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STRATEGIC MARKETING MANAGEMENT

Assignment: Marketing Plan - The Body Shop, UK. Course: DMS/GROUP A Date: 30/05/2010 Lecturer: Mr. John Heather By: Ashley Pereira

ASHLEY PEREIRA

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STRATEGIC MARKETING MANAGEMENTContents:1. Company Background.................................................................................................5 2. Situation analysis..........................................................................................................5 3. External analysis...........................................................................................................6 a) Political factors b) Economical factors c) Social factors d) Technological factors e) Environmental factors f) Legal factors

4. External Analysis- Micro Environment.......................................................................12 4.1) Industrial Analysis a) Threats of new entrance b) Threats of substitute products c) Bargaining power of customer d) Bargaining power of supplier e) Competitors 5. Market Segmentation...................................................................................................19 a) Consumer market b) Products c) Competitors d) Brands

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STRATEGIC MARKETING MANAGEMENT6. Internal Analysis........................................................................................................21 6.1) Resources analysis..............................................................................................21 a) Physical Resources b) Financial Resources c) Human Resources d) Intangibles 6.2) Competences and capabilities a) Market b) Materials c) Men d) Money e) Machines 7. S.W.O.T Analysis.......................................................................................................24 8. Marketing Plan............................................................................................................26 8.1) Objectives 8.2) Strategies 8.3) Gap Analysis 8.4) Generic Strategy 8.5) Ansoffs Matrix 8.6) Competitor Marketing Strategy 8.7) Market Positioning Strategy 8.8) Institutional Strategy 8.9) Implementation Plans........................................................................................29ASHLEY PEREIRA Page 3

STRATEGIC MARKETING MANAGEMENTa) Product b) Price c) Place d) Promotion e) People f) Process g) Physical Evidence

9. Budget Breakdown...............................................................................................30 10. Monitoring and Control.........................................................................................31 10. Appendix...............................................................................................................32 11. References.............................................................................................................43

1. Company Background1.1 Mission Statement ASHLEY PEREIRA Page 4

STRATEGIC MARKETING MANAGEMENT

To dedicate the business to the pursuit of social and environmental change. Creatively balance the financial and human needs of the stakeholders: employees, customers, franchisees, suppliers and shareholders.

Ensure that the business is ecologically sustainable, meeting the needs of the present without compromising the future.

Meaningfully contribute to the local, national and the international communities by adopting code of conduct which ensures care, honesty, fairness and respect.

Campaign for the protection of the environment, to defend human rights and against animal testing within the cosmetic industry. (Value Report, 2009 -2010)

Organizational Structure The Body Shop has a hierarchical structure. They have departmental heads spread all over the world. The Body Shop encourages open-door policy and two-way communication within the company. They have a strong belief in the company values which creates a bound between the employees. (Our People, 2009-2010)

1.2 Product/Market Range Products: Facial skin care products, make-ups, bath & body products, hair products and fragrance products. Market: Western Europe, North America, Asia, Eastern Europe, Latin America, Africa, Orient and Pacific.

1.3 Customer Target Professional stylists, non-professional stylists, these mainly include females clients.ASHLEY PEREIRA Page 5

STRATEGIC MARKETING MANAGEMENT

1.6 Financial Profile Since June 2006, The Body Shop is wholly owned by LOreal therefore it is no longer a listed company. (About Us, 2009-2010)

Volume sales of The Body Shop in 2009: 726 million units. Total sales LOreal by division in 2009: 16,257 million units. Net Profit of The Body Shop in 2009: 54 million, weight 2.1%, growth based on published sales +48.4%, percentage of sales 7.4%. (Annual Report, 20092010)

2. Situation Analysis

According to Blythe (2005) Marketing Audit is a reassessment of the firms current objectives, strategies, organization, company performance and activities. The main objective of this analysis is to highlight the strengths and weaknesses of the company, so that they can be improved for the future.

The marketing audit is a summary of what is happening in the company at present, hence this type of analysis have to be carried out on a regular basis, taking into consideration about the time and money that can be invested by the company.

3. External Analysis/Marco Environment

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STRATEGIC MARKETING MANAGEMENTThe macro environment includes major forces, the environmental factors that have an impact on the organisation on a varying scale (Jonhson, Scholes, & Whittington, 2008). The main element of macro environmental is the PESTEL framework which identifies the major drivers of change. The macro environments affecting the core business of the organization are identified below:

a) Political Factors FACTORS IMPACT ON COSMETIC IMPLICATIONS INDUSTRY Terrorism Restriction to carry personal Significant impact on care and fragrance products in the handbags abroad. when (Decision sales of the travelling cosmetic retail stores at News the airport and the high streets. of

Media SAS, 2000-2010) E-commerce

UK industry and government Growing number backed trust mark schemes. demand (Cosmetic announces, 2009) for

online

products and lose of loyal customers.

Employment

Due

to

the

recession Jobless available.

number positions

businesses find in difficult to outgrows survive in the market.

Conclusion: An opportunity arises on expanding an online purchase service for customers. Threats to the industry arise from the unstable economic and security environment where a contraction in demand is visible.ASHLEY PEREIRA Page 7

STRATEGIC MARKETING MANAGEMENT

b) Economical Factors FACTORS EFFECT ON COSMETIC IMPLICATION INDUSTRY Exchange rates Fluctuation in the exchange Raise the cost of

rate against the pound and in import of raw materials countries that supply the or finish products from companies with raw the rest of the world. materials. (Wearden, 2009) Increase in VAT UKs new chancellor George This will increase the Osborne announced on 21st price of daily which to buy May 2010, the hike on tax to commodities 2010) customers cosmetics. Direct selling Allows customers to buy Better products outside customer

20% by next April. (Clark, would lead to restrict

the relationship, firms can avoids expenditures on product promotion.

traditional retail enterprise. keep the cost low and (Dsa, 2009-2010)

High unit labour cost

High labour cost in UK has Company

strategies

left a gap in productivity as cannot be pursued to compared to the counter parts the fullest extent. like America and Japan. (Mail Online, 2010) Oil Prices Increase in oil prices. (Mail Can affect promotion, Online, 2009) sale and distribution as well as demand and purchasing power.

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STRATEGIC MARKETING MANAGEMENTConclusion: Due to the recession profits of the company can be affected, as the demand for the product will reduce and due to changes in the exchange rates which could affect product manufacturing.

c) Social Factors FACTOR EFFECT ON THE IMPLICATION

COSMETIC INDUSTRY Demographics According to the Office for Increase in the sales of National Statistic in April the 2010, the percentage of British products. public aged from 65-85 is growing and as of now the figure shows a growth of 1.5 million. (McCraddie, 2010) Cultural Changes Use of natural ingredients in Changing behaviour of the manufacturing of the customer towards the natural product. cosmetics by some firms. Cosmetic Testing anti-aging

Companies using animals for Affects brand image. their product testing. (Silva, 2002)

UK

cosmetic

industry UKs cosmetic industries are Affect brand image. buying product made out of talc from illegal mines and fromPage 9

risk to tiger forests.

destructiveASHLEY PEREIRA

STRATEGIC MARKETING MANAGEMENTwildlife Industry, 2003) London Olympics 2012. Increased number of tourists Opportunity in the country. awareness. for in India.

(Environmental Investigation

promotion and increase

Conclusion: Diversification of culture that changes the buying power of the customer will affect greatly the company, which will depend on factors like promotion, value and ethics.

d) Technological Factors FACTORS EFFECT ON COSMETIC IMPLICATION INDUSTRY Research & Development Cosmetic companies invest a Brand recognition. lot on R&D so that they can develop new products to suite the changing trends of the customer. 2007) Pulse perfection US based companies have Competitive develo