Page 133 - DMGT507_SALES AND PROMOTIONS MANAGEMENT

Unit 7: Advertising Strategy: Fundamentals

Notes
implementation. Numerous capable managers who were brought in to try to implement
professional management practices apparently gave up in bewilderment at the lack of
discretion that they were given, and then left dismayed.

The Body Shop's experience in America typified Roddick's pioneering style, which
frequently ignored sound marketing analysis. She sought a new way of doing business in
America, but in doing so she dismissed the experience of older and more sophisticated
retailers - such as Marks & Spenser and Sock Shop, which came unscratched in what is a
very difficult market. The Body Shop decided to enter the US markets in 1988 not through
a safe option such as a joint venture or a franchising agreement, but instead by setting up
its own operation from scratch, according to Roddick's principles of changing the business
rulebook and cutting out the greedy American business community. But this was an
exceedingly risky move. Her store format was based on the British town centre model.
She did not bother to appreciate the fact that Americans spend most of their money in out-
of-town malls. In 1996, the US operation lost 3.4 million pounds.
Roddick's critics claim that she has a naïve view of herself, her company, and business in
general. She has consistently argued her philosophy that profits and principles don't mix,
despite the fact that many of her financially successful competitors have been involved in
major social initiatives.

The rift between Roddick's and others' view of the world was revealed in the results of an
innovative independent social audit that The Body Shop commissioned in 1966. The
company was prompted to commission the study after the report following media criticism
that its social and environmental credentials might not actually be as good as the company
claimed. The results highlighted eye-opening shortcomings in virtually every one of the
company's stakeholder relationships. The company scored well in certain areas such as
promoting human and civil rights, pollution control, product information, wages, and
benefits, women's opportunities, and energy conservation; but it scored really badly on
issues of corporate governance, relationships with shareholders, responsiveness to
complaints of customer and franchises, accuracy of promotional claims, communication,
and reaction to criticism.
Critics claim that had Roddick not dismissed and ridiculed the need for marketing for so
long, The Body Shop could have certainly avoided future problems that it faced. But by
2000, it was paying the price for not having devoted sufficient resources to new product
development, to innovation, to refreshing its product ranges, and to moving the business
forward. It seems that heroes can change the rulebook when the tide is flowing with them,
but adopting the disciplines of marketing allows companies to anticipate and react when
the tide begins to turn against them.
N.B: The Body Shop was sold to L'Oreal, the world's largest cosmetics manufacturer, in
March 2006, for £ 656 million. Dame Anita Roddick gained personally to the tune of £130
million. Since British and French companies have very divergent views on strategy and
day-to-day management, it remains to be seen how successful the union will ultimately
turn out to be. For The Body Shop, it's yet another chapter in its struggle to remain
relevant in a changing world.
Questions
1. Analyse the significant issues in the case. Was Anita right in ridiculing the marketing?
2. How has Anita Roddick positioned The Body Shop and maintained its identity with
social and environmental causes as a unique positioning approach?

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