INTERNATIONAL BUSINESSCase Study : The Body Shop
...f Needs lower level needs must be satisfied before higher level needs can be addressed. In environments where the more basic needs are not being met, e.g. in the Ex-Yugoslavia, then The Body Shop’s products will not sell as there is a preoccupation with physiological, safety and association needs. In markets where the primary needs are being met people can turn their attention to esteem needs. A want is a cultural expression of a need. So if an individual wants to be clean this may find its expression in the purchase of either a Body Shop bar of natural unperfumed soap or in some highly fragranced cleansing product. In countries where strong perfumes are valued, and considered to be an expression of sophistication The Body Shop’s products would not have any appeal. Similarly where market demands are every simple, for example in some South American countries where soap is used as a substitute for shampoo, potential consumers do not understand the differentiation between the various product groups and therefore require education and instructions on use before the product can actually sell successfully. Consequently, conditioner which is an extension of shampoo, would not sell well, because the market must first be educated about the benefits of using shampoo. Finally in countries which have an established indigenous natural health and beauty tradition it is unlikely that The Body Shop products will make any inroads into the market. The Body Shop products will only succeed when they satisfy a need which is not being met by domestic products. In general it is safe to say that while the Body Shop offers quality products at reasonable prices with an association with a worthy social cause, the product features do not necessarily appeal to all markets. To gain complete international market penetration The Body Shop must first analyse local needs and through a process of acculturation meet those needs. 3) Why is The Body Shop’s unique formula of doing business difficult to export to some parts of the world? (Thomas W. Dunfee article) The Body Shop’s unique formula of doing business is societal marketing which according to Kotler (1996) is the process of marketing decision making which considers consumers’ wants and long term interests, the company’s requirements, and society’s long term interests. In other words neglecting consumer and societal long term interests is a disservice to consumers and society. The advantages of this particular formula include a positive consumer response reflected in higher levels of sales to consumers who identify with the particular social cause promoted by a company and who are prepared to pay a premium price if they feel that the cause will benefit in some way from their purchase. Other benefits are free publicity for the company engaging in social cause marketing as well as an increase in employee morale . However while this approach is very attractive it is not always possible to export it to all parts of the world. This approach has two implicit prerequisites: 1. Educated consumers who understand the wider implications of their purchases 2. A market with a relatively large disposable income which can afford to spend money in a socially responsible manner i.e. to vote with their dollar. There are many markets in the world which are not characterised by these features. One manner in which The Body Shop market and positions itself involves direct association with "green" or animal rights movements. This can only succeed in markets where the indigenous population is sympathetic to animal movements or green issues. The slash and burn mentality of many South American nomad communities is not compatible with any green movement in the developed world. Another method of promotion used by The Body Shop are brochures and displays highlighting social causes. These brochures demand high levels of literacy and numeracy in order to relate their message. If a host country, e.g. in the Sub-Saharan region of Africa, is characterised by illiteracy then this form of promotion is doomed to fail. Also if the indigenous population of a particular region are themselves a social cause, i.e. the victims of poverty then it is unlikely that they will respond to social cause marketing. A third method of promotion used by The Body Shop are specific programmes e.g. "Trade not Aid". Such programmes may lead to identification with a company which provides local employment but again - is there the financial power to express this support and identification present? If not then this method is destined to fail, too. Finally the fourth means of promotion used by The Body Shop, that is the sale of products in re-useable containers will have no appeal for markets which cannot afford the initial product not to mention the refill. The above forms of product promotion are clearly only effective in markets where consumers are in the position to exercise complete free choice in the selection of products and where the selection process is based upon social preferences. Hence a democratic environment where customer sovereignty is respected must be in place before the formula implemented by companies such as The Body Shop can succeed. 4) How would you rate Anita Roddick as a company’s leader? Do you think that she is genuine in her ethical concerns or is she just exploiting a market opportunity? Anita Roddick is clearly the driving force behind The Body Shop concept. She is the personification of business strategies which are committed not only to providing quality and value for money but also to social issues with which her customers identify. In doing so Anita Roddick has created a new market segment of sophisticated and socially committed consumers who are proud of their environmentally friendly image which is viewed favourably in today’s politically correct world. She is an obvious leader for an organisation like The Body Shop. Among Anita Roddick’s strengths as a company leader are: Customer Orientation. She looks at the market place as a consumer and distinguishes the good from the bad and the superfluous from the necessary. On the basis of her perceptions she then provides products to the market which she considers meet the needs of her market segment, i.e. cleansing and beauty products which are unharmful to the environment at inexpensive prices. The fact that Ms Roddick has eliminated all unnecessary packaging and hence reduced costs is a clear indication of her awareness of consumers’ wallets. Similarly her approach to educating consumers about her products (i.e. ingredients and their effects and uses) and by extension social issues reflects her commitment to respond to their needs. Coupled with her customer orientation Anita Roddick also has a clear social vision. Products are not tested on animals and are made using natural ingredients, e.g. oatmeal. Initially, when the Body Shop was in its infancy stages, financial improvisation determined the absence of packaging and the insistence on using refillable bottles and containers. But as the company grew from strength to strength these practices were not relinquished in favour of more expensive and potentially damaging materials. Similarly the use of natural materials is not diluted as a result of product diversification. The pure and simple approach has been maintained. Furthermore Ms Roddick continues to investigate ways to ensure that her company made a minimum impact on the environment. This is evident in Littlehampton where a wind farm generates electricity for The Body Shop head quarters and the "trade not aid" progr...