The Body Shop's e-commerce strategy in South Korea

Body Shop

Humor in the Workplace

The Body Shop in South Korea

Electronic commerce presents a series of opportunities for companies, especially when addressing new markets, opportunities that can be exploited in order to generate income. In the case of The Body Shop, the website can become very important in building a strong image for the company, given the fact that consumers worldwide have the possibility to access valuable information regarding the company's products and services, and its values and campaigns, also.

However, the simple development of an online strategy does not suffice for achieving success in a new market. The online strategy must address the specific characteristics of the market in case, instead in addressing it on a global level.

Theories of E-commerce

General E-commerce marketing strategies

Each business uses a different marketing strategy, or a combination of strategies that is most suitable for the situation in case, the targeted segment of customers, and the conditions of the market it addresses. The most important e-commerce marketing strategies used by companies include multi-channel marketing, interactive channels with customers, revenue model, value proposition, customer behavior theory, loyalty, localization theory and others.

Multi-channel marketing is probably one of the strategies preferred by companies because of the benefits it provides. The method consists in using several different marketing channels through which the customer can be influenced. Such channels include traditional stores, electronic shops, mail order catalogue, or direct communication with the customer.

This way, the customer can choose the purchasing means that is most comfortable for him. The method is also efficient for the company, which selects the channel that costs less and produces the most effects in terms of sales (McKinsey, 2000).

The revenue model applied for online businesses is developed in order to generate income from the use of the Internet. There are several forms of application for the revenue model in the case of e-commerce, like: revenue from subscription access to content, revenue from Pay Per View access to documents, revenue from CPM display advertising on site, revenues from CPC advertising on site, revenue from sponsorship of site sections or content types, affiliate revenue, subscriber data access for email marketing, access to customers for online research (Chaffey, 2009).

Another marketing strategy used in the case of online businesses is represented by value proposition. This method consists in analyzing and quantifying the advantages, the costs, and the value that the business in case can produce for its customers and other stakeholders. Other stakeholders addressed by this strategy include business partners, the company's employees, and suppliers (Investopedia, 2009).

Characteristics

The Body Shop's image was built on a series of values that helped the company to orient towards a growing segment of customers and to build an international image. These values include activating self-esteem for the company's existing and potential customers, positioning against animal testing, supporting community trade, protecting the planet, and defending human rights (The Body Shop, 2009). These values that compose The Body Shop's image have attracted a series of loyal consumers worldwide, and the company's strategy for South Korea is also based on promoting these values.

Marketing Strategies for the Body Shop in South Korea

As mentioned above, The Body Shop will develop its marketing strategy in addressing the South Korean market on consumer behavior and localization strategy. These strategies are considered by the company as the most suitable ones in order to better exploit this new market, and to satisfy consumers at the same time.

Regarding the consumer behavior strategy, The Body Shop must follow all the stages of the process in order to develop a successful marketing strategy. The information search is very important in addressing a new market, especially the South Korean one. This is because the consumer awareness on this market regarding The Body Shop and its products is quite moderate. Potential customers lack sufficient information on the company's products and benefits.

Also, the brand is not sufficiently distinct from its competitors on the South Korean market. In other words, consumers in this region are not very much aware of the difference between The Body Shop and other cosmetics producers, and between the advantages provided by the company's products.

Another obstacle that may influence the company's efforts in this region is represented by the fact that in South Korea public information is almost non-existent without social campaigns. This means that the company will have to increase its efforts in addressing this market.

Also, the lack of strong customer loyalty represents an obstacle that will have to be counteracted by The Body Shop in order to develop a significant customer base that the company can count on.

The information evaluation stage of the process did not prove to be encouraging for The Body Shop. This is because in this market consumers do not tend to be enthusiastic for certain products, the prices are not differentiated, the products' function and utility are also differentiated, while the psychological advantages can be considered negligible.

Given the circumstances, The Body Shop must exploit the opportunities provided by the purchase decision stage of the strategy. In order to influence consumers' purchase decision in The Body Shop's favor, the company provides an online payment secure system, online discounts and sales, gift wrapping and delivery services.

The post-purchase evaluation does not favor The Body Shop. Consumers do not benefit from online or offline services after purchase, the offline return policy is a standard one. Even more, online returns incur consumer costs.

The Body Shop has also decided to implement a localization strategy in addressing the South Korean market. The company's online strategy on local level presumes that potential consumers must have a membership account in order to purchase the products in case. This may prove to be quite discouraging for some of the customers.

The website only provides a limited number of products. This might also discourage some of the customers to address The Body Shop's traditional stores, also. The online strategy also presumes that values and campaigns are not displayed. All these aspects of the online strategy are the opposite of the aspects addressed by the U.S. online strategy.

The situation is quite the opposite with The Body Shop's offline strategy. In this case, the store layout and appearance is the same as in other regions of the world. The products and packaging are also uniform. The products' prices in South Korea are comparable to those in the U.S. And the U.K. The advertising campaign does not differ from that in other countries, since it is integrated in the company's global marketing strategy.

Recommendations

Regarding the consumer behavior strategy, it is recommended that The Body Shop implements a marketing approach that is more centered on competitive advantage. The company did not manage to distinguish its competitive advantage. The Body Shop is not sufficiently differentiated from other cosmetics producers that also address the South Korean market.

It is also recommended that the company analyzes consumers' needs that have not yet been addressed by their competitors. Such situations present opportunities that can be exploited by the company in order to gain more customers.

Regarding the website strategy and its relation with the localization theory, it is recommended that the company's website is active enough in educating and informing consumers about the company's social values and campaigns. In addition to this, the website should provide significant information regarding future campaigns and their objectives.

Given the fact that consumer feedback is very important, the website should encourage discussions and postings regarding consumers' needs and other aspects that The Body Shop should address.

Conclusions

It is obvious that The Body Shop did not manage to differentiate itself enough from its competitors on the South Korean market. The company did create significant competitive advantage that could be exploited in order to generate increased incomes.

The online dimension of the company seems to discourage some of the customers. In comparison to other countries, the online strategy in South Korea requires that consumers must have membership accounts in order to purchase the company's products, in addition to other disadvantages.

The Body Shop did not develop a marketing strategy for the South Korean market. Instead, the strategy for this market was part of the company's global marketing campaign. As a consequence, The Body Shop did not differentiate itself from its competitors.

Reference list:

1. Multi-Channel Marketing. Making Bricks and Clicks Stick (2000). McKinsey Marketing Solutions. Retrieved December 7, 2009 from http://www.mckinsey.com/practices/retail/knowledge/articles/Multichannelmarketing.pdf.

2. Chaffey, D. (2009). Online revenue models and business models. Retrieved December 7, 2009 from http://www.davechaffey.com/Internet-Marketing/C2-Internet-micro-environment/Online-revenue-models.

3. Value Proposition (2009). Investopedia. Retrieved December 7, 2009 from http://www.investopedia.com/terms/v/valueproposition.asp.

4. Perner, L. (2009). Consumer Behavior: The Psychology of Marketing. University of Southern California. Retrieved December 7, 2009 from http://www.consumerpsychologist.com/.

5. Graham, F. & Isaac, A.G. (2009). The Beavioral Life-Cycle Theory of Consumer Behavior

6. Theory of Consumer Behavior (2005). McGraw -- Hill. Retrieved December 7, 2009 from http://www.cu.edu.tr/insanlar/nerk/Dersler/ECON203Pof/MicroPPT/Chap008.PPT#318,13,Slide 13.

7. Armstrong, S.J. (2004). Most Influential Theories in Consumer Behavior or Most Useful Findings? ELMAR. Retrieved December 7, 2009 from http://marketing.wharton.upenn.edu/people/faculty/armstrong/ELMAR/MostInfluentialTheoriesinConsumerBehaviorOr.pdf.

8. Values and campaigns (2009). The Body Shop. Retrieved December 7, 2009 from http://www.thebodyshop.com/_en/_ww/values-campaigns/index.aspx.