Executive Summary
This paper focuses on the marketing strategies that can be applied to The Body Shop’s business practices in Saudi Arabia. The cosmetic market of Saudi Arabia has the highest growth potential as compare to any other Middle Eastern market.
Saudi Arabia has become the largest consumer of cosmetic products in the region and ranks among top ten cosmetic consumers among rest of the world. The cosmetic consumption in Saudi Arabia was $ 2.4 billion in 2009 with a CAGR of 11% same year (Allam, 2010).
Introduction
A marketing plan helps an organization to foresee the future requirements of promoting and marketing their products through the value chain activities, till the consumer purchased and consumed products of that organization. In this marketing plan, Body Shop is evaluating the cosmetic market and its environment in Saudi Arabia.
Body Shop
The Body Shop plc is a U.K based cosmetic giant with over 2500 franchises in 60 countries and a diversified workforce of 25000. The cosmetic giant satisfies a customer base of nearly 3 million with its organic, purely natural and ethical cosmetic products. These highly valued and premium products earn revenues of around $ 4.74 billion with a retail sales volume of nearly $14 billion. The Body Shop grows with a phenomenal growth rate of 4.5% in each year (The Body Shop, 2011).
Segmentation & Target of Body Shop in the Saudi Arabian Market
In Saudi Arabia, Body Shop is going to target the male and female belonging to all age groups. The reason for targeting all age groups is that Saudi Arabians do not consider their age when it comes to looking beautiful, young and energetic.
Especial emphasis will be paid to the younger population as the large portion of Saudi Arabia’s population consists of younger population. The cosmetic products offered by Body Shop will be beneficial for every segment of the market. Reason is that Body Shop designs its marketing strategy, keeping in view the niche sectors of the market.
Positioning Body Shop’s Products
Body Shop will use its products made from natural ingredients and plants, to position itself as a nature friendly organizations. Body Shop has already established itself as a powerful cosmetic brand and has a positive perception in consumer’s mind regarding its concerns for greener business practices.
As this is evident from market researches that cosmetic consumers in Saudi Arabia prefer product quality and natural ingredients been used in the product, Body Shop will have to highlight the ingredients and perception about their product in rest of the world, in their promotional efforts.
Marketing Research
The primary focus of the marketing research technique adopted by The Body Shop in the Saudi Cosmetic market is to thoroughly understand the requirements and demand of this market and then reviewing Body Shop’s product range and making suitable modifications as to suit the Saudi cosmetic market’s requirements.
This research aims at attracting and building the likelihood of at least 45% target segment, to buy The Body Shop’s products. For the sake of conducting research on the potential and weaknesses in Saudi cosmetic market, The Body Shop is going to use Online and observational research methodology (Perner, 2010).
An internet survey regarding cosmetic and beauty care products will be conducted and the researchers will combine data regarding the perspective of Saudi cosmetic consumers to the cosmetic products and different brands they are aware of. Observational technique will be used for the purchasing behavior of Saudi cosmetic consumers at stores, shopping malls and hypermarkets.
Marketing Objective
Through its marketing efforts, The Body Shop in Saudi Arabia wants to create awareness of the core brands and specifically designed organic beauty care range through targeted channels such that at least 70% of the target segment gets aware of these products and the differentiated values of the Body Shop.
Another goal, that the marketing strategy in Saudi Arabia is set to achieve, is build brand loyalty among at least 20% of the target segment and make them repeatedly purchase Body Shop products (Arens, 2006).
Situation Analysis
PEST analysis will assist in determining the possible problems that Body Shop will have to face in Saudi Arabian cosmetic market.
Political Influence
Saudi Arabia is a Muslim country where rules and regulations are very strict for cosmetic consumers. Wearing makeup is considered to be unethical at public places in Saudi Arabia in the light of Islamic laws. Wearing cosmetic and usage of fragrance is considered to be an act of attracting opposite sex.
Economic Influence
The economy of Saudi Arabia has flourished over the years due to the richness in oil and gold reserves. Saudi Arabia basically depends upon its oil exports.
Social Influences
Saudi Arabian cosmetic industry is at maturity level as make up has become an integral part of Saudi women and men’s daily life. Saudi cosmetic consumers are willing to pay any amount to buy cosmetic products.
The entrance of foreign cosmetic giants has escalated this desire in Saudi Arabian cosmetic consumers to buy quality cosmetic products. The increasing competition in the cosmetic industry has lead to a situation, where the Saudi cosmetic consumers become more brand conscious now.
Technology Factor
Body shop will have to outsource its technological assets from outer world or from its nearly located subsidiary, to satisfy its businesses’ requirements in Saudi Arabia. Most of the population of Saudi Arabia consists of young people and a sustained middle-class.
Internet usage and other means of information are easily accessible by the people, but there are restrictions on the type and quality of content that advertisers can show over Television or internet. This will somehow, facilitate Body Shop’s promotional efforts, but the company will have to design these promotional campaigns within the limits defined by law in Saudi Arabia.
SWOT Analysis
To counter these problems, Body Shop does possess strengths that will help them to succeed in the lucrative Iranian cosmetic market. A SWOT analysis will help us to highlight they key strengths, weaknesses, opportunities and threats to Body Shop in Iran.
Strengths
- The financials and the brand image all over the world will also help The Body Shop to successfully enter and flourish in the Saudi cosmetic market.
- The wide variety available in Body Shop’s product line will catch the eyes of Saudi Arabia’s mature cosmetic market (The Body Shop, 2011).
- Merger with L’Oreal will add more attraction to the market image of Body Shop (Roddick, 2006), as L’Oreal is an established and famous brand. Since this merger, Body Shop has experienced immense growth in company’s sales over the years.
- Body Shop’s strong and powerful social image and customer oriented social marketing strategies will help it to survive in the strict business environment of Saudi Arabia.
- Use of animal extracts is also prohibited in cosmetic products in Saudi Arabia, so Body Shop’s products will have good chances of success, as they are prepared from natural and organic ingredients. The company will also need to address its concerns for the environment and the reflection of these concerns in the ecological manufacturing of their products.
- The awareness level among the target market about the eco friendly products and the benefits of organic ingredients in cosmetic products will also help The Body Shop to uplift its market image in the Saudi cosmetic market.
Weaknesses
- Imitations and second copies of Body Shop’s products are widely available in the Saudi Arabian market, which damage the company’s image and the standards of quality it has maintained.
- There are number of other major players in Saudi cosmetic industry offering same products as the Body Shop, so the Body Shop will have to bring differentiated products in the market.
Opportunities
- As the large portion of Saudi Arabia’s population is young and they use cosmetic heavily, it will be an opportunity for Body Shop to enter the market and grab the attraction of the younger population of Saudi Arabia.
- As the usage of cosmetic is increasing among males, Body Shop will have a chance to capture market share of male customers, because Body Shop offers a wide range of products that are especially produced for men.
- Day by day changing fashion trends and the exposure of customers to media has escalated the desire in male and female consumers in the target market, for looking fashionable and attractive.
- Due to the increasing demand of cosmetic products in Saudi Arabia, it is expected that the purchasing of these products is going to get doubled in coming years.
Threats
- The availability of sub standard copies of cosmetic product in black markets also affects original product’s image.
- The organic ingredients that The Body Shop uses in the production of its cosmetic and beauty care range are scarcely available in the world and they are considered to be a finite resource.
Marketing Mix
Marketing mix of a company helps in understand that organization’s pricing, promotional and placement strategies and what products company is offering (Mind Tools, 2011). In the coming lines, a brief understanding of Body Shop’s marketing mix in Iran will be carried out.
Products
The body shop is going to offer a wide range of cosmetics, beauty care, perfumes and deodorants, facial skin care products, hair care products, scrubs, body butters, toners, cleansers, foot care products, sun screen creams and bath and body care products in Saudi Arabia.
Overall, body shop is going to offer its 900 organic products made of natural extracts and ingredients like olive oil, aloe-vera extracts, rose water, jojoba oil and other herbs. These products will be targeting both men and women segment of Iran’s cosmetic market. Also, the Body Shop will launch featured products for its customers in Iran.
Pricing Strategy
Body Shop will place price tags on its products in Saudi Arabia that suits customers of every income groups. Large portion of Saudi Arabia’s population belong to elite class who do not consider prices while buying out luxurious goods, so expensive beauty care products will also be an integral part of Body Shop’s offerings in Saudi Arabia.
As it is clear in today’s market environment that customers demand more from a product as compare to the price they are paying for a product. To meet customers’ demand at cheaper costs, Body Shop will modify the packaging of its products with a combination of improved ingredients and product formulas and compact sales outlet (Alexander, 2005).
Placement of Products
The Body Shop’s sales strategy is designed in accordance with B2C business model in which the seller interacts directly with the customer. This enables the company to provide products according to customer’s requirement.
The outlets will be designed, keeping in view the traditional naturalistic impact that customers perceive when they enter into a Body Shop outlet. Besides its franchises, the Body Shop will also set up an online store where customers can order their products and get it at their doorstep within 3 days.
Promotional Tactics
The usage of satellite or cable TV in Saudi household has increased. Arabic is the official language of the country and not many people in Saudi Arabia are familiar with English. This is the reason that target audience in Saudi Arabia prefers TV channels that use Arabic as language of programs and advertisements.
There are number of Arabic language TV channels that are being on aired from foreign countries, especially United States. Keeping in view the Islamic laws, Body Shop will prepare advertisements that will match the taste, values and cultural factors of Saudi target audience.
Beside TV advertisement, Internet is also an affective medium of communicating the target audience with the help of advertisements. Internet usage has increased and people have easy access to internet. Beside web sites and pop-up advertisements, social networking sites have also grown to be a useful medium for advertisement.
Saudi Arabian print media is also considered to be mature and marketers use newspapers and magazines to promote their products. Body Shop will use Saudi Arabia’s leading newspapers and fashion magazines to promote its products and offers.
List of References
Alexander, A., 2005. Cosmetics Makers put a new face on competitive pricing strategies. Web.
Allam, A., 2010. Saudi women among world’s biggest consumers of beauty products. Web.
Arens, W., 2006. Contemporary advertising. New Delhi: Tata Mcgraw-Hill Publishing Company Limited.
Mind Tools, 2011. The marketing mix and 4 Ps. Web.
Perner, L., 2010. Consumer behavior: The psychology of marketing. Web.
Roddick, A., 2006. Every body grows stronger. Web.
The Body Shop, 2011. Our company. Web.