UK Skin Care Market - Assignment Example

UK Skin Care Market By Table of Contents Table of Contents 2 Introduction 3 1 Background and Problem of the Study 3 2 Purpose of the Study 3 1.3 Delimitation of the Study 4 1.4 Objectives of the Study 4 2 LITERATURE REVIEW 4 2.1 Overview on the UK 4 2.2 Skin Care Market in the UK 4 2.3 Brand Loyalty 5 2.4 Factors of Brand Loyalty 6 2.4.1 Brand Name 6 2.4.2 Product Quality 7 2.4.3 Price 7 2.4.4 Design 8 2.4.5 Store Environment 8 2.4.6 Promotion 8 2.4.7 Service Quality 9 3.METHODOLOGY 9 4.SECONDARY DATA ANALYSIS AND INTERPRETATION 10 4.1 Results 12 4.2 Analysis of Results 12 5.RECOMMENDATIONS 13 6.CONCLUSIONS 13 7.WORKS CITED 14 1. Introduction 1.1 Background and Problem of the Study The present globalized world is characterized by improvements in science, education, technology, as well as economy, among others. This has contributed to people in the world today to have higher standards of living and style. In addition, this has resulted in improved tastes and preferences on the side of consumers. Consumers today also have become keen on beauty and hygiene. Consequently, this has an influence on the beauty industry. Since the demand for beauty care is high, many companies have ventured in the beauty market. In the United Kingdom, the category of face care dominates the skin care market. By value, this constitutes about 76% and 63% by volume. There is a difference between the contribution of men and women to the skin care market. While women contribute 72% share by value, the men contribute 38% (PR Newswire 2013). Nonetheless, this is quite true, as women in the UK account for 50% of the UK population. In addition, it is a fact that in most parts of the world, women are the major users of beauty products. This is also the case in the United Kingdom. However, it is expected that in future, more men will use beauty products, as they focus more on their personal grooming and hygiene (Premium beauty news n.d). Therefore, it important to understand the different factors that influence the decision of consumers in the UK to purchase skin care products. 1.2 Purpose of the Study The purpose of this research study is to explore the present environment of skin care industry in the UK. Special focus is on the loyalty of consumers, as well as their purchasing. The study will therefore, also assess the decisions of people in the UK to buy skin care products. In this case therefore, the study will explore various push factors, which influence people in the UK to buy skin care products. 1.3 Delimitation of the Study The scope of this research is limited to the study on the skin care market in the UK only. This involves the factors influencing the decision of people in the UK to purchase skin care products. Therefore, this study does not study the global market. For this reason, the findings of this study cannot be generalized to other skin care markets outside the UK. This is because the factors influencing the purchase of skin care products by consumers vary from country to country. 1.4 Objectives of the Study There are two major objectives of this study: i) To provide an overview of the skin care market in the UK ii) To examine the influence of brand loyalty on buying behaviours of skin care products 2 LITERATURE REVIEW 2.1 Overview on the UK The UK ranks as the third largest economy in Europe, as it comes after Germany and France (EUbusiness 2014). UK consists of England, Scotland, Wales, and Northern Ireland. It is served by London as the capital city. Overall, the UK has a population of approximately 61.7 million as by 2014. Most people in the UK are English, and account for 80% of the population. On the other hand, the Scot people constitute about 10% of the population, while the Welsh and Northern Irish people are the rest. The UK is also home to immigrants from different parts of the world. By 2013, the GDP of UK was 1.4%. Today, the budget deficit of the UK stands at 7%; but the public debt of the country is on the rise (EUbusiness 2014). 2.2 Skin Care Market in the UK The UK skin care market is dominated by the category of facial care, as opposed to other categories. Only about a quarter of the teenagers in the UK use skin care products. This means that many consumers of skin care products in the UK are the people in older age groups. Nonetheless, since the face care products sell more in the UK, this shows that people are willing to spend on the products irrespective of their prices. There is a difference in the rate of purchase made by men and women on skin care products in the UK. More women than men purchase skin care products, even though women constitute 50% of the population in the UK. Women contribute 72% share to the skin care market in the UK (PR Newswire 2013). This indicates that men in the UK contribute less to the skin care industry. The UK has an aging population. In the skin care market, more than a quarter of the value share is contributed by older consumers. Older consumers of skin care products in the UK account for 29% of the total consumers. In addition, most consumers of skin care products in the UK value branded products, as these account for 90% of skin care market across all categories (PR Newswire 2013). On the other hand, the skin care products with private labels account for about 10% of skin care market across all categories. This indicates that consumers in the UK are brand loyal. However, a few portion of the consumers, who are attracted and satisfied with private labels. Overall, about 21% of consumers of skin care products in the UK agree that they are for “Better Value for Money” (PR Newswire 2013). This is therefore, one of the major factors that influence the consumption trends in the UK. Furthermore, urban dwellers in the UK, who consist 70% of the total population in the UK, consume the skin care products more than the rural dwellers. 2.3 Brand Loyalty In order for any company to succeed, it must attract customers to its brand. Apart from attracting new customers, a company should ensure that it retains its present customers, and makes them loyal to the brand. According to Jacoby and Chestnut (1978, p. 80, in Mellens, Dekimpe, & Steenkamp 1996), brand loyalty can be defined as “The biased behavioural response expressed over time by some decision-making unit with respect to one or more alterative brands out of a set of such brands, and is a function of psychological (decision-making evaluative) processes.” This decision implies that brand loyalty is complex, and has various requirements. There are various factors that make customers to be loyal to a brand. First, there is the aspect of experience of the consumer. If the consumer has positive experience with a brand, then they will be loyal to it. In addition, barriers related to psychological, technical, and economic aspects might determine whether a customer will be loyal to a brand. Furthermore, customer satisfaction might determine whether a customer will become loyal to a brand. If a customer is satisfied with the brand, they will choose to remain loyal to it (Khraim 2011). 2.4 Factors of Brand Loyalty Attributes of brands are important, as these help consumers to make their decision to purchase a product. According to Lau et al (2006), there are seven major factors that determine the brand loyalty of a consumer towards a specific brand. These include name of brand, quality of the product, price of the product, design, store environment, promotion, and quality of service. 2.4.1 Brand Name Some brands are famous, while others are not. Keller (2003) notes that famous brands have a greater advantage to non-famous brands. Most consumers choose to identify with brands that are known and can be trusted. The famous brands and images attract consumers to purchase the brand and bring about repeat purchasing behaviour and reduce price related switching behaviour. According to Kohli and Thakor (1997), brand name is the creation of an image or the development of a brand identity and is an expensive and time consuming process. The development of a brand name is an important part of the process, since the name is the basis of the brand’s image. For this reason, brand name is paramount to a company, in order for the company to attract customers to purchase the product, and influence repeat purchasing behaviour. 2.4.2 Product Quality Product quality refers to the features and characteristics of a product or service that bears the ability of satisfying needs. If a product or service has high quality, this makes consumers to purchase the brand repeatedly. Therefore, high quality of product promotes brand loyalty. Some important aspects of product quality include material and texture, among others. In addition, consumers might also consider colour of the product. Therefore, if the colour of a product flatters or attracts a consumer, they are more likely to purchase the product, and repeated purchase of the product leads to brand loyalty. For skin care products, the functions such as breathable, waterproof, durable, lightweight, and quick-dry, among others are important and influence the consumer’s decision to purchase the product. 2.4.3 Price Price is an important aspect, which most average consumers consider before purchasing a product. Consumers that exhibit brand loyalty for a particular product will pay any price for that product, as it is their favourite. Therefore, the purchase decision of consumers who are loyal to a brand is not influenced by the price of the product. According to Keller (2003), consumers that are loyal to their brand will not evaluate and compare the price of their brand with other brands. Apart from price, the perceived cost and value of the product does influence the purchase decisions of consumers. Nonetheless, if a product has a higher value than cost, then the consumer is most likely to purchase the product. Furthermore, even if the prices of their favourite brand increase, loyal customers will pay the price, since they believe they will avoid the risk in going for the other brands that have lower prices. 2.4.4 Design Design refers to the visual appearance of a product. This includes the shape, size, line, and other aspects that influence the perception of the consumer towards the brand. Packaging is an aspect of brand design, which might attract fashion-conscious consumers to purchase the product. Consumers that are fashion-conscious also purchase repeatedly from stores that are highly fashionable. Such customers also gain customer satisfaction and positive product experience from the latest designs and brands. 2.4.5 Store Environment Store environment is an important factor that influences retail marketing and store longevity. Some of the aspects of the store include its location, layout, and in-store stimuli. These aspects have a considerable influence on brand loyalty. In addition, the number of stores and location of stores has an influence on the patterns of shopping and purchasing by the consumers. If a store is easily accessible by the consumers, and the store offers high quality services and products, then this will attract many consumers, and determine their decision to purchase the products in the store. Furthermore, the stimuli in the store are important, as this also influences the decision of consumers to make a purchase. For instance, the nature of other shoppers in the store, smells, salespeople and employees, noises, displays, colours, and space on the shelves, among others, has an influence on consumers, thus their decision to purchase might be determined by these aspects. 2.4.6 Promotion Promotion can be considered as a form of communication with consumers. The company tries to inform the consumers of its products, and offers important information on the products. A company can engage in promotion in different ways; for instance, through advertising its products and services. Other ways include personal selling, sales promotions, and publicity, among others. Promotions have an influence on the beliefs and attitudes of consumers towards a brand. Additionally, promotions can help consumers to differentiate between different brands in the market. Nonetheless, promotion is important to any company, as this influences the decision of customers to purchase a brand. 2.4.7 Service Quality Service quality is important for both the company and consumers. The service provided by a company should be capable of meeting the expectations of consumers. This should also leave the needs and requirements of consumers met. This involves interactions between consumers and employees of a company, mostly salespeople. Nonetheless, consumers will repeatedly shop or purchase from a store, where they are guaranteed good services. Therefore, service quality determines or influences the decision of consumers to purchase a brand and become loyal to it. Trust is a paramount aspect in service quality. When salespeople and potential buyers interact, it is important that the customers trust the salespeople. This however, depends on the nature of the salespeople. Nonetheless, if customers trust salespeople and are satisfied by the services they offer to them, these customers are most likely to develop brand loyalty. They will repeatedly purchase from the store with the trusted salespeople. 3. METHODOLOGY This research study is qualitative in nature. According to Dawson (2009), qualitative research mainly focuses on issues such as attitudes, experiences, and behaviour. In this study, some of the major factors that are explored are subjective in nature. These include attitudes, motivation, and behaviour of consumers. Some of these issues cannot be quantified, thus the quantitative approach is not used. This qualitative study is conducted using secondary research. Here, data is collected from among different publications, which focus on the topic of brand loyalty, as well as the skin care market. Nonetheless, secondary data analysis has been chosen as it holds various benefits. First, it is possible to access past and present information or data on a specific topic. Additionally, one can compare different data on a topic, and note differences. Furthermore, the views presented in the past publications have a considerably high validity, as these have been reviewed by other scholars in the field. Finally, it is possible to identify gaps in research, hence develop topics that future research should tackle. However, the major disadvantage of using secondary data is that, it is challenging for the researcher to determine the reliability of the data, which is presented (Bryman 2004). 4. SECONDARY DATA ANALYSIS AND INTERPRETATION In order to gain an intensive understanding of the study area, different literature is studied in detail. These include published works that focus on skin care market, brand loyalty, and brand purchasing. All these concepts add to the knowledge, and help in understanding the topic of this study. The secondary data used in this study include those works that were published between the years 2003 to 2011. Khraim (2011) conducted a study in which he explored the influence of brand loyalty on cosmetics buying behaviour of UAE female consumers. The study investigated all the factors of brand loyalty. Data collection was through questionnaires, which were administered to 382 female consumers of cosmetics in UAE aged between 16 and 42. The findings of the study showed that brand name, promotion, price, store environment, service quality, product quality, and design have a positive relationship with brand loyalty. In another study that was conducted by Duff (2007), focus was on exploring the niche market in the cosmetics of women. Nonetheless, the results of this study showed that more consumers were concerned with fashion, thus interested in products with a design that was appealing. In addition, the respondents in the study agreed to prefer different design for different occasions. This study therefore, proves that there is a positive relationship between brand loyalty and design of the product. Consumers will therefore, be loyal to the brand that has their preferred design. In 2003, Lin and Chang conducted a study in order to explore how channel convenience influences buying behaviour of consumers. The findings of this study showed that there is a positive relationship between channel convenience and brand loyalty. Therefore, when customers can access the store and product /brand easily, this influences their buying behaviour in a positive manner, as the customers will repeatedly purchase from the easily accessible store. In another study, Skalen & Molander (2010) explored the factors that influence the behaviour of men and their purchase decisions in skin care products. This study was specific to Karlstad, Sweden. Quantitative research approach was utilized in this study. Nonetheless, the results of this study showed that the men considered price of the product, quality of the product, as well as ingredients as the major factors that influenced their purchase decisions of skin care products. In addition, in this study, it was observed that the number of men using skin care products was low. However, compared to past years, this number had increased slightly. Nonetheless, this means that the skin care market is dominated by women. However, men have also begun to appreciate skin care products, thus more men are using the products today. Yee & Sidek (2008) conducted a research study, where they explored how brand loyalty influenced the purchase decision of consumers in sportswear brands. The study explored all the seven factors of brand loyalty, including brand name, product quality, promotion, store environment, service quality, design, and price. Data collection was through use of questionnaires. Nonetheless, the results of this study showed that all the seven factors of brand loyalty influenced the purchase decision of customers, and their brand loyalty. This can be applied to the skin care market, and help to show the relationship between brand loyalty and the factors of brand loyalty. In another study, Lofgren & Li (2010) explored the relationship between brand loyalty and celebrity endorsement in advertisements of cosmetics. This was a quantitative study, where data was collected through online questionnaires. The findings of the study showed that celebrity endorsement did not guarantee brand loyalty. This therefore, shows that although promotions positively influence brand loyalty, not all endorsers in promotions will result in brand loyalty. 4.1 Results The findings from the secondary data used show that there is a relationship between brand loyalty and the factors of brand loyalty. The seven factors of brand loyalty, which include price, product quality, design, service quality, store environment, promotions, and brand name, have an effect on the purchase decisions of consumers. If these are positive and satisfactory to the consumers, they will influence the consumer into making a purchase. Further results show that celebrity endorsements in the advertising of cosmetics do not automatically have a positive influence on the purchase decision of consumers. For this reason, the same might apply to skin care market. Using celebrity endorsements or any other endorsements in the promotion of the product does not guarantee the company brand loyalty. Instead, the seven factors of brand loyalty are key to determining brand loyalty. 4.2 Analysis of Results From the results obtained, it is evident that brand loyalty is solely determined by the seven factors of brand loyalty. Although there might be other factors, the seven are the core factors that influence brand loyalty. This is the reason why most researches have explored brand loyalty of different products basing on the seven factors. 5. RECOMMENDATIONS This research can be of benefit to the skin care industry in the UK. Nonetheless, the following recommendations can be adopted; I. Marketers of skin care products should avoid using endorsers such as celebrities during the promotion of their products. This is because endorsers have been found to have no major significance in ensuring brand loyalty. This would therefore, be a waste of funds on the side of the company. II. Marketers of skin care products should understand how the factors of brand loyalty influence the decision of consumers to make a purchase. This can be paramount in the segmentation of consumers and markets for their products, as well as marketing. III. Companies can improve customer satisfaction, and gain more customers if they explore how use of skin care products influences the consumers’ perception of the brand. IV. Companies should also identify the attributes of skin care brands that appeal to consumers, and use these to improve the image of their brands. 6. CONCLUSIONS This study explored how brand loyalty factors influence consumers of skin care products in the UK skin care market. Brand loyalty is important for companies to maintain its customers. Nonetheless, this is not easy to achieve, as there are other factors that might attract customers to different brands. However, in the UK skin care market, the seven factors of brand loyalty are appropriate, which are brand name, price, product quality, promotion, store environment, design, and service quality. The findings revealed that quality and design play a major role in influencing customer purchase decisions. Nonetheless, the skin care industry holds great potential in the UK. Therefore, there is need for more reliable findings on this topic in future. 7. WORKS CITED Bryman, A 2004, “Social Research Methods,” Oxford University Press, Oxford. Duff, M 2007, “Niche Marketing of cosmetics,” DSN Retailing Today, 38, 29-35. EUbusiness 2014, “United Kingdom: Country Overview,” Accessed 30 March, 2014 < http://www.eubusiness.com/europe/uk> Keller, K. L 2003, “Strategic Brand Management: Building, Measuring and Managing Brand Equity,” Prentice Hall, New Jersey Khraim H. 2011, “The Influence of Brand Loyalty on Cosmetics Buying Behaviour of UAE Female Consumers,” International Journal of Marketing Studies, 3 (2): 123-133. doi:10.5539/ijms.v3n2p123 Kohli, C. & Thakor, M 1997, “Branding Consumer Goods: Insights from Theory and Practice,” Journal of Consumer Marketing, 14(3), 206-219. Lau, M. M., Chang, M. S., Moon, K., & Liu, W. S 2006, “The Brand Loyalty of Sportswear in Hong Kong,” Journal of Textile and Apparel. Technology and Management, 5, 1- 13. Lin, M. Y. and Chang, L. H 2003, “Determinant of Habitual Behaviour for National and Leading Brand in China,” Journal of Product and Brand Management, 12, 94-107. Lofgren, E. & Li, J 2010, “Brand Loyalty: A Study of the Prevalent Usage of Celebrity Endorsement in Cosmetics Advertising,” Accessed 30 March, 2014 < http://www.diva-portal.org/smash/get/diva2:343717/FULLTEXT01.pdf> Mellens, M., Dekimpe M., & Steenkamp, J. B 1996, “A Review of Brand-Loyalty Measures in Marketing,” Accessed 30 March, 2014. < http://www.econ.kuleuven.be/rebel//jaargangen/1991-2000/1996/TEM1996-4/TEM1996-4_507-533p.pdf> Premium beauty news n.d, “United Kingdom: Dazzling sales for facial skincare as the market experiences a prestige boom,” Accessed 30 March, 2014 < http://www.premiumbeautynews.com/en/united-kingdom-dazzling-sales-for,5728> PR Newswire 2013, “The UK Skincare Market: What Consumers Use and Why?” Accessed 30 March, 2014. Skalen P. & Molander S 2010, “A Study of Factors Affecting on Men’s Skin Care Products Purchasing, Particularly in Karlstad, Sweden,” Accessed 30 March, 2014 < http://kau.diva-portal.org/smash/get/diva2:328065/FULLTEXT01.pdf> Yee, W. & Sidek, Y 2008, “Influence of Brand Loyalty on Consumer Sportswear,” Int. Journal of Economics and Management, 2 (2): 221-236. Read More