Case Study on Body Shop- A Study on Brand Assessment and Branding Strategy
Brand Strategy of Body Shop
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With only its eponymous brand
in the portfolio, The Body Shop has been able to focus its brand strategy
around its social and environmental values, building equity in the brand and
company simultaneously. With a limited amount of product-specific promotions,
the company’s external communication is mainly focused around campaign
activities under The Body Shop’s name for issues important to the company, such
as the “Stop Violence in the Home” campaign, which has been launched in 40
countries and raised over £500,000 during 2005. Through partnerships with local
organisations, television networks, traditional advertising and special-edition
products, the company has improved the situation for women who are the victims
of domestic violence around the world, whilst strengthening its own brand
equity.
·
Marketing a wide number of
different products under its brand umbrella, the company is increasingly
pushing its brand towards a masstige positioning. By providing a comprehensive
range of quality products, mainly produced by ingredients sourced from
disadvantaged communities under its Community Trade programme, the company is
aiming to exploit an increasing interest in social and environmental issues
among consumers, whilst making the shopping experience a positive one through
excellent customer service. In addition, by only using natural ingredients, the
company is well placed to capitalise on a growing consumer trend for natural
products, further strengthening its position in the market.
·
Given that there is only one
brand, sectoral expansion is an important part of The Body Shop’s overall brand
strategy. Through a high level of product development, the company is
innovating across various product ranges to encourage multiple purchases and
higher transaction values. Its product development activities also include
adapting products to specific local and regional needs with launches such as
its Moisture White range, developed to meet the demand for even skin tone and
luminosity among Asian women.
·
Until recently, and still the
case in many geographical markets, The Body Shop’s products have only been
available in its own stores, restricting the customer base to the areas where
stores are located. However, with the introduction of Body Shop at Home and
Internet sales distribution, the company is now in a position to reach people
in more remote locations, significantly increasing the potential customer
base. This will require increased focus
on the company’s marketing activities, which so far have been limited to
in-store promotions, to exploit these new channels effectively.
the Body Shop
·
The Body Shop only markets and
sells products under its own eponymous brand name which encompasses a wide
range of products stretching over a number of cosmetics and toiletries
sectors. Over the years the brand has
become synonymous with natural products that are not tested on animals, and is
well recognised for its green label. At the time of writing, the brand was
available in all regions in the world with the exception of Latin America.
·
In the last two years, the
company has actively worked on repositioning The Body Shop as a masstige brand
through new product developments and improved customer services. The company
has also continued to increase the distribution channels for the brand, both by
opening of more stores as well as development of its Internet and Body Shop at
Home direct sales concept in key markets.
·
Despite these initiatives, the
brand under-performed in many key categories in 2005. This was partly due to an
over-reliance on the mature markets of Western Europe and North America, which
contributed nearly 70% of the brand’s total cosmetics and toiletries sales in
2005. In these regions, cosmetics and toiletries sales have been largely driven
by increased developments of value-added products, of which the company so far
has comparably few. In skin care, for example, The Body Shop’s limited presence
in high-growth categories such as nourishers/anti-agers and
firming/anti-cellulite body care products, significantly reduced the company’s
growth prospects over the review period.
·
However, through the launch of
a number of new products including the high-performance skin care range Skin
Focus in fiscal 2005, the company has acknowledged this weakness and is
actively working to complement its portfolio. While The Body Shop is still well
behind the major cosmetics and toiletries companies when it comes to
technically-advanced products, the recent takeover by L’Oréal is likely to
provide the company with important resources in terms of technology know-how
and development funds, which should strengthen The Body Shop’s position in the
market.
·
The Body Shop’s increased focus
on developing regions should also help to boost brand sales going forward. In
Africa and the Middle East, the brand generated a CAGR of 18% over the
2001-2005 period, equalling the value growth achieved in Asia-Pacific. In
particular the company’s fragrances proved successful in this region, improving
the brand’s overall performance in fragrances, which otherwise show weak to
declining growth, as competitors such as Coty and L’Oréal dedicated major
investment to the region.
·
Furthermore, the company is in
the process of expanding its store presence in Eastern Europe, which again
should provide the brand with new growth opportunities. This is particularly
evident in Russia, where consumers have a high regard for the use of natural
ingredients, which would make The Body Shop’s product ranges appealing. With a
forecast CAGR of 7% over the 2005-2010 period, Russia is expected to add
another US$2.9 billion to the market, making it one of the most dynamic markets
in the region.
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