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I N T R O D U C T I O N

BACKGROUND

The body Shop is one of the most famous retail brands in the world, noted for its range

of naturally inspired skin and hair care products and ethical values. The name behind the

famous cosmetic shop, is Anita Perella Roddick, who used to be a part-time teacher. Anita

Parella Roddick traveled to different places like Madagascar, Mauritius, Australia and

Reunion; she was mesmerized by the organic products that women in the Polynesian islands

use to nurture their bodies. When she went back to England, she married a Scotsman poet and

traveler named Gordon Roddick in 1971. During the 1970s, when Anita and her husband

Gordon-Roddick were visiting San Francisco, they came across a store in Berkeley, which

nd founded by two locals. The two locals was also publicly

promoting environmental concerns, they even offering price cuts to customer to encourage

old to the Roddicks in the early 1980s, while the original store continuing

In the mid-1970s in United Kingdom, The very first Body Shop was established and

offering products made using natural and exotic ingredients, without testing on animals. The

Body Shop experienced rapid growth, expanding at a rate of 50 percent annually. The stock

500%. In March 2006 The Body Shop operates as a

distinct entity, with its own Board and Executive Committee Oreal Group. The

business continue to expand, till year 2010, the total number of locations for The Body Shop

exceeds 2605, trading in 61countries.

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The number of stores in different areas, year 2005.

Loreal 2010 Financial Statement

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Besides being well known for the rapid growth, The Body Shop is also well

recognized for social responsibilities programs. The first major campaign for The Body Shop

-wide ban against

animal testing on cosmetic products and ingredients with a largest petition in history against

-

esteem issues. Today, The Body Shop campaigns focus on three of the greatest challenges of

MISSION STATEMENT

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The mission statement of The Body Shop shows their deep dedication to their

customers and also the environment we live in. They stay on top of the latest developments in

order to provide the highest quality of product possible. The Body Shop will be entering a

market that is well educated on environment issues and desire for organic products, they

believe that as long as the quality of the products remain consistent with fair pricing, The

Body Shop will retain customer.

Values

Based on the mission statement, The Body Shop created 5 core values. This is to

ensure that the business will live by the mission statement, it will also act as a practical guide

for decision making at all level in the company. The profits have to be made by principles.

According to a survey conducted, 89% of The Body Shop Loyal customers think that it was

chain with dignity and respect. In 2007, The Body Shop were awarded a Big Tick by Business

in the Community for our Community for their Community and Ethical Trades Programs.

Besides that, due to the sustained commitment to animal welfare, The Body Shop was twice

the winner for the Royal Society for Protection of Cruelty against Animal (RSPCA) Good

Business Award.

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C E N T R A L P R O B L E M

The main problem that The Body Shop faces is the unethical conduct of The Body Shop top

management and its policies which resulted loss. The main problem for The Body Shop is the

unethical conduct of the founder. The main reasons for the brand recognition are their

programs related to social problems and environmental issues. For example, protesting against

the testing on animals, campaign against human rights abuse, environmental protection and

social uplifting activities. However, The Body Shop

aspect of generating revenues as indicated in the mission statement. As a result, the company

was plagued with numbers of controversies, between year 1995 and 2000.

SUB PROBL EMS

1. Claims on the natural ingredients used in The Body Shop products.

As the essence of the products is the unique selling point, The Body Shop has assured that

they only used natural ingredients in their products. However, it was later discovered that The

Body Shop products contains chemicals that was made in laboratories. It was not only that,

even there were reports stating that Body Shop was selling contaminated product supplies to

the consumers. In the year 1993, 151bottles of contaminated Banana Shampoo were sold to

consumers in the USA.

Besides that, The Body Shop did not mentioned the original sources of the ingredients used on

the package as other marketed products did, the organic or natural sources were not

mentioned. In fact like all big cosmetic companies The Body Shop make wide use of non-

renewable petrochemicals, synthetic colors, fragrances and preservatives, and in many of their

products they use only tiny amounts of botanical-based ingredients. Some experts have

warned about the potential adverse effects on the skin of some of the synthetic ingredients.

The Body Shop also regularly irradiates certain products to try to kill microbes - radiation is

generated from dangerous non-renewable uranium which cannot be disposed of safely.

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2. Crit ics on theenvironmental issues towards The Body Shop.

The Body Shop has successfully manufactured an image of being a caring company that is

helping to protect the environment. But behind the green and cuddly image lies the reality -

The Body Shop's operations, like those of all multinationals, have a detrimental effect on the

environment. A former US Body Shop environmental officer has accused the company of

hypocrisy and putting manufacturing priorities before environmental concerns.

The Body Shop, which prides itself on its green credentials, was responsible for two spills of

shampoo and shower gel from its Hanover, New Jersey, plant in 1992 which then caused

problems at a water treatment plant back to The Body Shop plant. The Body Shop's new US

headquarters are on a site whose groundwater is contaminated from emissions by a previous

owner. Its drainage is handled by a septic system, instead of flowing into the city sewer

system.

The Body Shop has also run into regulatory problems at its new plant in Wake Forest, North

Carolina, which was visited by US Food and Drug Administration inspectors. The FDA

officials recommended the firm correct certain practices after finding problems with product

samples and plant-cleaning records. The FDA documents said the allegations were made by

'former and current employees at this firm (who) contacted the informants', who are unnamed.

Body Shop has been embroiled in a furor over its 'green credentials' since it emerged that a

US ethical investment fund had sold 50,000 of its shares because of concerns over its

environmental record.

3. The Trade not Aid Program by the Body Shop.

There were few critics made towards The Body Shop on its trade not aid program. Even

n, it is in

fact a wage labor relationship whereby the Kayapo are not compensated for the real product

they provide The Body Shop: their photographic image. Furthermore, this program is but one

part of a portfolio of income sources available to the Kayapo, and does not prevent them from

engaging in environmentally exploitative contracts with loggers and miners, and so should not

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be seen as an exclusive alternative to environmentally damaging land use practices. The Body

me in for a good deal of cogent criticism, which in

spite of the real differences between them applies in some measure to both. The most

trenchant of the critics, Stephen Corry of Survival International, has distinguished between

igned to help local communities produce for local

markets, on terms that guarantee them a fair return for their products (which he supports).

4. Animal testing done by The Body Shop.

Though the Body Shop was against the testing of products on animals, it was found out

products were tested on animals. One fierce attack came from a British television program

of misleading customers with its

for companies to eliminate their animal testing, required rejecting all ingredients that had been

tested on animals in the previous five years. The TV program, however, charged the company

with using ingredients that had been tested on animals. The Body Shop brought a suit against

the television station 1993 and won 276,000 in damages. Although the company won the

suit, the battle had f

criticism.

Although the Body Shop identifies their products as "animal-testing free", they are facing

counter evidence of their extensive use of ingredients that have been tested on animals by

other companies. "They accept ingredients tested on animals before 1991, or those tested since

then (if they were animal-tested for some purpose other than for cosmetics)". Some Body

Shop products even have animal parts such as gelatine (crushed bone). In one word, The Body

Shop's animal-loving image is still under suspicion.

5. Claims on charity issues.

The reputation of the Body Shop for charitable giving had been an issue among the critics.

The critics claim that, while responsible charitable organizations such as Patagonia and Ben &

-tax profits for charity, the Body Shop is

contributing around 3% of its pre-tax profits. However, the figures do not take into account

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the voluntary activities undertaken by the employees of the Body Shop and the contributions

made by the customers. Different fund raiser activities such as sale of red ribbons during

campaigns also contributed to the charity activities conducted by the company.

SWOT ANA LYSIS

STRENGTHS

One of the strengths for The Body Shop is brand loyalty. The essence of the products which

is made of natural ingredients is the main selling point for The Body Shop. By meeting the

service and relevant information will let the customers felt of the sincerity of The Body Shop

and stay turn with their products. Loyal customers are important as they provide continuous

profit to a company and it also provides the basis for brand development and improvement.

Besides that, the niche marketing in The Body Shop also one of its strengths. There are

several of product lines offered by The Body Shop such as body care, bath, skin care, make

customer has different expectation, it is never an easy task to satisfy every customer needs or

wants with a sole product line. Through narrowing the market away from the mainstream, it

may be included less potential customers, but, on other hand, it is actually benefit to the

company because can satisfy various types of customers in market.

The strength in The Body Shop is the charity support. The founder, Anita Roddick can

successfully build up the business of The Body Shop was through protesting against the

testing on animals, campaigns against human rights abuse, environmental protection and

socially uplifting activities. These charity supports lead The Body Shop being the second

trusted brand in United Kingdom and the founder Anita was popularly know, had received

numerous awards as well.

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WEAKNESSES

There are few weaknesses in The Body Shop. One of them is The Body Shop emphasis on

social issues rather than business. It was not to discourage the companies from caring on

social issues, but at least in an appropriate way. The existence of every business in market is

to earn profit; therefore The Body Shop should not just emphasis on social issues rather than

its business which may hurt company especially their shareholders.

Other than that, The Body Shop also weak on their restructu restrategy. After the Patrick

Gournay ascent to power, he immediately implemented a retrenchment of 300 staffs in order

to cut off the cost of operation in company. The action taken by Patrick Gournay had lead to

the losses of the company. This unsuccessfully restricting attempt shown that when the wrong

decision is made, this may bring a negative impact to the company.

Besides that, poorly motivated shareholder also is one of the weaknesses. No one even

voice out their opinion of dissatisfaction on how The Body Shop operate their business. This

leads to tremendous loss of sales and everyone just mind their own business.

OPPORTUNITY

One of the opportunities for The Body Shop is the pionee r of using natural ingredient in

cosmetic product. It is always benefits to be the pioneer in a market which can gain the first-

mover advantages. For instance, products of The Body Shop is made by the natural

ingredients which is totally different with others cosmetic product in market. The Body Shop

will gain the competitive advantages as a pioneer over those starts later because it already

builds a customer base and benefits from the economies of scale as well.

The larger market in cosmetic li ne also consider as opportunity for The Body Shop. The

global sales of cosmetics and toiletries are increasing every year and this show that cosmetic

line is a potential market to be grown although there are lots of competitive brands in market.

Nowadays, ladies are willing to spend their money in the pursuit of beauty. Therefore, the

combination of beauty and healthy concepts in the Body Shop products do really provide a

potential market for it to grow since the products of the Body Shop is made from zero

chemical ingredients.

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The opportunity to reinforce the brand imageis always there as we can see The Body Shop

work tirelessly to win support from customer with its participation in the charity drive events.

This is to prove that The Body shop not only sell products but also care about social issues as

well and repositioning its brand as the corporate socially responsibility.

THREATS

The first threat faced by Body Shop is the public propaganda. The particular issues in which

the Body Shop was challenged included its claims of natural ingredients, environmental

protection; Trade not Aid program, animal testing and the charity issues. For instance,

outsiders claim that many of the products in Body Shop contain chemicals where the source

was not mentioned. Public might be influenced by the negative rumor and lose confidence

Next, de-motivated franchisee also is the threat for Body Shop. The Body Shop used to

the company started to buy back the franchised outlets and offer them a job as the employees

in the parent company. The actions taken by Body Shop towards the franchisees that are not

willing to sell off their business turn negative impacts to his own. Due to that, hand inventory

started to accumulate and on the hand the Body Shop lost revenue and customers.

In addition, political involvements also consider one of the threats faced by the Body Shop.

The company had involved itself into activities which had ultimately led the company into

clashes with political factions. For example, the Body Shop started a protest against the oil

multinational Shell which had destroyed the natural habitats of the Ogoni tribesmen in

Nigeria. When these kinds of incidents keep happening, it may influence the business of the

Body Shop itself. This might be given an opportunity for its competitive brands to take over

their business.

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A L T E R N A T I V E S

1. Repositioning The Brand Image

In order to be a unique proposition, and having effectively created its own retailcategory, The Body Shop has appeared slow to evolve its brand identity. The strong

association between the company and its campaigning founder, the increasing competition

and changing consumer attitudes, have been significant factors in the company's struggle

to realign and update its brand.

-Palmolive, Esteen

Lauder and so on.

Positioning is about the position a brand occupies in a market in the minds ofconsumers. The Body Shop took on a massive repositioning activity in early 2005. The

global marketing director of the company, Andy King (King) advocated that the need to

reposition the brand to carve out a differentiated position in a crowded cosmetics market.

King describ

and prestige. Several changes had been taken place in this strategy. The shop interiors had

been changed from the traditional dark floors and walls to neutral tiles and hemp-coated

backlit screens. Colourful and bulging shelves had been replaced with attractive glass

at

the counters of a department store.

2. PackagingA brand differentiates the attributes and benefits of products or services by

their distinctive visual merchandising and promotion, in order to enable consumers to

make preferences. The Body Shop also made changes on its product packaging. This

new design is often required to satisfy loyal customers when the visual appearance of a

product has become tired on their mind while appeal to new audiences.

Being a green retailer is the core value at The Body Shop. It always has and

always will be. The company avoids excess packaging whenever possible. They are

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also creating the most Earth friendly packaging possible for their products. For

instance, all of our tubes and bottles are made with a minimum of 30% recycled

plastics. These included the black-topped bottles, which used to come in three

different sizes (fitting every pocket), had been replaced with 'Boston round' containers

with white caps which came only in large sizes. "The Boston Round" gives it a fresh

look and feel to reflect this innovative merchandise offer.

3. Introducing Loyalty CardThe Body Shop aims to expand its customer base in all the outlets through its

loyal buying behavior. The company offered customers to sign up for 'Love Your

Body' loyalty card with purchase a 5 (RM21.60) loyalty card which can be used

online and at any participating store. The loyalty card rewards customer with an

birthday special offers, free gifts and access

to the kinds of perks and privileges in a whole year. The membership card had been

successful in attracting customers proven when the program was launched in the UK

in 2004 after a successful five-year run in the US, and had amassed half a million

members by mid 2005. The global cosmetics and toiletries industry which was

growing at a healthy rate from 2000 also acted as a catalyst in this process.

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DECI S I ON

Based on the 3 different alternatives available, we decided to choose repositioning the

brand image. This is because after suffering from periods of losses, coupled with poorly

motivated shareholders, de-motivated franchisees, unsuccessful restructuring attempts and

public propaganda against the company, there is a strong need for The Body Shop strives to

reposition their brand image. It is all about how the company merges as an outstanding

Cosmetic and Toiletries Company among the competitors and became popular among the

consumers.

Andy King, the global marketing director of the company emphasis on repositioning

the brand to create a differentiated position in this saturated cosmetics market. This is due to

the high street stores such as Boots and newly emerging Lush Cosmetics have developed their

own successful natural beauty products in recent years, erode into The Body Shop's traditional

niche. Thus, they come up with numerous changes made in rebranding the Body Shop's new

brand as 'masstige' - somewhere between prestige and mass market, offering the company the

opportunity to compete with prestige brands.

Meanwhile, The Body Shop have to determine the needs, wants, and interests of target

markets and to deliver the desired satisfactions more effectively and efficiently than

s well-being.

The change more apparent than in Body Shop's newly refurbished store in London's Covent

Garden. It is one of 18 outlets across the world that has been given a facelift to prepare for the

brand repositioning. This year between 75 and 80 stores in the UK, and 250 globally, will get

the same treatment.

After almost three decades, the trademark dark green 'box' has gone. Dark floors and

walls have been replaced with neutral tiles and hemp-coated backlit screens. Colourful and

bulging shelves, once a mecca for teenagers browsing for sweet-smelling bargains, have been

replaced with sleek glass counters.

The new 'invent your scent' perfume counter and luxurious Spa Wisdom range,

introduced in March, are also designed to tempt customers who would usually shop at a

department store beauty hall.

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I M P L I C A T I O N

1. Providesconfidence regarding purchase dec isionThe Body Shop has been advocating about the social issues such as natural products,

environmental claim, trade but not aid program, animal testing and charity issues. But

due to some controversies in the mid and end of 1990 has badly affected the company

image and affect the customer trust of this brand. Thus, as The Body Shop tried to

restructure the internal company operation and also repositioning it brand image,

customers become more confidence about the Body Shop products and they feel they

have made the right decision by purchasing the products after the brand repositioning.

2. Customer loyalty to the brandAs the brand champion in few social and charity issues, the winning of Royal Society

for prevention of cruelty to animals (RSCPA) was the life changing event for The

Body Shop as it fights its survival. Good time seems to be back for The Body Shop

and customer loyalty increased after The Body Shop successfully reposition its brand,

differentiate itself from other cosmetic line and proved that they really employ the best

practice in terms of treatment to animals in the cosmetic, fashion and food industries.

The Body Shop was still considered as prestige brand in Middle East and Asia which

comprises of 25% of the global cosmetic and toiletries market which is supposed to

leverage the brand needs.

3. Increase in Sales and ProfitsRepositioning helps in make the sales and profits soars as a strong corporate image

allow the company to charge more for the products. Most customers believe that they

to improve mark up margins and profits of the firm. At the same time, global cosmetic

and toiletries was growing at a healthy rate starting from year 2000 also acted as a

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CONCLUSI ON

From a small stall in Brighton England to 2400 stores in 61 countries and second

largest cosmetic franchise in the world following O Boticario, a Brazilian company,the Body

Shop is headquartered in Littlehampton, West Sussex, England, was founded in 1976 by the

late Dame Anita Roddick and is now part of the L'Oral corporate group.

In its earliest years, The Body Shop did not visibly market itself as committed to social

causes. Its products we considered at the time "natural"; however, the bright colors and strong

fragrances were created by chemicals, including from petrochemicals, which were also used

as preservatives. The social activism dimension of the company begins in 1986 when The

Body Shop proposed an alliance with Greenpeace in the UK to save the whale.

Roddick began launching other promotions tied to social causes, with much public and

media interest. The Body Shop regularly featured posters on shop windows and sponsorship

of local charity and community events. Over time, Roddick blossomed into a full-time critic

of business in general and the cosmetic industry in particular, criticizing what she considered

the environmental insensitivity of the industry and traditional views of beauty, and aimed to

change standard corporate practices.

Despite of protesting against animal testing, campaign against human rights abuse,

environmental protection and social uplifting events, The Body Shop company spark

controversies on how ethical is the company to its commitments to the issues. The company

the mission statement.

As a result, the business during Anita reign had to suffer from tremendous loss and the

Body Shop has restructured the company operations. Unfortunately, the restructuring was in

vain and it leads to more sales loss and the top management had to do massive repositioningactivities in order to build its brand image again in 2005. Finally in March 2006 The Body

Shop agreed to a 652.3 million takeover by L'Oral.

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