CUSTOMER’S DECISION MAKING PROCESS-

COSMETICSPREPARED BY:Mansi ChawlaNimisha BhartiHitesh KumarJayanth MandadiMansi Arya[Section B- Group 12]

OBJECTIVE

A new company NEWBE is planning to launch a new product in the category of makeup products. To reach target market segment, company wants to understand the factors affecting consumer’s cosmetic consumption as well as decision making process for purchasing the cosmetic products to plan for their future advertising campaigns.This research will help us to make strategies that our company can adopt to attract maximum customers

Identifying Variables:• Dependent variable:

Consumer Buying Behaviours

• Independent Variables= Price, Brand Loyalty, Quality, medicinal benefits, Health benefits(Herbal/organic), Variety, Free Samples Additional Preferences

Type of data:

Primary & Secondary: Internet, Magazines

, Newspape

r

Instruments of Data

Collection: Survey

Questionnaires, Focus

Group Interviews

Sampling Method & Sampling Size: Convenience

Sampling as we have conducted surveys with people who are easily

approachable: & 100 is the sampling size

METHODOLOGY AND DESIGN

What’s your Occupational Status? [ Working/Non-Working], What is your age?

Please specify your Income Group: 0 - 20000, 20000 – 30000, 30000 – 40000, 40000 Above

Do you use make up products? If yes, then which brand do you prefer?

“The quality of the product is important while buying it”- Likert scale

“Having varied options influences my willingness to buy the product”-Likert “I always buy make-up products which are herbal/organic”- Likert Scale

“I always buy make-up products which are herbal/organic”- Likert Scale“I prefer being price conscious while buying make-up products”- Likert Scale

Will you consider buying a product if it has a free sample of a new product ?What additional preferences you look for in a product?

QUESTIONNAIRE

Need Recognitio

n

• Buyer becomes aware of a particular unsatisfied need/problem/opportunity- Recognition of a particular brand eg. Maybelline, Revlon, Nivea etc.

Search for Information

• Customer recalls how he/she has solved such a problem in the past, if relevant• Consumer will try to solve the

problem by asking a friend or going to the market to seek advice concerning which product will best serve the need

Evaluation of

Alternatives

• Consumers evaluate alternatives according to various criteria such as features, characteristics and benefits that a consumer desires in solving the specified problem.

Purchase Decision

• Selection of a brand and the retail outlet at which to purchase the desired product. And final step of transaction with either cash or credit

Post Purchase

Evaluation

• If post-purchase evaluation is favorable, the customer will be satisfied with the process.• If the product’s perceived performance level is below expectation, then this will in due course lead

to dissatisfaction

CUSTOMER’S DECISION MAKING PROCESS

Need Recognitio

n

• INTERNAL STIMULI: fashion consciousness, wishing to emulate others and the need for greater self-esteem

• EXTERNAL STIMULI: actions and opinions of friends, doctors, beauticians, advertisements and others

Search for Informatio

n

• Product range availability, price, product suitability and use and the nature of the products. Opinions of family, friends, doctors and beauticians, as well as reference to company websites and advertisements

Evaluation of

Alternatives

• Price, quality, brand image, ingredients, suitability, availability and other relevant features

Purchase Decision

• Here consumers evaluate the purchase decision considering various risks like functional risks, physical risks, financial risks and psychological risks.

Post Purchase Evaluatio

n

• Customer satisfied- Likely to use the same cosmetics brand in future and gives rise eventually to brand loyalty.

• If particular products do not perform as per their expectations- Consumers likely to switch to another brand if one is available and it is perceived to exceed the performance of the current product.

FACTORS AFFECTING CUSTOMER’S DECISION MAKING PROCESS PROCESS

Geographic Segmentation The company has to focus

more on Tier-1,Tier-2 and Tier -3 cities

Demographic Segmentation

Based on the age group, income levels and social

class has to be considered for the demographic

segmentation.

Psycho demographic Segmentation

Costumer lifestyle and Personality fall under this

category.

Behavioral SegmentationDivide the market into

beginners and advanced users. Young beginners are target market because they

pursue beauty and appearance. Pricing will also be a deciding factor for this

age group.

SEGMENTATION STRATEGY

SEGMENTATION STRATEGY

SearchThe company increases the visibility of the product by increasing the product portfolio and also by occupying the shelf space in the stores

Alternative EvaluationThe company has to check the price and products offered by competitors and has to maintain a differentiating factor. Costumer retention has to be maintained through out which can be only possible by capitalizing on the price and availability of the wide variety of products in stores. Providing beauty services along with sale of products helps to improve costumer retention.Outlet SelectionThe outlet selection has to be based on the population distribution across different regions.In Tier 3 cities the product has to be available in all the beauty parlors, Fancy stores and in Tier-1& Tier-2 cities standalone stores has to be opened to provide services

IMPLEMENTATION STRATEGY

• Create customer review blogs under each product listing to collect feedback on product range, delivery & service.

• Urge customers to participate in feedback surveys by offering discount coupons.

• Use mobile apps(make up apps) to provide a virtual experience and use the same as a source to accumulate feedback & promote new products.

• Create visibility on social media(facebook, twitter) for customers to provide feedback & make recommendations.

POST PURCHAS

E FEEDBAC

K

RECOMMENDATIONS & CONCLUSION

Surveys results provided various insights to balance quality & price of makeup products with varied options in color, fragrances & other choices

NEWBE should engage beauty & lifestyle bloggers into product testing inviting them to test products, provide feedback & give reviews on their blogs, social media, word of mouth, YouTube, etc.

NEWBE should provide free samples with already existing successful products.

Upper middle class female customers are looking for various benefits from makeup cosmetic products like looking good & glamorous, hygiene & long lasting effects are other benefits which a customer is looking for

Marketers should find it useful to understand how loyalty factors can affect consumer-buying behavior in the marketplace, which can help in segmenting consumers and markets for their brands and marketing communication.