Consumer Behaviour: LOreal Shampoo - Case Study Example

Consumer Behaviour: L’Oreal Shampoo Contents Contents 2 Introduction 3 Discussion 3 Factors influencing Consumer Behaviour 3 Psychological Factors 3Sociological Factors 7 Construct Motivation 8 Maslow’s Hierarchy of Needs 9 Means-End-Chain analysis 10 Marketing Mix of L’Oreal Shampoo 11 The Consumer Decision Making Process (CDP) 13 Conclusion 16 Reference List 18 Introduction Consumer behaviour is an implicit study of psychology and economics in which a group of individuals are examined to understand the procedure they apply for the purpose of adopting products and services that will best satisfy their needs (Griffin and Moorhead, 2009). Psychological, sociological factors as well as the composition of market largely influence the consumer behaviour. Psychological factors such that motivation, perception, learning, beliefs and attitude affect purchase behaviour of consumers. Purchasing power, lifestyle, reference group behaviour are some of the sociological aspects that also influence the buying decision of customers. Apart from all these, market structure and the marketing activities exercised by companies such as promotional activities, brand endorsement etc also influence the consumer behaviour of individuals and groups. In this paper, analysis will be done on a brand’s effort to plan its marketing mix in such a way that will lead to satisfy the need of consumer group and its ability to influence consumers’ purchasing behaviour in a better way as compared to any other brands in this segment (Haddock and Maio, 2004). For the purpose of study, consumer response to a leading shampoo brand, L’Oreal will be analysed. L’Oreal is world’s largest Cosmetics Company with headquarter in Clichy, France. In this discussion, how marketing activities of L’Oreal aligns with consumer needs and draws attention of consumers more efficiently than its consumers will be examined. Discussion Factors influencing Consumer Behaviour Psychological, sociological and marketing mix is the key factors to determine consumer behaviour. Psychological Factors Attention L’Oreal has an inherent attention seeking capacity. The brand images and colours used for packaging and smell of the product works as stimulus in consumers. The brand colour, pink symbolizes of romantic, charming, feminine and tenderness, hence more and more ladies are attracted to become a part of the glamour world. Figure 1: Packaging of L’Oreal Shampoo to capture Consumer Attention Perception Perception is the process of deriving the value of a particular product from the information received about the product and moulding the purchasing pattern according to the belief interpreted (McGuire, 2006). Consumers derive a perceived value from the product much before using it. The advertisement saying, “5 problems, 1 solution” arises a sense of having complete care by using the shampoo. Figure 2: Perception of L’Oreal Shampoo Motivation Motivation drives the customers to purchase that product which they want to buy in their subconscious mind. The main motivating factors used by L’Oreal are its strong emphasis on advertisements. L’Oreal appoints all time leading actresses and super models as their brand ambassadors. Glamorous postures and background used for campaigning and advertising of L’Oreal shampoo motivates ladies to use the shampoo and become a part of the glamour world. Figure 3: Brand Ambassadors used by L’Oreal to motivate consumers Learning and Memory Learning directs individuals to acquire information and alter their buying behaviour according to the obtained information. L’Oreal shampoo leaves high visual impact on consumers which get attached into their memory and they tend to imitate those emotive photos in their subconscious mind. Uniqueness of the brand in this segment also helps the consumers to store and recall the Figure 4: Point of Purchase Display of Loreal Shampoo brand image which influences the future buying decision. Learning associates situational analysis and reinforcement. Consumers learn about the product from the catchy taglines and point of purchase display. Taglines used by L’Oreal shampoo helps consumers to learn about the care and effectiveness of the product starting from hair fall, dryness, roughness, dullness to split ends (Lamb, Hair and McDaniel, 2011). Personality and Attitude Personality and attitude are directed towards external influences that may bring modifications in consumer behaviour (Carr and Neitzel, 2005). Cognitively based brand attitude is exposed when knowledge, beliefs and attitude are integrated in the brand image. Attitude leads to overall impression of the brand: how consumer perception is going to accept or reject the brand. L’Oreal shampoo reveals that attitude is everything, which has tremendous capability to attract young ladies to use the products. Figure 5 Personalities and Attitude Revealed by Loreal Shampoo Sociological Factors Sociological factors also influence consumer behaviour to a great extent. For instance, a product which satisfies the need of a 20 year young individual may appear to be useful for a 70 year old person. Family life, friend circle, standard of living, purchasing power, social class, personality of self and involved group highly affects the behaviour of consumers in the market (Dweck, 2013). Culture and Values The organizational values practiced by L’Oreal are reflected into its products which L’Oreal strives to incorporate into their consumers’ life. Passion for beauty, innovation, entrepreneurial spirit, open-mindedness, quest for excellence and sense of responsibility are the in centric values of L’Oreal which they tries to infuse into the product and the brand itself in order to aid value in the consumers’ perception and to mould their purchasing behaviour towards the company’s shampoo. L’Oreal integrates all cultural aspects irrespective of the boundaries, colours, race and region. Figure 6: Cultures and Values Potrayed by Loreal Shampoo Such effort has enabled the brand to influence all consumers across globe (Hoyer and MacInnis, 2008). Peers and Reference groups Peer and reference group hold a very important role in influencing buying behaviour of consumers. Reference group includes friends, family, colleagues and many other close knit groups. Considering L’Oreal Shampoo, peer and reference group influence consumers to obtain the product through sharing information regarding features and efficiency of the products. Figure 7: Peer Group effect on L’Oreal Shampoo Celebrity Celebrity endorsement is the big trick used by L’Oreal shampoo for influencing the consumers’ stimuli and to influence for buying its products. Glamorous stars with unrivalled beauty are chosen to inspire women around the world to influence them to discover the charisma within themselves, be it Canadian beauty Linda or boll wood glamour queen Aishwarya. Figure 8: Brand Ambassadors of Loreal Shampoo Construct Motivation Motivation may be defined as a theoretical construct which is used to explain the rationale behind human behaviour. It aims to reflect the reason for all the actions, desires and needs demonstrated by individuals. The construct of motivation hold importance in understanding purchasing pattern and consumer behaviour as well. It can be best established through two theoretical aspects such as, Maslow’s Hierarchy of Needs and Means-End-Chain analysis (Breeden, Fontaine and Kuryk, 2006). Maslow’s Hierarchy of Needs Maslow’s Hierarchy of Needs is one of the most momentous theories of motivation proposed by eminent psychologist Abraham Maslow. According to this theory, human beings continually drive to achieve unsatisfied need. The motivation to achieve the needs is represented in a hierarchical pyramid, starting from the elementary needs to the most complex need of human mind (Rakowski, 2011). These are: Figure 9: Maslow’s Hierarchy of Need (Montana and Charnov, 2008) Physiological needs are the base of the pyramid which includes the basic needs required for human being to continue their livelihood such as thrust, hunger, sleep etc. The next motivation for human being to achieve is the safety need which includes safety and security from the environment, employment security and guarantee of availability of resources. When the physiological and safety needs are fulfilled, individuals tend to be motivated towards achieving social needs in terms of love, friendship, family. Need for self-esteem arises when individuals strive for recognition for their contribution and achievements in the workplace and when all these needs are secured, individuals shift to the need for self-actualisation in which they desire to accomplish factors such as morality, creativity and problem solving (Mcclelland and Liberman, 2006). The pyramid is structured according to the importance of human life and an individual strives to achieve a higher need in the pyramid only when the lower needs are satisfied. Consumer behaviour also differs according to the change in the hierarchical status of human being. For instance, an individual lying in the physiological needs of hierarchy, will go for a product that will best suit his need such as Sunsilk in shampoo category but when his physiological and social needs will be fulfilled and he will be elevated to self-esteem need in the hierarchy, the same person will strive to get premium branded product like L’Oreal (Eysenck, 2004). Means-End-Chain analysis Means End Chain Analysis is a rigorous research approach used for understanding the behavioural pattern of consumers. The method establishes connection between consumers and products through constructing an associative network among product attributes, psychosocial consequences of the product and the terminal value of the product that the consumer derive from it. It reveals the underlying emotions, significances and inherent values that a customer perceives for making a consumer choice (Chern and King, 2007). Figure 10: Means-End-Chain analysis The analysis is conducted through an in depth interview using laddering questionnaire and the outcome is interpreted in quantitative manner. In order to understand the consumer choice, researchers devise advertisements and communication messages for influencing the consumers to choose their preferred product from the range of products and brands available (Chern and King, 2007). Output of the analysis leads to construct Consumer Decision Map which explains the most accepted decision path, value chain which in turn reveals consumer behaviour. Marketing Mix of L’Oreal Shampoo Marketing Mix is a technique used in strategic management for the purpose of creating marketing plan for a company and to create responsiveness regarding the product among consumers’ mind. The four key elements of Marketing Mix such as Product, Price, Place and Promotion help the company to establish its product in the market among all other substitutes available and support the consumers to derive inherent value from the products of the particular company (Blythe, 2013). The marketing mix approaches of L’Oreal Shampoo are as follows. Product The product basket of L’Oreal shampoo is highly diversified. The company has introduced professional products such as Kérastase and Matrix, luxury products like Lancôme, YSL, Giorgio Armani and Biotherm and consumer products like L’Oréal Paris, Garnier, Maybelline (Lantos, 2010). In hair care division, L’Oreal takes care of all hair related needs of consumers and provides hair oil, shampoo, conditioner, hair gel, hair colour and colorants. In general, the products of L’Oreal lead to attract the premium customer segments that are already in the self-esteem or self-actualization hierarchy level of Maslow’s pyramid. The perceived value of L’Oreal products is so established that it also motivates the consumers in the social need of pyramid to enjoy the flair of the product (Biswas, 2011). Place As Garnier is the most accepted and widely used consumer product of L’Oreal shampoo division, the company strategically places the product in 130 countries in the world. Wide distribution channels of the company have ensured access of the products to every global customer (Nelson, 2012). Matrix products are customised for using in parlours and beauty salons. Hence, customers who are served by Matrix products in salons by the hairdressers can directly derive the value of the products and can influence others for using these products. Apart from the salon products such as Matrix, L’Oreal includes consumer products under the umbrella of Garnier for regular use as well, hence successfully satisfying all needs of consumers (Dah and Hoeffler, 2004). Figure 11: Perpetual Map for L’Oreal (Matthew, Shitole, Nair and Sitalaxmi, 2010) Price The marketing principle of L’Oreal follows Pareto Principle, according to which 80% of the company’s sales come from 20% consumers of the market. This factor comes from the strategy of premium pricing adopted by the company. L’Oreal started their operations from luxury brands and gradually penetrated into different market segment. However, with the innovation of Garnier, the consumer product, which adopts international pricing strategy i.e. pricing of the product according to the market structure and customers’ purchasing power, consumers tend to accept the product. Still, consumers perceive the product as a high end brand and it has got the power to influence consumers to upgrade their social status by using products from L’Oreal (Kumar, Scheer and Kotler, 2000). Promotion L’Oreal drives very strong promotional strategies to enhance the brand visibility and brand acceptance of its products. The tagline of L’Oreal, “Because I’m Worth It” is really timeless and it has the ability to influence inner strength and beauty of every women since last 40 years (Carr and Newell, 2014). The company plans its promotional activities in such a way that consumers perceive a feeling that using the brand will enhance their social recognition. Apart from advertisement, putting advertisements in magazines, uploading hoardings, distributing free sachets in mall and supermarkets, sponsoring beauty contests and other events are some of the promotional strategies used by L’Oreal. In September, 2014 L’Oreal has planned to shift the pattern of advertisements, from highlighting product features to connecting emotionally with the customers. The company has launched recent apps on makeup tips which are accessible to all Smartphone users. Such promotional efforts taken by L’Oreal can be attributed as the company’s attempt to psychologically connect the brand more with the consumers in its targeted market segment (Carr and Newell, 2014). Packaging L’Oreal puts substantial effort to make the packaging of shampoo bottles so that it can capture glimpse of customers from shelves of supermarkets, among all other brands available there. In 2012, packaging all the Pureology brand professional products including shampoo, conditioners and treatment oils were changed to sustainable packaging, using 100% vegan formulation. The company makes sufficient investments to make its packaging environmentally sustainable and in order to achieve that L’Oreal adopted Packaging Impact Quick Evaluation Tool (PIQET). This identifies and reviews the impact of packaging on environment and designs a packaging system which leads to minimize the issues arising out of materials used for packaging that may harm the environment. Such effort taken by the company creates a positive value in the consumers’ mind and they tend to purchase the product as it bestows a feeling in them of contributing towards environmental sustainability while using the product (Trotter, 2013). The Consumer Decision Making Process (CDP) The model on Consumers’ Decision Making Process holds a construct to the Maslow’s Hierarchy of Needs. The model is derived from Means-End-Chain analysis in order to evaluate the purchasing pattern and buying decision of consumers. The decision making model consists of following steps. Need Recognition Consumers are willing to purchase a product only if the product becomes successful in raising need in consumers’ mind. The need is recognized when a difference is identified between the present situation of consumer and his desired situation. However, raising need is not the only factor for which customers tend to purchase the product. The product should be able to raise needs among the set of customers for whom the product is acceptable and affordable (Sirgy, 2002). This need recognition further explains categorization of Maslow’s hierarchy of need. Internal stimuli lead to create physiological needs which are unavoidable whereas external stimuli inspire the individual to possess a product leading from advertisements and other promotional activities. In case of L’Oreal shampoo, the brand has been successful in generating social need among the premium customer segment through its premium pricing strategy, promotional activities and attractive packaging (Hoyer and MacInnis, 2008). Search for Information Once the need is identified, the consumers tend to search for information. However, degree of information required depends on the complexity of products. Consumers acquire information generally from two sources. Internal information which is already preserved in consumers’ mind in the form of opinion about the brand and external information which is received from discussion with family, friends and peer and cultural groups or analyzing promotional activities of companies (Mosley and Irvine, 2010). Internal information are somewhat biased as it does not consider the newly launched products and innovative efforts of companies. L’Oreal provides both internal and external information to the consumers. With the large established customer base, word of mouth spreads around peer groups and group of friends. After seeking information from the peer group, once individuals purchase the product, they themselves understand the efficiency of the product out of using it and pose a perception about the product value. Advertisements also play an important role in offering external information to the consumers (Janssen and Jager, 2001). Figure 12: Consumer Decision Making Process (Peet and Thrift, 2013) Pre Purchase Evaluation After collecting all the information from internal and external sources, consumers tend to evaluate all other alternatives available in the market and select a product that is most suitable for satisfying their need. For this purpose, consumers compare products from both objective and subjective standpoints. Objective characteristics are associates with the functionalities of the product whereas subjectivity deals with perceived value and reputation of the brand in consumers’ mind (Peet and Thrift, 2013). Considering objectivity or subjectivity depends on the nature of product. For instance, subjective values related to L’Oreal shampoo majorly attract the consumer base mainly due to the attractive packaging, promotional activities and existing customer feedback. Once they purchase the product, then they derive the objectivity inherent with L’Oreal products. Therefore, both objective and subjective value addition leads the consumer to repurchase the product again and again (Kardes, Cronley and Cline, 2010). Purchasing Decision After evaluating all available alternatives in a product segment and calculating the perceived value of the product, finally consumers make a decision of buying a particular product which is most appropriate for satisfying their need. However, such decision are largely influenced by the quality of salesmen, condition of stores and overall shopping experience in which companies have limited control (Santrock, 2012). In order to control purchasing decision of consumers, L’Oreal appoints company representatives in each retail stores who are well trained to influence customers’ choice by highlighting product features. The company also run promotional activities in malls and superstores in order to attract consumers through product innovation, diversification and by reaching the message of such efforts of L’Oreal through such initiatives (Mathis, Jackson and Valentine, 2013) Post Purchase Evaluation After purchasing and using the product, a natural tendency has been noticed among consumers that they will tend to evaluate whether the product has been able to significantly satisfy the need and demand of the consumer or not. Such opinion largely affects future purchasing decision of consumers. A positive evaluation will lead to repurchase of the same product whereas if the product fails to satisfy the need of the consumers, they will eliminate the product from future buying consideration. Such elimination leaves a negative impact on the company and its products as a result of negative feedback circulated by the affected consumer through his/her family, friend circle and peer and culture group and by the means of social media (Ryu, Park and Feick, 2006). In general, post purchase evaluation provides sound results to the company due to the company’s continuous for product development and innovation. However, an individual must choose carefully the L’Oreal shampoo from their wide range of products which is most suitable for his/her own hair texture in order to experience best result (Kardes, Cronley and Cline, 2010). Conclusion Consumer behaviour is always complex. Incidents are very few where it is noticed that consumers are responding in a uniform way for the purpose of buying behaviour. Purchasing decision also varies across consumers from various culture groups, level of motivation, perception and company’s capability to influence consumers. However, studying a range of theoretical aspects such as Maslow’s Hierarchy of Needs, Means-End-Chain analysis and Consumer Decision Making Process in the light of marketing mix driven by L’Oreal, it can be inferred that purchasing pattern of individuals cannot be controlled. Hence, it becomes the company’s responsibility to analyse and understand the suitable customer segment of its products and drive their marketing operations and promotional activities in such a way that they can be successful in influencing consumers to opt for their products and fulfil the needs of multifaceted clients. Reference List Biswas, S., 2011. Relationship Marketing: Concepts, Theories and Cases. 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