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Unit 5: Market Positioning

with performance in almost all European, North American, and Far Eastern markets Notes
stagnant.
Yes, everybody recognized that Anita Roddick has been the dynamo behind The Body
Shop’s success. From a small single outlet, she inspired and managed the growth of the
chain to some 1500 familiar green-fronted establishments in 46 countries around the
world. Yet, until the late 1990s, she continued to boast that The Body Shop had never used,
or needed, marketing. Much of the company’s success has been tied to its promotional
approach by campaigning for the pursuit of social and environmental issues. But while
Roddick campaigned for everything from physical torture of wives and Siberian tigers to
the poverty-stricken mining communities of Southern Appalachia, the company was facing
major problems in all its key markets.
Part of the problem of The Body Shop was its failure to fully comprehend the dynamics of
its market place. Positioning on the basis of good causes may have been enough to launch
the company into the public mind in the 1970s, but what it now needed was a sustainable
long-term positioning. Other companies soon launched similar initiatives. For example,
the Boots Pure Drug Company matched one of The Body Shop’s earliest claims that it did
not test its products on animals. Competitors had copied even the very feel of The Body
Shop store that included its décor, staff, and product displays. How could the company
stay ahead in terms of maintaining its distinctive positioning when many others had
similar differentiation? Its causes seemed to become increasingly remote from the real
concerns of shoppers. While most shoppers in UK may have been swayed by a company’s
unique claim to protect animals, it is not clear how many would be moved by its support
for Appalachian miners? If there was a Boots or Superdrug store next door, why should a
buyer shell out a premium price to buy from The Body Shop? The Body Shop may have
pioneered a very clever business launching formula over twenty-five years ago, but the
concept had been successfully copied by others. And these other companies had made
enormous strides in terms of their social and environmental concerns and awareness.
Part of the company’s problem has been blamed on the inability of Roddick to delegate.
She is reported to have spent almost half of her time globetrotting in propagating support
of her good causes, but did have a problem in delegating marketing strategy and
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 & Spencer 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.

Contd...

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