Improving Competitiveness (Essay Sample)

Using marketing to improve the competitiveness of an organization - "Body Shop."
Name
Institution
Due Date
Body shops current target market
Geographic variables
Body shop a company that has built its values on activism was started back in the 1976 by Human Rights Activist Anita Roddick. Body shop arose from the grass root level that cared about products sold on affecting both the skin and the body. Today, Body shop has risen in a global level and one of the successful franchise companies that is spotted all over the world. The company at the moment operates in over 60 markets with over 2,500 stores worldwide. The Body Shop franchise has strong beliefs and values in animal protection, civil rights and care for the environment. Today, Body Shop attracts a wide range of customers in its revenue bracket with women taking the larger share compared to men. From middle to upper class, the wide range of customers has embraced consumption of organic products.
Demographic variables
On a demographic level, Body Shop has moved for the middle to upper-class women who live in the suburbs or in cities due to store placement in major cities all over the world. The Body Shop has targeted two main age groups in its revenue bracket. Consumers of between 18-24 and 25-34 age frames flow to their stores day in day out. Females of age 25-34 years have the highest consumption level of Body Shop products more than the 18-24 age group. Based on an internet survey of 1,685 users of Body Shop products with an age of 18 and above; 20% of consumers were of between age 25-34 while the 18-24 came behind at 12%. Age group of 65+ had the least consumption of 2%.
Consumer behavioral variables
According to Quant cast survey on Body Shop of U.S market, results have shown that 70% of Body Shop target markets are women with the remaining 30% going to men. The number of online consumers ranges from 18-55, although the average consumer is about 37 years of age.
Psychographic variables
Research done by Body Shop marketing survey team have shown that women with an income ranging between $60,000-$100,000 constitute the largest market for Body shop products. Women with an income ranging from $30,000-$60,000 follow closest behind on the target market. The current target markets have also shown that these women are Caucasians and majority of them have a bachelor’s degree. Based on surveys and inferences, Body shop consumers consider themselves as knowledgeable and well informed about politics, environment and current health trends. Thus, The Body Shop target market has an active role in community affairs and creates a stand on social justice similar to the activism nature of Body Shop. This concept has seen Body Shop attract wealthy consumers who have a surplus to spend on beauty organic products while still catering for the Middle class who are eager to purchase. The Body Shop consumers are passionate to work, reading health magazines, driving big vehicles like BMW or Mercedes and they normally shop in boutiques.
Body shop is one of the largest companies that sell beauty products all over the world. It accounts for 35% share of the global product market and therefore it needs to comprehend every country’s market in order to keep in line with the PESTLE situations. The market reach of Body shop is diverse- they are present in almost every country from New Zealand to US. The PEST analysis technique has been applied successfully by Body shop and it has obtained competitive advantage in the industry. Their PEST analysis is as discussed below:
Political:
The Body shop business is governed by government and state rules. Its international operations are subjected to political stability of a country. Body Shop Company follows all the regulations set by European Cosmetics Regulation in order to stay active in the market. Body shop complies with all rules regarding safety and free movement of goods. Body shop considers factors such as competitive regulations, employment regulations, health regulations, safety regulations and product regulation. These factors affects organization in various ways like how a company operations, costs and demand for goods and services. Recently there have been several changes in the UK legal regulation that affects the behavior of the firm. There have been regulations limiting the sale of goods in the internet. Internet services are preferred by many because of their reduced cost. Body shop has not been able to implement this service in all countries. Body shop sells goods on cash, credit or hire purchase. The terms of credit sales are stipulated in consumer credit act. Body shop adheres to all employment regulation regarding to wages, heath care, flexible working hours, equality, job security and child care.
The Company ensures that all its products are safe for consumer use. All products are labeled according to the Cosmetic products Regulations 1996. Some countries charge more tax than others but the company pays all taxes due to the government. Increase in tax rate in some countries has affected the cost structure of the business. For instance for the last three years the tax rate has increased by 10% for almost half of the countries where Body shop is present. The rest has remained fixed all over. The change in tax rate has affected the profit of the business. Lately the businesses have had some civil unrest in some markets due to inflation due to inflation.
Economic
As a result of the recent economic crisis, Body shop had to restructure their marketing and sales campaigns greatly. With diminishing profits the company had to undergo internal downsizing and new plans are made on penetrate new markets. Economic conditions have had a high effect on the business. Though, not in favour of Body shop’s, the economic crisis that started in 2010 led to decreased sales of products mainly because as people were being retrenched from jobs, they could not afford to purchase products. The purchasing power of the customers has gone down. The unemployment levels have gone down since the year 2007.A study conducted by Body shop marketing shows that the unemployment level has decreased at the rate of 5.5% since 2012.This indicate that a good part of customers have lost their purchasing power. This will greatly affect the sale of luxury goods.
In some economies large population is unemployed and therefore there is a high chance of closing the business. A cosmetic industry has high chances of closing since their products are termed as luxury. The cost of operations differs from one country to another. This is because the availability and cost of labour differ from one country to another. The GDP in some countries has increased significantly. This has provided a positive outlook for organizations and business. Business expansion is usually tied to interest rate. UK’s rate of interest has been decreasing continuously. This means that the cost of loan is low. A high rate of interest may be too costly and will discourage business organizations from implementing their strategic plans. UK’s low interest rates encourage the purchase of items of greater value on credit and this is a very good environment for the Cosmetic industry. The current interest rates in UK are favorable and it encourages businesses to implement strategic plans.
Social
Social factors greatly affect Body shop, as sellers of beauty product and it has to stay in line with the stark and strict differences of cultures all over the world. Body shop exist in a society with different classes of people (lower, middle and upper Class,).The lower class category usually spend their money on necessity. Middle class segment are more interested in investing in products that would secure their future. The upper class category is known for buying luxurious products such as expensive cars, clothes, gadgets and other products. You hardly find person from lower class spending his/her money on luxurious products. A low class person find it hard to buy Body shop products because they are packed in large quantities and therefore too expensive for them. In some cultures, people make fun out of males buying creams. This is because in such cultures it’s only females who are supposed to use and buy beauty products. Males are said to be tough strong and it is believed that they look good naturally. Body shop communicates its image as a global brand to help people associate with it as products that connects the world together. The social implications are seen in sales and marketing campaigns for instance certain countries have music festivals, so Body shop has to stay in line with those festivals in order to understand the behavior of their market and how they can create cash during such opportunities. Currently the sales team has found out that customers prefer imported products to local products. The current generation seems to prefer short working hours unlike what Body shop is offering currently.
Technological:
With the rapid changes in modern technology, companies have no choice but to integrate themselves with the recent technological changes. A lot has changed with the current technology. New productions machines are developed each day. The new machines have reduced production cost as well as efficiency. The social media explosion has called for an interactive engagement with consumers so Body shop has to stay ahead of all developments given the rate at which the modern youth utilizes the platform for their benefits. In order to achieve marketing objectives the company plan to increase markets by attracting new customers and venturing into new markets. The company advertises more on the social media to create awareness. To increase production the company has purchase better equipment to increase its capacity and efficiency.
In order to achieve the competitiveness ...