The Body Shop Case Study
The Body Shop Case Study
For people who live in different countries all over the world the words “the body shop” came to have a special meaning. Today, when one mentions going into one, it is very rare that the counterpart would not know what kind of body shop is mentioned. This is because the words “the body shop” today represent one of the largest cosmetic firms in the world The Body Shop that was founded in 1970 in England. In the following paper I would like to talk about the mentioned above brand. My paper will mainly focus on analyzing the reasons of raid growth and sudden decline of the brand. Additionally, the paper will discuss The Body Shop brand positioning and evaluate the company’s market targets and the actions TBS (The Body Shop) took to reposition the brand.
In order to make the paper more thorough and easy for the reader to understand I would like to start it off with a brief insight into the history of The Body Shop. The “green business” idea to open up a shop that would sell only organic products was born in the minds of Anita and Gordon Roddick in the early 1970s. The British couple needed money to raise their children and for this purpose started their small business. Their first shop – The Body Shop opened up in 1976 in Brighton, England. In their first shop Anita and Gordon sold vegetable, flower, and fruit-based products, ranging from facial creams to body butters. Additionally, the owners of the store encouraged clients to bring in their own bottles instead of buying products in new ones.
From early on it was clear that Rodderick’s business was a great success. Thus, the shop started opening new branches firstly in England and later in other countries. The brand was initially built around five values: opposition to animal testing, community trade, self-esteem, human rights, and protection of the planet. The owners of The Body Shop actively participated in community and charity events. When it came to advertising, Anita Rodderick was willing to bring an alternative message of beauty to the world. For her campaigns were not just words, she wanted to turn those words into actions. She did not want her products to be presented by women who torture themselves with diets or do everything possible to alter their bodies with help of plastic surgeons. She wanted her brand to carry a different message – a message of health, happiness, and naturalism.
In 1985 The Body Shop went public and signed an agreement to work with Greenpeace. In 1990 The Body Shop Foundation was established with the goal to fund human rights and environmental protection groups. In 1990s the company has made agreements with many world organizations working towards improvement of life conditions in the third world countries, environmental awareness and human rights. In 1996 The Body Shop launched a new program with the name The Body Shop at Home. In the framework of this program a customer may visit one of the 2000 at home stores situated in England, get free consultations from professionals and purchase the products from their homes. In March 2006, The Body Shop was taken over by L’Oreal. It was reported, that Anita and Gordon Roddick would make £130 million from the sale (The Independent). As of today, The Body Shop has 2,400 stores in more than 60 countries, additionally it is the second largest cosmetic franchise in the world.
Rapid Growth and Decline of the Brand
In the 1980s and the early 1990s The Body Shop had experience rapid growth. The success and recognition of the brand was remarkable. Not only the brand was presenting the consumers with innovating and appealing products, the company was also carrying a very “right” and “attractive message”. The above implies that The Body Shop had adopted a marketing approach that was different from other traditional retailers of cosmetic products. In particular, the products were promoted through unusual and pioneering brochures, moreover, Roddick’s social and environmental activism was also a center of the company’s marketing strategy. The aura The Body Shop had created and the reputation of producing healthy natural products that were good for consumers were the primary reasons of the Brand’s success. People loved the friendly little Body Shops that offered them cute little products made from fruit, vegetables and flowers. The prices for these products had never been low, though the attraction was too strong. In addition, rapid growth was caused by the lack of competition. Up till the mid-1990s, the had been no brands like The Body Shop, the consumer, affected by endless advertisings on importance of using natural cosmetics had no choice but purchase it from The Body Shop.
However, by the end of 1990s, it was clear that the brand was going to experience a decline. This was primary caused by the emergence of many other retailers that would sell organic products for a smaller price. All of a sudden, The Body Shop stopped being the only retailer in the market and started to actually suffer because of the over-expansion in the previous years. By that time almost every mall in European countries and in Americas had a Body Shop, some of these “body shops”, were The Body Shops, though the once admired brand was lost within others. In the light of revenue decline the company’s CEO and founder Anita Roddick resigned from the CEO position and passed it down to the fresh management team. The new management tried to bring the revenues to at least the levels it used to have, however, the new programs were not entirely successful. Even though, new management managed to grow the revenue, they lost 21% in their OIBT. Thus, another major reason for the decline of the brand, in my opinion, was a lack of forecasting and use of inappropriate financial modeling. Furthermore, I assume that the brand suffered in the late 1990s and early 2000s because of quality issues related to The Body Shop products and rumors and controversy that started to surround the brand. An example of such controversy was the takeover of the company by L’Oreal. L’Oreal was accused of testing products on animals that contradicts The Body Shop’s core value of Against Animal Testing. As a response, L’Oreal denied the claim, at the same time as The Body Shop’s reputation of a green business was scattered into pieces.
Positioning and Repositioning of The Body Shop Products
The previous section of the paper was ended with a story of the decline of The Body Shop. Of course, when the management of the company faced this problem in was clear that the marketing approach had to be changed. The brand had to come up with something that would distinguish it from other new retailers of the kind and it had to embellish its agenda to win the consumers back. Thus, with such goals the company started the repositioning campaign. In the framework of the new positioning campaign that had received the name “masstige”, the company had focused mainly on the customer experience. The message about improving customer experience was given by the company through its revised mission statement, through its corporate website, through its advertising. The masstige positioning was characterized by combining excellent service with an all-embracing variety of naturally-inspired personal care products that offer performance, indulgence and great value. The new positioning program not only included launching of an innovative range of personal care products, but it also involved new store design, new customer service programs for sales associates and At Home consultants.
Furthermore, as part of its repositioning campaign The Body Shop undertook to deliver high quality products at the lowest cost. However, the price of products, though being lowered, was not low enough. The company could not risk offering its products for a very favorable price as well as offer promotions like 20% off its products because that would tell customers that the regular price was not really the lowest it could possibly be. However, in order to make the customers feel cared for and give them a feeling of purchasing products and making a good deal the company developed added value, sampling opportunities and gifts with purchase. Lastly, the company started to work with multi-channels, franchising continued to be an important revenue generator, however the company started working though At Home and the Internet channels.
Pros and Cons of the New Masstige Positioning
Without a shadow of doubt, the repositioning campaign was successful. With this campaign the company has reappeared on the market and has shown the costumers that it had something innovative to offer. The Body Shop had launched amazing new products, such as Spa Wisdom (a wide range of home-spa products), Vitamin E skin care products, a new fragrance range, and many more others. To cut a long story short, the company did succeed to recover not maybe to the level it used to have, but definitely to a decent one.
On the other hand, the repositioning program had its negative sides that I would like to mention lower. To begin with, in my opinion it would have been better for The Body Shop not invest that much money into the new design of the stores and new products, but to consider more the pricing strategy of the brand. I believe that one of the biggest restrains on the way of the brand was its sometimes unreasonable price, that is why in order to influence people to buy more TBS should have come up with more innovative client’s payment services. I find this so important because surely, nothing enhances the customer’s shopping experience more than a good discount. For example, a company could develop a system in which a customer is offered a different gift sample at every visit or a bigger sample with every next time he/she visits the store (Purkayasha, Rajiv).
Additionally, I think that the company should have invested more into developing a special link between customer participation and corporate sponsorship. The Body Shop had to make it possible for customers to donate to The Body Shop Foundation. This is so important because one of the main strengths of the company is its attitude towards important world issues. Thus, it would be useful to make the customers also part of these important actions. Though, the biggest mistake that the company made in the framework of repositioning was, in my opinion, approving of the acquisition by L’Oreal. If other marketing tools used in the campaign did help improve the situation of the brand, the acquisition ruined it (Purkayasha, Rajiv).
In conclusion it must be said that The Body Shop is a remarkable brand, different from many others. It had its successful times, it had to go through decline times, then it managed to make another appearance on the market, though only a year after that was acquired by L’Oreal. Today, two and a half years after the acquisition we see that The Body Shop brand is still thriving, however, it is by far not as popular, innovative and well recognized as it used to be. Hopefully, in the nearest future the brand will surprise its customers with new ground-breaking products.