The Demand Of The Body Shop

INTRODUCTION

The Body Shop is a global manufacturer and retailer of naturally inspired, ethnically produced beauty and cosmetic product. In 2002, Body Shop have 2,133 stores in 55 countries with a range of over 1,200 products in Europe, America, Middle East, Asia and Africa. However, so far The Body Shop has not entered the China market, it is banned by China because cosmetics sold there have to be tested on animals (The Body Shop International plc, 2009).



The selection of this study on The Body Shop is because The Body Shop always been passionately against animals testing (The Body Shop International plc, 2009). Besides that, it is the second largest cosmetic franchise in the world and they are also environmental friendly (The Body Shop International plc, 2009). Lastly, the business is known for its cosmetic products that are naturally made and environmentally friendly which serves as a competitive advantage (The Body Shop International plc, 2009).

 

The Body Shop is a strong advocate of environment and human rights, which implementing Societal Marketing Concepts as their marketing strategy. They determine the needs, wants and interests of target markets and to deliver the desired satisfactions more effectively than competitors (The Body Shop International plc, 2009).

The Body Shop products are categorized as the medium class, which is affordable and targeted to medium and upper level society. The common competitors are The Face Shop, Skin Food, Elianto and etc, but The Body Shop is more unique than the others as they emphasized on vegetarian and produce only cruelty free products for animals and environmental lovers (The Body Shop International plc, 2009).

     

According to the market research, The Body Shop is a monopolistic competition. This is because of small market shares among the cosmetic company around the world. Besides that, The Body Shop has a wide range of products and caters with different prices which targeted different social level in market society.



   

Today, the external factors have great influence on the business, such as environmental factors, economic factors, cultural factors and technological factors. These issues will actually affect the demand of purchasing of The Body Shop products. External factors are presented on the products of The Body Shop, they know people care about the environment. Instead of using animal, they used natural plant to make their cosmetic products. Also, they have a poster on their website which says “Protect our plant”.

 

                                               

Economic factor also affects The Body Shop. When the market gets near bottom (The Independent ,1995) , The Body Shop will make more promotions to attract customers to improve their sales. For example, the stores are giving out “buy three get two free” promotion. The Body Shop also extends more new product line to satisfy the needs of customers.

Sociocultural leads the body shop to develop new product that will accommodate different groups’ needs. In the store, you can see that those products have different flavors to match different cultures.

Technology also has great influence on The Body shop. The Body Shop has a website which provides information to its customers. The particular department will always update their website by posting up new products. The also provide a feedback and discussion board to the customers. 

 

The problem statement of this survey:

1. What is the market competition of The Body Shop?

2. What is the factors which affect the demand of The Body Shop products?

3. What is the elasticity of the consumers towards the products?

 

 

Objectives that obtain from this survey:

1. To determine the market competition of The Body Shop.

2. To identify the factors which affect the demand of The Body Shop products.

2. To determine the elasticity of the consumers towards the products.

 

 

There are several limitations in conducting this study such as the sample of study is within the range of 20-25 correspondents. This may not give the robust answer to analysis. Next, the survey answer might not be accurate as most people were rushing through the survey.  Besides, some of them don’t quite understand the questions posted in the survey. Hence, the answers may not be accurate as well. 

METHODOLOGY

Twenty-one copies of survey form were prepared to determine the demand of The Body Shop products. The survey was held in Sunway Pyramid shopping centre right in front of The Body Shop lot itself. After the survey, all the data were compiled and analysed. These steps really help to retrieve the information about the demand of the beauty products. From the survey, there were a few factors that caused and affect the demand of The Body Shop products. The survey results showed that the price of The Body Shop products was the main factor which affects the demand. This could be because there are few competitors of The Body Shop which sell similar products. Therefore, the prices of these competitors will affect the decisions of the consumers. In addition, the uncertainty of the future price of their products is also one of the factors. The consumers would usually wait for sales discounts or other promotions before purchasing their products. Other than that, the survey also showed that age is also one of the factors which affect the demand. Teenagers bought the least of these products as they have low purchasing power. This survey also showed that different people have different taste and preferences. Some of prefers the The Body Shop brand, and there are some who prefers other brands. The Body Shop products are made of natural ingredients; they are healthy and also eco-friendly. Consumers who love the environment will purchase The Body Shop products.

ANALYSIS

Demand is the desire and ability to consume certain quantities of a good service at certain prices at a particular point of time. The factors of demand that shifts the demand curve are price, uncertainty of future price, age, taste and preferences and eco-friendliness.  

Price is one of the leading factors in deciding the consumer behaviour in purchasing cosmetic goods. According to the survey, 67% correspondents have agreed that price is a major concern. Some of them said that because beauty products are long-term expenditure, therefore if the price is too high for them, they will stop purchasing the product. Besides, some of the consumer will depends on their income level, because not everyone had a high salary especially the teenagers. Based on the survey, the demand of purchasing a product from The Body Shop will decrease if the price increases. Therefore, we can conclude that consumers have an elastic demand towards the product.

Next, another factor which affects the demand of the product is the uncertainty of the future price. According to the survey, 90% of the people probably will not continue to purchase the beauty product if the future price of the product increases. Due to the comments of the consumer, it will be too expensive for them and it is not worth to pay so much for a beauty product. Also, there are some commented maybe they will purchase if the beauty product gave a positive result. Demand of the beauty product will increase for now if there is an increases price in the future because consumers are willing to purchase the product in a lower price. Therefore, consumers also have an elastic demand towards the expectation of the future price of the beauty product.

In addition, age is also a factor which affects the demand of the beauty product. According to the survey, those who use products from The Body Shop are 30 years old and above, but only a few who are 17 years old and above use their beauty products. This is because of the affordability of the consumers. Those who are 30 years old and above have their fixed salary and income, that is why they can afford to buy this beauty product, whereas, those who are 17 years old and above could not afford to buy because most of them are still studying and did not have much allowance. Therefore, demand for the beauty product will be higher for the people who are 30 years old and above. It will be an elastic demand because the young and old ones are sensitive towards the price.

Besides that, taste and preference is also one of the factors that affect the demand of the product. According to the survey form, 14/24 people preferred The Body Shop and only 10/24 preferred L’Occitane. This shows that different people preferred different brand of product. Therefore, for people who like the product from The Body Shop, the demand is high even though price of both goods are the same. For people who prefer L’Occitane, the demand for their product is high at the same price. As a result, the elasticity of the product is inelastic. This is because the consumers are loyal to the particular brand and willing to use and purchase the product regularly when the price is constant.

 
Lastly, the demand factor of The Body Shop products is its natural-oriented cosmetic product. According to the survey, most of the people know that the beauty products from The Body Shop are made of natural ingredients which will give a very positive effect to their skin. This is one of the main reasons why people choose The Body Shop products. This also means that the demand of their beauty products will increase among those who are vegetarian or are environmental conscious as the products suit their lifestyle. This product will have an inelastic demand because most of the other products by the competitors are animal-tasted whereas The Body Shop products are not.

CONCLUSION

The Body Shop is a monopolistic competition. This shows that they have their own differentiated products. They are independent and they determine their own pricing policy. There are few factors that influence the demand of their product such as price, unpredictable price for future, age, taste and preference and natural-oriented cosmetic products. This has given a result that most consumers are elastic to the factors and majority of people are sensitive towards the price. Most consumers will compare The Body Shop products with others company’s product. Each company have their own characteristic to attract consumers for purchasing their product. Here are some suggestions for The Body Shop to increase their outstanding achievement. They could improve their sales by letting more people to know about their product. Example, they could conduct a promotion or sales in the main hall of a shopping mall. This will attract many customers in the shopping mall to purchase their product. Besides that, when the price of the product decreases, this will attract the consumer to buy more of the products. They also can promote their product by advertising through television and radio. Another suggestion is to build customer relationship with current and future customers. They can encourage customers to sign up a membership card and give them special offers. This will also increase the loyalty of customers. This will leads to customer satisfaction, customer loyalty, and profitability. In conclusion, promotion or sales, advertising and customer relationship can give a help in increasing the outstanding achievement. 


REFERENCES

Cope, N. (1995) Body Shop creates space for a voice in marketing. The Independent [online] 1 July 1995. Available at: http://www.independent.co.uk/news/business/body-shop-creates-space-for-a-voice-in-marketing-1589275.html [Accessed: 23 April 2013].

The Body Shop International plc (2009) Values Report 2009: Living Our Values [online]. New City Court: The Body Shop International plc. Available from: http://www.thebodyshop-usa.com/pdfs/values-campaigns/Values_report_lowres_v2.pdf [Accessed 22 March 2013