Marketing Strategies Challenges Faced by the Body Shop in Thailand

Business

Breaking into the Asian Market:

The Marketing Strategies of the Body Shop and Its Competitors

We live in a global world. Technology, in particular television and the Internet, link together different peoples. They cross the barriers of oceans, mountains, and political frontiers. The decisions that governments make, the actions of environmental activists, and the marketing campaigns of large corporations affect hundreds of millions across the Planet. Time was when a retail operation consisted of a privately-run neighborhood store. The storeowner knew, and interacted with his customers. Goods and services were provided locally. Only rare or unusual objects needed to be imported from far away. The high costs of transportation and communication guaranteed that the horizons of our daily lives extended little further than the distances traversed by long familiar roads and byways.

Today, however, a fashion retailer can manufacture a man's suit in Malaysia or Thailand; ship it to New York, Los Angeles, London, or Paris, and sell it in the local mall for less than the fabric alone would cost the local tailor. Style too, cross international boundaries. Tastes and customs that were once the preserve of a few are now the delight of many. Asian consumers demand the same kinds of sneakers and shoes, lipsticks and creams, perfumes and soaps as their peers in the United States and the United Kingdom.

A company like the Body Shop - seller of a complete range of skin and hair care products - sees its potential market as global in extent. Operating a chain of stores throughout America and Europe, the Body Shop is now looking actively to expand into Asia. The Body Shop and its competitors - Bath and Body Works, Perfumania, Fragrance.net, and a host of drugstores and other body care retailers - see a common denominator. Health-conscious, appearance-conscious, upwardly-mobile individuals seek the same things the world over. These companies are united in the belief that shared ambitions and shared trends can be linked together to create the formula for global success. Yet, with global retailing expansion, come global retailing concerns: potential damage to the natural environment, intrusion on local traditions, and exploitation of workers and their families. This study will examine the "globalization" of the body care industry, with a special focus on the Body Shop and its efforts to establish a vital presence in the Kingdom of Thailand.

Globalization carries with it a multitude of social and economic costs. The drive to produce one's product more cheaply than the competition, the rush to purchase the cheapest possible raw materials, and the need to edge out rivals has serious consequences for both the home country of the manufacturer, and also for the various Third World nations that suddenly find themselves on the corporate map.

The notion that an integrated global economy has developed in recent decades has become part of the new common sense. It is widely believed that nations, firms, and individuals have no option but to adapt to the intensifying global competitive pressures or go under. Distinct national economies, it is claimed, have dissolved into the world system, and with them has gone the possibility of macroeconomic management by national governments. The new global system is driven by uncontrollable international market forces and is dominated by transnational companies that produce and sell wherever economic advantage dictates. States cannot govern world markets and if they are not to disadvantage their societies, they have to accept that the only role remaining to them is to help make their territory attractive to internationally mobile capital.

As a result of such views, many Third World nations have become home to a new generation of sweatshops where workers labor long hours at virtual starvation wages to produce the high-fashion consumer goods so in demand in the West and in the more affluent parts of Asia. Often, these workers are children.

Rather than concentrating production in their own hands and in one country, firms commission production from many independent sources in different countries at the lowest possible cost. Accenture Research has shown that, between 1997 and 2000, the typical large firm formed no fewer than 177 alliances with other companies.

These developments have led to globally integrated businesses in which national boundaries in business organizations have been dismantled in favor of business units organized by global product or service lines. In spite of its economic logic, it can make global business look remote and unaccountable, and blind to its impact on local communities and world society. It may also lead to businesses taking a blinkered, central view of the world, while at the same time making it difficult to take a holistic, long-term view of countries and markets.

Simply put, multinational corporations like the Body Shop locate their operations wherever it is most economically feasible to locate them. As financial costs are the overriding concern, there is often little interest in the operation's effect on local conditions. By the same token, a corporation will quickly move from one locale to another if it finds conditions better somewhere else. Not only do such enterprises give little thought to the impact that their presence has on the local culture and economy, but they give even less thought to the effects of their withdrawal from the community. Major corporations provide employment, and even sometimes healthcare, to workers in Developing Countries, but should a company suddenly move its operations elsewhere the local economy would be devastated and families ruined.

Yet the impact of these globalizing corporations is more than just a matter of economics.... [It is also] cultural, with many commentators expressing dismay at the effects of advanced capitalism, what Jerry Mander describes in The Case Against the Global Economy (1996) as the "global homogenization of culture, lifestyle, and levels of technological immersion, with the corresponding deterioration of local traditions and economies. Soon, every place will look and feel like every place else, with the same restaurants and hotels, the same clothes, the same malls and superstores, and the same streets crowded with cars" -what author Benjamin Barber has categorized as "McWorld."

All over the world, traditional ways-of-life are fast disappearing. Modern industry dramatically changes social relationships in any country to which it comes. Cultures are turned upside down. Much as the Body Shop, and Bath and Body Works, are themselves examples of the pervasiveness of Western consumer goods, they are also emblematic of a general Westernization of attitudes and cultural constructs. As non-Western peoples shed their traditional costumes and modes of adornment, in favor of "Papaya Body Butter," "Satsuma Splash," and ten milliliter bottles of "Calm Water Home Fragrance Oil," they also adopt Western attitudes toward family, gender roles, parent-child relationships, and significantly in many places, assume a far more secular worldview. The growing separateness of human beings from the natural world is a consequence of both the decline of traditional lifestyles and, the growth of a consumer-oriented outlook such as is typical of the Developed World.

A major factor in The Body Shop's success in the United States and Europe has been its pandering to very opposite trends from those described above. Reacting to the increasing commercialization, homogenization, and "artificialization" of the modern West, they have emphasized the "naturalness" of their products. All Body Shop products are made - so the labels - say from a variety of all-natural ingredients. These ingredients are typically herbal concoctions, many with exotic-sounding names and non-Western origins. Appeal is made to the pharmacopoeia of the "Mysterious East." Oils, butters, scrubs, and fragrances sound as if they've come straight from the rainforest, or from the time-honored cosmetic secrets of fresh-faced peasant women in carefree Southeast Asian villages. These are all excellent and valid marketing strategies, techniques well-calculated to appeal to consumers raised in a Western society. These are individuals who feel "cut off" from the world of nature. They feel isolated from their "animal" roots, and hemmed in by technology and science. Their homes are to be found amid the glass and steel of crowded cities, or in the sameness of sprawling suburbs. They believe that their environment is dangerously polluted, and that their bodies are filled with numberless toxins. The ancient mysteries of the rainforest, and of the shamans, and of the Feng Shui candle offer an escape into a simpler time and place - a wholesome, pristine world such as their ancestors knew, and Native villagers know still.

But what about in Thailand? Is the "typical" Thai consumer as susceptible to this kind of marketing as the typical Western consumer? Even in today's increasingly small world, can an essentially Western company actually establish a foothold in an eastern country - especially when so much of its appeal is to the exotic, the "Asian" or "Native" character of its merchandise. As part of its environmentally-friendly marketing strategy, the Body shop has also attempted to make an actual impact on the environment. In this case, the company is employing just a little bit of psychology, in making its patrons believe that they are actually helping clean up their environment by participating in the program (and buying Body shop products).

A program with a strong tie between requested social behavior and sales of the company's products, but that does not provide consumers with direct personal benefits from engaging in the social behavior, is the "Once is Not Enough" program of The Body Shop. This chain of franchised stores sells a line of naturally-based cosmetics and personal care products and has been urging customers to bring in their empty cosmetic containers for recycling or reuse. They pay 5 cents a piece for containers to be recycled and 25 cents a piece for containers that customers ask them to refill. Shop owners feel the program is successful, seeing that they hand out thousands of dollars in rebates each year. However, it would be impossible to determine how much social impact this campaign has had in reducing solid waste.

The success of a program of this kind depends necessarily on the target consumer's being aware of, and concerned about, environmental degradation. These concerns have become a part of the culture in the Developed World, but do these same factors influence purchasing habits in a developing country like Thailand?

Increasingly, as Thailand has become more industrialized, and more technologically advanced, it has seen its society become increasingly sensitive to the influences of Western nations, and also of Developed Asian states such as Japan and Singapore. Labor safety laws, public health policies, and environmental regulations, arise in part, from outside pressure. This is to say that, as Thailand, and other Developing nations participate more and more in the global marketplace, they find themselves increasingly becoming parties to international treaties and United Nations compacts. To a much greater extent than ever before, these agreements - the Kyoto Accords for example - endeavor to establish universal norms and standards. They also come from better education and from the increasing interconnectedness of the world's elites and middle classes, as described previously. Television and magazine advertising, and most especially, the Internet, have made Thai citizens more aware of the thinking of others. Many are now familiar with the causes and concerns of the West. The Thailand Council for Sustainable Business Development (TBCSD) is an umbrella organization encompassing more than fifty major companies in Thailand. Working under the supervision of the Thailand Environmental Institute, the TBCSD encourages environmentally-friendly manufacturing and businesses practices. Furthermore,

Corporations want to appeal to middle-class consumers who are increasingly environmentally concerned. Second, in the 1990s, the government began to enact more stringent environmental protection laws and regulations that the business sector must comply with. Third, requirements stemming from international trade and international organizations such as the World Trade Organization and the European Union shaped the environmental behavior of Thailand's export-oriented businesses. Finally, multinational corporations that operate in Thailand, by complying with environmental practices initiated by their headquarter offices, set examples for local businesses to follow in enhancing the latter's environmental record.

So, it seems that many Thai consumers do follow trends similar to those of their Western counterparts. In this case, appealing to the environmental instinct is a wise choice for the marketer. The Body Shop, and other businesses like it, would be very fortunate indeed if environmental woes were their only worry. There are, however, many other avenues of focus, such as those to which we have already alluded. Human culture is just as important a factor as ecological concern in determining purchasing preference. In fact, it is almost certainly even more significant than the latter criterion.

The preeminent importance of the culture factor can be adduced from the foregoing explanation of the development of environmentalism as a force to be reckoned with in the Kingdom of Thailand. If there had not been a cultural shift toward concern over the environment, organizations such as TBCSD would never have come into existence.

The reason for many of the difficulties encountered by retailers when they venture overseas is that they tend to export, wholesale and unchanged, a retail formula that is successful for them at home. This formula often features standalone business systems, static purchasing arrangements, and 100% ownership. While such an approach may work for a small number of retailers with truly unique and global concepts, it is not likely to succeed for the majority.

Relating to the Body Shop's ventures in places like Thailand, and also to the practices of other western corporations, Body Shop founder, Dame Anita Rodick, reiterated the company's devotion to fairness and to the protection of indigenous peoples and cultures. "She insisted local co-ops, tribes, families and other small-scale workforces need to be nurtured and protected from exploitation, enslavement, imprisonment and other human rights abuses," adding more colorfully, in her own words, "[It] deeply, deeply, deeply pisses me off... The way businesses run roughshod over indigenous communities." From the statements of its founder and guiding hand, Dame Rodick, there can be no doubt that the Body Shop is committed to pursuing a course that respects the rights of all the peoples whom it serves and with whom it deals, both Western and Non-Western.

II. Research Method

A. Introduction

Now that we have established the theory behind the Body Shop's marketing strategies, it is time to take a look at how these ideas apply in reality. According to Body Shop founder, Dame Anita Rodick, hers is a company that is committed to the equitable treatment of all peoples, and to a respect for the world's different and varied cultures. The Body Shop purports, as well, to care for the natural environment as much as it cares for the human i.e. cultural environment. Its products are made predominantly from herbal ingredients without the addition of any unnecessary artificial additives. The Body Shop's product line is, furthermore, designed to promote a "natural," "good-feeling" in those who use them. Thus, they are marketed, in effect, as agents in a kind of holistic therapy that is designed to help the individual rediscover her or his natural, true self, and so become more in tune with the unadulterated world of plants, animals - and Non-Western peoples - and, of course, with the changeless rhythms of the universe.