Consumer behavior a strategic approach - Essay Example

Consumer behavior a strategic approach Company Profile and Initial analysis Company Profile The report is will focus on the Corporate Communication Campaign of The Body Shop International PLC. The company produces cosmetics and is based in United Kingdom (U.K.). Although established in 1976, the company was founded in 1976 by Anita Roddik. Operating in sixty-one countries of the world, the company has almost above 2300 cosmetics stores in the market. However, it should be considered that the company is now a part of L’Oreal corporate group. As it operates in several countries in the contemporary world, the company generates more than 6000 large employment opportunities in the global economy (The Body Shop, 2008). The company operates in the cosmetics industry. Thos industry is highly competitive in nature. The company engages in the production of various types of cosmetics. The products lines of the company are bath &body, makeup, fragrance, hair, by line and skin care cosmetics. The company is a well established company in the global market, its cosmetics has a market share in U.K. of about 20%. As the primary motto of its communication program, the company claims to serve eco friendly products by giving an image of ethical beauty and original natural brand. The organization has also been successful in providing good relations with stakeholders by its efficient public relations (PR) activities. Initial Analysis SWOT Strengths The long established business of the company has helped to augment the brand image of the company. Moreover, the ethical virtues of the company are also commendable. The uses of natural ingredients in the products of the company have helped to boost its sales in the market. Weaknesses The products of the company are only sold in the retail outlets of the organization. The large departmental store in the modern economies does not sell the products of Body Shop. In the recent years, the stakeholders in the supply chain of the company have expressed their doubt regarding investing their trust on the organization. Opportunities The increased environmental awareness of the individuals has augmented the demand for eco friendly and organic products. Moreover, the new range of skin care products available for men has helped to boost the overall revenue of the company. This has also helped to increase the sales of the company (Spangler, 2008). Threats Though the company aims to sell eco-friendly cosmetics, the suppliers of the raw materials do not seem to adhere to the standards of eco friendliness. The biggest drawback of the company that can be a threat to its market position in future is the lack of an advertising and marketing department in the company (Müller, 2005). Companies like MAC, Make up Forever etc are now following the footsteps of The Body Shop by improving on the scale of their scope of social responsibility in business. The PESTLE analysis is given in the Appendix. The present market for the cosmetics industry is highly competitive in nature. At this juncture, the lack of proper advertising and marketing of the products of the Body Shop can substantially detrimental to its brand value and strength of the customers. The business of Body Shop is well known in the market for its ethical standpoint. The company strictly opposes to the testing new products on animals. But L’Oreal is blamed for this practice in the market. In 2008, the Animal Rights group have sternly warned the company to abolish such practices. As the ownership of Body Shop has been undertaken by L’Oreal since 2006 with an amount of $1.14 billion, the ethical standpoint of the company is now doubted by its stakeholders (Pitman, 2006). The fall in the disposable income of the individuals due to the soaring price levels have considerably decreased the purchasing powers of the individuals. As a result, the overall demands for luxury products like cosmetics have fallen. The three main key issues that the company is following are: The merger of the company with L’Oreal in 2006. The recessionary trails in the economy damping the demand for the luxury and comfort items in the market. The core competence of the company was its business operations that gave primary importance to ethical values. It has been found that many cosmetics companies like MAC, Make-up-Forever are also manufacturing eco friendly cosmetics. Thus the core proficiency of the company (The Body Shop) no longer unique in the industry at present. Key Stakeholders and Target Publics The key stakeholders and the target publics of the Body Shop are likely to be affected by the three main issues faced by the company. Mergers of the company: the merger of the company would affect the existing shareholders and the employees of the organization. The shareholders would be suspicious about the performance of the company in the new merged position in the market. Rather the working culture of the organization would also change with the merger, this would affect the employees. The consumers would also doubt the ethical virtues of the company after the merger as LO real is known to not follow ethical issues in business. The recession in the world economy: the crisis of finance in the global economies can force the company cut down some jobs, this would affect the employees. Rather the fall in the disposable income levels would hamper the purchasing power capabilities of the consumers. The suppliers would also be reluctant to provide raw materials at lower prices. The ethical virtues of other cosmetics companies: this would directly affect the decisions of the consumers in the market. They might reduce the demand for the products of The Body Shop. Considering the initial business analysis, it can be stated that any change made in the business operations of The Body Shop would surely affect its stakeholders. Figure 1 and 2 in the Appendix, shows the stakeholders map for the Body. The most important stakeholders of the company are the customers and the shareholders. The cooperation of the employees and the suppliers also matter to the success of the business. Finally, as the company is a private one, the power of the government, communities and the business support groups is the minimum. Thus, it is obvious that the above three issues of the business of the Body Shop will affect its stakeholders like the consumers, suppliers, employees, business support groups (for ethical viability of the firm to be maintained in the long run), communities, government and the shareholders of the company (Westwood, 2005). The Body Shop must take active measures to assure the trust of its stakeholders amidst all the above business problems. As per the Situational Theory of the Publics, as the individuals communicate in real life, when communications regarding the business effectiveness of a company are aimed at them, the results are most likely to be effective. Therefore all these glitches indicate that The Body Shop should set up an effective communication plan for its business to ensure its stakeholders loyalty in the long run. The target publics for whom The Body Shop must frame the communication targets are the consumers, business support groups and the shareholders of the company. As a whole, the most important issue that has to be ensured by the company through the communication campaign is its ethical stand in business in the long run (Freeman, n.d). The detailed profile and the rational to include each target group: Customers of the company are all age group, coming from middle and high income societies of developing and developed economies. The customers are the primary concern for any private profit making company. Shareholders of the company are both corporate and individual shareholders. Gesparel Holding Company, Bettencourt Family and Nestle are the direct shareholders of L’Oreal (owner of Body Shop). The individual shareholders of the company belong from both developed and developing economies. The shareholders are the one-time investors in the company. Business Support Groups of the company are the media (news and magazine companies) of different forms covering the business of the company. These groups are the modes via which the Body Shop would popularize its products. Further Analysis of the Organisation and Issues After considering the three issues above it can be analyzed that The Body Shop is now losing its long established reputation that it had over its moral values in business. The company is known to deliver natural cosmetics. But its merger with LOreal makes its consumers suspect the quality of products produced by the company. The company through its communication plan must assure the public that even after the merger it has not compromised with the quality of the products delivered. Table 1 in the appendix contains the three years financial data of L’Oreal, who owns Body Shop presently. The projected data of the coming three years are also given in the map. It is clear that sales of the company are rising with time. All the dimensions of profit making of the company are also increasing with time. However, it should be considered that the rise in the dividend per share of the company is substantially low. L’Oreal now is a famous company and the scale and scope of its operations is also increasing with time. Thus, in order to formulate the communication campaign, the Body Shop must not have much financial crisis in its operations (Morningstar, 2013) Under the memorial of the original founder of the company, Anita Roddik (23 October 1942- 10 September 2007), the communication campaign would assure the sustainability of the ethical views of the business of Body Shop. It would assure the target groups that in spite of the merger in the long run, the company would not compromise with its ethical terms which had been incorporated by its original founder Anita Roddik. Thus, the main issue of concern that the company would address in the campaign is the consistence of the ethical virtues in its business even after the acquisition of L’Oreal since 2006. The business of Body Shop is well acknowledged in the market for its ethical outlook. The company stringently opposes to testing new products on animals. But L’Oreal is blamed for this practice in the market. In 2008 the Animal Rights group have sternly asked the company to eradicate such practices. As after 2006, the ownership of Body Shop is in the hands of L’Oreal who acquired the company with $1.14 billion, the ethical feasibility of the company is now doubted by its stakeholders. This doubts and uncertainties have to be solved by the company through its communication campaign. According to the Situational Theory of the Publics, the officials of the Body Shop have to empirically prove its targeted stakeholders that it has not compromised its corporate social virtues even after the merger through the communication campaign. Also, the brand would not lose its austerity and value in the long run (New York Time, 2006). Even after the merger the organization claims to work on its own ways and claims to only report to the CEO of LOreal regarding their work. (The Body Shop, 2013) Business and Communications Objectives for the Campaign The Body Shop should abide the norms of SMART objectives to suffice its business and communication plan. Specific: The business and the communication objectives of the company must be specific in nature. The communication campaign must aim to protect the communities in the environment itself. The company should try to provide superior services to the target clienteles and provide good worth for their money invested in the business. The company should also claim to act instantaneously for the needs and the requirements of the customers. Anticipating the actions in business undertaken by the potential rivals, the company must react actively to lead its position in the market. Measurable: The firm should aim to augment its aggregate sales by almost 5% in a year, through the benefits of the communication plan. Achievable: It is assumed that the target of 5% rise in the sales of the cosmetics of Body Shop must be achievable. Realistic: It is also considered that the above mentioned target and the objectives of business that the Body Shop claims to suffice through the communication plan must be realistic in nature. Because malfunction of unrealistic objectives would demotivate the employees of the company. Time bound: As the communication campaign will be set for a year, the company would have to attain its objectives within a time span of about a year. Corporate Communication Programme The communication program of the Body Shop should address to the primary issues of the business and it should also meet the objectives established for the campaign. The following section of the report will consider various communicative marketing strategies the Body Shop must adopt to target the publics. In memorial of the original founder of The Body Shop, the company would make the communication plan focussing the ethical values imbibed in the company by Anita Roddik. The communication plan should address to the five core values of business that were assigned by Anita Roddik. “Support Community Fair Trade” , “Defend Human Rights”, “Against Animal Testing”, “Activate Self Esteem” and “Protect our Planet” were the five values of business that were imbibed by Anita Roddik. In the communications program, the company must make innovative campaigning that would help to address to these five values. For the purpose of community fair trade, the company can purchase raw materials from poor farmers of poor economies in certain campaigns. This would provide a mode of income for these farmers. In order to protect the human rights, the company can sponsor special programs for the non government organizations that claim to fight for human rights in the economy. A dog show can be introduced as a part of the campaign, in this show the company can show its love for animals and protest strictly against the different type’s chemical testing on them. For the motto of saving environment, the company can easily reduce the use of plastics in packaging their cosmetics products. Self esteem value can be created by the company by organizing some programs of meditation for its customers. The most important communication mode through which Body Shop should aim to promote its products is internet. With the rise in the literacy level of the individuals, it has been empirically found that the proportion of the internet users have largely increased in the modern world. So the Body Shop should launch excellent commercials for its products on the internet sites. Such advertisements not only reach out to a wide range of customers but is also cost saving in nature. Digital marketplaces have become the most important shopping destinations for the busy individuals today. Thus the advertisements made by the company would surely pitch for the customers shopping on the online sites like Ebay, Flipkart etc. Moreover, it should also be considered that the advertisements of the products of a company on the internet are helpful in reducing costs. There are various types of tasks which a company must ensure to execute. One of them being the awareness of products through advertisements in separate economies. The rules and regulations of the government are different for different economies in the world. Rather some of the economies have high value of currency, like Australia. If Body Shop decides to advertise its products in Australia through a separate commercial then the cost of the resources used by the company would be significantly high. But setting advertisements in the online websites will help the company overcome such difficulties in business. Moreover, it is also empirically proved that the extent of social media marketing activities have increased in the modern days. Social networking sites like Facebook and Twitter, MySpace etc are the most common social networking sites used by us. These networking sites are not only used for the purpose of social entertainment but are also serves the business-to-business and business-to-consumer dealings. Thus, launching advertisements in the digital marketplaces is one of the most important tasks the officials of the Body Shop must execute in the communication campaign. It should not be ignored that no product commercials of Body Shop has been launched in any form of media like television, newspaper etc yet. The company should incorporate the process of celebrity endorsement while communicating its advertising commercials in the different modes of media. Famous personalities are accompanied by large group of fans or followers. Therefore if the cosmetics of Body Shop are endorsed by the celebrities, it would help the company to pull in a larger group of buyers (Rogers, 2001). The most important issue that must be addressed in the advertising campaign is the ethical virtues of the company. The commercials of the company should clearly claim to not compromise with the quality of the cosmetics manufactured. Like always, the products of the company should be produced with the help of natural ingredients like fruits and vegetables. The most important feature that should be highlighted in the commercials is the catchphrases. The Body Shop can use special catchphrases like “Use the best of Mother Nature” or “Be Natural” in its commercials. Such advertisements would surely help the company acquire the trust of the individuals. As per the principles situational theory of publics, such messages in the commercials of the company would surely help the firm to hold on to its customer base and their loyalty. Moreover, the company should try to achieve an official certification for the eco-friendliness of its products. If an official certification like ISO certification is achieved, then such an asset of the company will help to augment the worth of its goodwill in the views of the consumers. Cosmetics are primarily used by women of all ages. In the recent market trends, the use of anti-aging products is largely famous in the markets. Thus, the company should introduce special commercials to communicate the essentiality and vitality of its anti-aging cosmetics range. Though the primary target would be the middle and old aged rich or middle income women, the company should not ignore the youth and the male customers entirely. The response to the new range of the male cosmetics of Body Shop has been excellent. Thus the company should communicate special advertisement programs for the men and young customers. A single advertisement type cannot be attractive to all the age groups. Thus the company should set separate advertisements for separate age groups accordingly to their suitability. In short, the company should adopt Persuasive, Comparative and reminder-oriented advertising technique. The persuasive advertisement would promote the competitiveness of the product. The comparative advertisements would indicate that their products are better than the products of any other company engaging in the production of similar types of products. The reminder oriented commercials would help the company remind the customers about the products that had been introduced earlier (whose product life cycle has almost come to an end) of the company in its commercials. Newspapers, direct mails, radio, television, magazines should be the modes of the advertisements of the company but some amount of resources of the company should be also spent on outdoor and other media advertisements. The company should realize that newspapers have the best circulation networks in all the economies. Thus, the company should never ignore to print advertisements for its products in the numerous important newspapers circulated in the different countries (NCBI, 2013). Considering the most important issue, the company should try to assure its corporate social responsibility while communicating through its advertisements. It should fund or donate several animals and animal-rights protection societies to prove its ethical virtues to the consumers (California State Assembly, 2010). There are also other ways by which a company can portray the intensions of the communication campaign apart from advertisements. This can be conducted by arranging product campaigns in the prime locations of these economies. These temporary shops in the form of kiosks should be organized by the company and detailed leaflets about the quality, variations and functions of the various cosmetics by the company could be distributed to customers from these kiosks. While setting the communication campaign the company should stress more on the economies where the customers are more brand conscious like Thailand, Hong Kong etc. The company should appoint a good Public Relations (PR) team in its business. This team would primarily look into the needs and the requirements of the customers. Since the company operates in more than 40 nations in the world, the PR team should be distributed in all the retail outlets of the companies operating in different economies. Good customer services would help the company to enhance and maintain its brand value and thereby will facilitate it to enjoy large number of potential customers (Reading, 2002). The company should aim to follow the ethical values of Anita Roddik in business, in its communication plan. It can create a message for the communication plan like “Be Close to Nature”. The time line for the corporate communication plan is explained in Table 2 of the Appendix. In the first four months the company should try mobilize the required finances for the different types of advertisements for the products it would launch. To facilitate this, the company might appoint different marketing agencies from the host countries where it would have to launch its commercials. The biggest importance should be given to the printed commercials as they are have the widest circulatory systems in different all the economies (Assael, 2005). However, the next best mode is the television advertisements. For developing the advertisements, the company should try to incorporate the practice of celebrity endorsement in its commercials to capture a larger pool of customers. For the sake of the outdoor advertisements, the company should introduce unique and catchy catchphrases. The underlying message should be different in the advertisements targeted towards the different customers. For instance, the commercials of anti-aging products should assure the effectiveness of the products whereas the commercials for the general cosmetics should concentrate on the motto of style and class in it (Webster, 1995). After running such activities in the first four months, the company in the next two months should appoint a good PR team. However, the company needs to appoint specific local PR personnel in specific countries where it would desire to trade its products. From the 5th to the 9th month, the company must work on promotion of its products through the social media. This is because the local workers would acquire better knowledge about the tastes and preferences of the consumers in the respective local markets. In order to prove that the in spite of the merger, the company has not compromised with its product quality and ethics in business, it should fund and sponsor the various social programs that should aim at saving and protecting the animal along with their rights and environment. This stance may be adopted by the company from the 8th to 10th month of the plan execution. In the last two months of the plan, the company should introduce the advertising kiosks campaigns in the prime locations of the different markets in the diverse countries it operates (Steyn, 2002). Monitoring and Evaluation Plan According to the theory of evaluation and planning the company can introduce a questionnaire survey to qualitatively analyze success of the communication planning (Fritz and Mcllraith, n. d). The duty of the company would not be over if it simply sets and launches the corporate communication plan to augment its business. The company should have a proper mode of tracking system that would help to analyze the effectiveness and influence of their communication plant. The company should maintain a customer complaints department in every market where it operates. The officials of this department of the company should ensure that the products of the Body Shop are good and suffice their requirements. The company should have a group of efficient analysts that would assure the effectiveness of the communication campaign of the company via technical statistical tools. The company should also implement the technique of Key Performance Indicator (KPI) in order to efficiently assess the growth of its sales which had been targeted through the communication plan. By observing or comparing the targets and its achievements, the company may determine the effectiveness of its communication campaign. According to the assessment, the company may modify its marketing and advertising strategies in future. It should also be considered that the evaluation step of the company must make sure that the financial resources allocated by the company are not misused in the course of the operations of the business (Handfield, 2011). Reference List Assael, H., 2005. Consumer behavior a strategic approach(2005) Indian. Delhi: Dreamtech. Bryson, J. M., 2004. What to de when Stakeholders Matter. [pdf] Humphrey Institute of Public Affairs. Available at [Assessed 30 October] California State Assembly, 2010. Emerging foreign economies. ? [online] Available at < http://ajed.assembly.ca.gov/emergingeconomy > [Assessed 23 October]. Freeman, R. E., n.d. Stakeholders Theory in the Modern Corporation.[pdf] Udayton. Available at [Assessed 23 October]. Fritz, C. and Mcllraith, S. A., n. d. Monitoring Plan Optimality during Execution:Theory and Implementation. [pdf] Department of Computer Science, University of Toronto. Available at [Assessed 31 October]. Handfield, R., 2011. What is Supply Chain Management? [online] Available at < http://scm.ncsu.edu/scm-articles/article/what-is-supply-chain-management > [Assessed 23 October]. Kapferer, J. N., 2012. The new strategic brand management: Advanced insights and strategic thinking. Delhi: Kogan Page Publishers. Morningstar, 2013. Financial Data. [online] Available at [Assessed 30 October]. Müller, A. K., 2005. Swot-analysis for Henkel's loctite. Munich: GRIN Verlag. NCBI, 2013. 'BRICS without straw'? A systematic literature review of newly emerging economies' influence in global. ? [online] Available at < http://www.ncbi.nlm.nih.gov/pubmed/23587342 > [Assessed 23 October]. New York Time, 2006. L’Oreal Is Paying $1.1 Billion for Body Shop. New York Times, 18 March. Pitman, S., 2006. L'Oreal's Body Shop acquisition meets with mixed reaction. William Reed Business Media, 22 March. Reading, C., 2002. Strategic business plan. London: Kogan Page Limited. Rogers, S. C., 2001. Marketing strategies, tactics, and techniques: a handbook for practitioners. Connecticut: Greenwood Publishing Group. Spangler, R., 2008. Learning Curve. New York: Bold Strokes Books Inc, 2008. Steyn, B., 2002. From ‘Strategy’ to ‘Corporate Communication Strategy’: A Conceptualisation. [PDF] Prconversations. Available at [Assessed 23 October]. The Body Shop, 2008. The Body Shop Stakeholder Panel Review. [pdf] The Body Shop. Available at [Assessed 23 October]. The Body Shop, 2013. The Body Shop. [online] Available at < http://www.thebodyshop-usa.com/> [Assessed 30 October]. Webster, F. E., 1995. Industrial marketing strategy. New Jersey: John Wiley & Sons. Westwood, J., 2005. The marketing plan workbook. Delhi: Kogan Page Publishers. Appendix SWOT Strengths Eco friendly products produced by the company. High brand value. Weaknesses Lack of proper marketing programs. Products only sold in the departmental stores. Opportunities Increasing sales by improving the product lines. Threats Growing social responsibilities of the competitors. Recession in the global economy. PESTLE Political To accept the challenge of sufficing the rules and regulations of the governments in the different economies in which it operates. The company (L’Oreal as it has undertaken the business of Body Shop) has to abide the norms of the Advertising Standard Authority in its operations. Economical Since the products are sold in several kinds of economies, the business is subjected to exchange rate or currency risks. The recessionary trails in most of the economies in the modern world after 2008 have dampened the demand for the products. The cosmetics industry in most of the market economies is highly competitive in the modern world. Social The company has to constantly upgrade its product lines as per the rapidly changing tastes and preferences of the consumers. While making the basic advertisements, the company has to take into consideration the cultural and religious behaviours of the customers. Technological The company invests large sums of money for the purpose of Research and Development and uses the most modern style of technology available for its production process. It uses internet extensively to trade its products (Kapferer, 2012). Legal The organization pays heavy penalties for any kind of defects found in its cosmetics. The business is subjected to various types of legal norms set by the authorities of different countries in which it operates. Environmental The rising environmental awareness of the individuals across the world has significantly contributed to the rise in demand for the natural products of The Body Shop (undertaken by L’Oreal). Figure 1: Stakeholders Map for a Company desiring to get Public Value (Source: Bryson, 2004) Figure 2: Stakeholders Map of Body Shop Stakeholders Salience Position of the Issue Table 3: The Financial Data of L’Oreal (Source: 4-traders, 2013) Table 4: Gantt chart for the Communication Campaign Month Particulars 1 2 3 4 5 6 7 8 9 10 11 12 Invest and set the various advertisements for the different target groups Appoint PR team Social media networking Corporate Social Responsibilities Initiate Business Kiosks Read More