The Intricacies of Consumer Perception and Behaviour of Consumers of Cosmetics in India
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1 The Intricacies of Consumer Perception and Behaviour of Consumers of Cosmetics in India Kameswara Rao Poranki Professor in Department of Marketing, FAFS, Al Baha University, Saudi Arabia (KSA) & Abstract The increase in the usage in Cosmetics and toiletries become manifold in India, because along with women more and more men are also using for their personal grooming. There are some cosmetics like body sprays, perfumes and other cosmetics and toiletries are predominantly used by men in India. As a result the rising demand from men, the Indian market is getting enlarged and many players are coming out with cosmetic products especially skin care products for men. With the advent of globalization the increase in usage of cosmetic products and their penetration into many markets leads to high competition among companies and to exploit opportunities offered by this sector. The researcher has made an solemn attempt to find out the intricacies of consumer perception and consumer behaviour of consumers of cosmetics in Visakhapatnam, India. Originality/value: The researcher has conducted research on Cosmetic products of Lakme, of HUL (Hindustan Unilever Limited) at Visakhapatnam, Andhra Pradesh of India to garner the intricacies of Consumer Behaviour and Perception of Consumers of Cosmetics in India. Keywords: Consumer Behaviour, Perception, Consumer satisfaction, brand awareness and product quality. Introduction The researcher has found that in the history of ancient cosmetics can be traced back to the cultures of ancient Greece and Roman Empire, where people used herbal concoction with components like henna, sage and chamomile to darken their hair is clearly evident. It is very interesting and startling fact that the India's retail beauty and cosmetics industry, currently estimated at $950 million, is likely to almost treble to $2.68 billion by 2020, experts said and annual growth in the Indian beauty and cosmetics markets is estimated to remain in the range of per cent in the coming years, twice as fast as that of the US and European markets. According to the editor Massooma at New Age Salon & Spa magazine and knowledge partner for 'International Beauty Mart' (IBM) 2014, believes awareness in India of the latest global beauty trends and the numbers are prompting more international players to set up shop and increase their presence in India. It is reported that the India's cosmetics market is reportedly growing at per cent annually, twice as fast as that of the US and European markets and the demand for skin whitening products by men as well as women, is driving the trend but other beauty products are not far behind. Also, since last five years, cosmetics products have seen a growth of 60 per cent. The most striking fact is that the skin care cosmetics have experienced a relatively slower growth and products such as anti-wrinkle creams, cleansers and toners are not as popular as facial creams, moisturizers and fairness creams in this genre. Companies like Pond's and Fair & Lovely top the list in this segment. The growth in number of salons is 35 percent and hair and beauty industry is seeing a per capita annual spend of $1.2 which is expected to grow to $ 6.2 by The spa and body treatment segment is estimated to grow approximately $772 million over the next five to eight years. As per the increase in consumption in rural and semi-urban areas, the fast-moving consumer goods (FMCG) market is set to double from $14.7 billion in to $30 billion in 2014 in order to become the fourth largest sector in the economy with a market size in excess of $14.7 billion," Manoj Mehta, chairman, IBM 2014, said and as per the study titled "Prospects in the FMCG sector," recently made public by the Associated Chambers of Commerce and Industry of India, FMCG sector will witness more than 50 per cent growth in rural and semi-urban India by 2014 by experts. At this juncture, All India Hair & Beauty Association and the Indian Franchise Association and the Indian > RJSSM: Volume: 05, Number: 1, May 2015 Page 125
2 Spa and Wellness Association, IBM 2014 will also hold special master classes on trends in hair, makeup, skin and nail etc ( This gives me an opportunity to work on with this endeavor focusing on the Consumer behavior and perception of women towards cosmetics with special reference to the Lakme cosmetics products. The primary objective of the study is to understand the consumer behavior and perception of women by studying the awareness of the cosmetic products within the consumers and the number of consumers who take the products from Lakme. Review of Literature Perception According to august researchers, the term Perception derived from the Latin perceptio, percipio is the organization, identification, and interpretation of sensory information in order to represent and understand the environment across the market (Schacter, Daniel, 2011). However, thel perception involves signals in the nervous system, which in turn result from physical or chemical stimulation of the sense organs of human body(goldstein,2009). According to ( Bernstein, Douglas A,2010) the vision involves light striking the retina of the eye, smell is mediated by odor molecules, and hearing involves pressure waves and also, the Perception is not the passive receipt of these signals, but is shaped by learning, memory, expectation, and attention. It is interesting to note that the same author explained that the Perception would somehow be split in two. One is the processing sensory input which transforms these low-level information to higher-level information and for example, it extracts shapes for object recognition. The second one is the processing which is connected with person's concept and expectations or knowledge and selective mechanisms like attention that influence perception. According to the author Goldstein(2009) the Perception depends on complex functions of the nervous system, but subjectively seems mostly effortless because this processing happens outside conscious awareness. It was observed that the subject of psychology from the 19th Century, it was beginning to understand the nature of perception has progressed by combining a variety of techniques(gregory, Zangwill,1987). Therefore, the author Kameswara Rao Poranki (2014) has advocated in his research paper on 'Preferences towards male deodorants consumers and retailers in Saudi Arabia' that there is a need for understanding the Perception by the marketers before understanding the 'Consumer Perception' because there is a significant impact on consumer behaviour as the behaviour of consumers are directly proportional to their perceptions based on previous experiences and judgments upon the products or services they had used. Source: tomstinrealty.com The above figure explains about the consumer perception based on intergenerational influence. It tells us the strength of family relationship with respect to basic influence through product and brand type while evaluating the product through the expertise, resource control. perceived similarity while considering perceived risk of using the products finally leads intergenerational influence. It means from one generation to another the consumer perception of specific brands of products has been influenced as per the above conceptual model on consumer perception. > RJSSM: Volume: 05, Number: 1, May 2015 Page 126
3 Consumer Behaviour The researchers defined that the, Consumer Behaviour is the study of individuals, groups, or organizations and the processes they use to select, secure, use, and dispose of products, services, experiences, or ideas to satisfy needs and the impacts that these processes have on the consumer and society at large (Kuester, Sabine 2012). Consumer Behaviour has the combination of the factors like psychology, sociology, social anthropology, marketing and economics are most relevant. The consumer behaviour helps the marketers to understand the decision-making processes of buyers, both individually and in groups such as how emotions affect buying behaviour of either products or services. Generally the characteristics of individual consumers such as demographics and behavioural variables in an attempt to understand people's wants and also tries to assess influences on the consumer from groups such as family, friends, sports, reference groups, and society in general for better understanding (Lynn R. Kahle, Angeline G. Close,2011, Elizabeth A. Minton, Lynn R. Khale 2014). The author Kameswara Rao Poranki has defined the consumer behaviour is the activity of an individual buyer who responds to various marketing stimuli and make a choice on buying of a product or service. Another author defined the Customer behaviour study is based on consumer buying behaviour, with the customer playing the three divergent roles of user, payer and buyer in general and the research in this field has shown that consumer behaviour is difficult to predict, even for experts in the field of Marketing (J. Scott Armstrong, 1991). The History of HUL (Hindustan Unilever Limited) In the summer of 1888, visitors to the Kolkata harbour noticed crates full of Sunlight soap bars, embossed with the words "Made in England by Lever Brothers". With it, began an era of marketing branded Fast Moving Consumer Goods (FMCG). Soon after followed Lifebuoy in 1895 and other famous brands like Pears, Lux and Vim. Vanaspati was launched in 1918 and the famous Dalda brand came to the market in In 1931, Unilever set up its first Indian subsidiary, Hindustan Vanaspati Manufacturing Company, followed by Lever Brothers India Limited (1933) and United Traders Limited (1935). These three companies merged to form HUL in November 1956; HUL offered 10% of its equity to the Indian public, being the first among the foreign subsidiaries to do so. Unilever now holds 67.25% equity in the company. Pond's (India) Limited had been present in India since It joined the Unilever fold through an international acquisition of Chesebrough Pond's USA in Lakme Limited, formed a 50:50 joint venture, Lakme Unilever Limited, to market Lakme's marketleading cosmetics and other appropriate products of both the companies. Subsequently in 1998, Lakme Limited sold its brands to HUL and divested its 50% stake in the joint venture to the company. It was noted that HUL formed a 50:50 joint venture with the US-based Kimberly Clark Corporation in 1994, Kimberly-Clark Lever Ltd, which markets Huggies Diapers and Kotex Sanitary Pads. HUL has also set up a subsidiary in Nepal, Unilever Nepal Limited (UNL), and its factory represents the largest manufacturing investment in the Himalayan kingdom. The UNL factory manufactures HUL's products like Soaps, Detergents and Personal Products both for the domestic market and exports to India. Finally, BBLIL merged with HUL, with effect from January 1, The internal restructuring culminated in the merger of Pond's (India) Limited (PIL) with HUL in The two companies had significant overlaps in Personal Products, Specialty Chemicals and Exports businesses, besides a common distribution system since 1993 for Personal Products. The two also had a common management pool and a technology base. The amalgamation was done to ensure for the Group, benefits from scale economies both in domestic and export markets and enable it to fund investments required for aggressively building new categories. In January 2000, in a historic step, the government decided to award 74 per cent equity in Modern Foods to HUL, thereby beginning the divestment of government equity in public sector undertakings (PSU) to private sector partners. HUL's entry into Bread is a strategic extension of the company's wheat business. In 2002, HUL acquired the government's remaining stake in Modern Foods. On 17th October 2008, HUL completed 75 years of corporate existence in India. Interestingly, on 15th November, 2010, the Unilever Sustainable Living > RJSSM: Volume: 05, Number: 1, May 2015 Page 127
4 Plan was officially launched in India at New Delhi. HUL completes 80 years of corporate existence in India on October 17th, Source: Source: Methodology Simple random sampling is used and the primary data was collected from 100 respondents and out of these 100 respondents 60 were specifically Lakme customers and the age group of respondents are 18-20; 21-24: and some are more than more than 30 years. The researcher had framed suitable objectives for this study and also collected secondary data from various published sources as well as from the websites of the company under study. As per the framed up Hypothesis, this research study conducted the testing of Hypothesis from the data. Objectives 1. To know the general perception of consumers towards cosmetics products. 2. To find out the growth of cosmetics sector in a city like Visakhapatnam of India 3. To estimate the awareness of consumers about Lakme. 4. To find out the intricacies of perception towards Lakme products in India. 5. To find out the intricacies of consumers' behavior about cosmetics like Lakme. Results It is clearly evident from this research the Lakme is the clear market leader in cosmetics Industry of India as per the consumer perception across all age groups and income levels out of which 60 respondents out of total 100 respondents are using Lakme products but only 20 are using L'Oreal and > RJSSM: Volume: 05, Number: 1, May 2015 Page 128
5 15 consumers are using Garnier and only 5 are using Lotus cosmetics. It was found that during the investigation the consumers are using some products like mascara, eyeliner, foundation, face-powder, blushers etc. However, 58 consumers felt that their brand of cosmetics are healthy and 20 consumers are perceiving these cosmetics are harmful to health. It is interesting to note that 35 consumers are using these cosmetics as thery are economical. Also, 68 consumers are spending less than Rs. 500 on their cosmetics but 14 consumers are spending between Rs Rs in cosmetics. 44 people appreciate the facial and massage services provided by their favorite cosmetic but 20 consumers out of 60 users who use only Lakme products, while 18 out of 60 uses it because Lakme is very economical in nature and 34 consumers out of 60 users of Lakme products use the sunscreen lotion the maximum times, the next product being lip gloss. The consumer awareness about Lakme is good among 28 consumers and 20 consumers out of 60 use Lakeme makeup products, while 17 of them use Lakme products of skin protection. It is nice to note that 28 consumers are rated Lakme as good while 18 found rated it as excellent and 14 of them rated it as moderate. Finally, was found that the 48 consumers of Lakme are satisfied by the services provided by the company and 53 are fully satisfied with the products of the company Conclusion This research study thus, given insight into various intricacies of consumer perception and consumer behaviour related to the usage of cosmetic products in India with particular reference to Lakme of Hindustan Unilever Limited (HUL). It is interesting to note that along with women in India men also using large quantities of cosmetics for their personal grooming. Naturally, a person grooms himself or herself perceives that their level of confidence and happiness would increase. Also, this study helps the research to understand the factors that affect the buying behavior of consumers and to know how can perception have a positive and a negative impact on the consumer behaviour. Finally, the researcher has found out that in India, the usage of is increased as the population also increasing day by day and they are more concerned about their grooming. In this research the researcher finally able to find out the Intricacies of Consumer Perception and Behaviour of Consumers of Cosmetics in India. The cosmetic industry has good competition and all the marketers in this field are devising distinctive strategies to grab the appropriate market share in Indian cosmetics market. The future researchers could focus on wider areas to assess the consumer perception of cosmetics market of India. References 1. Bernstein, Douglas A. (5 March 2010). Essentials of Psychology. Cengage Learning. pp ISBN Retrieved 25 March Elizabeth A. Minton, Lynn R. Khale (2014). Belief Systems, Religion, and Behavioral Economics. New York: Business Expert Press LLC. ISBN E. Bruce Goldstein(2009) 'Sensation and Perception;, 8th Edition, University of Pittsburgh and University of Arizona ISBN-10: ISBN-13: , pp Gregory, Richard. "Perception" in Gregory, Zangwill (1987) pp J. Scott Armstrong (1991). "Prediction of Consumer Behavior by Experts and Novices". Journal of Consumer Research (Journal of Consumer Research Inc.) 18: doi: / Kameswara Rao Poranki (2014) & Dr. Abdulbaset Hasouneh, 'Preferences towards male deodorants consumers and retailers in Saudi Arabia'- International Journal of Current Research, Vol. 6, Issue, 04, pp , April, Available online at journalcra.com 7. Kuester, Sabine (2012): MKT 301: Strategic Marketing & Marketing in Specific Industry Contexts, University of Mannheim, p Lynn R. Kahle, Angeline G. Close (2011). Consumer Behavior Knowledge for Effective Sports and Event Marketing. New York: Routledge. ISBN Schacter, Daniel (2011). Psychology. Worth Publishers /articleshow/ cms > RJSSM: Volume: 05, Number: 1, May 2015 Page 129
6 ANNEXURE Test of hypothesis Whether the consumers are satisfied with cosmetic products and services of Lakme company. Customer Cosmetic Services Total Satisfaction Products Satisfied Dissatisfied Total Ho : consumers are satisfied. Ha: consumers are not satisfied. Level of significance: 5% and Degree of freedom ( DOF): (R-1) (C-1) = (2-1) (2-1) = 1 Tab=7.88 and Test of statistics- (O-E)*2/E Observed value Expected value (O-E)*2 (O-E)*2/E (O) (E) Total 1.25 Cal = 1.25; Tab = 7.88 Interpretation: Since, the calculated value (cal) is lesser than tabulated value (tab), null hypothesis (Ho) is accepted, i.e. alternate hypothesis (Ha) is rejected. It means consumers are satisfied products and services of Lakme. 1. Which company's cosmetics are you using? Table showing that cosmetics of which company are most used. Particulars Frequency Loreal 20 Lakme 60 Garnier 15 Lotus 05 The above table explains about the usage pattern of the consumers for various cosmetics. 2. Which product are you using most often in a month? Hair care Products Skin care products Body care products Make up The above table depicts that how frequently the cosmetic products being used by the consumers 3. Do you think that your product provides you with an option of healthy and long lasting harmless? Yes 58 58% No 20 20% May be 17 17% Not Sure 5 5% The above table depicts the perception of consumers of cosmetic products, whether these products are harmless to health or not. 4. What is the reason that motivates you to use the products of a particular company? Economical 35 35% Trendsetter 20 20% Measurable Results 28 28% Easily available 17 17% The above table helps us to understand the consumer perception, it means at what extent they are motivated towards the company understudy related to the above particulars. > RJSSM: Volume: 05, Number: 1, May 2015 Page 130
7 5. Approximately how much do you spend in the buying of cosmetics? Below Rs % Rs.500+_ % Rs.1000 to Rs % Rs.2000 and above 6 6% The above table throws light on the spending pattern on cosmetics based on consumer behaviour 6. Do you find your cosmetic products economical? Yes 49 49% No 30 30% May be 11 11% Note Sure 10 10% The above table tell us the consumer perception whether the cosmetics are economical or not. 7. If you are being asked to choose amongst one of the best product that you use, what would that be? Sunscreen Lotion 59 59% Hair Bouncers crème 15 15% Moisturizers 9 9% Lip Gloss 17 17% The above table tells us the product related consumer perception of the respondents 8. What services of your favorite company you appreciate the most? Steam bath 32 32% Manicure/Pedicure 14 14% Facial/Massage 44 44% Hair Services (Rebounding) 20 20% The above table depicts the consumer perception about their favorite company of cosmetics 9. What motivates you to buy Lakme products? Measurable results % Economical 18 30% Easily available 12 20% Trend setter % The above table tell us the level of motivation on Lakme products 10.In which cosmetics of Lakme do you invest your money more? Sunscreen Lotion % Hair bouncers crème 9 15% Moisturizers % Lip gloss 12 20% The above table tells us that how much money the consumers are willing spend on various brands of Lakme 11.what is your level of information on Lakme as a brand? Excellent % Good % Moderate % Bad % The above table depicts the brand awareness of Lakeme among the consumers 12. what is the purpose for which you buy Lakme products? Skin protection % Long and Strong hair % Glow and acne free skin % Make up % > RJSSM: Volume: 05, Number: 1, May 2015 Page 131
8 The above table tells us for which purpose the consumers are buying the products of Lakme. 13. Rating the products offered by lakme as: Excellent 18 30% Good % Moderate % Poor 0 0% The above table depicts the consumer perception on the rating of the company 14. Are you satisfied with the beauty services offered by Lakme saloons? Yes 48 80% No 12 20% The above table depicts the consumer perception on the level of satisfaction of the company saloons. 15. Are you satisfied with the products offered by the company? Yes % No % The above table will explain the consumer satisfaction about the company products. 16. Is the site site useful to you? Yes 42 70% No 18 30% The above table is about the consumer perception on the company website 17. Approximately how much do you invest on Lakme products monthly? Below Rs % Rs.500-Rs % Rs.1000-Rs % Above Rs % The above table explains about the consumer spending monthly on Lakme products. 18. Do you think that Lakme is a leader in a cosmetic industry? Yes 68 68% No 12 12% Cannot Say 10 10% Moderate 10 10% The above table is about the consumer perception about the position of the company in the industry. 19. Would you continue to buy Lakme products even if its price rises by say up to 15%? Yes 39 65% No 21 35% The above table is to find out the consumer perception on Lakme even after the prices are increased up to 15%. > RJSSM: Volume: 05, Number: 1, May 2015 Page 132
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