis :!orter9 1--4
!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

,%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.
3perations: $%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.
3ut#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 Ee&elopment: $%e Body S%op %as in&ested a lot in .>E 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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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: $%e Body S%op %as o&er 2588 store o&er 68 market segments9 as t%ey %a&e #een acHuired #y '73real all t%e "inancials are done under t%emM Huality control is monitored closely "or Huality.
)ppendix 2: +mplementation !lan
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$opics !eople Strategy $o impro&e $actics $raining >
customer ser&ice #y 84=18 in sta"". $o educate t%e sta"" a#out tec%niHues sales7
de&elopment "or t%e sta"" %as to #e done ,it%in 2 mont%s *oti&ate sta"" ,it% di""erent > regular c%eck %as to #e undertaken.
!roduct
By 8-=18 en%ance t%e sales o" male products By 11=18 impro&e t%e appearance o" t%e stores in AF
By 11=18 +ntroduce packages di""erent clu##ed toget%er o" products
By 81=11 %a&e to c%ange t%e ,%ole looks o" t%e s%ores
!rice
By 18=18 introduce &alue pack #ene"it. By 11=18 "orm a ,ell planned cost strategy. "or until money t%ey
By
keeping
t%e on
product introductory discounts. +ntroduce di""erentiation pricing market rises. a"ter
t%e
demand
!lace
By 86=11 open ne, store in Scotland. By 81=18 de&elop sc%emes o" "ree
Start
looking in in
"or t%e 3
entrepreneurs interested #usiness
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deli&ery o&er t%e sales o" 28 pounds mont%s. Start pricing t%e
products tactically. !romotion En%ance t%e sales o" male cosmetics #y 81=18 in AF. By 81=12 introduce a ne, range o" #a#y cosmetics. Start promotions on ta#loid ne,spapers9 'ondon underground stations9 trains. !romote on #uses9
maga<ines related to c%ild care9 mot%ers. !%ysical E&idence By 8-=18 de&elop so"t,are mem#ers o" "or t%e customer %istory "or loyalty group. By 18=18 "orm a promotional strategy "or ne, product launc%. 'et t%e +$
department de&elop it #y t%e next 2 mont%s. /rom 86=18 c%eck t%e progress o" sales o" eac% product till 18=18 and "orm a competiti&e price "or t%ose products.
!rocess
By 83=11 de&elop online course employees. By 82=12 de&elop sel" ser&ice c%eck out tills in store. learning "or
By 8-=18 organise t%e online ,e# link on t%e company "or ,e#site employees.
By 82=11 introduce sel" ser&ice tills "or

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sa&ing money. time >
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)ppendix 3:
Segmentation9 positioning and planning
Market Segmentation 1. Identify customer needs and segment t e market. 2. !e"e#o$ $rofi#es of resu#ting segment.
%arget marketing 1. &"a#uate attracti"eness of eac segment. 2. Se#ect target segment.
Marketing 'ositioning 1. Identify differentia# ad"antage for eac segment. 2. (ormu#ate marketing mi).
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Marketing '#anning 1. !e"e#o$ marketing $#an eac segment. 2. !e"e#o$ marketing organisation.
Source: :Eoyle > Stern9 2886
)ppendix ( Bene"it Segmentation o" t%e Body 'otion *arket Segment name !rinciple #ene"its soug%t Eemogr ap%ic Special Brands !ersonality cs 'i"estyle cs
Be%a&ioural disproportionat cs
c%aracteristi c%aracteristi
Strengt% c%aracteristi ely "a&oured
+ndepen dent segment Socia#le
'o, cost
2orkin g men
0ea&y user
3li&e "la&our
Sel" automony
K ;alue oriented
Scent > Noung "eel people9 teens
?ormal skin
Satsuma "la&our K Citrus scented Butiri Ba#y
Socia#ility
)cti&e
2orrier
Skin care *ot%ers So"t skin and kids
0ig%ly Sensiti&e
Conser&ati& es 0edonistic
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Sensory
/la&our
C%ildre
Ase o" "ruit @apanese c%erry Sel"-
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segment o" t%e n "la&oured lotions #lossom in&ol&emen t
product
)ppendix 5 Core Competency *odel.
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Source: :.+*S9 2818
)ppendix 1 Anso// matrix

MA%<E# !E'E#%A#&$' * * $).6E$ ?E2 *).FE$ )?E +*!.3;E SE.;+CES
!%$()C# (E2E+$!ME'# - EE;E'3!*E?$ 3/ ?E2 .)?6E 3/ B)BN !.3EAC$S
MA%<E# (E2E+$!ME'#
(&2E%S&"&CA#&$' * S3C+)' SE.;+CES +?C.E)SE C3.!3.)$E S3C+)' .ES!3?S+B+'+$N *
E?$E. +?$3 $0E A?$)!!EE *).FE$ /3. *)'E C3S*E$+CS +?EAS$.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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* )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 +i/e 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 $%e Body S%op %as already %as a good reputation in t%e
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market i" t%ey launc% any ne, product t%ey don7t need to do #e%a&e like ne, entrance #ecause people trust t%is #rand and t%ey ,ill #uy t%eir product.
)ppendix 4 .esource !lan: )cti&ities Enrolment Structure )ppro&al !roduct )d&ertisement Eistri#ution Sales @)? /EB *). )!. *)N @A?E @A'N )A6 .esources *anager Executi&e *anagement 0. *arketing 0. *arketing
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Bi,liograp.y
About Us. +2009*2010,. -etrie"ed .une 04/ 2010/ from % e 0ody S o$ Internationa#1 tt$122333.t e4odys o$.com25en25332ser"ices2a4outus5media*centre.as$) Annual Report. +2009*2010,. -etrie"ed .une 05/ 2010/ from 678rea#1 tt$122333.#orea#* finance.com2eng2annua#*re$ort 9#ark/ %. +2010/ .une 24,. Business. -etrie"ed .une 24/ 2010/ from % e :uardian1 tt$122333.guardian.co.uk2uk220102;un22424udget*2010*tom*c#ark*ana#ysis Cosmetic announces. +2009/ <o" 09,. -etrie"ed .une 05/ 2010/ from My <e3s !esk1 tt$122333.myne3sdesk.com2uk2"ie32$ressre#ease2mac*cosmetics*mac*cosmetics* announces*ne3*3e4site*#aunc *and*c ristmas*co##ections*347578 Cosmetic Design. +2010/ (e4 15,. -etrie"ed .une 05/ 2010/ from =nderstanding t e IS8 22716 Safety 9ertification Standard for 9osmetic 'roducts1 tt$122333.cosmeticsdesign.com2smart#ead2"ie32289025242=nderstanding*t e*IS8*22716* Safety*9ertification*Standard*for*9osmetic*'roducts Decision News Media SAS. +2000*2010,. -etrie"ed 05 31/ 2010/ from tt$122333.cosmeticdesign.com2'roducts*Markets2'o#itica#*turmoi#*turns*#u)ury*cosmetics* markets*on*its* ead !oy#e/ './ > Stern/ '. +2006,. Marketing Management and Strategy. &ng#and1 (inancia# %imes. !sa. +2009*2010,. Direct Selling Association. -etrie"ed .une 12/ 2010/ from !irect Se##ing 6egis#ation1 tt$122333.dsa.org.uk2#egis#ation. tm &n"ironmenta# In"estigation Industry. +2003,. =? 9osmetic Industry -isks %iger (orests. Media Briefing / 1*9.
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:i##igan/ 9./ > @i#son/ -. +2009,. Strategic Marketing lanning. :reat 0ritain1 Macmi##an 'u4#is ing So#utions. :#o4a# Insig t. +2007,. A Study of t e &uro$ean 9osmetic 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 4e e)ceeded1 tt$122333.ft.com2cms2s202e45a4450*7332*11df*ae73* 00144fea4dc0. tm# .o nson/ :./ Sc o#es/ ?./ > @ ittington/ -. +2008,. %&ploring Corporate Strategies. &ng#and1 (inancia# %imes. .on so/ ../ Sc o#es/ ?./ > @ ittington/ -. +2008,. Marketin Audit. In .. .on so/ ?. Sc o#es/ > -. @ ittington/ %&ploring Corporate Strategy. &ng#and1 (inantia# %imes. ?ot#er/ './ ?e##er/ ?./ 0rady/ M./ :oodman/ M./ > Bansen/ %. +2009,. Marketing Management. &ng#and1 'earson &ducation 6imited. 6am4/ 9./ Bair/ ../ > 9/ M. +2008,. !"e %ssentials of Marketing' (t" edn. 9anada1 <e#son &ducation. )ondon Boroug" *f Ric"mond Upon !"ames. +2009*2010,. -etrie"ed .une 14/ 2010/ from Make a 'ayment 8n#ine1 tt$122333.ric mond.go".uk2$ayments 678rea#. +2010,. % e =? 0eauty Industry. !rends +,-, / 1*12. 6uck/ !. +2008,. !"e *fficial C.M Course book. =?1 &#se"ier #td. Mail *nline. +2009/ <o"em4er 24,. -etrie"ed .une 14/ 2010/ from <e3s1 tt$122333.dai#ymai#.co.uk2ne3s2artic#e*12304782S ark*oi#*tankers*.urassic*9oast* en"ironmenta#*accident*3aiting* a$$en. tm# Mail *nline. +2010/ .une 18,. -etrie"ed .une 18/ 2010/ from <e3s1 tt$122333.dai#ymai#.co.uk2ne3s2artic#e*12877182@ ite a##*e)$erts*cost*ta)$ayer*24i##ion* 3ages. tm# Mc9raddie/ 6. +2010/ A$ri#,. Anti/ageing trends. -etrie"ed .une 14/ 2010/ from 'rofessiona# 0eauty1 tt$122333.$rofessiona#4eauty.co.uk2$roducts2skincare2anti*ageing*trends* skincare25013082.artic#e Mc<air/ 6. 9. +2008,. Management Accounting Business Strategy. =?1 9IMA. *ur eople. +2009*2010,. -etrie"ed .une 03/ 2010/ from % e 0ody S o$ Internationa#1 tt$122333.t e4odys o$.co.uk25en25g42ser"ices2a4outus5our$eo$#e.as$) 'orter/ M. +1998,. Competiti#e Ad#antage. America1 % e (ree 'ress. -IMS. +2010/ .une,. Risk and .nsurance Management Society. -etrie"ed .un 10/ 2010/ from &ducation1 tt$122333.rims.org2education2'u4#is ingImages2rrmccmgra$ ic.;$g
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-usse#/ .. +2007/ Marc 11,. %t"ical Corporation. -etrie"ed .une 11/ 2010/ from 0ody S o$ %ake 8"er * &t ica# 4usiness as usua#1 tt$122333.et ica#cor$.com2content.as$C 9ontentI!D4936 Si#"a/ 8. !. +2002,. % e 9ontri4ution of &uro$ean 9osmetic Industry to t e !e"e#o$ement of Aternati"e to Anima# %esting. Steering Commitee on Aternati#es to Animal !esting / 189* 183. !"e Body S"op. +2009 * 2010,. -etrie"ed .une 10/ 2010/ from A4out =s1 tt$122333.t e4odys o$.co.uk25en25g42inde).as$) !"e Star *nline. +2009/ .an 10,. -etrie"ed .une 15/ 2010/ from 0usiness1 tt$1224iE.t estar.com.my2ne3s2story.as$Cfi#eD220092121024usiness22882015>secD4usiness 0alue Report. +2009 *2010,. -etrie"ed .une 04/ 2010/ from % e 0ody S o$ Internationa#1 tt$122333.t e4odys o$.co.uk25en25g42"a#ues* cam$aigns2assets2$df2Fa#ues5re$ort5#o3res5"2.$dfC @earden/ :. +2009/ .an 2009,. Business. -etrie"ed .une 05/ 2010/ from % e :uardian1 tt$122333.guardian.co.uk24usiness220092;an2202$ound*ster#ing*do##ar*#o3
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Strategic Management The Body Shop

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STRATEGIC MARKETING MANAGEMENT

Contents:The Body Shop Page 1

STRATEGIC MARKETING MANAGEMENT

5. *arket Segmentation...................................................................................................1a # c Consumer market !roducts Competitors

The Body Shop

STRATEGIC MARKETING MANAGEMENT

6.2 Competences and capa#ilities a # c d e *arket *aterials *en *oney *ac%ines

1. S.2.3.$ )nalysis.......................................................................................................2( 4. *arketing !lan............................................................................................................26 4.1 3#5ecti&es 4.2 Strategies

The Body Shop

STRATEGIC MARKETING MANAGEMENT

The Body Shop

STRATEGIC MARKETING MANAGEMENT

STRATEGIC MARKETING MANAGEMENT

STRATEGIC MARKETING MANAGEMENT

3. External Analysis/Marco Environment

STRATEGIC MARKETING MANAGEMENT

*edia S)S9 2888-2818 E-commerce

products and lose o" loyal customers.

recession @o#less a&aila#le.

#usinesses "ind in di""icult to outgro,s sur&i&e in t%e market.

28C #y next )pril. :Clark9 ,ould lead to restrict

)llo,s customers to #uy Better

STRATEGIC MARKETING MANAGEMENT

c Social "actors "AC#$% E""EC# $' #-E &M!+&CA#&$'

STRATEGIC MARKETING MANAGEMENT

risk to tiger "orests.

'ondon 3lympics 2812.

+ncreased num#er o" tourists 3pportunity in t%e country. a,areness.

promotion and increase

STRATEGIC MARKETING MANAGEMENT

or #uying more and more

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

o" Bene"its t%e companies t%at

STRATEGIC MARKETING MANAGEMENT

$rade Companies import all its $%e

0. External Analysis/Micro Environment

The Body Shop

STRATEGIC MARKETING MANAGEMENT

$o analyse t%e company9 it s%ould #e considered !orter7s "i&e "orces.

The Body Shop

STRATEGIC MARKETING MANAGEMENT

Source: :@on%son9 Sc%oles9 > 2%ittington9 2884

STRATEGIC MARKETING MANAGEMENT

STRATEGIC MARKETING MANAGEMENT

The Body Shop

STRATEGIC MARKETING MANAGEMENT

Conclusion: 'ooking at t%e a#o&e analysis #uyer po,er is considera#ly at an a&erage.

The Body Shop

STRATEGIC MARKETING MANAGEMENT

Eue to sti"" competition

STRATEGIC MARKETING MANAGEMENT

The Body Shop

STRATEGIC MARKETING MANAGEMENT

) market segmentation ta#le o" t%e company can #e "ound on )ppendix (

STRATEGIC MARKETING MANAGEMENT

$%e !erceptual *ap. 0ig% Juality

STRATEGIC MARKETING MANAGEMENT

'o, Juality Source: :'am#9 0air9 > C9 2884

6.1 .esource )udit

STRATEGIC MARKETING MANAGEMENT

The Body Shop

6.2 Competences and capa#ilities a # c d e arket aterials en oney *ac%ines