1. SPD4456 Strategic Marketing
Final Group Project
Lecturer: Dr. May Lau
Group 2 Class: A02B
Choi Winki 13627878S
Kwok Chi Fu 13630489S
Tong Wing Ni 13625443S
Wong Wai Kin 13610687S
Yip Yun Cheong 13609260S
Zhang Kan 13609928S
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2. Agenda
• Company Background
• Reasons of choosing The Body Shop
Introduction
• External Analysis
• Internal Analysis
• SWOT Analysis
Situation Analysis
• Product Portfolio – BCG Matrix
• Business level strategies
Corporate and business level
strategies
• Segmentation
• Targeting strategy
• Positioning
Customer Analysis
• Brand related strategies Product strategies
• Pricing strategies Promotional strategies
• Place strategies
Functional level strategies
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3. Product & Company
100% natural
Natural
waxes
Vitamins
Essential
oils
Coconut oil
Founded in the UK in 1976
Makes and sells natural product
Over 2,400 stores in 61 countries
Eco-friendly
company
Behavior
Truthful,
natural and
ethical
Company belief
Natural
ingredients and
recycle
packaging
Leader in
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4. PESTEL Model
• A complete table of ingredients must be shown (HKTDC, 2008)
Political & Legal
• Per capita incomes is increasing globally (FranchiseHelp, 2014)
Economic
• Many people have interests in natural cosmetics (HKTDC, 2014)
Socio-cultural
• More than 3 million tons of chemicals are dumped each year
• 38,000 animals died per year to test product (Urbantimes, 2012)
Environmental
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5. The Five Forces Model
Low bargaining
power of supplier
Standardized raw
materials
Bulk purchase
Easily shift
between different
suppliers
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6. • Ethical brands
natural ingredients
packaging came from recycled or sustainable sources
• 83% of regular customer
prefer retailers treat environment and social issues seriously
Strong Brand Equity
• The Body Shop
sales: EUR 835millions 1.2%
• L’Oreal S.A.
32th World’s most valuable brand
sales: EUR $30.5 Billion
Financial Support
Internal Analysis
Meet customer’s expectation
Has a strong financial
supports
(Forbes, 2014) 6 6

7. Sourcing and Production
Internal Analysis
130 suppliers in 26 markets
Community Fair Trade suppliers in a further 21 countries
The Body Shop Technical Team
 ensure no ingredient has been tested on animals
 address ‘chemical of concern’
 devotes to support Community Fair Trade
 promises to buy more sources through Community Fair Trade
 promises to provide a fair trade condition
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8. Internal Analysis
• Over 1,200 products
• Skincare
• hair care
• cosmetic products
• The Body Shop’s proportion in product categories
• skincare and hair care products occupied over half of the
proportion
• cosmetic products only have 16.6% (The Body Shop, 2013)
Product
portfolio
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9. SWOT Analysis
Strengths:
1. Strong brand image
2. Many loyal customers
3. Strong financial supports
4. Good supplier network
Weaknesses:
1. Little product
advertising
2. Narrow brand portfolio
of cosmetic products
Opportunities:
1. Increasing worldwide
awareness of natural and
eco-friendly products
2. Customer’s safety-conscious
is increased.
3. Beauty industry keeps
expanding
Threats:
1. Stiff competition in the
cosmetic market
2. There are regulations and
requirements on labeling
ingredients increase of
cost
Internal
External

10. Corporate Strategy
• Launch the new products on existing markets continuously
• Keep on launching new flavor
body cream, shower gel,
skin care
 New products are the extension of the
original product for existing market
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Ansoff’s Model

11. Product Portfolio – BCG Matrix
• Global beauty market
estimated
to reach 387.3 billion euro
by 2015
(Euromonitor
International, 2011)
(Ibis World, 2012)
• Several Strong
Key players
in Industry
• L’Oreal’s key brands
on lipsticks:
Maybelline, Lancome
and YSL
(Ibis World, 2012)
• Body Shop is not the
best lipstick seller of
L’Oreal
• Shower Gel is FMCG
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12. Hybrid Strategy
• Beauty market in worldwide
• Hybrid Strategies
(Cost leadership + Differentiation
strategy)
• By innovation
 Natural materials
Distinctive feature
• New technologies
 Low costs
• Economies of scale
Produce large quantity
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13. Segmentation
(1) Demographic & Psychographic segmentation  By Gender & age
women & men have young to middle age 16-40
and aging segments (Age ≥40) (HKTDC, 2011)
(2)Usage Behavior  light, medium to Heavy user
(3) Analysis of product market:
Product Level Needs of customers
Generic Beauty product Beauty Enhancement
Product Type Cosmetic product  Use for make-up
Product Variant All-Natural
cosmetic product
Improve appearance, no harm to body and
environmental friendly
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14. Targeting
• Differentiated marketing
P1: Young to middle
age women
P2: Aging customers (Basically
women)
P3: Young to middle age men
P1 P2
P3
 More for same strategy
 Functional strategy
• Emphasis the natural beauty &
product features
• Affordable price with good quality
Positioning
Medium to
Heavy User
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15. Brand related strategies
The Logo
Green color
Environmental
friendly image
The brand
Name
Care about
body
short and
simple
Memorable
The slogan
Enhance
beauty
naturally
Manufacture
products
ethically
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16. Brand related strategies
Brand identity strategy：
• focuses on developing
natural products
• environmental friendly
company.
• commit in seeking and
sustaining natural materials
• one of the first to adopt anti-
animal testing,
The founder of The body shop
Dame Anita Roddick
human right activist.
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17. Brand related strategies
Managing brand strategy
• Product improvement
• Improve Ingredient formula is 100% natural ingredient
Brand Leveraging strategy
• Line extension
• Existing Brand & Existing product category
MANAGING BRAND STRATEGY
Proactive efforts should be devoted to managing
each brand over time
Strategies for Improving Product Performance
Product line
StrategyAdd new
product(s)
Cost
reduction
Product
improvementAlter
marketing
strategy
Eliminate
specific
product(s)
Environmental
effects L9-29
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18. Product strategies
Product level The customer value hierarchy
Core benefit : enhance beauty
Basic product: fundamental elements, lipstick
Expected product: Lipstick with moisturizing &
coloring function
Augmented product: 100% natural ingredients &
environmental-friendly packaging
potential products: lipstick with medical function.
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19. Product strategies
Product classification:
• Shopping Products :customers are willing to invest time and effort to buy. (Ashok,
2007).
• customer will compare brand, price, quality, design, color etc. before buying
lipstick
•  The All-Natural Lipstick belongs to Shopping Products
New product life Cycle
• extension of existing products
• improve formula & packaging
• stimulate sales volume & reactive the PLC
• Cycle-Recycle pattern.
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20. Product strategies
The All-Natural Lipstick
Differentiation feature :
• 100% natural Ingredient
• only one lipstick no petroleum & no Lead
• good performance in coloring
 Unique in the market
(1) The Product design
According to FDA’s studies in 2012:
much more leads was found in the lipstick ,
up to 7.19 parts per million (Servens, 2013).
Leads and petrochemicals
 are harmful to human health
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21. Product strategies
(1) The Product design
Unique features:
• Did not contain any chemical
• more safe & will not harm for human health.
• differentiate with competitors
attract customers who want to avoid digesting
chemicals, petroleum or heavy metals.
Major Challenge for product design
• Moisture function:
Natural waxes, vitamins, essential oils & coconut oil.
• Coloring function:
derived from fruit /vegetable extracts/flower & herbs
e.g. Raspberry to derived the red color
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22. Product strategies
(2) The Packaging design of the new product
Replaceable
lipstick Core
• More environmental friendly packaging design
• Full recyclable materials
• Refill the new lipstick core to the old lipstick
holder.
• Cradle-to-cradle practice: encourage customers
to bring the old lipstick holders for recycle and
receive 5% discount.
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23. Pricing strategies
• Position: More for less(short term)
• Price objective: Relatively low price
• Around $100 in short period
• If the demand of lipstick is high
• Charge $140 in long term
• Not selling to the premium
• Focus on product feature
–100% natural ingredients
• To stimulus the
purchase
intention
• e.g. cosmetic
box set
High-passive
strategy
Bundle pricing
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Pricing Strategy

24. Promotional strategies-Internet Marketing
“Guess the
Ingredients
”
Banner Advertisements
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25. Reasons for using Internet marketing
Draw a lot of attention
Feedback could be collected
Cost is relatively low
Fast information dissemination
Familiar with using social media
A paperless tool
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26. Promotional strategies-Public Relations
• Makeup Artists,
audiences & models will
be invited
• Lucky draw
• Free lipstick samples
1. Make-up
demonstration
• 0.5% of sales for each lipstick
 Friends of the Earth
• Promote environmental
sustainability
• Concern about anti-animal
testing
• Increase brand awareness
2. CSR event
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27. Reasons for using public relations
Draw attention from target customers
Attract media coverage
Show the effect after using All-Natural
lipsticks
Communicate message “BEAUTY WITH
HEART”
Convince people to purchase
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28. Place strategies
Retail Shops & Online stores
The Body Shop operate over 2,600
retail stores across 65 countries
Greater control of distribution
Lower the distribution cost
Directly communicate with customer
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29. • Franchisee help
The body shop
run the
business
• Expand their
business to
different
country in low
cost
• Distribute the
product rapidly
Franchising
network
Online channel
The trend in online retail sale
is increasing
Follow this trend to increase
the sale volume
Reach customer online
everywhere
Reduce operation
cost
Place strategies
(Forrester Research, 2010)
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30. Conclusion
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31. Reference
• Apple Daily 蘋果日報,. (2014). 【環保救兵】石油化妝品 深入肌膚底層. Retrieved 9 October 2014,
from http://hk.apple.nextmedia.com/news/art/20130503/18248119
• Ashok, J. (2007). Principles of Marketing Management (1st ed.). Vk Global Publications Pvt.
• Body Shop Fails to Return 1 billion to 06 Shareholders. (2011, December 12). Retrieved November 20,
2014, from http://www.bloomberg.com/news/2011-12-12/body-shop-fails-to-return-1-billion-to-06-
shareholders-retail.html
• Cosmeticsinfo.org,. (2014). How Cosmetics and Personal Care Products Are Regulated in Other
Countries. Retrieved 26 October 2014, from http://cosmeticsinfo.org/Regulation-other-countries
• Franchisehelp.com,. (2014). Beauty Industry Analysis 2014 - Cost & Trends. Retrieved 8 October 2014,
from https://www.franchisehelp.com/industry-reports/beauty-industry-report/
• Gotaas, M. (2012). Major Companies. In IBISWorld Industry Report OD4961: Lipstick Manufacturing in
US (1st ed., Vol. 1, p. 23). United States: Ibis World Marketing Research.
• Info.gov.hk,. (2014). 政府諮詢化妝品行業對產品須登記及附有標籤的意見. Retrieved 9 October 2014,
from http://www.info.gov.hk/gia/general/200411/19/1119291.htm
• Info.hktdc.com,. (2014). Regulations on the Administration of Food and Cosmetics Labelling
(hktdc.com).Retrieved 9 October 2014, from http://info.hktdc.com/alert/cba-e0811g.htm
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32. • L'Oreal Global Financial Result. (2014, October 2). Retrieved November 20, 2014, from
http://www.loreal-
finance.com/_docs/fichiers_contenu/0000000786/LOREAL_Results_2013_GB_10_02_2014.pdf
• Lipbalmpalooza. (2013, November 1). Retrieved November 14, 2014, from
http://www.naturalkath.com/2013/11/lipbalmpalooza.html
• Lipstick & Lead: Questions & Answers. (2007, December 1). Retrieved November 20, 2014, from
http://www.fda.gov/Cosmetics/ProductsIngredients/Products/ucm137224.htm
• Mbaskool.com, (2014). The Body Shop SWOT Analysis. Retrieved 20 Nov. 2014, from:
http://www.mbaskool.com/…/lifestyle…/9339-the-body-shop.html
• Servens, M. (2013, May 6). Which 20 Lipsticks Contain the Most Lead? Retrieved November 6, 2014,
from http://www.motherjones.com/environment/2013/05/study-lead-metals-lipstick-top-20
• Simmons, J. (2013, January 1). What’s in lipstick? Retrieved November 8, 2014, from
http://greenopedia.com/article/what-is-in-lipstick
• The Body Shop - Skin Care Review. (n.d.). Retrieved November 23, 2014, from
http://www.fitnesshealth101.com/review/skin-beauty/the-body-shop
Reference
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33. • Thebodyshop.com.hk,. (2014). About The Body Shop. Retrieved 16 October 2014, from
http://www.thebodyshop.com.hk/en/about_us.aspx
• The Body Shop Values Report, (2011). Retrieved 20 Nov. 2014,
from:http://www.thebodyshop.com/conte…/…/global-values_report.pdf
• The Dangers of Lipstick. (2014, June 1). Retrieved November 14, 2014, from
http://dherbs.com/news/4504/4669/The-Dangers-of-Lipstick/d,ai.html#.VHMUm1eUch5
• Urban Times,. (2012). Why Makeup Should be Greener. Retrieved 9 October 2014, from
https://urbantimes.co/2012/07/why-makeup-should-be-greener/
• Ukexecutive-search.nigelwright.com,. (2014). The Body Shop becomes “Beauty With Heart”. Retrieved
24 October 2014, from http://ukexecutive-
search.nigelwright.com/Assets/Documents/FeaturedinterviewBiancaVerburg.pdf?1347878483
• Ukessays.com,. (2014). A Study On Body Shop Marketing Essay. Retrieved 19 October 2014, from
http://www.ukessays.com/essays/marketing/a-study-on-body-shop-marketing-essay.php
• 123helpme, (2014). Swot Analysis Of Body Shop :: Strategic Management. Retrieved 6 Nov. 2014, from:
http://www.123helpme.com/swot-analysis-of-body-shop-view.as…
Reference
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34. Q&A
Thank you!
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