CHAPTER 1 INTRODUCTION

Transcription

1 1 CHAPTER 1 INTRODUCTION 1.1 Research Background Cosmetic industry is one of the large industries in the world and it is a profitable business for most manufacturers of cosmetic product. Cosmetic product has a very important role for human, particularly women s consumer life. We know that cosmetic product is including skin care product and make up. The cosmetic industry has grown in some big countries such as United State, France, Germany, Italy, and Japan. Based on the eurostaf in 2008, a private subsidiary company of the Echoes Group, United State is the largest market that made US$ 170 billion annual turnover, followed by Japan that made a market worth more than US$ 17 billion per year, and the 3 rd largest that has generated sales more than US$ 9 billion at retail sales in Even the United Stated has the largest market turnover, but Europe is still the leading the market, that representing approximately 63 billion. France is one of the European countries who have the biggest sales that plays very important role in cosmetic product, both nationally and internationally. For the high-end brand, Made in France label is very familiar in most all cosmetic brands and very valued in international market. The well-known cosmetic brands produced from France include Yves Saint Laurent, Chanel, L oreal, Yves Rocher, Make Up Forever and many others. In Indonesia, the cosmetic industry is growing. Because the researcher did not get the accuracy information and data resources about the cosmetic industry in Indonesia, the researcher used the advertising budget data as stated to estimate the growth of cosmetic industry. And the data showing that cosmetic industry posted second highest in terms of advertising budget, higher than media and telecommunication industry, which is in the third place. 1

2 2 Figure 1 Advertising spending in 12 industries (Source: SWA Magazine No.15/XXVII/18-27 July 2011) The table above is showing that the cosmetic industry is very high industry in Indonesia market and very competitive, which means in order to compete with all of the brand they dare to spend a lot of money to compete tightly with all the existence cosmetic brands in Indonesia to attract more customers. As we can see from 2008 the cosmetic and personal care industry had spending for advertising was more than 4 billion rupiah, in 2009 was more than 5 billion rupiah, and in 2010 was more than 6 billion rupiah and the increasing from 2008 until 2010 is 38.46%. The latest data according to SWA Magazine until May 2011, cosmetic industry is in the second highest that spent around 424 million rupiah, after food and beverages industry that spent more than 750 million rupiah and followed by media and telecommunication industry in the third place that spent around 328 million rupiah. There are some players from local branded that have a big role in cosmetic industry, they are: Mustika Ratu, Sari Ayu, Viva, Wardah, Tje Fuk, Marcks, La Tulipe and others. And according to SWA magazine in July 2011, there are top four domestic cosmetic brands in Indonesia; Mustika Ratu, Wardah, Sari Ayu, and Viva. (Source: SWA Magazine No.15/XXVII/18-27 July 2011)

3 3 Beside those local brands, there are also a lot of top imported cosmetic brands that selling in Indonesia. They are: Artistry, Oriflame, MAC, L Oreal, Estee Lauder, Revlon, Clinique, Dior, Max Factor, Bobbi Brown, and Lancome. The existence of global cosmetic brands makes a tightly competition in cosmetic market as a result. For example, the fake cosmetic brands are selling in the market. MAC is one of the high end imported brand that the distribution of the counterfeit product is easy to find in the market beside Dior, YSL, Lancome, and others. In the market, they selling it with very low price, the packaging might be very similar with the original one. With the ever increasing competition, consumer is faced with abundant of advice in cosmetic brand, and putting the supplier in a weaker position. So, this study will do the research about the relationship between consumer involvement and brand perception of female cosmetic consumers, and how this involvement may influence brand perception of brand personality and brand attitude. Another objective was better understanding of how consumers, based on their varied interests in products, differ in their perceptions of brands. Ultimately, this research was hoped to supplier in creating better market offer. 1.2 Problem Statement The marketing program within the cosmetic industry is still general, not aiming a particular segment. This problem could lead to inefficiency in marketing cost. By identifying and categorizing consumers, players in the industry could design more effective and efficient marketing program thus in offering better value to their consumers.

4 4 1.3 Research Question The main questions for this study are: Can cosmetic consumers be divided into several categories? Is there any relationship between brand personality to consumer trust, attachment, and commitment in the cosmetic brand? 1.4 Scope and Limitation This research was about consumer involvement and brand personality relationship to consumer trust, attachment, and commitment toward cosmetic brand, so this study was focused on female consumers as the biggest consumers, to cater to time and budget limitation. The convenience sampling was the chosen method for getting the respondents. They respondents were 150 female students of Binus International University, from 15 until 39 years old. 1.5 Aims and Benefits The aims of the study research is to understanding the female consumer involvement in making the purchase decision of cosmetic product and to gather more knowledge about the brand personality and brand attitude in affecting the consumer preference toward the purchase intention of cosmetic product. This study also seeks to understand how each segment may hold different impressions of brands based on their product involvement profile and brand personality associations. Implications for marketers in appealing to the target market, as well as developing brand image.

5 5 1.6 Structure Chapter 1 Introduction This chapter describes the background of cosmetic industry in general, cosmetic industry in Indonesia including the current condition, current issues, and also the importance of this topic study. Chapter 2 Theoretical Foundation This chapter explains about the theory about the consumer involvement, brand personality and brand attitudes and the relationship between those things. Chapter 3 Methodology This chapter discussed about the methodology that will be used for this research study. Chapter 4 Findings This chapter consists of the result and analyzing using SPSS, assessing The relationship between consumer involvement and brand perceptions or female cosmetic student consumers. Chapter 5 Conclusion This chapter consists of the conclusion, recommendation, and suggestion of the study.