Qualitative Techniques: This kind of technique requires words. They are often called subjective or judgmental methods, as they rely heavily upon opinions. It also involves actions such as interviews or group discussions or observations.
Examples of these are:
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Consumer/user survey method: This basically consists of asking customers about their likely purchases. The method is straightforward, but won’t be very accurate if a small number of purchasers participate.
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Panels of executive opinion: This is a jury method, and experts are counselled about the business with which they are familiar with the product. Experts can come from both inside and outside the company, including management consultants, professionals and investment analysts.
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Product testing and test marketing: These methods are used when little or no previous sales data exist. Product testing involves a small number of respondents and a report of their opinions and attitudes towards the new products.
Quantitative Techniques: As the term implies, it relies upon mathematics. It can also be split into time-series analysis and casual techniques. Examples are:
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Moving Averages: The technique is very simple and involves the data in a time series. The longer the moving average, the greater will be the ‘smoothing’, and the principle is to subtract the earliest sales figure and then adds the latest sales figure. The product figure is then divided by the appropriate number of data periods added together to bring it back to an average.
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Time-Series analysis: This technique is of most use when there is a seasonal pattern that is repeated on a regular basis. The time-series analysis analyses the seasonal movements in terms of their deviations from the average trend.
The Marketing Mix:
The term ‘marketing mix’ refers to the set of marketing ingredients the business can use to achieve its objectives. The main elements of marketing mix became known as the ‘four Ps’:
- Product
- Price
- Promotion
- Place
From each element, more details can be broken down to give a more descriptive idea of what its general concept is:
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Product → Product range: breadth, depth, and mix → Product features → Product quality → Packaging
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Price → Price levels → Price discounts → Credit policy → Price strategies
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Promotion → Advertising: spend, copy content, media selection, scheduling → Sales promotion → Publicity → Personal selling
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Place → Channels of distribution → Stock levels → Delivery
Influences to the Market:
Consumer Buyer Behaviour: This is very important, as it definitely will affect the sales of the products. If the essence of marketing centers on identifying and satisfying customer needs, then the marketers must understand these needs. Basically, marketers need to understand the buying behaviour of existing and potential customers. There are many reasons on why a customer would want to buy a certain product. Here is a framework describing the consumer buyer behaviour:
Environmental Influences:
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Cultural: Culture plays an important part in the environmental influence. As a child grows up, they learn certain culture values from the people with whom they socialize with. Therefore, family, school and friends have large impact on the cultural values.
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Social Class: This refers to the grouping of individuals who have certain common social or economic characteristics. Members of similar class have similar patterns of behaviour, values and interests. Groupings can depend on occupation, education or income. Market research often uses occupations to define a person’s social class:
Social Class Types of Occupation
AB Management and professional
C1 Supervisory and clerical
C2 Skilled manual
DE Unskilled manual and unemployed
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Situational factors: This may also determine a purchase or consumption situation. The consumption situation will directly influence consumer brand and purchase behaviour. This is very important and it connects with product availability, change in price, the existence of queues and the amount of time available for buying will all affect the purchase behaviour.
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Marketing efforts: Much of this concentrate on the planning of decisions aimed at influencing buyer behaviour. As we can see, the marketer makes decisions about products, prices, distribution and promotions which aims to influence the consumer to purchase the marketer’s brand.
Individual influences:
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Psychological Factors: This range includes perception, motivations, attitudes and personality. Only a vague indication can be revealed about the psychological factors, and only perception and attitude are briefly considered:
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Perception is the way in which individuals select and organize. This includes on how they look at the business and it’s products. Potential buyers form up a brand awareness among the vast amount of different brands available, therefore, brand image becomes especially important for a product.
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Attitudes must be specific. Good attitude must be held within a good salesperson in order to promote products to the consumer.
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Life Style: This depends on individual’s activities, interests and opinions. A person’s life style describes how a person links with their environment-and will affect on their purchase behaviour.
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Demographic: This describes individuals according to age, sex, income, education and occupations. Demographic factors will have a bearing on the types of product individual want, where they shop and how they evaluate possible purchases.
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Economic situation: This is extremely important, as it not only influences on how much income individuals have, but whether if they have the attitude towards spending.
Target Marketing:
The concept of target marketing is when my business needs to relate the goods and services provided more closely to customer requirements, because customers are no longer satisfied with common products eg. just shampoo-but they want particular types of product with specific characteristics to suit their requirements eg. Shampoo + Conditioner + Oil protection.
It is hard to keep up the demand of an entire population for a particular product category, but if I target on specific groups of consumers, I can develop more effective marketing programmes.
There are three stages in Target Marketing:
- Market Segmentation: This is a very important stage as I have to divide buyers into distinct groups and to decide the most appropriate way for segmentation. I will be using Demographic variables to segment the market, because it is more straightforward and meaningful. The variables which I will be asking are as follows:
Age- Many products purchase is strongly related to age. Eg. 18-24 year age group tends to buy cosmetic products for it’s fashionable colouring or attractive design, whereas 25-35 year age group tends to go for more sophistication.
Gender- Some of the products will be obvious to which gender it is aimed at eg. makeup, perfume. But some products are not so obvious eg. shampoo, shower gel. Certain products can be regarded as ‘female’ products, eg. Dove.
Social Class/income- Most classifications are based on the occupation or the income of the consumer. Socio economic groupings are used in the UK to define the working class. (Shown on page 9)
- Market targeting: This is when I evaluate each segment and decide how many of the segments I want to serve. Once the market segments have been identified and evaluated, the marketing I have to decide on the level of market involvement. I might decide to ignore meaningful segments and cover the whole market with one basic product or service. Or I might want to establish a number of meaningful segments and decide to service all or a number of them with different products.
- Product Positioning: This is when the designing of the product is made to fit a given place in the consumer’s mind. Using market research, I can establish the position of the competitor’s products in any given market segment, and then decide whether I want to compete by joining the segment or to attempt to fill a gap in the market.
Results of Market Research
Desk Research:
Just BodyCare belongs in the cosmetic and fragrances section which are within the personal care market, and include toiletries, haircare and skincare products. The Cosmetic, toiletry and Perfumery association Ltd (CTPA) valued the entire market at 4.86 billion pound in 1998-of which 14% on sales of cosmetics and a further 12% on perfume. UK was the third largest European market for cosmetics, behind Germany and France.
The table below shows Cosmetic and Fragrances consumption:
Source: Trade sources/Key Note
Improvements in quality perfecting the skin have stimulated growth in the market for cosmetics and fragrances. Therefore, this is a useful source of information for Just BodyCare to know the rough guide for people’s usual expenditure on cosmetics. It is also extended consumer base, with increasingly younger children becoming conscious of their appearance, and older women, often with high incomes, retaining a pride in appearance for longer.
Foreign Trade:
This is an extremely useful source of information for Just BodyCare, since the shop will be importing 100% foreign products for sale. The figures will give the business some idea of popularity of products from abroad.
Both imports and exports decreased between 1996 and 1999, and exports to a far greater extent. From 1996, figures include fewer products, yet have a higher value, and the decline is significant.
The value of imports from countries within the EU in 1999 outweighed that attributable to other countries in every category, where there was a high level of imports from the US.
Imports from France accounted for 63% of the value of perfume, and only 55% from worldwide. Clearly, this evidence proves that French perfume is among the top favourites in the perfume industry, and I will make sure there is a wide range of French perfumes in my shop.
Imports from the US accounted for 61% of beauty and make up preparations for the skin in non-EU countries and 22% worldwide. France accounts for 30% of the total, and 48% of imports from within the EU. USA is already well known for having the largest cosmetic industry in the world, therefore, importing US products will add to a good brand image and trust in the product.
Germany, Italy and the Republic of Ireland were other significant exporters of cosmetics to the UK.
Imports:
Source: Overseas Trade Statistics
Distribution:
Supermarkets now have a larger share of the health and beauty market as a whole than the specialists, such as Boots the chemist LTD and Superdrug Stores PLC. However, in the cosmetics and fragrances market, Boots maintains its lead.
More supermarkets are creating ‘shop within a shop’ formats which contains mid- and premium priced beauty products, and the basic, low priced products may appear on shelves with other products. This may affect the sales of products in Just BodyCare, because it might be more convenient for some customers to shop for their grocery and buy their beauty products at the same time. This is why Just BodyCare must highlight its specialty in order to attract customers.
Brand Usage by Age:
The results of market research shows that Estee Lauder, Chanel and The Body Shop were the most frequently cited brands. Penetration by age shows which specific groups of women prefers some brands. Estee Lauder was found to be very much favoured by older women. The Body Shop fragrances tended to be popular with younger teenager while Chanel was consistently popular with those aged over 35. Yet the most definite result was the usage of Calvin Klein fragrances among the youngest age group.
Field Research:
In this part of the research, I will be working on the responses from survey searches. To do this, I have made up some question that may tell me more details about customers which secondary data could not provide.
The four main requirements of giving a successful survey research are listed on page 7, and in this section, I will concentrate on just the first requirement- Selection of communication method:
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Postal Questionnaires: The main advantage of postal questionnaires is their low cost. The cost is in proportion with the amount of questionnaires involved-the more questionnaires, the less the cost per unit. Questionnaires can be distributed to large geographical population and can have quick responses. But, the questionnaires must be short and easy to understand, because not many people are willing to complete a long set of questionnaire.
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Personal Interviews: This is by far the best way of getting a response from customer. It is also very good at collecting large amounts of data, as the cost is not very high.
I will set up a small table outside the business with a friendly staff who will be asking people to fill in the questionnaire.
In order to attract attention and to encourage people to answer the questions, a small sample of a product from Just BodyCare will be given to the respondent. The small sample can be e.g. shampoo, face cream, hand cream, etc.
Questionnaire:
Respondent No: 1
Please answer the following questions by ticking the boxes:
- Please state your gender:
Female
Male
- Tick your age category:
10-15 15-20 20-35 35-45 45 and above
- How many times in a week do you shop?
Once a week
At least twice a week
None
- Do you usually go to a cosmetic shop when you go shopping?
Yes
No
- How much are you willing to spend on cosmetic products/Fragrances/Body products?
$1-$5 $5-$15 $15-$25 $25 and above
- Would you be interested to buy imported products from leading cosmetic countries eg. USA, France?
Yes
No
- What do you look for in a product before buying it? (Tick in each category)
Important Somewhat Not Important
Size
Price
Design
Brand
Image
Quality
Other reasons
0
Please state: ________________________
- Do you think it is important for a shop to have a good environment?
Yes
No
Maybe
Thank you for participating in this questionnaire-Please e0njoy your free sample.
Just BodyCare
Results of Questionnaire:
- Please state your gender:
Female- 15
Male- 13
- Tick your age category:
10-15 = 2
15-20 = 4
20-35 = 10
35-45 = 8
45 and above = 4
- How many times in a week do you shop?
Once a week - 14
At least twice a week - 10
None - 4
4) Do you usually go to a cosmetic shop when you go shopping?
Yes - 16
No - 12
5) How much are you willing to spend on cosmetic products/Fragrances/Body products?
$1-$5 = 3
$5-$15 = 5
$15-$25 = 12
$25 and above = 8
- Would you be interested to buy imported products from leading cosmetic countries eg. USA, France?
Yes - 21
No - 7
7) What do you look for in a product before buying it? (Tick in each category)
Important Somewhat Not Important
Size 2 10 16
Price 9 9 10
Design 11 5 12
Brand
Image 13 10 5
Quality 19 5 4
8) Do you think it is important for a shop to have a good environment?
Yes - 16
No -2
Maybe – 10
Analysis of Data
- Please state your gender:
Female- 15
Male- 13
The bar graph above shows the number of male and female who participated in this questionnaire.
- Tick your age category:
10-15 = 2
15-20 = 4
20-35 = 10
35-45 = 8
45 and above = 4
From the bar graph, it shows that there are more middle-aged people. This is because most of the products are aimed at 20-45 year olds, therefore, more people from this category are asked to fill in the questionnaire.
- How many times in a week do you shop?
Once a week - 14
At least twice a week - 10
None - 4
This graph gives a rough guide about how many times people like to shop. This is quite important, because if there’s more people shopping, there’s better chance of selling products. Therefore, the response of this question is linked to the number of customers and the amount of products sold.
4) Do you usually go to a cosmetic shop when you go shopping?
Yes - 16
No - 12
This is an important question, because when people go shopping, they usually have a target product to buy eg. clothes. Along with other factors, their main focus is to find the perfect target product, and this not make them want to visit unnecessary shops. The main point of this question is to see if cosmetic products are ‘popular’ during a shopping trip.
Most women made up the 57% of the question.
5) How much are you willing to spend on cosmetic products/Fragrances/Body products?
$1-$5 = 3
$5-$15 = 5
$15-$25 = 12
$25 and above = 8
From this chart, we can see that nearly half of the people who took apart in the questionnaire are willing to spend $15-$25 on a cosmetic product. This gives a rough estimation of how I can charge the product.
It is not surprising to find that majority of the women are willing to spend $15 and above for cosmetic products, whereas most of the men were in the $1-$15 category.
- Would you be interested to buy imported products from leading cosmetic countries eg. USA, France?
Yes - 21
No – 7
This question is very important, as all of the products sold in Just BodyCare are imported from other countries. From the above graph, majority of the people who took a part all seems to be interested in buying foreign goods.
