Chapter 1: Introduction
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.
1.1 Research Background
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).
1.2 Reason Behind Choose the Topic
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.
1.3 Research Problem
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).
1.4 Research Aim and Objectives
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:
- To investigate how consumer buying behaviour factors influence female teenagers when purchasing cosmetic products.
- To explore the role of peers and celebrities and their influence on female teenagers’ purchasing decisions of cosmetic product.
- To analyse how celebrities influence the brand choice of youth females’ buying behaviour towards cosmetic products in London market.
- To give recommendation and conclusion.
1.5 Research Limitations
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.
1.6 Structure of the Dissertation
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.
Chapter 2: Literature Review
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.
2.1 Consumer behavior
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.
2.2 Consumer Decision making theories
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.
2.2.1 Normative decision theory
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.
2.2.2 Behavioural 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)
2.2.3 Naturalistic decision theory
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).
2.3 The Buying Decision Process
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.
2.3.1 Problem recognition
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).
2.3.2 Information search
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).
2.3.3 Evaluation of alternatives
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).
2.3.4 Purchase decision
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).
2.3.5 Post purchase behavior
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).
2.4 Consumer Learning Process
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.
2.4.1 Cognitive approach
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.
2.4.2 External conditioning approach
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.
2.4.3 Experience social interaction approach
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.
2.5 Teenage Learning Process for Shopping
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).
2.6 Influencing Factors of Purchase Decision
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