MARKETING MANAGEMENT MID-TERM ASSIGNMENT

COURSE CODE : MKTG501

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 THE BODY-
SHOP
A BRIEF HISTORY OF BODYSHOP

The Body Shop International is a multinational company that mainly produces

environmentally friendly skin and hair products. The company was founded in 1976 with
Anita Roddick as
SUBMITTED BY-SUGANDHA MISHRA
its founder, and sold to
L’Oreal in ROLL NUMBER-MBA2020-168 2006 for
about $940 SECTION-B1 million. The

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company offers over 1200 naturally produced healthy products, and beauty products are
generally aimed at women. Shampoos, conditioners, bath products, soaps and skin creams are
the primary focus of product development but they also include fragrance, spa products, and
beauty-related accessories.
Their Products are based on natural ingredients and are manufactured according to the code
of ethics which opposes testing cosmetics on animals.

Sales of the Body Shop fell by ~5 percent to €921 million in 2016, while operating profit
fell by 38 percent to €33.8 million in the same period. In 2016, the operating margin of the
division fell below 4 per cent, thus L’Oreal decided to sell the brand to Natural Cosmetics.

MARKET- ENTRY OF BODY SHOP IN

INDIA IN 2006
Body Shop had begun its Indian retail
operations in June 2006 with the support of
another Indian franchise, Quest Retail Private
Ltd. (Quest). Body Shop had five stores in
India as of November 2006-two in Delhi and
one in Gurgaon, Jaipur, and Mumbai.

HOW BODY-
SHOP BEAUTY ROUTES ON BUDGET ACCORDING TO THE LOCAL
MARKET IN INDIA?

Marketing is the main factor for success in each organization, as it is the main channel
between any organization and its customers. Marketing has a lot of strategies but all of
these strategies have one goal, this goal is to promote products or services for the
organization by increasing customer satisfaction.
Product, packaging, promotion and place are the most important factors which has
helped the Body Shop in creating its brand equity.
Price is the most important element in the Marketing Mix. It may be referred to as the
amount charged for any product or service.  It's a difficult job to set the price of the product.
Marketers need to know that while fixing the price, this process can be controlled by so
many factors such as the need for a product, costs involved, the ability of the consumer to
pay, government restrictions, prices charged by competitors for comparable products, etc.
In 2006, when Body-Shop entered India it targeted the high-end customers and product had

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a premium price, but soon it realized they had to lower-down the prices for the Indian-
Market to increase its reach quickly.
 In 2010, Body-Shop slashed the prices of 800 products by 35% for the domestic
market in India to make the product more accessible and affordable to the tier-II
customers. The Indian Market is the most economical and for the premium brand to
increase its sales -> reducing prices will help the company to gain more customers
 In 2011, Brand connected with the Indians due to its relationship with the ecological
and environmentally friendly product.
 In 2013, Body shop insisted that they don’t want to label as “super-premium-brand”
instead they want to be categorized in between “premium brand and mass brand”.
Today, Segmentation, Targeting, and Positioning (STP) is a well-known strategic
approach to modern marketing. It is one of the most widely used marketing models in
practice for the brand to establish.

SEGMENTATION TARGETING POSITIONING

 Psychographic  Identifying which  Creating a concept
segmentation is the right groups of to appeal to the
method of customers to aim target market.
establishing clusters for better growth.  Body Shop has
of customers that  Women 20-55 positioned itself as
have similar who are an
characteristics environmentally “Environmentally
 It is then grouped and socially Conscious Brand”
These clusters may conscious.
form subsets (or Recently started
segments) of targeting Men also
customers based on
their social status.
Lifestyle, Interests,
value

C
USTOMER-CENTRIC PRICING: Customer-driven pricing is the practice of pricing the
goods or services of a company according to the perceived value of the customers. The
assumption basis for this model is that when the value delivered exceeds that cost, a
customer is willing to pay a certain price. Customer-driven pricing can work if a product or
service is customizable as opposed to commoditized as there will be many options when
many competitors are offering similar products or services. The Body Shop brand is seen as a
trustworthy brand that makes products of great quality. When a brand takes initiatives for a
cause, it increases consumer's affinity towards the brand. 835 of the consumers are more likely to
buy a product that takes environmental and social issues.

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COMPETITIVE-PRICING-STRATEGY: B0DYSHOP- INDIA adopted a competitive-pricing
strategy as a methodology to position the product in the local market. The method of
setting the price of a product given the price of the rival/competitive market (Ayurvedic and
Natural cosmetic products) is known as competitive-pricing strategy. The price-set should
justify the quality of the product which would help to pull in more customers from the
market.

PRICE-BUNDLING: The company offers a discount of 25% on the purchase of four

products on its website. The company uses a technique of Price-Bundling i.e. combining
several products (different prices) into a comprehensive unit (one-single price) and selling it
at a discounted price. Although the products are being sold at a discounted rate, yet it can
increase the profits because it promotes the purchase of more than one product.

PSYCHOLOGICAL PRICING: It is a marketing strategy implied to attract customers who

use emotional responses instead of rational responses.
Bands priced -> If a customer accesses product price information that is segregated
into price bands, the use of fractional pricing
may shift a product's price to a lower price
band where customers may be more likely
to make a purchase.
For instance, if a customer wants to
consider a product costing less than INR-
600, pricing a product at INR-595 will drop it
into the lower price-band and potentially

increase its sales

SWOT ANALYSIS OF BODYSHOP

FOR FUTURE GROWTH
SWOT analysis of The Body Shop analyses
the brand/company with its strengths,
weaknesses, opportunities & threats. It is a proven management framework that enables a
brand like The Body Shop to benchmark its business & performance as compared to the
competitors and industry. As of 2020, The Body shop is one of the leading brands in the
lifestyle and retail sector.

Strengths: Weakness:
 1,200 a wide range of products and a  There is a very little awareness of its
system of continuous creativity in its low-medium priced products.
product variety.  Lack of advertisements for their eco-
 Well-designed store layout and friendly products.
ambiance establish customer

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 attraction.
 It has a high brand image and is seen
as a socially conscious organisation
due to its participation in many
philanthropy activities.
 Quite a strong network of suppliers.
Sources of raw materials by
Community trade fairs.
Opportunities: Threats:
 With a growing understanding of  There is a very strong competition in
natural and eco-friendly goods, there the cosmetics industry, with a new
is a huge potential to expand in the brand being introduced regularly
local market. Some companies are selling natural
 The number of online customers is goods made according to the needs
growing and thus the use of its of the consumer and can become a
website platform for the sale and free serious challenge to The Body Shop.
delivery to grow its market share.  The economic downturn can impede
sales.

RECOMMENDATIONS:
PROBLEM 1: Lack of Communication doesn’t make advertisements on TV channels and
radio broadcasts about their green campaigns.

The customers don’t know about the brand’s core idea: Green
Recommendation: Add more advertisements, campaigns on public channels to let more
consumers be aware of the body shop’s environmentally friendly activities to enhance the
core value.

PROBLEM 2: Low entry barrier, Nonspecific brand core value thus Leads to too
many copycats all over the world.
Recommendations: Make some innovations of the brand value based on “natural” and try
to make the brand unique to the customers.
CONCLUSION:
The Body Shop currently (year-2020) has 175 stores all over the country. The beauty brand
has endeared itself to almost all consumers in big cities like Mumbai, Delhi, Bangalore,
Chennai, Hyderabad, Kolkata. It is also hugely popular in Tier-II cities like Guwahati, Siliguri,
Jammu, Aurangabad, Patna, Nasik, Mysore, Calicut, and many more towns and cities. Body-
shape had also planned to open 20 new-stores in 2019 which shows the blend and demand
of brand in the local market. They had a slow start, but with time and their initiatives helped
them to understand the Indian Economy. Body Shop Slashed prices for their products by 20-
30% for the Indian Market.

REFERRENCES:

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 (https://economictimes.indiatimes.com/opinion/interviews/india-is-a-pillar-of-
future-growth-the-body-shop/articleshow/5841771.cms?from=mdr)
 (https://www.business-standard.com/article/management/body-shop-takes-
budget-beauty-route-110070100027_1.html)
 https://www.gcimagazine.com/marketstrends/regions/bric/117587613.html
 https://naturalcosmeticslovers.wordpress.com/customers-insights/the-body-shop/
 (https://www.forbes.com/sites/greatspeculations/2017/02/23/why-is-loreal-trying-
to-sell-off-natural-beauty-brand-the-body-shop/#5e83396f1523)
 https://www.thebodyshop.in/25-on-any-4.html