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DISSERTATION

A comparative study of Asian and Non-Asian consumer

perceptions of promotional strategies in the cosmetic

industry.

a conceptual project submitted in partial fulfillment of the requirements for the

degree of Master of Arts in International Business and Management at the

Westminster Business School

of the

University of Westminster

by

SB

29.August 2013

Supervisor: NS

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Abstract

As the world’s economic gravity centre is gradually shifting from west to east,

it is of tremendous interest for cosmetics companies to either enter these

markets or to further familiarize themselves with the market characteristics to

optimize their strategies. The increase in disposable income of the middle

class promises for Asia to host 64% of the global middle class and will be

responsible for over 40% of worldwide middle-class consumption.

The omnipresence of the Internet and the availability of vast amounts of

information have empowered consumers and therefore made company

sponsored advertising through traditional marketing less effective.

In order to increase consumer’s purchase intentions and gain customer

loyalty, firms now need to consider using new media strategies, such as

indirect advertising through opinion leaders on social media platforms. The

latter imposes a higher risk for firms as reviews online can spread negative

word of mouth, but the emphasis of negative attributes is what makes the

message more authentic and credible to consumers.

This research has compared the consumer perceptions of various means of

advertising, traditional and non-traditional, and the trust therein of Asian and

Non-Asians with the use of an online survey.

The most predominant finding of this research was that the advice and

recommendations of friends and family were preferred over any medium at

any time. However, it was found that Non-Asians showed a favorable attitude

towards more factual and expert advertising such as print media and sales

staff. Asians were strongly influenced by online reviews and blogger’s

recommendations. Non-Asians also had a very strong bias towards company-

sponsored advertising, whereas Asians felt largely indifferent towards it.

Company-launched social media networks were largely unheard of, but

Asians showed an interest in using those, whereas Non-Asians strongly

preferred independent social networks and reviews. In line with the findings of

this research, recommendations have been provided for firms.

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Table of Contents

1.Introduction .............................................................................................................6

1.1. Economic Shift towards Asia .............................................................................. 6

1.2. Cosmetics in Asia ............................................................................................... 7

1.3. Web 2.0 and Social Media.................................................................................. 8

1.3.1. Reference Groups ......................................................................................... 10

1.3.2. Opinion Leaders............................................................................................. 11

1.4. Project Objectives ............................................................................................. 12

2. Literature Review ............................................................................................... 12

2.1. History ............................................................................................................... 12

2.2. The Cosmetics Industry .................................................................................... 13

2.3. The Asian Cosmetic Industry............................................................................ 14

2.4. Marketing .......................................................................................................... 15

2.5. Cross Cultural Marketing .................................................................................. 17

2.6. Traditional Advertising ...................................................................................... 17

2.7. Online and Social Media Advertising................................................................ 19

2.8. Non-Traditional Advertising .............................................................................. 20

2.9. The Influence of Bloggers................................................................................. 22

2.10. Word of Mouth in the Cosmetic Industry ........................................................ 24

3. Methodology ....................................................................................................... 25

3.1. Introduction ....................................................................................................... 25

3.2. Gap Analysis ..................................................................................................... 25

3.3. Research Design .............................................................................................. 25

3.4. Primary Research- Quantitative Survey ........................................................... 27

3.5. Sampling ........................................................................................................... 28

3.6. Pilot Test ........................................................................................................... 28

3.7. Secondary Data ................................................................................................ 29

3.8. Limitations ......................................................................................................... 29

3.9. Data Analysis .................................................................................................... 30

3.10. Ethical considerations ..................................................................................... 30

4. Data Analysis and Interpretation ................................................................... 30

4.1. Basic Data......................................................................................................... 31

4.2. Motivation and Influencers................................................................................ 32

4.3. Company Advertising........................................................................................ 38

5. Conclusion and Recommendations ............................................................. 41

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6. Limitations ........................................................................................................... 44

7. Appendix .............................................................................................................. 53

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1.Introduction

1.1. Economic Shift towards Asia

It is no news that the world’s economic gravity centre is gradually shifting from

west to east. (Dobbs, 2012) Above all, the increase in disposable income of

the middle class shows assuring figures and by 2030, Asia will host 64% of

the global middle class and will be responsible for over 40% of worldwide

middle-class consumption. (Rohde 2012) Consequently, the Asian emerging

markets portray attractive investment opportunities for multinational

corporations (MNC), who have largely been expanding into these regions.

The economic growth has brought a change of lifestyle to these areas,

increasing the consumption of consumer goods. Emerging markets usually

need to achieve a certain level of income or GDP before consumer goods are

adopted. Initially, these markets are introduced to household goods such as

detergents, soaps and processed packaged foods before moving to personal

care products and cosmetics (Mirae Asset 2012). Given the aforementioned

middle class predictions and the fact that Asia ‘s development is moving

towards advances stages, this region should be the main focus of fast moving

consumer goods (FMCG) and cosmetics companies. As Figure 1

demonstrates, the personal care industry has been steadily growing over the

past five years and is even said to less sensitive to crisis compared to other

industries. In the 2001 crisis, lipstick sales soared 11% in the US, and was

referred to as the “lipstick index” by Leonard Lauder, the chairman of Estée

Lauder. He believed that the latter was a reliable indicator that lipstick sales

increased in economic downturns, as women still try to find more affordable

ways to indulge and treat themselves (The Economist 2009).

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Figure 1 Dow Jones Personal Products Index, 5yr performance Source:

Bigcharts.marketwatch.com

1.2. Cosmetics in Asia

Moreover, the Asian vigorous skincare routine with the use of multiple

products goes far beyond an average European. Additional skin concerns

unknown in the western markets, such as whitening creams, equip the market

with further sales opportunities. (Daneshku 2013)

Thus, in order to make use of that highly profitable market and gain market

share and customer loyalty, companies try to reach out to consumers in

countless different ways. Numerous studies investigating different advertising

techniques and consumer perceptions in the Asian cosmetics market have

previously been conducted by authors such as Barnes (2009) and Barnes and

Yamamoto (2008), whereas none of them have included perceptions non-

traditional approaches, such as endorsement through blogs, YouTube

channels, online reviews and other social media platforms. On the other hand,

word of mouth (WOM) enablement and consumer engagement through social

media has been explored to a large extent, but not in a comparative cultural

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study in the context of cosmetics. These researches will be further explored in

the literature review.

1.3. Web 2.0 and Social Media

The Internet has transformed the world. There are people born in the new

“digital era”, growing up with the Internet and having no imagination of what

life would be without it. (The Economist, 2010) Now that a third of the world is

connected to the Internet, the state of hyper-connectivity has been further

enforced with the emergence of social media. (Aljazeera, 2012) Creating our

identity online has become a consistent part of modern life. (Beddington, J.

2013)

This has created an entire new sea of opportunities for companies, as they

can now use an interactive approach with their customers. Consumer

engagement has led to discoveries of new ideas on how to market and even

improve products. Those include factors such as better insight to consumer

behavior, and actual measurable Return On Investment (ROI). The constant

improvement of analytical quantifying tools will soon be able to enlighten the

actual return on investment on social investments, especially if the recent

trend of institutionalizing social practices integrates itself into normalcy.

(Holmes, R. 2012)

Considering those recent modifications, the business environment is faced

with rising dynamism and complexity. Constant changes in customer demand

challenge businesses to innovate new strategies to keep up with the market

pace. (Alpay, G., Bodur, M., Yilmaz, C. 2012) A profound issue that

businesses are faced with is the fact that consumers are becoming better

informed by the day and therefore have built some immunity towards

advertising. (Social Media Contractors, 2012)

Furthermore, tools like Online Reviews and Social Media have created a

platform for users to engage with each other as well as to be more connected

to a brand. It is therefore of high importance for businesses to realize that

traditional advertising is not enough to encounter the informed consumer in

the way to stimulate their purchase intention. (Kirby 2006) Businesses have

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started adapting their marketing strategy to an Integrated Marketing Strategy-

that means, in addition to traditional advertising, businesses must engage

consumers with Social Media as well as find bloggers to actively review their

products. (Figure 2)

Figure 2, Source: Nielsen 2012

The emergence of online-based social media platforms has enabled one

person to communicate with thousands of other people about products used

and companies that deliver them. Therefore, the power of consumer-to-

consumer communication, also known as word of mouth, has been

significantly magnified. Mangold and Faulds (2009) hence argue that social

media is a hybrid element of the marketing mix, as it enhances traditional

marketing by allowing companies to directly communicate to their consumers,

and transformed non-traditional ways by consumers directly exchanging

experiences and knowledge to one another. Contrary to traditional integrated

marketing communications, the content and frequency of occurrence of the

latter is out of the company’s direct control. Kingaby’s (2012) found that 90%

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of adults use social media platforms- 79% of those who purchase beauty

products online spent half their time researching products pre-purchase

through blogs and other social media. Consequently, the average budget

companies allocated for blogs and social media has tripled in the last three

years.

Given the powerful position of consumer driven conversation and buzz,

managers must learn to influence and form consumer discussions that is in

line with the organization’s mission statement and performance objectives. As

it is crucial to promote consumer engagement to establish a sustainable

customer relationship, it is suggested that companies actively provide

networking platforms, use blogs and other social media and promotional tools.

(Mangold and Faulds, 2009)

1.3.1. Reference Groups

A reference group is an individual or a group considered of having significant

influence and relevance upon an individual’s, aspirations, behavior and

evaluations. Before the Internet was extensively available, most reference

groups were formed with people who had face-to-face contact. Due to the

Internet, it is possible to share interest, opinions and content online through

virtual communities or blogs and reach out to a wider range of people that had

not been met in person. Whereas membership reference groups consist of

people that are known to the members, aspirational groups are composed of

members that people can identify with or admire. Marketers therefore attempt

to adopt an aspirational reference group strategy by focusing on highly visible

and widely admired figures and connect these people to brands and products

in order for them to make consumers associate those admirable qualities with

the products endorsed (Solomon 2010). In the cosmetics industry, this

strategy is widely used by celebrity endorsement. L’Oréal Paris for instance

uses celebrities such as Jennifer López, Beyoncé and Eva Longoria to

advertise their products.

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1.3.2. Opinion Leaders

Recommendations of some people carry more weight than other people’s.

These knowledgeable people whose advice is taken seriously are referred to

as opinion leaders. They are known to habitually influence other people’s

attitudes and behavior. The information opinion leaders provide is considered

extraordinarily valuable, as they possess expert and knowledge power in a

certain product category with which they are able to inspire and guide their

social environment. As they are independent, they present product

information in an unbiased way and consequently depict a credible and

authentic source of opinion seekers.

The blogosphere therefore has provided a massive platform for beauty

bloggers to establish themselves. According to Li (2005), the most significant

motivators for people to blog were self-documentation and self-expression.

Those needs combined with the prospect of monetization have led to a

significant increase in professional relationships between firms and beauty

bloggers. Even though most beauty bloggers receive products for free to

review, opinion leaders do not represent the interest of one firm, unlike

commercial endorses. Therefore, they are able to portray a more relatable

and credible image to consumers and form an ideal link between consumers

and firms. They are the ideal outlets for firms to communicate through a

credible source to their consumers.

Whereas for most people risk is the most purchase-encumbering factor,

opinion leaders are likely to be amongst the first to purchase new products

and thus absorb a large share of that risk, reducing hesitation for the less

courageous. Most importantly, beauty bloggers do not only focus on the

positive aspects of a product like company sponsored communication, but

include negative attributes into their reviews, which makes their opinion

invaluable to information seekers looking to reduce risk (Solomon 2010).

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1.4. Project Objectives

Even though giant market players such as L’Oréal and Estée Lauder have

entered the Asian markets years ago, it has not been effectively explored how

Asian consumers engage in Social Media in terms of beauty. This report aims

to investigate the attitude towards traditional and non-traditional media and

the perceptions thereof from Asian and Non-Asian consumer perspectives. In

Britain alone, Mintel (2012) suggests that 15million British people have

interacted with beauty and personal care brands online through social media.

Still, it is said that cosmetic companies have not managed to unlock its full

potential and haven’t been successful of implementing an effective social

media marketing strategy (Kingaby 2012). In order to understand the

consumer behavior, this research aims to extract and compare Asian and

Non-Asian responses to (1) what media, traditional and non-traditional, they

use to inform themselves about beauty products, (2) how much trust and

confidence they have in different media vehicles, (3) what factors they find

most influential on their purchasing decision and (4) if they actively or

passively engage with social media in beauty terms.

The findings of this research shall provide firms with an insight to consumer

perspective and preferences, and what media is favored and perceived as

most trustworthy to stimulate a purchase intention. This should aid firms when

making advertising decisions for Asian and Non-Asian target markets.

2. Literature Review

2.1. History

It is believed that the use of cosmetics embarked around 12’000 years ago,

when the ancient Egyptians discovered healing properties of essential

scented oils, and started making protective balms from substances such as

beeswax, olive oil and rosewater. Kohl was widely used as eyeliner to

enhance the intensity of the eyes. Cosmetics were popularized to the point

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where they were incorporated in religious rituals, such as the embalming

process before mummification. (Schneider 2005)

Since, the reputation of the use of cosmetics had experienced phases of

rejection or exclusivity, not reaching the status of mainstream until the late

19th century. Throughout the 18th and 19th century, the industry progressed

significantly due to developments in chemistry and medicine. Cosmetics were

still not fully accepted by society, but the Victorian style of the 19th century

demanded women to present themselves with beauty, fragility, precisely

defined facial features and extravagant clothes. Consequently, products such

as lipsticks, eye shadows and nail varnishes started gaining foot in the

market.

The rise of photography and film strongly influenced the 20th century,

increasing the demand for cosmetics in the western world and allowing the

industry to establish itself and invest in innovation. At this time, most of

today’s market giant market players, such as L’Oréal, were founded. They

introduced innovative merchandises such as mascaras and lip-glosses. After

the archaeological discoveries beneath the Egyptian pyramids revealed that

the ancient Egyptians used eyeliners, its sales soared and gained mass

popularity. After 1930, the international fashion and cosmetics industry

transformed quickly, presenting a different trend in each passing decade.

(Historyofcosmetics 2013)

2.2. The Cosmetics Industry

Nowadays, cosmetic products play an important role in all consumers’ lives.

Not only traditional cosmetics such as makeup and perfume, but personal

care goods such as shampoo and toothpaste are indispensable to today’s

western style life. The current cosmetics market is determined by constant

innovation- on the one hand, to gain competitive advantage in a highly rivaled

market, and on the other, to tailor their products to serve individual needs.

This is especially of high importance to such a globally present market, as

consumers come with all skin types, skin colours and personal as well as

cultural preferences, when they are acquired across several regions.

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There is a high turnover of products as the lifespan of regular cosmetics

seldom exceed 5 years. As consumers demand great variety and effective

performance, manufacturers annually reformulate at least a quarter of their

whole product range to stay ahead of the market. The US American

cosmetics market is the largest in the world, followed by Japan and China

(European Commission, 2013).

2.3. The Asian Cosmetic Industry

Global cosmetics sales have not declined once in the past 18 years, whilst

their yearly growth rate reported 4.4% between 1992 and 2011.

Whilst the Chinese cosmetic and skincare market has grown at a steep rate of

17% in the last decade, the premium cosmetics market even reached a

growth rate of 22.3%. With these promising figures and the increase in

disposable income of the middle class, it is no surprise that China and the

Asian emerging markets are of substantial interest to cosmetic companies.

Given the immensely lucrative outlook on the Asian markets, many market

players such as L’Oréal, Estée Lauder, Shiseido PG etc. have been heavily

investing in these areas over the past ten years (Mirae Asset 2013).

L’Oréal’s strategic objective is to acquire another billion customers in the next

ten years and have consequently been stressing on internationalization into

the emerging markets. In 2012, the new markets became the most important

geographic zone for L’Oréal in sales terms, with Asia alone contributing 9.6%,

whereas Western Europe only registered an increase of 0.6%. (L’Oréal

Annual Report 2012)

According to Wantchinatimes (2013), the most profitable industry in China is

the cosmetics and personal goods sector. This can be justified with the

prevalent development of the premium skincare products market in Asia, and

the extremely high margins thereof. (Huang et all 2013)

Furthermore, Daneshkhu (2013) explains that in Asia, the Korean skincare

regime is the most vigorous, including the use of 10-11 products during 30-40

minutes per night, whereas the average French woman only uses 1-3

products during 3-10minutes. The article also suggests that this type of

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skincare procedure corresponds to other countries in the region, concluding

that the potential of multiple product sales are more likely in Asia than other

geographic regions. Besides the Asian willingness to spend more of their

disposable income on cosmetics and the cultural pressures to maintain

perfect skin, this geographic region offers an extension into the men’s

grooming segment. Whereas the use of men’s cosmetics was almost

unthinkable in the past in Europe, the Asian market does not know such

stigma, allowing companies to realize the potential of that segment and

herewith expanding their market reach (Mirae Asset 2013)

The high margin nature of this industry attracts a lot of market players,

resulting in very high competitiveness of the industry. Huang (2013) states

that “the physical product of skin care is largely a commodity business and

the gross margins for premium skin care products are extremely high,

demonstrating the importance of brand value for skin care products where

marketing channels play the dominant role.” Because the value proposition is

thus purely marketing based, cosmetic companies need to carefully design

their marketing strategy in order to win customer loyalty and differentiate

themselves from competitors.

2.4. Marketing

Marketing is said to be the process necessary to satisfy the needs of

stakeholders, such as customers, investors and the internal company

environment itself. (Kirby & Marsden, 2006) A commonly used model, which

was classified and introduced by McCarthy in 1960, is the so-called

“Marketing Mix”. The Marketing Mix is constructed with the use of the “4 P’s”

that refer to product, price, promotion and place. (Grönroos 1994) Each

element is equally as important as the others. In order to establish an overall

brand image, companies adjust each variable in the mix to fit their concept.

This is crucial for them to create a unique selling point that differentiates their

product from others. (GCSE 2010)

As a response to the growing consumer power, a customer-driven approach

has been introduced. This model focuses on the “4C’s”, of which there exist

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two viewpoints. Lauterborn (1990) emphasizes on consumer, cost,

communication and convenience, whereas Shimizu’s (1973) four C’s

concentrate on commodity, cost, communication and channel. (Davis, 2010)

The purpose of marketing ultimately is to favourably influence consumer

behavior, which is defined as “the behaviour involved in searching for,

purchasing, using, evaluating and disposing of products and services that

they expect will satisfy their needs” (Schiffman et all, 2007).

Furthermore, the self-concept theory enlightens how marketing is able to

influence and manipulate consumers to a certain extent. This concept

discusses the beliefs and values a person holds about their characteristics

and how they assess these attributes, continuously comparing one’s actual

self to an ideal self. The problem recognition occurs when there is a

significant difference between the two selves and acts as the base for the

consumer decision-making process. The consumer therefore wants to satisfy

the detected need and starts to search for a solution to his problem. Whilst

this process occurs naturally, it is often encouraged by marketing efforts.

Marketers can uncover hidden needs by introducing the consumers to

opportunities, which might bring them closer to their aspired ideal selves

(Solomon, 2010). It is a common practise, especially in cosmetics advertising,

the consumer’s self esteem through hardly attainable appeals and to then

introduce their products, which are supposed to reduce the previously felt

dissatisfaction. The mechanics of cosmetics advertising was investigated by a

study conducted in 2010 by Apoala-Ibañez, who confirms, “the greatest

influences were found for the feeling of relief from dissatisfaction with one’s

self-image.” Her research revealed that the most chosen advertising

mechanism cosmetic firms use is to lower women’s self perception followed

by a delivery of relief from this displeasure, which translated to obtaining an

emotional benefit through the advertising brand. Ethically, the industry is often

criticized for their chosen strategy (Apaola-Ibañez et all 2010). Even though

often critiqued, images presenting attractive models characterize the norm of

cosmetics advertising, as it is a successful strategy used to influence the

consumers’ desire for the products being presented by inspiring them to

emulate the models. (Zhou & Belk 2004).

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2.5. Cross Cultural Marketing

Advertising is fundamentally subjective to cultural values as it is built on

communication and language. (Usunier 2000) As culture defines the manner

in which people consume and prioritize their needs that mold their style of

living, it is crucial to obtain an understanding of local culture to succeed in

cross-cultural advertising (Ghauri 2010). It is said that consumers commonly

respond positively to advertising messages that demonstrate congruency with

their cultural values, and reward advertisers who recognize and reflect such

aspects in their marketing content. (Müller 1992; Zhang and Gelb 1996)

Consequently, international marketers are faced with the need to

comprehend the impact their marketing campaigns have in terms of cultural

sensitivity and ethical values when taken across regions (Fam and Waller

2003). Nakanishi (2002) argues that western adverts usually use a rational

approach such as facts and figures or expert endorsement to convince

people. Whereas Japanese ads, for example, are more holistically orientated

and have an emotional appeal by utilizing intuitive, affective and empathetic

messages. The implementation of western models is widespread in Asian

advertisements, but is exclusively used to promote non-Asian products

(Clammer 1995). For instance, Japanese consumers feel positively towards

fragrance commercials featuring French models, as it enforces the country-of-

origin-effect and radiates classiness, status and internationalization (Müller

1992). Alibhai-Brown (2010) also suggests that western features are

considered the ideal beauty standard in Asia. Perceptions of beauty standards

are also changing in China; even though western models might be perceived

as correlated to high fashion, some companies favor the use of Chinese

models in order embody a more traditional appearance for the Chinese

audience. (Zhou & Belk 2004). However, Barnes’ study (2008) revealed that

the affinity and likeability of the model was more important to the audience

than beautiful physical features only.

2.6. Traditional Advertising

The traditional forms of marketing are usually built around mass media

advertising. This includes media such as TV, radio, magazine, newspaper-

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and billboard commercials with a large audience. With the rapid growth of the

Internet usage in recent years, however, the traditional advertising industry

has suffered. The major criticisms for traditional advertising include the lack of

measurability of exposure and the lack of linkage to actual return on

investment. (Nova Advertising 2013) Therefore, it has become unthinkable to

exclude Online Advertising from a corporate marketing strategy. Sacks

(2010), however, explains that print media is not dying out, but undergoing a

deep-rooted transformation from print to digital. Figures show that digital

revenues will exceed print revenues, forcing publishers to adapt their products

to digitally compatible. Especially with today’s omnipresence of

technologically advanced devices such as tablets and smartphones, most

print magazines were forced to take themselves online (Challinor 2013)

In the cosmetics industry, magazines play an essential role to reach out to

potential customers. Even though print media is thought to be dying out

slowly, the Professional Publishers Association (PPA) clarifies that in fact,

magazine advertising delivers remarkable return on investment. The study

they had conducted with 20 different branded consumer goods confirmed an

increase of 11.6% in sales compared to the control group that was not

exposed to the magazine adverts. (PPA 2012)

As opposed to the slowly maturing traditional marketing practices in many

industries, the beauty industry witnessed an increase in print media spending

over the last year. Figure 3 demonstrates how L’Oreal Paris, which is

considered to be the most heavily advertising company, has increased their

spending on magazine print advertisements compared to the first quarter of

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the financial year 2012. (Richards 2013)

Figure 3 The top 5 beauty advertisers. Source: AdRadar, Beautypackaging.com

2.7. Online and Social Media Advertising

With the Internet being the largest existing communication tool, it has allowed

marketers to reach consumers in an entirely new way. It is now possible to

target consumers directly- technology has enabled pages to track user

preferences and then deliver ads accordingly. Additionally, websites can track

the traffic on a webpage based on the number of times an ad is being clicked

on, which permits the ability to analyze consumer response to their adverts.

Finally, online advertising provides an interactive platform where it lets

consumers be part of the advertising campaign. (Solomon, 2009) Social

Media Advertising has brought another level to this interactive, two-way

communication model. Consumer engagement has enabled companies to

uncover new ideas on how to market and even improve products. Social

Media has previously also been criticized for not fulfilling its overhyped

expectations from a business perspective. (Deloitte, 2012) Those include

improved insight into consumer behavior, enhanced office productivity with

internal networks and above all, measurable Return On Investment (ROI).

One of the transforming developments that Social Media and online

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commerce as a whole has brought onto the market was measurability. It is

believed that this gap between the desired state and the reality will soon

merge as a result of establishments if new social technologies. The steady

improvement of analytical quantifying tools will soon be able to enlighten the

actual return on investment on social investments, especially if the recent

trend of institutionalizing social practices integrates itself into normalcy

(Holmes, R. 2012). Furthermore, the use of YouTube advertising has allowed

companies to save on TV advertisements, as they are believed to have twice

the recall power than TV adverts alone (ThinkwithGoogle 2013). According to

a report from Forrester Research (2011), it is believed that online advertising

will overtake TV advertising by 2016. (Hof, 2011)

Despite better measurability and consumer targeting, critical voices

concerning personalized retargeting practices have arisen. A study with 2000

participants has shown that 65% of felt that they were exposed to limited

information, as it delivers adverts concerning products that the user had

previously looked up on search engines and possibly already investigated on.

Another 73% felt that their privacy was invaded and responded unfavourably

to targeted online ads (Hof 2012). Consequently, firms should consider

refining their outlets for intentional exposure, as consumers expect more

relevance from their Internet searches.

2.8. Non-Traditional Advertising

Kevin Roberts, the CEO of Saatchi & Saatchi, stated the following in 2005:

“For the first time the consumer is boss, which is fascinatingly scary and

terrifying, because everything we used to do, everything we used to know, will

no longer work.” Kirby (2006) argues that the biggest challenge that has

resulted from the Internet and the abundance of information is the skeptical

and marketing-savvy behavior of consumers. This especially applies to young

consumers who have a pessimistic attitude towards the efforts large

corporations make to win their loyalty. In order to keep up with those

consumers and give off a more credible and authentic image; marketers have

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added new marketing tactics to their portfolio of strategies. Those methods

include buzz, viral, word-of-mouth and guerilla marketing. (Solomon, 2009)

Buzz Approaches

Word of Mouth

Marketing

Strategy that involves giving people a reason to talk

about products and services by facilitating the

conversation

Buzz Marketing Makes people talk about the product or brand by

using high-profile entertainment or news

Viral Marketing

Entertaining and informative messages that are

designed to be passed on in an exponential way,

mostly electronically.

Guerilla Marketing "Attacking" consumers with promotional content in

unexpected places

Figure 4 Source: Word of Mouth Advertising Association

Notarantonio (2009) argues that consumers perceive buzz marketing as more

influential than traditional advertising. Her studies have shown, however, that

buzz marketing has given off a less authentic impression than traditional

advertising. Stone (2012) also affirms that traditional advertising enables

companies to gain market share easily and reduce competition as its high

barriers to entry emphasize the need for distinctiveness and brand prestige.

Even though traditional media has been criticized for being expensive and not

being able to correlate to an actual return on investment, she states that most

consumers can remember ads that have affected their mood profoundly. This,

according to Stone (2012), is proof for the fact that if an advert can change a

customer’s mood, it must inadvertently change their decisions as well. On the

other hand, Kirby (2006) emphasizes that new “ad-busting technology”

enables consumers to ignore advertising by blocking and skipping it- and

therefore challenge the traditional marketing concept.

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2.9. The Influence of Bloggers

Marketers trust bloggers and social networkers to have the ability to create

the buzz that will either make or break a new product (La Plante 2007).

A study carried out by the PR agency DeVries and the weblog BlogHer in

2011 has shown that blogs have twice the influence potential than regular

company advertisements. Their survey examined the most helpful source in

providing beauty product advice and recommendations, to which the

respondents contested with “familiar blogger”, 61%, “store website”, 46% and

“social network”, 33%. 50% of the participants even indicated a purchase of a

cosmetic product following a bloggers recommendation who also publishes

about other topics than beauty (PRWeb, 2011).

Depending on the price range, cosmetics can even be considered a high

involvement product category. If looked at the Maslow’s Hierarchy of Needs, it

becomes evident that the requirement for safety, health and security of body

represent fundamental needs. (Maslow, 1954, Figure 5) Cosmetics are

Figure 5 Source: Maslow

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products that might challenge this intactness of physical integrity; therefore,

consumers can feel a more predominant need to reduce the purchase risk by

performing thorough research before committing to a purchase.

Consumers feel greater skepticism towards cosmetics advertising which

promises to enhance physical attractiveness and relies on verbal claims

(Prendergast and Liu 2009).

Therefore, beauty bloggers have gained tremendous popularity over the years

as they provide valuable advice on beauty products with which they are able

to inspire and guide their social environment. As they are independent, they

present product information in an unbiased way and consequently depict a

credible and authentic source of opinion seekers.

Contrary to commercial endorsers, beauty bloggers are not obliged to

represent the firm’s interest, even though they receive products for free to

review. Unlike company-sponsored advertisements, they also highlight

possible negative product outcomes and portray a more relatable and credible

image to consumers. Beauty bloggers do not necessarily fall into the category

of aspirational people like celebrities and give off a more attainable feel to

readers and viewers. Particularly bloggers who express themselves through

YouTube can directly familiarize their audience with how a product is being

used. These vloggers (video-bloggers) are powerful social influencers with

devoted followers and high levels of engagement on various social media

platforms (Aspler 2013). With over a billion monthly views, it is clear that

consumers seek visual content (YouTube Statistics 2013). Consumers watch

beauty vloggers in order to inform themselves on what products to buy, what

stores they favour and what techniques they use. Whereas brand channels

have an average 10,000 subscribers on YouTube, popular beauty vloggers

have several hundred thousand subscribers. (Aspler, 2013) The most

subscribed beauty vlogger to date is Michelle Phan with over 4 million

subscribers. (Vidstatx, 2013) These visual demonstrations and tutorials can

significantly reduce the purchase-hindering factor of risk for potential

consumers (Solomon 2010).

24

2.10. Word of Mouth in the Cosmetic Industry

The old-fashioned word of mouth is still considered to be the most trustworthy

and powerful form of advertising in the cosmetic industry. (Montague-Jones

2007) According to Qualman (2009), however, that model is plagued by

several shortcomings. He argues that if the information travels from one

consumer to another, the speed at which the news spreads is considerably

low. Furthermore, the original message alters when exchanged and if the

recipients further down the line are unfamiliar with the original source, lack of

trust or identification could lead to discredit of the content of the message.

Alan Wilson, in an interview with Montague-Jones (2007), further reasons that

consumers seldom discuss the products they use, limiting the efficacy of word

of mouth in practice. This is where social media platforms come into the

picture; a Facebook status or a tweet allows the message to be directly

received by the entire network, or reach even further through sharing.

Therefore, social media eliminates the aforementioned flaws and portrays the

ideal vehicle for word of mouth communication. (Qualman 2009) The danger

thereof, however, is the speed at which negative word of mouth spreads. It is

believed that dissatisfied consumers will share their experiences with 11

acquaintances whereas positive incidents will only be spread to 3. (Kotler

1991) Consequently, if the latter is combined with the use of social media to

directly communicate to a wide range of potential consumers, it can have a

very damaging effect on companies.

In addition to increasing their presence on social media platforms, cosmetic

companies have started launching their own social networking sites in order to

strategically drive word of mouth more aggressively. For instance, Procter &

Gamble launched an online community called “Vocalpoint” for women in 2006,

encouraging them to discuss and share their opinions and advice. (Berner

2006) This project was incentivized through various angles, including

numerous free samples of P&G products and with the promise of “the brands

actually listen to what you have to say“ (Vocalpoint, 2013) Vocalpoint has

been successful at acquiring over 600,000 users who receive coupons and

new product samples in the mail and then share their experiences with of 25-

30 other women a day, whereas the average woman only speaks to 5.

25

Vocalpoint promotions made sales in test locations double (Ferguson 2008).

3. Methodology

3.1. Introduction

Before any research was carried out, it was necessary to obtain information

on the existing research possibilities. Initially, the advice of lecturers at the

University of Westminster and the Research Methods for Business Students

5th Edition have been obtained. After encountering articles about studies that

have been conducted to investigate comparable matters, it was decided to

adapt a similar strategy. For the primary research, a quantitative survey

method with a few qualitative attributes was chosen in combination with an

extensive use of secondary data including textbooks, academic articles,

journals and news sites.

3.2. Gap Analysis

After extensive research of secondary literature, it became evident that

numerous studies of cosmetics advertising perceptions and the influence

thereof had been conducted. However, none of those studies had included

the medium of social media such as blogs and YouTube tutorials. On the

other hand, there was a lot of literature available on social media examining

various angles. Therefore, the gap was determined to be the combination of

both the latter, a comparative study of Asians vs. Non-Asians and their

perceptions of traditional and new media in the cosmetics industry.

3.3. Research Design

The research instrument was designed to extract findings that would meet the

objectives of the report. Initially, it was planned to solely use the qualitative

approach by interviewing consumers. Even though this qualitative approach

26

would have provided a deeper understanding of consumer opinions, it was

then found that the responses would be difficult to index and behavioral

patterns to be recognized for a comparative study. Particularly, as the

comparison of Asians and Non-Asians was the objective, it would not have

been ideal, as the respondents should have the same options to choose from

in order to investigate a possible difference in perception and behavior.

Furthermore, the studies previously conducted investigating advertising

perceptions in Japan and China by Barnes (2009) had also adopted the

quantitative design.

Given the time constraint and the aim to discover a behavioural pattern of the

partaking respondents, it was then definitely decided to carry out an online

quantitative survey, as it is a convenient, rapid and cost effective tool.

Considering both Asian and Non-Asian participants, it was the most ideal

approach to carry out the survey online, as that minimized the issue of the

geographical distance to certain Asian respondents and shortened response

time and ensured high distribution speed. Besides multiple choice and

checkbox questions, 5-point scales and a few open-ended questions were

included to give the contestants the opportunity to express their opinion in

more detail. The questionnaire had been designed using googledocs and

distributed through multiple channels to target participants who are interested

in the subject matter of cosmetics. Prior to distribution, a pilot study had been

conducted with a few students from the University of Westminster to verify if

there was a lack of clarity regarding the questions asked and to ensure

eventual correct function. The questionnaire had been amended with the

implementation of the feedback acquired during the pilot study. The results

were obtained through a period of 3 weeks. The questionnaire was in English

and particularly the Asian participants were asked to share the survey to other

potential Asian respondents, as it was more challenging to obtain their

responses given the geographical distance.

The respondents were solely asked to click on their choice of response and

submit the survey, which did not take longer than 5 minutes on an average.

As cosmetics are a topic that is happily discussed by females, there were no

issues regarding unwillingness of participation. Ultimately, 80 responses were

obtained, of which 40 were Asian and 40 Non-Asian. The majority of

27

respondents were students (36%), followed by full time employees (30%),

part-time employees (17%) and unemployed people (7%).

As far as the educational background was concerned, 45% had a Master’s

Degree, 44% a Bachelor’s Degree, 9% High school Diploma and 3% a PhD.

The largest age group represented was the 25-30 year olds (46%), followed

by the 18-24(33%), 31-40 (16%), and 40+ (6%). The data was analyzed

using excel and was compared to results from secondary research.

3.4. Primary Research- Quantitative Survey

In order to meet the objective of investigating and comparing the behavioral

patterns of Asians and Non-Asians towards cosmetics advertising, a survey

had been designed to extract information which could later be correlated and

provide insight. The main age group that was of interest was 18-40, as those

elder are less likely to interact using social media.

The questionnaire comprises three sections. The first part was designed to

obtain basic information of the contestant, such as age, employment status

and ethnicity. It was followed by a section to inquire about the frequency of

interaction with cosmetics, such as purchase, the level of importance of

cosmetics to the contestant’s life and allocated budget spent on cosmetics.

The final and core part requests participants to specify the degree of research

conducted prior to purchases and preferred media vehicles thereof, the level

of trust they have in those and their own social media behavior in beauty

terms. For this part, a five point semantic scale was used, where it could be

chosen from “Strongly Agree” to “Strongly Disagree”. In order to get a deeper

insight, qualitative questions have been incorporated into the survey as well.

Respondents are required to elaborate on to what extent their cultural

background influences their desire to use cosmetics and what cosmetics

companies could improve to be more interesting for them. The responses to

the latter should deliver an understanding of the cultural differences and

media behavior between Asians and Non-Asians.

28

According to Mintel (2012), adults under the age of 35 are most likely to share

their thoughts on beauty products on social media platforms. Even though the

survey addressed women from 18-50+, most responses were purposely

obtained from the age group of 18-40 by choosing the most age-appropriate

distribution channels. Besides addressing students from University of

Westminster, the survey was also distributed through social media. As

another Mintel (2012) article suggests that Facebook is the favored vehicle for

opinion sharing on beauty brands, the survey has been shared on Facebook

pages of popular cosmetic brands and bloggers such as MAC, NARS,

Shiseido, Urban Decay, L’Oreal Paris India, L’Oreal Paris UK, Benefit

Cosmetics, Kosé, Skinfood, Pixiwoo, Estée Lauder and Michelle Phan. This

step has ensured to reach a target audience with a shared interest for this

subject.

3.5. Sampling

In total, 80 responses have been obtained, of which 40 were Non-Asian and

40 Asians. Given the more feminine subject field, it has been decided to only

include female participants into the research. Initially, this research was

considering focusing on one specific nationality versus another, but time

constraints and limited access did not allow for this design to be executed.

Therefore, the Asian ethnicities included Chinese, Indonesian, Malaysians,

Indians and Japanese. The Non-Asian group integrated responses mainly

from Caucasian Europeans and Americans. Hogg and Tanis (2010) suggest

that a sample size of 25 or greater is enough to produce statistically relevant

results. Therefore, it was made sure to exceed this number on both the Asian

and Non-Asian group.

3.6. Pilot Test

The pilot test had been conducted with a small group of 9 people from the

University of Westminster. The survey was distributed to them online and was

filled out under the author’s presence, so that the contestants could clarify

immediately if there was anything unclear with the questionnaire. The pilot

survey had included a question about the disposable income of participants in

29

order to identify how much of their income was allocated to purchase

cosmetics. This question was justified with the fact that the monthly amount

spent on products become more meaningful when compared to the entire

disposable income. Even though the survey is anonymous and the option of

“prefer not to say” was included, the question was removed due to its

sensitivity. Initially, the survey had only included quantitative questions.

However, as the pilot group was eager to discuss and elaborate on their

choices of answers, more qualitative and open-ended questions were

included to allow deeper elaboration.

3.7. Secondary Data

Academic articles, textbooks, newspapers, YouTube videos as well as

journals have been consulted further to determine the existing theories and

approaches. These were compared to and merged with the findings of the

primary research.

3.8. Limitations

As only little literature existed on the influence and popularity of beauty

bloggers, it was originally planned to expand the qualitative field by

interviewing a few bloggers to obtain an understanding of the functioning of

the blogosphere. However, the access significantly more difficult to acquire

than anticipated. Attempts to of contact were largely declined- therefore; it

was then decided to solely focus on the consumer perspective and the

quantitative approach. Ultimately, it allowed the research to isolate the

findings better rather than merging them with a qualitative result from the

source that was investigated through the sample group.

As above-mentioned, the focus on solely 2 nationalities was rejected due to

limited access and absence of time. As there were numerous nationalities in

both of the groups, it might give a more general result as the mixture of

cultures might deteriorate some of the responses.

Also, Kotler (2009) explains that some Chinese find hypothetical questions

difficult to answer, and the Japanese encounter difficulty with scale-based

questions. Barnes (2009) also mentions that the Chinese Confucian values

30

might bias Chinese participants when answering to a 5-point scale and led

them towards a mid-point response.

3.9. Data Analysis

Excel was used to analyze and quantify the obtained data. Charts were drawn

to visualize the results for a better understanding. In order to weigh the results

and compare both groups against each other, the answers have been

numerically weighed.

3.10. Ethical considerations

All contestants were informed about the purpose of this research before

participating in the study. They were also informed about its anonymity and

the survey was designed to be completely confidential. Therefore, no names

or Westminster IDs were obtained when responses were recorded. However,

due to the culturally investigative nature of this study and categorization and

statistical purposes, the contestants were asked for age and ethnicity. The

partaking was entirely voluntary. The creation of the survey online enabled the

study to be paperless and did not require additional sealed storage. The data

extracted from the interviews will not be misrepresented. No bias will be

implicated in interpreting the collected data. Only information of which

permission had been obtained will be published.

4. Data Analysis and Interpretation

The data used in this research has been gathered both from secondary and

primary research. The primary research has been conducted through an

online questionnaire (Appendix). As secondary sources, academic journals

and articles as well as my supervisor’s input have been implemented.

31

4.1. Basic Data

The basic data revealed that cosmetics play a more crucial role in Asian

respondent’s life than Non-Asians. Figure 6 demonstrates the numerical

difference, as the survey ask the respondents to rate the importance on a 1-5

scale, where 1 was least important and 5 most important.

Figure 6

Consequently, the Asian group disclosed a slightly larger average monthly

spending on cosmetic products. (see Figure 7)

Figure 7

The respondents were also asked to specify the type of cosmetics they tend

to purchase. The survey gave the option of choosing from drugstore skincare

0

20

40

60

80

100

120

140

160

Importance

of

cosmetics

Importance of Cosmetics

Asian

Non-Asian

Asian81

Non Asian73

Monthly Cosmetic Expenses

32

(Skincare D) and makeup (Makeup D) and prestige skincare (Skincare P) and

makeup (Makeup P). Whilst drugstore makeup was of similar interest level,

prestige makeup and drugstore skincare were heavily preferred by Non-

Asians. Prestige Skincare, however, was notably more of Asian interest. The

literature supports this finding as Asian women use up to 11 skincare products

every evening, compared to modest 1-3 products of the average non-Asian

woman. Moreover, the result reflects the exponential growth of the Asian

luxury skincare market.

Figure 8

4.2. Motivation and Influencers

In order to examine the motivation behind the use of cosmetics, the

respondents were asked to state the reason why they had started using

cosmetics. There were influencers from the social environment, such as

family and friends, or the general social and cultural framework that could

impose a certain norm or expectation. The other factors included non-external

factors such as acne or problematic skin, which would intrinsically motivate

the consumer to reach out for cosmetic products to better their current state.

0

5

10

15

20

25

30

Makeup D Makeup P Skincare D Skincare P

Type of Cosmetics Drugstore vs. Prestige

Asian

Non-Asian

33

The last factor was celebrity, another external influence by which many

women use as a source of inspiration. (Figure 9)

The Non-Asians as well as Asians were both strongly influenced by friends.

The Asians also felt a stronger influence from family than their counterparts,

which has been further validated by the high responses in social and cultural

pressures. Celebrity was more a more popular source for Asians, which

contrasts Barnes’ (2009) findings, as his research showed that celebrity was

perceived to be relatively unimportant.

The Asian social and cultural influence can be supported with the fact that the

nationalities that had partaken in this survey were all from a more collectivist

cultural background. The individualism level according to Hofstede is

considerably low, as Indonesia (14), China (20), Japan IDV (46) and India

(48) are all considered collectivist cultures. (The Hofstede Centre 2013)

Yaveroglu and Donthu (2002) argue that collectivist cultures are more likely to

imitate each other and rely strongly on Word of Mouth from the surrounding

society.

The underlying issue in focus is the degree of interdependence a society

maintains amongst its members, and is determined by whether people define

themselves as “I” or “we”. Whereas in individualistic societies, people are

solely expected to take care of themselves and immediate family, collectivist

societies move in groups and look after each other in trade for loyalty. (The

Hofstede Centre 2013)

Consequently, the Asian responses valuing family and social pressure higher

than their global counterparts could be related to their collectivist nature.

Furthermore, Asians not only use more skincare products than Non-Asians,

but also have another cultural motivator; Skin color, or the fairness thereof.

Having fair skin is considered ideal and is associated with a better social

status, especially in India (Rajesh 2013). The absence thereof in western

cultures could have also contributed to the lower responses in cultural

pressure and family influence.

34

Figure 9

As nowadays there are countless media available to inform oneself about new

products, participants were inquired about their preferences. (Figure 10)

It stands out that Asians particularly rely on the word of mouth

recommendations of their family and friends, which is again in line with their

collectivist culture. It turned out that Non-Asian valued traditional media such

as magazine and TV advertisements much more than Asians. Even though

traditional media is sought to be dying out, the literature supports the fact that

it is still of crucial importance in the cosmetic industry. Non-Asians have

further favoured company social media, such as a Facebook fan pages, and

e-mail newsletters, which provides the reader with regular updates. The Non-

Asian preference pattern reveals a slight preference for more factual and

tangible media. The interest in blog and YouTube recommendations were

almost equal on both sides, which could be justified with the fact that there is

equal access and availability of the latter, and no differing incentives that

could influence the preference. For both focus groups it can be concluded that

external motivators were stronger than intrinsic ones such as Acne and

sensitive skin.

0

5

10

15

20

25

30

How did you get interested in cosmetics?

Asian

Non-Asian

35

Figure 10

After establishing the preferred source of information, the contestants were

asked to evaluate which factors stimulate their purchase intentions the most.

This was a 5-point scale question, which has then been evaluated by

weighing “strongly agree” as 5 and “strongly disagree” as 1. The contestants

were able to choose as many checkboxes as they desired. The sum of the

weighing numbers 1-5 were exported into the chart (Figure 11)

It stands out that Asians lean towards online media such as reviews, YouTube

tutorials and the products that were used. Bloggers, with whom the Asian

consumers identify, seem to have a strong influence on purchase intention

along with endorsed celebrities and again family and friends. It is evident that

Asians strongly identify with aspirational reference groups such as celebrities,

and feel the need to reduce the purchasing risk through opinion leaders

before committing to a product.

Non-Asians significantly favored the advice of sales staff more than any online

opinions. This could be linked to the fact that in Western cultures, a less

0

5

10

15

20

25

30

Preferred Medium for Information

Asian

Non-Asian

36

emotional, more rational appeal is preferred and often, experts are endorsed

when it comes to promotion and advertising (Nakanishi 2002). Sales staff is

therefore trained experts who can counter any mistrust or uncertainties with

professional knowledge. Therefore, celebrities had the lowest impact on them,

as from a non-Asian point of view; they do not exert any expert or knowledge

power. In this research, non-Asians were much less influenced by aspirational

reference groups. However, they did indicate a similar amount of influence on

purchase intentions through popular bloggers as Asians. Friends and Family

recommendations were also of highest value to the Non Asian respondents.

Figure 11

Even though Asian consumers felt strong purchase intention after consulting

online outlets such as bloggers and reviews, it turns out that Non-Asians

conduct a more thorough pre-purchase research. (Figure 12) Non-Asians

therefore feel a stronger need to reduce their pre-purchase risk and are less

likely to commit to a product and perform impulse buys. This could again be

supported with the thirst for factual knowledge of westerners. Asians on the

other hand indicated that impulse buys were more likely for them. Research

0 50 100 150 200

Friend/Family Recommendation

Identification with Blogger

Celebrity Endorsement

Products used in Tutorial

Online Reviews

Sales Staff

Popular Blogger

TV Advertisement

Magazine Ads

Factors Influencing Purchase Intention

Non-Asian

Asian

37

has been conducted which confirms that store design has an impact on

impulse buys (Mohan, 2013). Firms can therefore strategically plan their store

designs to actively provoke impulse buys in Asian countries.

Figure 12

It was discovered that only a small number of participants engaged actively in

social media activities in beauty terms. As supported with the preference of

online and blogging information for Asians, they indicated a higher passive

consumption, whereas Non-Asians have strongly denied the active usage of

the available social media tools. Their passive consumption was lower as

they had previously indicated a moderate interest and influence power of

bloggers and online reviews.

146 148 150 152 154 156

Intensity of Pre-Purchase Research

Non-Asian

Asian

38

Figure 13

4.3. Company Advertising

As company sponsored advertising messages habitually only highlight the

positive attributes of a product, consumers feel great skepticism towards

them. Prendergast and Liu (2009) argue that consumers feel greater

skepticism towards adverts for cosmetic products. Their explanation for this

finding was that these products claim to improve or enhance physical

attractiveness. Marketers in this industry heavily rely on verbal claims rather

than specific numerical statements to highlight the effects of their products.

Consumers also felt that verbal claims offer a wider scope for deception than

more specific quantifiable statements. (Prendergast, 2009)

As the research has revealed, family and friends proved to be the most

trustworthy and influential source for both ethnic groups. This confirms the

consumer’s desire to choose unbiased word-of-mouth recommendations over

any other source at any time. Non-Asians felt more critical towards direct

company advertising, whereas Asians felt largely indifferent or showed a

moderate trust in its credibility. It can be suggested that the more rational

approach to cosmetic purchasing of Non-Asians exposed a more critical

analysis of advertising.

0 5 10 15 20 25

Yes

No

No, but passively

Do you actively engage in cosmetics social media?

Non-Asian

Asian

39

Figure 14

In order to combat the mistrust of the marketing savvy consumers, firms are

trying hard to give off a more authentic, genuine and more relatable image of

their products to increase positive word of mouth. The survey asked the

participants to express their opinion in terms of what firms could do to improve

in order to gain more of their attention. The majority stated that they wished

firms provided more transparency regarding the contents and claims products

make. Furthermore, both ethnic groups felt that the use of Photoshop in

cosmetics advertising made them less credible and relatable, resulting in a

negative feeling towards the brands. The respondents suggested the use of

more relatable models to reduce the distance to the unattainable image the

brands give off. The Asian respondents also strongly suggested that brands

should represent themselves with models of all skin shades. The most

prevalent answer of non-Asians included the desire for a strong sense of

corporate social responsibility and better trained sales staff that delivers

trustworthy expertise. It can be concluded that the open-ended answers all

expressed a desire for more authenticity, as the consumers are actively

seeking for reasons to trust the company.

0

5

10

15

20

25

1 2 3 4 5

No bias Strong bias

Level of Trust in Company Advertising

Asian

Non-Asian

40

The most worrisome aspect of the usage of consumer induced online

activities, such as reviews, is that it is out of direct control of the marketer

(Mangold and Faulds 2009). Especially as of mouth spreads more intensely,

as it is believed that dissatisfied consumers will share their experiences with

11 acquaintances whereas positive incidents will only be spread to 3. (Kotler

1991) Therefore, firms are trying to actively inject positive word of mouth into

the market by launching their own social networking site where consumers

can exchange tips, review products, socialize with like-minded consumers and

inform themselves about products by watching tutorials. This allows word of

mouth to be generated in a company-controlled environment, and firms are

faster to react to consumer dissatisfaction and negative experiences.

Rewarding reviewers with free samples incentivizes those sites. Moreover,

firms have a direct access to customer feedback- negative and positive- and

can improve their products accordingly. The research exposed that Non-

Asians had no interest at all to engage in such company-launched social

networks. They also indicated a heavy preference for independent social

networks or review platforms. This is supported with the previous finding of

the strong bias Non-Asians feel towards company advertising. Asians

indicated an interest in using these types of social networks and a lesser

attention in independent sites. Only the minority showed a regular interaction.

Whilst the negative attitude towards those WOM networks can be justified

with lack of trust and suspicion, however, the fact that the majority had not

heard of these networks before cannot.

41

Figure 15

5. Conclusion and Recommendations

Even though similar in many ways, the comparative analysis had revealed

some significant differences between the preferences of Asian and non-Asian

participants. It can be generally concluded that both groups trust their friends

and family’s recommendation the most and would always prefer that medium

to any other. There was also a robust indication that Non-Asians feel a strong

bias towards company advertising, whereas Asians felt more indifferent and

were also interested in using the company launched social networks. The

recommendations will be made in line with the objectives of this report.

The first project objective was to figure out what media, traditional and non-

traditional, the focus group uses to inform themselves about beauty products.

Here, the most significant differences were visible in the fact that Non-Asians

chose print media such as female magazines and TV advertisements,

whereas Asians preferred friends/family, blogs and YouTube tutorials.

0 5 10 15 20

I regularly use them

Prefer independent social

networks/reviews

I have not used them, but would

like to

I have never heard of them

Company Launched Social Networks

Non-Asian

Asian

42

Therefore, as L’Oréal already demonstrated in the first quarter of this year, it

would be beneficial for firms to increase magazine adverts and have their

products included on beauty editor’s favorites lists in western countries.

Furthermore, as TV adverts were also a preferred medium for non-Asians,

firms should continue their TV advertising strategy and possibly consider

replacing some of those with YouTube adverts, as they showed double the

recalling power and are significantly cheaper to run frequently.

For Asian countries, firms should consider to increase their sponsorship and

endorsement of bloggers. L’Oréal employed the most subscribed beauty

YouTuber Michelle Phan in 2010 to be their first official video makeup artist

and to have her endorse some of their products in her online tutorials (L’Oréal

USA 2010). 3 years later, she was able to create her own cosmetics line

based on all the online feedback she had gotten from her subscribers

throughout the years (Buck 2013). Even though this lead to a slight loss of

authenticity, Phan still has over 4 million subscribers she can reach out to.

Firms could adapt the same approach as L’Oréal, however, in order to

maintain credibility, it might be worth considering providing free products to

bloggers to review. This way, the blogger is under no contractual obligation to

review favourably and will be regarded as a credible and authentic source by

her readers/viewers. Also, if there should be any negative feedback regarding

the products, firms can react quickly to improve their products.

Moreover, firms should definitely consider introducing more e-word of mouth

into the Asian markets. Asians did not have a negative attitude towards these

company launched social networks, but the majority was unaware of their

existence. Given that recommendations from friends, family and bloggers was

appealing to them, firms should try establishing networks of such nature to

increase buzz. The qualitative questions have also revealed that Asians would

like to have access to more free samples; the WOM networks would therefore

be an ideal way to build a mutual relationship with consumers.

The second objective was to examine the level of trust and confidence

respondent had in different media vehicles. Non-Asian showed a strong bias

to company advertising, and did not have an interest whatsoever in using the

company WOM social networks. However, it was discovered that Non-Asians

also perform a more vigorous pre-purchase research than Asians. Non-Asians

43

therefore seek for intentional exposure to information. Hence, firms operating

in western countries should provide an excellent customer service and

provide an abundance of reliable product information on their websites. The

latter will be very beneficial as all respondents wished for more transparency

and integrity from cosmetic companies. Firms need to provide a user-friendly

interface for consumers, especially for complaints and feedback. Consumer

dissatisfaction will spread negative WOM, whereas a well-handled complaint

could lead to increased customer loyalty (Solomon 2010).

Asians on the other hand felt largely indifferent towards company advertising

and expressed an interest in using the WOM networks. As previously

mentioned, firms should advertise the existence and benefits of those

networks in order to gain a larger consumer base in the Asian markets.

The third objective was to determine the factors they find most influential on

their purchasing decision. Asians were most likely to purchase a product after

relying on online reviews and blogs as well as on friends and fami ly

recommendations. Companies should closely monitor the buzz created on the

Internet and provide popular bloggers with coupon codes, which viewers and

readers can use to get a discount off their initial purchase. This should

increase and incentivize the desire to purchase.

Non-Asians, besides also relying on friends and family, felt that sales staff in

stores would influence their purchase intention the most. Westerners prefer

more rational and factual advertisements with expert endorsements, where

sales staff are also considered to be product experts (Nakanishi 2002). Firms

might therefore contemplate improved staff training, as well as an

implementation of best practice sharing. They should make their in-store

services more competitive in order to differentiate from other market players.

The last objective of this report was to explore the desire of respondents to

actively or passively engage with social media in beauty terms.

This research has resulted in the fact that only the minority actively engages

in using social media for beauty products. The majority of Non-Asians do not

use social media at all for product reviews and tutorials. Asians on the other

hand have demonstrated being keen on consuming social media content

44

passively. If companies are keen on increasing the engagement activity on

social media platforms, they need to provide incentives. Kelly (2007) believes

that conversational marketing is the key to succeed as a marketer in this

generation. She quotes “Traditional marketing and communications do not

help people talk. Advertising and direct marketing promote, web sites and

public relations inform. Vision, mission and values statements are directional.

Messaging documents are too often written to be read, not said.” Firms need

to accept that this type of marketing is difficult to control and be in charge of,

however, it has become a necessity since consumers are marketing savvy

and have less trust in companies and also struggle to make sense out of so

many choices and vast amounts of accessible information. Therefore, firms

need to eliminate worthless buzz and create dynamic stories along with their

products to get consumers genuinely talking (Kelly 2007).

6. Limitations

This study will have its limitations due to numerous factors. Firstly, the Internet

and especially the social media market is a constantly developing

phenomenon. It is problematic to conduct a research if the examined

variables are changing fast. Also, the number of participants in the primary

research might not be enough to give a completely accurate picture, as this

field is strongly influenced by personal preference.

Due to the fact that the participants’ employment statuses were

inhomogeneous, it deteriorated the results when spending and category of

cosmetics were asked for. It was evident that employed participants had a

much higher interest in prestige skincare and makeup, whereas most students

spent less on an average and stuck to drugstore products. The study would

have shown clearer result if the participants were all from the same income

group i.e. had the same amount of money to spend on cosmetics.

Given the time constraints and limited access, it was not possible to focus on

two contrasting nationalities only. Therefore, different cultural backgrounds on

both the Asian and Non-Asian group might have deteriorated the results

further.

45

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7. Appendix

54

8/25/13 Cosmetics and Social Media

https://docs.google.com/forms/d/1xMexHRwMnR8rqRbsNVpx5mUAchZd0DkpMub7KHumI74/viewform 1/6

Cosmetics  and  Social  Media

Dear  participant,  thank  you  so  much  for  taking  part  in  my  survey!  I  am  investigating  the  correlation  between  your  cultural  background  and  how  media  influences  your  cosmetic  purchasing  process.  Cosmetics  include  Makeup  and  Skin  care  (Face  and  Body),  but  not  haircare  and  personal  care  goods  such  as  toothpaste  and  deodorant.  I  am  not  recording  your  Westminster  ID,  name  nor  e-­mail,  so  this  survey  will  be  completely  anonymous.Your  feedback  is  invaluable  to  my  dissertation  and  I  am  very  grateful  for  your  contribution.  *  Required

55

8/25/13 Cosmetics and Social Media

https://docs.google.com/forms/d/1xMexHRwMnR8rqRbsNVpx5mUAchZd0DkpMub7KHumI74/viewform 2/6

What  age  group  are  you  in?  *

 18-­24

 25-­30

 31-­40

 41-­50

 50+

What  is  your  educational  background?  *

 Highschool

 Bachelor's  Degree

 Master's  Degree

 Other:  

What  is  your  employment  status?  *

 Student

 Part-­time  employed

 Full-­time  employed

 Self-­employed

 Unemployed

 Other:  

What  is  your  ethnicity?  *

PLEASE  SPECIFY  YOUR  NATIONALITY  IN  "OTHER"

 Asian

 Caucasian

 Mixed

 Black

 Latin

 Middle  Eastern

 Other:  

Where  did  you  grow  up?  *

Please  specify  the  country  you  spent  most  of  your  time  in:

How  frequently  do  you  purchase  cosmetic  products?  *

 Weekly

 Twice  a  month

 Monthly

 Occasionally

 Other:  

How  much  are  your  average  monthly  spendings  on  cosmetics?  *

 £0  -­  £25

56

8/25/13 Cosmetics and Social Media

https://docs.google.com/forms/d/1xMexHRwMnR8rqRbsNVpx5mUAchZd0DkpMub7KHumI74/viewform 3/6

 £25  -­  £50

 £50  -­  £100

 £100  -­  £200

 £200+

How  did  you  get  interested  in  cosmetics?  *

 Friends

 Family

 Acne

 Problematic/Sensitive  Skin

 Social  and  Cultural  Influence/Pressure

 Celebrities

 Other:  

How  important  are  cosmetics  to  you?

1 2 3 4 5

Very  Important Not  Important  at  all

What  type  of  cosmetics  do  you  typically  purchase?  *

 Makeup  -­  Drugstore

 Makeup  -­  Prestige

 Skincare  -­  Drugstore

 Skincare  -­  Prestige

 Other:  

How  well  researched  are  your  purchases  typically?  *

 Impulsive

 Moderately  researched

 Always  well  researched

 Depends  on  price  -­-­>  more  expensive  =  better  researched

 Other:  

How  do  you  learn  about  new/existing  beauty  products?  *

 Print  Media  (  Magazines,  News  Papers  etc.)

 TV  Advertisement

 Informercial  Channels

 Cosmetic  Company's  Social  Media  (e.g.  L'oreal's  Facebook  page)

 Bloggers  (Social  Media)

 Youtube  Tutorials  (Social  Media)

 Friends/Family

 Beauty  Box  Subscription  (  Glossybox,  Birchbox,  etc.)

 E-­Mail  Newsletters

57

8/25/13 Cosmetics and Social Media

https://docs.google.com/forms/d/1xMexHRwMnR8rqRbsNVpx5mUAchZd0DkpMub7KHumI74/viewform 5/6

In  your  opinion,  how  far  does  your  cultural  background  influence  your  desire  use  cosmetics?*

How  trustworthy  are  beauty  company  advertisements  for  you?  *

1 2 3 4 5

Very  Trustworthy,  Unbiased Not  Trustworthy  at  all,  Strong  bias

How  do  you  feel  about  company-­launched  social  networking  sites?  Are  you  using  any  ofthem?  *

For  example,  Procter  &  Gamble  has  launched  their  own  social  networking  site  called  vocalpoint,where  users  can  interact  and  share  their  tips  and  tricks  to  increase  word-­of-­mouth.

 I  regularly  use  them

 Prefer  independent  social  networks/reviews

 I  have  not  used  them,  but  would  like  to

 I  have  never  heard  of  them  

 Other:  

In  your  opinion,  what  could  cosmetic  companies  improve  to  be  more  interesting  for  you?  *

Thank  you  so  much  for  your  time!