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.
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.
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
