06 Mar 2018
This introductory chapter is divided into five subsections. Firstly, a brief background of the research will be presented. Thereafter, the problem discussion will be provided, which in turn will lead to the purpose and objectives of the research. Finally, the delimitations and summary of the dissertation will be set.
According to Kotler (2008), consumer behavior is the study of how people buy, what they buy, when they buy and why they buy. It is a subcategory of marketing that blends elements from psychology, sociology, socio psychology, anthropology and economics. It attempts to understand the buyer decision-making process, both individually and in groups. It studies characteristics of individual consumers such as demographics, psychographics, and behavioral variables in an attempt to understand people needs. He also stated that it also tries to assess influences on the consumer from group such as family friends, reference groups, and society in general for example while consumers purchase the shoe, then they go for family decision, comfort, satisfaction, price and quality (Kotler, 2008).
According to Baker (2002), consumers are not aware of the products and usage but constantly they are choosing among the various products. They are intentionally procuring the various new brands without any knowledge about the new products. Additionally if new company enters into the market, for every consumer it is very complicated to understand the features of the news products and this makes confusion among the consumers to obtain the information. For example: If one local company enters into the market then to increase the knowledge about the features of the new product, it will take long time for the consumers to recognise.
Baker (2004) stated that the consumer will respond according to the product quality and reliability, the fundamental understanding of products is necessary to understand the product features, products reliability and product benefits. The consumer is the end user for the product; consumers buy the products in market; in order to execute flourishing sales operations in the market an efficient distribution channel and networks are required for the organisations. He also stated that advertisement, distribution channels and networks play an important role in the consumer goods industry. Manufacturing companies, retailer and suppliers do not have an idea about the consumer behaviour in the local market. Thomas (2004) suggested that direct marketing activities should be left to the local market leaders, because the local market leaders have best idea of local market and local consumer behaviour.
In the current literature, there are two major approaches to studying consumer decision-making involving screening and choice. One approach is to extend the single-stage choice models by adding an explicit choice set from which the final choice is made (Swait & Adamowicz, 2001). Another approach studies the process of screening prior to choice (Teder, 2000). Understanding consumer decision-making is important. From a practical perspective, marketing managers are increasingly concerned that their products/brands may not be considered or chosen over those of their competitors. From a research perspective, a more representative model of the staged decision process may significantly improve our ability to predict consumer choices (Roberts & Lattin, 1991).
Recently, the growth of cosmetic industry in the global beauty market represents a slight slowdown due to a weakened economic state in the most developed markets and declining penetration of emerging markets. However, among the gloomy picture of the world's cosmetic industry, the Asian market emerges as the brightest star as according to the Euromonitor's report (2009), the Asia Pacific market's value is up to more than US$70 billion which is the second highest after the Western European market. Among the European markets, UK is the fastest growing market with the compound growth rate of fourteen percent over the period of 2000 to 2005. The economic growth of more than seven percent a year since 1990 could be the reason why the UK's cosmetic market has attracted a lot of the world's cosmetic leaders like Unilever, L'Oreal, Johnson & Johnson and P&G. These cosmetic companies' activities in UK help creating an exciting and competitive cosmetic market (Euromonitor, 2009).
Consumers' unique shopping patterns are developed and affected by socialization agents, which include family, peers, and the media. According to Lachance et. al (2003), these socialisation agents may often impact whether or not the adolescents will buy certain products or brands.. However Miller et.al (2003) claims that celebrity endorsements do not influence consumers' purchasing behaviour. In contrast Boyd and Shank (2004) maintain that consumers, particularly teenagers, are likely to select products or brands that are endorsed by celebrities.
Moreover, peers are likely to exert normative and informative influence. Lachance et. al, 2003 identified that they may influence the teenager's brand and product choices. Additionally, an individual is likely to conform to a group if he or she shares beliefs and norms with the group (Arnould et.al, 2004). Also, a group is likely to effectively exert influence on an individual if the individual is highly committed to the group (Hawkins et al, 2004).
The main reason behind chosen this topic is previous studies have not precisely conducted a focused investigation into the influence of peers and celebrities on fifteen to eighteen year-old females' purchasing behaviour in cosmetic products. Most researches on peer influence were conducted on general consumers with general products (Elliott and Leonard, 2004). Moreover, As for researcher, she always felt that “Consumer Buying Behaviour” is one of the most interesting subjects for her and as a female she thought to do a dissertation on the influence of celebrities endorsement on female teenagers would suitable for her to work on. Researcher did previous semester in LSC and she took a course on Research and Methodology (RM) which helped her to know the format of the research paper. Moreover her supervisor Dr.Fahad's motivation and encouragement had helped researcher to select this topic. Researcher have studied out many articles of Consumer Buying Behaviour and annual reports of different cosmetic company and tried to sort out a topic, which is going to be suitable for her dissertation according to supervisor's suggestion. This dissertation will help cosmetics firms and retail stores develop a precise marketing strategy to appeal to teenage consumers and to understand their purchasing behaviour.
According to the website of BHB (2009), beauty and cosmetics are not innovations of the 20th century. It is known from reports of old Egypt and the Roman Empire that people have ever since attached importance to a cultivated appearance. Numerous up to date studies prove that today more than 60 per cent of women really care much about beauty, cosmetics, skin and body care. Even men show an increasing interest and demand in products such as skin care cosmetics, creams or anti aging lotions.
To place and keep a cosmetic product successfully in the market, it is vital for companies active in manufacturing and selling cosmetics to have extensive scientific pharmaceutical and market research done. It is crucial for manufacturers of natural cosmetics or make up to know about consumer behaviour, trends and demands in the sector. Consumers might decide for a product because of its characteristics, its care factor, its sensitivity or its branding and attractive packaging. Cosmetics companies use the desires, senses and images consumers have or want to experience. More and more often, companies let celebrities and super models act as testimonials for fragrances, organic cosmetics or anti aging make up cosmetics. Colourful and exciting advertisements on TV, the internet or in print media tremendously influence consumer purchasing behaviour and desires. Packaging and the design of, for example, perfume bottles, let a cosmetics product appear even more desirable and trendy. This dissertation will focus on beauty products in order to help cosmetics industry and retail stores develop a precise marketing strategy to appeal to female teenagers and to understand their purchasing behaviour. Previous studies have not precisely conducted a focused investigation into the influence of peers and endorsers on fifteen to eighteen year-old males' purchasing behaviour in cosmetic products. Most researches on peer influence were conducted on general consumers with general products (Cited in Escalas and Bettman, 2003). However, some research has investigated this influence among children (Piacentini and Mailer, 2004). According to Klein (2001), teenagers are mostly influenced by friends and may not necessarily be influenced by celebrities. Additionally, no research has been conducted on symbolic consumption in relation to beauty products among the above-mentioned age groups. The researches were conducted on general consumers with general products (Piacentini and Mailer, 2004).
The purpose of this study is to investigate internal and external influences on teenagers' purchasing decisions on cosmetic products in London. This research also investigates that how celebrities influence the brand choice of teenagers' buying behaviour towards cosmetics in London market.
The key objectives of this study are outlined as follows:
The delimitations of a research study indicate its parameters; that is what the study will include and not include (Creswell, 2003). The scope of the study was limited to female consumers aged fifteen to eighteen living in the UK, specifically London city. This was due to time and budget constraints. In addition, the study only examines beauty products as opposed to general products. Further, the focus of the research was on symbolic consumption, peer groups and aspiration groups including beauty products endorsements rather than all internal and external influences.
Chapter 1: In this chapter mainly it talks about introduction of this dissertation, which also includes brief introduction of the topic, research background, rationale behind choose the topic, problem statement, aim and objectives and limitations of this research.
Chapter 2: The second chapter is the literature review of this dissertation concerned about, the works of various authors and scholars who have highlighted and discussed about the theories of consumer behaviour and celebrities endorsement from different dimension.
Chapter 3: This chapter will analyse the overall market overview of cosmetics products in UK
Chapter 4: This third chapter will discuss the research method used in this research paper. Research method allows the researcher to plan and design the whole research in a proper way and shows the right direction to achieve an outcome. So the chapter explains the reasons behind the use of selected research method and the advantages by using the specified research approach.
Chapter 5: This chapter discusses and analyses the market information and survey for the sake of the research. It also shows the data those have been gathered through interviews of customers, sales representative, and analyse the data to provide a fruitful meaning of the research finding.
Chapter 6: This chapter has been discussed the research recommendations, limitations, further research on this topic and also describe how managers can get benefit or managerial implications of this paper.
This chapter is the theoretical foundations that underpin this research study. In this chapter the theoretical framework relevant to dissertation purpose and questions will be presented. The chapter starts with a presentation of the brief discussion on consumer buying behavior, followed by purchase decision process and teenagers learning process and thereafter theories regarding factors influencing the purchase decision will be discussed. The following chapter presents the theoretical foundation of this research. The framework of the literature review is outlined.
Consumer behavior is the study of consumers as they exchange something of value for a product or service that satisfies their needs (Well & Prensky, 2003, p.5). The study of consumer behavior focuses on how individuals make decisions to spend their available resources (time, money, effort) on consumption related items (Schiffman & Kanuk, 2004, p.5). In short, the company should study and create the marketing campaign for their target group. But in the product life cycle, due to the consumer behavior the image, target audience or function of this product can be in change. This group of consumers have a diversity of needs, such as a need for belonging, independence, approval, and responsibility, as well as having the need for experimentation (Solomon et al. 2004). Teenagers are increasingly given the task of buying products for the family. They not only have more spare time but also enjoy shopping more than their parents do. For this reason, marketers are targeting their ads mainly at teenagers. To gain teenagers' attention more effectively, advertising campaigns must be honest, have clear messages, and used with humour. Moreover, teenagers tend to be inconsistent and are likely to switch brand preference quicker than any other age group, as they have a high need to be accepted by their friends (Blackwell et al. 2001). Finally, teenagers are “easier targets, because they have grown up in a culture of pure consumerism. Because of this, they are way more tuned into media because there is so much more media to be tuned into” (Bush et al. 2004, p. 109).
Teenagers enjoy advertisements; a McCann survey shows that 75% of a sample of mixed 15-25 year olds felt that advertising was entertaining and 68% said that they found it a useful source of ideas about what to buy (Piper, 1998). When youth's needs and desires are understood, marketers can show young consumers how products improve their lives. Harris Interactive, a Rochester, New York-based market research firm, estimates that teens spend on average $94.7 billion yearly ($3,309 per capita), while young adults between ages 20 and 21 spend $61.3 billion yearly ($7,389 per capita) (Schadelbauer, 2006). He also stated that interestingly, 69% of the U.S. youth respondents of one survey said that their parents pay their bills and they have little or no idea of who provides their telecommunications services or how much they cost. In the databases mentioned above, there are studies about ethical aspects of marketing to youth, whether regarding clothing, soft-drinks, cosmetics, technology, movies, records, food, and tapes exchange. Some companies use “cool” appeal in their advertisements. The young people distinguish themselves among social classes to the detriment of their “natural” behavior by purchasing “cool” products. Misleading advertisements change the behavior of young people and can affect them when they grow up. In the 1980s, Nike and Calvin Klein brands began to focus on brand capital rather than on products themselves. Now, the brand names become the objective of the purchase in itself (Bergadaa, 2007). In particular, cigarette and alcohol producers are criticized by those who say that they are marketing to immature consumers (Schadelbauer, 2006). According to the Keynote UK marketing report (2008), respondents were asked if they had used any so-called ‘celebrity' fragrances, as industry comment has been made on the popularity of such brands. Those who used fragrances endorsed by celebrities, who tended to be in the youngest age group, were most likely to have chosen Britney Spears's fragrance; others of popularity included the Beckhambranded fragrances, and the Jennifer Lopez and Kylie Minogue fragrances The report also stated that the retail chain The Perfume Shop names Stunning by Katie Price (the glamour model formerly known as Jordan) as its most popular female fragrance of 2007, with Shh by Jade Goody in second position and Coleen by Coleen McLoughlin (the celebrity girlfriend of Manchester United football superstar Wayne Rooney) in fourth place. The Fragrance Shop, meanwhile, lists Coleen, Curious (Britney Spears) and Kate (Kate Moss) among its ten bestselling women's brands in 2007.
Acoording to Shao (2006), the decision literature can be classified into three broad categories: 1) normative 2) behavioural, and 3) naturalistic. In this section the differences between the three different approaches to studying consumer decision behaviour is identified.
Normative Decision Theory originated in the economic discipline. According to Shao (2006), earliest researchers viewed decision-making as gambles and decision makers as “economic” men striving to maximise payoffs. The word ‘normative' describes how decision makers should behave in order to obtain maximum payoffs. Examples of Normative Decision Theory include Expected Utility Theory adapted by Neumann & Morgenstern (1947) and Subjective Expected Utility Theory adapted by Savage (1954) (Cited in Shao, 2006).
An important addition of the Expected Utility Theory is the Subjective Expected Utility Theory proposed by Savage (1954). The main difference between the two is that the former uses objective probabilities, while the final uses subjective probabilities. By substituting subjective probabilities for objective probabilities, Subjective Expected Utility Theory proposes that the decision maker may be uncertain about whether the various outcomes (payoffs) will actually occur if the option is chosen (Beach, 1997). On the other hand according to Schoemaker (1982), Normative Decision Theory is actually a family of theories and at their core is a rational decision maker. The implied decision process is a single-stage process of consistent calculations of the options' utilities. He also stated that consumer decision-making is a complex process. However, the normative assumptions are imposing an order on the complexity of decision-making (Beach, 1997). Over time, there has been growing discontent with the normative approach to studying consumer decision-making because the observed decision behaviour often violate the underlying assumptions of Normative Decision Theory.
Behavioural Decision Theory emerged when decision researchers observed that decision makers seldom make explicit tradeoffs, let alone explicit use of probability and their preferences are constructed, not invariant (Bettman et al., 1998). The rational decision maker depicted by Normative Decision Theory was challenged by Simon (1955) who argued that decision makers have only bounded rationality and is seeking to satisfy. He also argued that Normative Decision Theory put “severe demands upon the choosing organism and those consumers do not necessarily search for all available alternatives, but choose the first feasible alternative that exceeds a given amount of payoffs. However he also proposed classic Satisfying strategy that was employed on decision makers in complex choice situations” (Cited in Shao, 2006)
Naturalistic Decision Theory originated from the discipline of organisational behaviour. According to Shao (2006), many researchers have developed various naturalistic decision models based on their observations of how decisions are made by individuals in natural environments. For example, a decision maker such as a fire ground commander will first recognize the fire situation, generate a few potential plans of actions, use cognitive imagination to assess the appropriateness of each plan to controlling the fire, and then act on the plan that he believes is the most appropriate (Cited in Orasanu & Connolly, 2009).
The consumer decision making process consists of mainly five steps according to most researchers within the field (Peter and Olson 2005, p.169). They also stated that the steps included in the model are; need or problem recognition, information search, evaluation of alternatives, purchase and the post-purchase process. However, not all purchased require every step. Consumer can skip the evaluation of alternatives when considering low involvement products (Peter & Olson 2005, p.168). According to Hawkins et al. (2001, pp.26-27) there are more aspects than only decision making process that affect consumer behavior which are external and internal influences.
The consumer decision making process generally begins when the consumer identifies a consumption problem that needs to be solved (Hoyer & MacInnis, 2007, p. 195). Problem recognition is the perceived difference between an ideal and actual state. Ideal state is the way consumers would like a situation to be or the way they want to feel or be at the present time. An actual state is the way individuals perceive their feelings and situation to be at the present time (Hawkins et al., 2001, p.508). It can be said that consumer encounter the dissatisfaction or inconvenience situation and they would like to move to other preferable ones, problem is therefore recognized (Hawkins et al., 2001, p.508).
Once the problem is recognized, relevant information from the past experience or long term memory is used to determine if a satisfactory solution is known, this is called internal search (Hawkins et al., 2001, p.528) and if the solution cannot be found in internal search then the external information relevant to the problem will be sought. Normally after problem recognition has been stimulated, the consumer will usually begin the decision process to solve the problem, typically from internal search because each consumer has store in memory a variety of information, feelings and past experiences that can be recalled when making a decision (Hoyer & MacInnis, 2007, p.195). However, the stored memory can be decayed overtime, then they will be uncertain about their recalled information they will be engaged in external search, acquiring information from outside sources. According to Hoyer and MacInnis (2007, p.205), consumers can acquire information from five major categories of external sources such as from retailers, media, other people and independent sources, and by experiencing the product. After searching for appropriate evaluation criteria, the consumers would probable seek appropriate alternatives-in this case brands, or possibly stores. They also identified that brands are affected in internal search and external search. In the internal search, consumers recall the sets of brands from their memory wherever the problem recognition occurred. Normally two to eight brands are tended to recall at a time and if they cannot recall brands from memory, the set of external factors such as availability on the shelf or suggestion from salesperson will then affected consumers' purchasing. Additionally, well-known brands are more easily recalled during internal search than unfamiliar brands because the memory links associated with these brands tend to be stronger (Hoyer & MacInnis, 2007, pp. 203-204).
The next step in the process is an evaluation of the alternatives which consumer compares the available options and information that has been gather through the searching process (McCall et. al., 2002) and seem most likely to solve the problem. There are two methods that consumers use when evaluating alternatives, which are attribute-based choice, this choice requires the knowledge of the consumers to compare the attribute of each available alternative and tends to exploit more effort and time, thus to be rational in the evaluation. And the other method applied is attitude-based choice, this method occur when consumers use their emotion, such as attitude and impression, in their evaluation (Hawkins et al., 2001, pp.560-562).
Consumers evaluate the store's image such as merchandise, service, physical facilities, convenience, promotion, store atmosphere, institution and post-transaction factors and make a selection to purchase at that specific outlet. On the other aspect, amount of the purchase, it is common that the consumers enter to one outlet with an intention to buy a particular brand but leave the store with a different brand or additional items. This shows the influences operating in the store effect consumers purchasing decision (Hawkins et al., 2001, pp.609-618).
After purchase, the customers evaluate their level of satisfaction or dissatisfaction with the product. Buyer satisfaction is determined by how close the product's performance came to meet the buyer's product expectations (Hoyer & MacInnis, 2007). They also stated that consumers can experience dissonance (anxiety over whether the correct decision was made) or regret after a purchase (pp.272-273). One way of reducing dissonance is to search for additional information from sources such as experts and magazines. With searching for information to support and make the chosen alternative more attractive and the reject ones less attractive, thereby reducing dissonance (Hoyer & MacInnis, 2007, p.272). Additionally, information that supports the consumers' choice acts to bolster confidence in the correctness of the purchase decision (Hawkins et al., 2001, p.628).
Learning is a progression by which consumers systematize their knowledge and it evolved over time. Consumer's attitude and their future purchasing activities can be influenced by the learning process constantly. For gathering information from the stimuli in their environment consumers use their perceptual processes. According to Ganassali et.al (2009), consumer behaviour is approached by researchers adopting a variety of interpretative models and with a wide array of multidisciplinary frames, from economy to sociology, psychology and anthropology. According to East (1997), a shared perspective the different approaches to the understanding of consumer purchase decisions can be grouped.
According to Ganassali et.al, (2009), this one is deeply rooted in the economic science and assumes a sensible behaviour of the decision maker, based on the price of the goods and on its attitude to respond to functional needs. The critical variable under this approach is the availability of sufficient information about purchase alternatives (price, product functionalities) to support the decisional process. So, from this approach, a main block of determinants concerning product characteristics drives the buying process.
According to Foxall, 1990 cited in Ganassali et.al, (2009), this approach, the purchase decision is a response to external stimuli .The significant variable under this approach is which kind of external stimuli can influence purchase decision. From this second approach, a group of external determinants can influence the buying process, for example parents' opinions or ads exposure.
According to this approach, the present consumer decision aims at the construction of personal identity (Ganassali et.al, 2009). Following this idea, two main streams have been developed. One focuses on individual consumption decisions based on “emotional” explanation of consumer behaviour (Holbrook and Hirschman, 1982).
Ganassali et.al, (2009) also stated that the other stream concentrates on consumption as a means of social interaction, building on the pioneer sociological contribution of Veblen (1899 cited in Ganassali et.al, 2009). From both streams, the idea is that each prospective consumer has an individual internal value schema (based on internal emotions and external social interaction) that manipulates what he/she buys.
According to Solomon et al. (2004), teenagers are group of consumers that has a variety of needs. Such as, need for belonging, independence, approval, and responsibility, as well as having the need for experimentation. He also states that teenagers are increasingly given the task of buying products for the family. Since they not only have more spare time but also enjoy shopping more than their parents do. Therefore, marketers are targeting their ads primarily at teenagers. In order to gain teenagers' attention more effectively, advertising campaigns must be honest, have clear messages, and humorous. Moreover, teenagers tend to be fickle and are likely to switch brand preference quicker than any other age group, as they have a high need to be received by their friends (Blackwell et al. 2001).
According to Moschis and Moore (2001), as people grow up from childhood to adulthood, they obtain the skills, knowledge and attitude relevant to form purchase behaviour. The conceptual model of consumer socialisation presented in figure 2.5 demonstrates this. It claims that an individual learns from a socialisation agent through interaction and that changes his or her cognitive organisation with age. The socialisation agent (Churchill and Moschis, 1979), can be a family member, peers, teachers, the media, and media personalities like athletes, movies stars, and rock stars (Mowen and Minor, 1998). They can exert strong influences on the individual due to frequent interactions, superiority or control over rewards and punishments. The individual is influenced by the agent during the process of learning. However, this depends on the individual's cognitive development or life stage and structural variables, like status, sex, age, social class and religious background. Additionally, the individual will develop cognitions and behaviour, learning properties, which will form his or her consumer behaviour (Moschis and Moore, 2001).
In Moschis and Moore study on teenagers' decision-making (2001), it was found that for low involvement products young people depend largely on the mass media for information. The results of the study imply that socialisation agents may affect the consumer's decision-making cognitions. The study also found that low-involvement products are bought with peers rather than parents (Moschis and Moore, 2001). Furthermore, teenagers are more likely to stand on their evaluation on the brand name and the sale price in their buying decisions. Males are more motivated by social consumption and characterised by materialistic attitudes than females. This may be because status, power and respect are important among the peers (Churchill and Moschis, 1979).
Advertising informs consumers about the existence and benefits of products and services, and tries to persuade consumers to buy them (MacKenzie, 2004). Moreover, Kotler et al. (2005), claim that advertising aims at attaining target consumers to either think or respond to the product or brand. As a method of achieving advertisement goals, advertisements as well as their contents play an essential role in the process of commercial communication. More specifically, it is the advertised product and brand as well as the content of the advertisement that determine greater or lesser memory retention among the consumers (Royo-Vela, 2005). That is, to inform, persuade or remind. When introducing a new product category, informative advertising is heavily used where the objective is to build a primary demand, but as competition increases, persuasive advertising becomes more important. Here, the company's objective is to build selective demand for a brand by persuading consumers. That means it offers the best quality for their money. Reminder advertising, on the other hand, is employed for mature products as it keeps customers thinking about the product (Kotler et al. 2005).
Assael (1994) suggests that celebrity advertising is effective because of their ability to tap into consumers' symbolic association to aspirational reference groups. Such reference groups provide points of comparison through which the consumer may evaluate attitudes and behavior (Kamins 1990). Atkins and Block (1993) assert that celebrity advertising may be influential because celebrities are viewed as dynamic, with both attractive and likable qualities. Additionally, their fame is thought to attract attention to the product or service. However, in a study involving Edge disposable razor advertisements, Petty et.al (1983) found that under high involvement conditions, arguments but not celebrities influenced attitudes, whereas under low involvement conditions, celebrities but not arguments influenced attitudes. This suggests that celebrity influence may be related to the nature of the product rather than the person. Despite mixed findings, three factors seem to be associated with the degree to which celebrity advertising is effective: source credibility, celebrity knowledge and trustworthiness, and celebrity appearance.
Celebrity knowledge or expertise is defined as the perceived ability of the spokesperson to make valid assertions. The expert spokesperson seems most appropriate when advertising products and services that carry higher financial, performance, or physical risk while an ordinary consumer is considered best for low risk products or services (Atkin and Block, 1993). When celebrity spokespersons were viewed as experts in the product category, they were more liked (Buhr et.al 1987). Further, celebrity expertise tends to be highly correlated with believability and trustworthiness. However, not all the studies on physical attractiveness have found it to induce attitude changes. For example, Cooper et.al (1994) found that a deviant-appearing person, rather than an attractive person, was a more effective source of persuasion about income tax. Similarly, Maddox and Rogers (1990) found that "presence of arguments" and "expertise, influenced consumer attitude ratings toward sleep while "physical attractiveness" did not.
Previous research has shown that although various definitions of sponsorship exist, they all certify that sponsorship is primarily a commercial activity. It is where the sponsoring company gets the right to promote an association with the sponsored object in return for benefit (Polonsky et al. 2001). More specifically, Javalgi et al. (1994 p. 48) claim that “sponsorship is the underwriting of a special event to support corporate objectives by enhancing corporate image, increasing awareness of brands, or directly stimulating sales of products and services”.
Sponsorship activities are used for a number of reasons. Three of the most common objectives comprehend overall corporate communications, which include building and strengthening brand awareness, brand image, and corporate image (Gwinner et al. 1999). Strategies that are aimed at increasing brand recognition, are typically employed using a wide range of advertising tools which are designed to expose the sponsoring brand to as many potential customers as possible (Cornwell et al. 2001). More explicitly, event image can be transferred through association to the sponsoring product and is created from a number of external and internal factors as indicated in figure 2.5
Kotler defined a brand as “a name, term, sign, symbol, design-make or combination of these that identifies the maker or seller of the product or service” (Kotler 2008, p. 549). Moreover, consumers often use brands as non-verbal cues to communicate with their friends groups. Therefore, they choose brands they feel physically and psychologically comfortable with (Chernatony and McDonald, 1996). According to Nike, “brands are bigger than the products they represent” (cited in Haig 2004, p. 92). Branding itself conveys the quality of the product.
Loyal customers understand that the quality and service will be the same at every purchase. Brands like Apple, Nike and the BBC have strong brand power which links the business closely with the customers in a symbolic relationship (Ellwood, 2000). Some studies, have found Nike is children and teenagers' favourite sportswear brand (Elliott and Leonard's, 2004). Brand preference is very common with young consumers today. They seem to prefer brands they consider carrying images similar to their own self-image (Moschis and Moore, 2001). Furthermore, the choice of brand is particularly crucial to teenagers when its purchase will impact their image. A brand image will be the (Advertising Age, 2005), the intangible feature of the product. It is “the perceptions about a brand as reflected by the brand associations held in consumer memory” (Keller 2003, p. 66). Teenagers look up to the media and celebrities to pique their interest in new brands. But they will not purchase the brand just because their favourite celebrity uses it - they want validation from their peers. By contrast, if they notice a person they do not hope to emulate using a brand, they may form a negative image of the product or brand (Klein, 2001).
Recent research (Marketing Week, 2004a and 2004b) has found that teenagers in the UK are very focused on style and their appearances. Their aspirations are large and they are seeking to be loyal to sophisticated brands. But at present they are not loyal to individual brands. A research conducted by Wood (2004) found that eighteen to twenty four year old males consider price, brand, quality and the reputation of the brand when purchasing products, but not for all products. However, quality is by far the most important aspect sought by consumers when purchasing footwear (Marketing Week, 2004b). In Andreoli's (1996) study about the retail industry and teenagers, it was found that the dimensions indicated in Figure 2.6 makes a brand ‘cool' among teenagers. As can be seen in the table, quality takes the leading position.
Branding and brands provide a variety of benefits for both the firm and the consumer. From the firm's point of view, it is instrumental to build brand loyalty and brand equity. On the other hand, consumer can use the brand to communicate their identity in their social environment. As a result of a comprehensive analysis, the main areas of the study will be the present internal and external influences on the purchasing decisions of teenagers. Consumers who have used brand associations to construct their self-identities may be more brands loyal and less likely to switch to competitors' brands in response to price cuts, special displays, bundling tactics and coupons. To assess the effectiveness of a celebrity endorsement, all three elements must be taken into consideration celebrity image, brand image and consumer aspirations. Right use of Celebrity plays a vital role for the success of the brand along its advertising over the target market. Selection of Celebrity requires a detailed study to predict its affects on the target market. Companies must have to conduct the complete research process before the selection of the Celebrity for their desired association with the product, especially in Fast Moving Consumer Goods (FMCG) celebrities' selection which becomes more critical (Advertising age, 2005).
The use of products or brands in the development of self-identity and self-concept is known as symbolic consumption. According to Belk (2000), an individual's material possessions are essential in forming their identity. He claimed that, “our fragile sense of self needs support and this we get by having and possessing things. It is because, to a large degree, we are what we have and possess” (p. 139). Therefore, consumers use symbolic consumption internally, to prove comfort; and externally, to signal others who they are and what group they belong to (Piacentini and Mailer, 2004). According to Mowen and Minor (1998), the symbolic personality of a product is essential in forming an individual's self-image, which is illustrated in figure 2.6. In the first step, the individual purchases a product that conveys his or her self-concept to significant others such as reference groups. In the second step, he or she anticipates a positive discernment of the symbolic character of the product by his or her audience. In the final step, the individual anticipates the audiences' perception of him or her to be very similar to the qualities of the product (Mowen and Minor, 1998).
Consumption symbols are significant to young people because of their uncertainty phases, insecurity and their collection of material ownership. They want to increase their standing and self-esteem and feel a need to create, foster and develop their identity (Hyatt, 1992). Moreover, they put a great deal of importance in fitting in within a group by wearing clothes that symbolise the connection between them and they wish acceptance from the group. Also, they may use clothes and brands to prevent social punishment (Piacentini and Mailer 2004), “keep up with the joneses” in school and signal to others that they are not underprivileged (Piacentini and Mailer 2004). Conversely, they may reject a product choice if it's symbolic meaning is dissimilar to those of their group (Elliott and Wattanasauwan, 1998). The self-concept theory explains how an individual's personality construction is influenced by their social condition. Hawkins et.al (2004) pointed out that an individual's self-concept is formed from childhood. They defined self-concept as “the totality of the individual's thoughts and feelings having reference to him- or herself as an object” (p. 442). And he claimed there is a connection between clothing and self-concept. An individual's personality is to behave consistently with his or her self-concept in order to increase, maintain or improve his or her self-esteem and self-image as well as to predict interactions with others (Mowen and Minor, 1998).
This theory is known as the image congruence hypothesis (Anould et. al 2004). Clothing is an example of self-image and product- or brand-image comparison. It is conspicuous, variable and has personality (Mowen and Minor, 1998). According to literature (Solomon, 2004, and Mowen and Minor 1998), we have multiple self-concepts comprising a compilation of images, activities, goals, feelings, roles, traits and values (Anould et. al, 2004); these are identified in table 2.1
Actual self:
How a person actually perceives him or herself.
Ideal self:
How a person would like to perceive him or herself.
Social self:
How a person thinks others perceive him or her.
Ideal social self:
How a person would like others to perceive him or her.
Expected self:
An image of self somewhere in between the actual and ideal selves.
Situational self:
A person's self-image in a specific situation.
Extended self:
A person's self-concept that includes the impact of personal possessions on self-image.
Possible selves:
What a person would like to become, could become, or is afraid of becoming.
People's self-concept is affected by their communication with others (Solomon, 2004). The theory implies that people behave in ways that define, maintain and enhance their self-concept. They do this through purchase and use of products and brands that are comparable to their self-concept (Escalas and Bettman, 2003)
An individual can articulate his or her personality by being their actual selves. Or they can do it by behaving in a way that will reposition them nearer to their ideal selves and enhance their confidence (Asseal 2004). This is usually done through the use of brands (Mowen and Minor, 1998). However, the lower the self-esteem level (Asseal, 2004) the higher the influence of purchases of products that can boost self-esteem (Solomon et.al, 2004). He also state that the actual self is comparable to psychoanalytic theory of the ego and the ideal self is linked to the superego. However, our relationship with other people influences the creation of our self to a large extent. The Social self is a ‘looking-glass self,' which means that reference groups allow us to compare and evaluate our own attitudes and behaviour (Arnould 2004).
Furthermore Arnould (2004) included in his book that most importantly, it is created by the mirrored views of others and it depends on those opinions the individual consumer is reflecting on. The looking-glass self occurs with purchase or use of status products, conspicuous products or greatly advertised goods. The possession of these products may become so imperative that they form part of the individual's extended selves (Hawkins et al 2004). Naturally, the more conspicuous a product is, the more probable the individual's choices will be. It can be influenced by other socially significant, particularly in a situation of high perceived social risk. This concept is illustrated in figure 2.9
In Bearden and Etzel's (1981 cited in Solomon, 2004) research on reference group influences on products and brands. It was found that public necessities, such as cars, clothes, wristwatches and so forth, were perceived as involving more value-expressive and utilitarian influence than private necessities. It is because of fear of embarrassment for not possessing products or brands that were required. Also, brand decisions for public products entails less informational influences than private product.
A reference group is a group used by an individual as a point of reference to evaluate correctness of his or her own actions, beliefs and attitudes (Mowen and Minor, 1998). It is “a group of people that significantly influences an individual's behaviour” (Bearden and Tezel 1981 cited in Solomon et.al, 2004). Most people belong to a number of different groups and aspire to belong to several others (Hawkins et.al, 2004). In fact, a reference group can play an important role in an individual's purchasing decisions, in terms of product and brand choice. This influence depends on three factors. They are: the individual's attitude towards the group, the nature of the group, and the nature of the product (Hawkins et al, 2004). Furthermore, it is usual for consumers to compare their attitudes with other members of key groups as to determine which groups to support (Bachman et al, 2003). This comparative influence is a process of self-maintenance and enrichment (Asseal, 2004). He also state that referent power is used here and the individual's aim is to boost his or her self-concept through the associations with the group. It enables the consumer to reinforce him or herself and establish a satisfied ego. An individual's tendency to conform to others with regards to influence of purchase decisions may be dependent on the social situation. This is demonstrated in figure 2.10. An individual with low tendency of conforming is inclined to make anticipated purchases whether shopping alone or with others. On the contrary, individuals with high tendency of conforming are predisposed to make more alterations in their purchase plans whilst shopping with others (Mowen and Minor, 1998).
Young people are usually members of informal primary groups. These groups usually consist of friends at school or leisure. These group members exert a high degree of influence because there is frequent interpersonal contact. It is in these primary groups that consumers develop product beliefs, tastes and preferences and it is the most important groups to marketers (Hawkins et al, 2004). Additionally, there are groups that an individual may admire and wish to belong to. But the likelihood of belonging to these groups is low though the individual accepts the beliefs and values of the group. Marketers commonly use celebrities in their advertisements as symbolic aspiration groups (Asseal, 2004). Mowen and Minor (1998) argued that an important reference group is the aspiration group, so this group is essential to marketers in marketing communications.
Teenagers usually point peers as their primary social agents (Bachman et al 2003). This is because, as they approach early-adulthood they become uncertain about their self and the need to belong. According to Arnould et al, (2004) consumers acquire needs reflecting the social and psychological needs. That may occur as a consequence of their psychological condition and interaction with others. Common examples of these needs are autonomy, prestige and need for recognition from friends. Additionally, Abraham Maslow's hierarchy of needs, claim that people purchase clothes due to belongingness motives as they have a desire for love, friendship, affiliation and group acceptance (Arnould et al, 2004). Conformity to peer pressure is considered to be another of the hallmarks of adolescent behaviour. The peers provide informative or normative influences (Lachance et. al, 2003). Therefore, he also states that peers are the most important agents in the development and establishment of brand sensitivity in clothing among adolescents. For example, branded clothes and sport shoes, due their conspicuousness, are prerequisite condition in social interaction and peer acceptance (Lachance et. al, 2003).
The most important aspiration groups to marketers are symbolic aspiration groups. According to Picton and Broderick (2005), they use celebrity endorsers to create an emotional connection between the consumers and the advertisements. This form of group influence is very common in Western cultures. It is because in that culture consumers frequently search to gain power, status, prestige and money (Klein, 2001). As mentioned earlier, a referent power is high when the individual identifies and shares beliefs and attitudes with the members of the group. However, the individual does not have to belong to the group to experience referent power (Asseal, 2004).
According to the Scottish Daily Record (17th October 2007), around one in five young adults in the UK use a fragrance endorsed by a celebrity, of which there were at least 30 new introductions in 2007 alone. The popularity of scents such as Stunning by Katie Price, Stella by Stella McCartney and Mystery by Naomi Campbell has boosted retail sales significantly, particularly as celebrity-endorsed fragrances tend to be modestly priced in comparison with the top-of-the-range brands. This encourages multi-buys and trading up, rather than stealing market share from premium-priced fine fragrance (Keynote, 2008).
However, as is the case with decorative cosmetics, the distinction between premium and mass market products is becoming blurred, in part due to the influx of ‘celebrity' male and female fragrances endorsed by the likes of David and Victoria Beckham, Jennifer Lopez, Britney Spears and Kylie Minogue. Although these perfumes are marketed as premium fragrances, their price is modest in comparison with the more classical brands (Keynote, 2008).
According to the Datamonitor (2009), As in other areas of consumer goods and services, the supermarkets are increasingly encroaching on the cosmetics market. Avoiding selling the big name beauty brands (although larger Tesco stores also offer staffed beauty counters selling discounted premium brands such as Clarins and Vichy), chains such as ASDA, Tesco, Waitrose and Sainsbury's stock their own exclusive ranges at reasonable prices. However, just because they are reasonably priced does not necessarily make them inferior, since the multiple grocers have the funds to utilise the skills of beauty experts. Tesco, for example, has exclusive ranges by celebrity make-up artists Barbara Daly and Bharti Vyas. However, it also has its own All About Face value range.
Moreover, Coty also owns the mass-market brand of Rimmel, acquired in 1996. Its best selling fragrance brand is Calvin Klein while its portfolio of fragrances also includes Cerruti, Chopard and Joop! Coty is synonymous with celebrity fragrances producing, among others, scents licensed with the names of Kylie Minogue, David and Victoria Beckham, Jennifer Lopez and Sarah Jessica Parker.
According to Peetz et.al (2004), an athlete endorsement will be effective when a meaning is successfully transferred from the athlete to the product and finally to the consumer. This is inspired by the ‘transfer meaning model.' which claims that people transfer an athlete's attached meanings (e.g. success, invincibility) to the product (Belch & Belch, 1998). There are three stages in which the transfer can occur.
A study about general consumers found that celebrities do not influence consumers purchasing decisions (Bashford, 2001). Another study found that generation Y consumers (people born after 1978) are not influenced by cosmetics and fragrance endorsements regardless of their heroism status (Veltri et al, 2003). A cosmetics and fragrance endorsement is most effective when the target market is female and the celebrity is female and the product is cosmetic and fragrance related.
After analyzing the theories of consumer buying behavior it can be seen that consumer buying behavior has become one of the most important research agendas in the business today. It has become equally important marketing and sales channels and compensate in delivering products and services. This literature review section examined several major factors that have been believed to determine consumer behavior. In order to meet the research objectives, the paper has evaluated the key factors that influence the consumer purchase decision. The critical analysis of this chapter showed that recently, a spate of highly successful ‘celebrity' cosmetics has helped the value of the market in UK. They tend to be more expensive than mass-market scents but more modestly priced than classic brands, and have been responsible for consumers trading up, at the expense of cheaper products, rather than cannibalising sales of premium products. It remains to be seen if the seemingly unstoppable introduction of such fragrances continues to be as successful, and lucrative, as it has been to date. One of the most common ways of attempting to influence consumers is through celebrities as they belong to a group the consumer might aspire to. However, advertising play an important role in influencing teenagers, especially the influence of branding, sponsorship and peers group on advertisement is greatly affected in consumer mind. Additionally, teenagers may use a brand or product to communicate their identity or actual self to others.
Before proceeding to the data analysis and findings chapter, information regarding cosmetic industry, UK cosmetic industry, cosmetic market overview and also the PEST and SWOT analysis in order to indentify the changes of business, are presented so that the readers would have overview regarding the industry and UK market.
According to Euromonitor's just released 2008 cosmetics and toiletries data, the global cosmetics and toiletries market experienced another year of strong growth in 2007, registering six percent growth over 2006. However, in comparison to Euromonitor International's 2006 figures, the growth in the global beauty market represents only a slight slowdown, which may be attributed to a weakened economic state in most developed markets and declining penetration of emerging markets (Perez, 2008).
To maintain the high developing growth, beside the familiar markets like the Western Europe or United States, the cosmetic companies should increase the penetration into the emerging markets. Western Europe is considered as a strong candidate. It is because Western Europe has the highest market performance than other emerging market as Asia pacific, Latin America or Middle East according to Euromonitor.
Among the emerging markets in Western Europe, United Kingdom is a strong candidate. It is because UK has the third highest market performance than other emerging market in Western Europe as showed in the figure below according to Key note market plus report 2008. The diversified multinational companies Unilever and Procter & Gamble (P&G) are dominant in the global market for cosmetics and toiletries, while Coty and Estée Lauder are at the forefront of the fragrance sector and L'Oréal is the leading brand in make-up and skincare in UK. According to the European Cosmetic, Toiletry and Perfumery Association (COLIPA), the retail value of fragrances and perfumes in Western Europe grew by 4.6% from 2005 to 2006, while growth in that of decorative cosmetics was stronger still, at 5.9%.
Cosmetic is a product a substance used to beautify people's appearance. The definition and coverage of the word cosmetic is very wide. According to Euromonitor, the cosmetic and toiletries in Western Europe region is divided in 11 categories which are baby care, bath and shower products, deodorants, hair care, color cosmetic, men's grooming products, oral hygiene, fragrances, skin care, depilatories and sun care. In this thesis the cosmetics category is focused because it contains the highest volume as of US$ 22955.3 million from the whole industry as of US$ 63117.3million. The value of the skin cosmetics comparing with the whole cosmetic and toiletries is 34percent (Davies, 2007). As a result, collection data and analysis of data presenting in the following chapter are focus cosmetics products in UK market. It is because UK cosmetic market has a high growth and the skin care sector is accounted for one-third of the market. Colour cosmetic products are primarily designed for adornment, although, increasingly, they are also making more scientific claims which containing ingredients that reverse or delay signs of ageing, for example. These cosmeceuticals are clinical strength skincare products that claim to make a visible difference to the skin, lifting wrinkles and removing blemishes, spider veins, etc.
For the purposes of this report, cosmetic products include:
The total market for decorative cosmetics and fragrances, as covered by this Key Note Market Report Plus 2008, was valued at £1.9bn in 2007, representing an increase of 6.3% on the previous year. Decorative cosmetics showed stronger growth than fragrances, both in 2007 and over the period from 2003 to 2007 as a whole illustrated.
According to Keynote (2008), the decorative cosmetics sector was worth £1.03bn in 2007, having increased in value by 9.6% from the previous year.
Face make-up accounted for the largest value share of the decorative cosmetics sector at 41% in 2007, increased from 40.1% in 2006. Growth continues to be driven by innovations in formulations, particularly those promising anti-ageing properties. Although the distinction between premium and mass-market facial care is becoming increasingly blurred, the vast majority of the value of retail sales comes from products perceived as premium by their price, manufacturer, image and method of distribution (Keynote, 2008). Eye make-up includes mascaras, eye shadows, pencils and kohls, sales of which accounted for 30.1% of the value of decorative cosmetic sales in 2007, having increased in value by 1.4% from the previous year. Mascara is the largest subsector, accounting for more than half of the value of make-up (Keynote, 2008).
Retail sales of lipsticks and glosses, etc. accounted for 22.5% of the value of total sales of decorative cosmetics in 2007. Although the sales value of lip products had increased since 2006, this growth was at a slower rate than other categories of decorative cosmetics and thus they contributed a smaller percentage to the total. Accounting for 6.4% of the total decorative cosmetics sector, retail sales of nail products were valued at £66m in 2007, having increased in value by 1.5% since the year before. Although such growth was modest compared with other product subsectors of decorative cosmetics, it was nevertheless an improvement on 2006, when the sales value had declined from the previous year. It is a product subsector that regularly suffers adverse publicity surrounding possible health hazards from ingredients commonly found in nail polish and polish remover, which may affect volume sales. Sales of what are commonly perceived as fine fragrances account for more than four-fifths by value, and one-third by volume, of the fragrances sector. However, as is the case with decorative cosmetics, the distinction between premium and mass market products is becoming blurred, in part due to the influx of ‘celebrity' male and female fragrances endorsed by the likes of David and Victoria Beckham, Jennifer Lopez, Britney Spears and Kylie Minogue. Although these perfumes are marketed as premium fragrances, their price is modest in comparison with the more classical brands (Keynote, 2008).
The direction and constancy of political factors are the major contemplation for managers on formulating company strategy (Pearce & Robinson, 2005). Political process and legislation influence the environmental regulations with which industries must abide by (Taylor, Lumpkin and Dress, 2005). Political constraints are placed on firms through regulatory bodies and processes, government policies, government term and change, trading policies, funding, grants and initiatives, home market lobbying/pressure groups, international pressure groups, wars and conflict etc (Businessball, 2009). For example, the EU Commission proposal for a “Cosmetics Regulation” was adopted on 5 February 2008 with the primary aim to remove legal uncertainties and inconsistencies as highlighted by the large number of amendments and the complete absence of any set of definitions. Several measures are included to facilitate management of the Cosmetics Directive with regard to implementing measures. In addition, the aim of the simplification is to avoid divergences in the incorporation of the provisions of the EU directive into a Member State's domestic law ensuring the product safety and avoiding additional regulatory burden and administrative costs (Frost and Sullivan, 2009).
Economic factors concern the nature and direction of the economy where the firms are operating their activities (Pearce & Robinson, 2005). The economy has a significant impact on all industries from suppliers of raw materials and manufactures of finished goods and service as well as all organisational stakeholders. Key economic indicators include interest rates, unemployment rates, income level, inflation, balance of payment, the
Then shoot us a message on Whatsapp, WeChat or Gmail. We are available 24/7 to assist you.
We know how critical is the final-year dissertation for a student. Check out how we help students in passing the final year.
Now! moonlight your way to A+ grade academic success. Get the high-quality work - or your money back.
Our experts are ready to assist you, call us to get a free quote or order now to get succeed in your academics writing.
