Adopting the New High Max Lush Facemask for the Lush Cosmetics Australia - Case Study Example

Marketing Research Table of Contents 1. Introduction 2 New product introduction 2 Target market 3 2. Issues Facing Consumers in Adopting the New Product 3 Positive customer issues in identifying a new product 4 Self-direction and independent decision making 4 Stimulation and attitude towards high quality products 4 Negative customer issues in identifying a new product 5 Social cultural issues and attitude toward existing products 5 Conformity 5 3. Consumer Response to these Issues 6 4. Recommendations and Conclusion 9 Recommendations 9 Marketing mix 9 Conclusion 11 References 12 Appendix 14 1. Introduction Lush cosmetics Australia is a cosmetics multinational company that came into being in 1994. The company’s first shop was opened in Poole and with time, it was able to grow into a chain of over 130 shops globally in about 50 countries (Frank et al, 2001). The reason behind the substantial growth was the idea to combine freshness, fun and nature. The operations of the Lush cosmetics Australia are based on the notion of freshness, fun and nature. Through the said ideas, the company has been in a position to attract like-minded individuals as their leaders, employees and clientele to communicate the importance of their brand as well as their vision and mission. Their main objective in this is to provide the best products within the cosmetics industry. Lush Australia is well known for its full time production of fragrance products, which include bath oils and foams, soaps, moisturizers, massage bars, cleansers, creams, deodorants, and perfumes (Frank et al, 2001). New product introduction As a strategy of their growth, the company aims at introducing a new product in the market. The new product is a skin care that is aimed at giving its clients a good facemask particularly after a long day. The high max lush facemask will also be made using the fresh and organic ingredients. The only difference of the new facemask from other facemask is that it will be neither papery nor thick as other facemasks but instead it will have a fair texture, which will allow for most of the serum and not the skin to sink into the skin. Target market The company targets the young women and their acquaintances aged between 12 and 30 living within the highly populated urban cities (Frank et al, 2001). Apparently, based on the market segmentations, there are various ways of grouping customers. In order to reach the targeted group, the company aims at subdividing its customers based on psychographic and demographic segmentations. This way the company will be able to address the needs of all its clients despite their social differences. 2. Issues Facing Consumers in Adopting the New Product On frequent instances, the customer is confronted with innovations, which necessitate them to adopt new behaviours while discontinuing the older behaviours (Im et al, 2003). Though the performance of a new product could excite the customers, they also become increasingly concerned with uncertainties and they opt for the traditional products when it is time to purchase the new product (Im et al, 2003). The behaviour of a customer in adopting a new product is of paramount to the researchers and the managers due to the significant role it plays in the diffusion processes of the new product in the market (Im et al, 2003). In the contemporary high-tech era, understanding the differences between visionary customers and the pragmatic customers within the mainstream market is vitally important in the marketing of a new product. A number of studies have been done in order to identify the customer influences on new product adoption. They include: Positive customer issues in identifying a new product Self-direction and independent decision making Self-direction is a value that constitutes of the openness to alter domain and the independence to change ones daily life. Within the field of consumption, self-direction is mainly reflected when one tries to make sovereign decisions on what he or she will consume. According to past researches a consumer’s decisions on new products is highly dependent on the customer innovativeness (Roehrich, 2004). This is because customer innovativeness comprises of making judgments and initiating new behaviours independently. Self-direction is a value linked to the consumer’s attitudes, which are developed by an individual’s direct experiences of life. This in turn is influenced by a person’s own ideas and personality. It is evident therefore that customer innovativeness positively affects the adoption of a new product in the market by the customer. Stimulation and attitude towards high quality products This is a value type in the openness to alter the domain that indicates the need for variety and excitement. The need for stimulation by the consumer is fulfilled by the adoption of new offerings in the market. According to research, stimulation has a positive effect on consumer innovation (Roehrich, 2004). This is a clear indication therefore that new products are always a source of stimuli for the consumers as they bring in a new package of unique benefits and functions. In our case, the new high max lush facemask is unique as it is not papery as other facemasks and it also has a fair texture that will attract the consumers to adopt it. Negative customer issues in identifying a new product Social cultural issues and attitude toward existing products Evidently, the tradition value is highly linked to an individual’s favourable attitude of the past as well as the present. Additionally, it indicates the respect one has for his culture, tradition and norm. Within the consumer context, the tradition value will denote a positive attitude towards the older products that the consumers are used to having (Daghfous, et al, 1999). If the customers possess this kind of attitude, then it is apparent that will not replace their old though still functional products with the new brand to be introduced in the market. In the contemporary world where there is a rapid new product development as well as huge market competition, technology is rapidly and prematurely becoming outdated. Consequently, the consumers are in a great position to change from using a particular product to adopting the new ones. However, the consumers with a positive attitude toward the existing products always resist the new product and they prefer using the products they are used to until they stop functioning (Daghfous, et al, 1999). This therefore means that culture will negatively affect the adoption of the high max lush facemask. Conformity These value of conformity focuses on the individual restraints in their daily interactions reflected in the qualities of self-discipline and the honouring of elders and parents (Im et al, 2003). According, to scholars, the customers with a high degree of conformity value have a tendency of making decisions which are in line with their close social environment’s expectations whereas those whose degree of conformity value is low mainly focus on their individual needs and show little concern to the expectations of their friends and relatives (Burgess, 1992). In the consumer context, conformity is linked to the acquisition information of the customer, which is a major step in the adoption process of a new product. The consumers with a high level of conformity value are limited in their information inflow. In addition, they heavily rely on individual sources for instance their friends or families for information on a new product. They then conform to the expectations from their social environment (Im et al, 2003). Evidently, such kind of a consumer is less likely to process or accept information of a new product form the advertisement as well as impersonal promotions. As such, they are less open to the new market offerings (Burgess, 1992). The information obtained from own sources are usually limited in scope, variety and content. As a result, these customers are less innovative and thus they are likely not to adopt the new product in the market. 3. Consumer Response to these Issues Data in this study was acquired through the primary data collection tool, interview. Personal interviews with four consumers aged between 12 and 30 years was conducted. These respondents were selected on a random basis from the urban population of Australia using the probability proportion to sizes method and hence identifying the right sample of the urban populace consumer population. This study clearly provides a comprehensive understanding of the experiences of new product adoption by new customers. Generally, the results of this study, from a contingency perspective reveal that both the psychographics and demographics highly influence the adoption of a new product in any market (Hoeffler, 2003). It is apparent that new product adoption by the consumers is negatively linked to the age of the customer and positively to the education as well as to the income of the customers. Amid the consumption attitudes, the respondents indicated that the adoption of the market innovations had a negative impact on the customer’s attitude towards existing products. The respondents revealed that usually there is a high degree of unwillingness to adopt new products when the old are still functioning and meeting their needs. Additionally, the production of new products linked positively with autonomous decision-making and the preferences given to the high tech products. It is clear that the implications of consumption attitudes were beyond the demographic effects. From the interview with the four respondents, the attitude towards the personal advice reflecting the conformity value was clearly not found to influence adoption of a new product. In this case, this is entirely not surprising given our study of the Australian urban consumers. The social environment comprising of relatives, family and friends remain a vitally important source of information for the innovative and non-innovative consumers in a collective society such as Australia. Besides, the decision making process in the adoption of a new product was also identified as an issue influencing the diffusion of a new product. The respondents assured that this factor is found to be more due to the efficient market structure of Australia whereby there is plenty of information both from the personal and impersonal channels. However, the impersonal channels remain the most used by the Australian consumers both the early and late adopters (Hoeffler, 2003). This therefore indicates that the influence of the socio-cultural factor and the strong desire to follow the social expectations are still very strong and vitally important in Australia (Hoeffler, 2003). Further, the respondents reported that while the consumption attitudes impact the consumers’ new product adoption significantly, the extent of the impacts hinge on the demographic characteristics of the consumer particularly their age and income. From the respondents perspective it is clear that the younger of the respondents (that is up to 23 years) and the richer are less influenced by their consumption attitudes. In its place, it is apparent that for such consumers, the adoption of the new products in the market seems to be driven by their financial capability rather than their consumption attitudes and preferences. As for the older and low-income consumers, the attitudinal impacts tend to be stronger. From the finding, it is true to say that, financial ability and age is not insurmountable obstacle (Moreau et al, 2001). It is also evident from the interview that age does not necessarily affect the adoption or rejection of a new product in the market. In this study age has been used to as a segmentation variable due to its convenience and its presumed association with other variables for instance the ability to generate new information, open-mindedness as well as the willingness to change and accept risk. The respondents reported that the consumption attitudes have implications that are beyond those of age. In addition, they indicated that there is a willingness by the older consumers to replace the older product with the new market offering irrespective of the older product being functional in some instances. Such willingness defies the presumed negative implications of age. Equally, with the customers’ attitude towards the high tech products helps lessen the conventional barrier of age to adopting new market offerings. From the interview, it was discovered that attitude towards the products already in existence independent decision making as well as an attitude towards saving influences both the low income and high-income consumers. Evidently, a less favourable attitude towards the already existing products could offer non-functional-linked reasons for the adoption of a new product by the consumer. The consumers are always willing to change their lifestyle for a new, fancier and interesting product if the right channels are used. Additionally, the low income is not necessarily a constraint for adoption of a new product does not have a favourable attitude towards the products they are using. 4. Recommendations and Conclusion Recommendations As discussed above, many are the instances whereby a customer is faced with innovations, which demand them to adopt new behaviours and discontinue the older behaviours. However, despite the fact that a new product could excite the customers, the consumers are also faced with uncertainties and for a company to ensure that it succeeds in selling its new product, it has to take a number of things into consideration (Brunso et al, 2004). In our case, it is recommended that Lush cosmetics Australia review its marketing mix strategy in order to capture its chosen target market (David, 2010; Lawrence and Carl, 2008). Marketing mix Marketing mix has been defined as an amalgamation of marketing tools used to meet the goals of a company as well as meet the needs of the consumers (Lawrence and Carl, 2008). The marketing mix is an offering to the customer and are controlled by the price, product, promotion and place commonly referred to as the four P’s (Cadogan, 2009). Research has proven that when a company uses the four elements, it is in a position to reach out to its clientele within its target market. Product A facemask is a common product within the cosmetics industry. A product is used to ensure a smooth and young skin to the consumers. The new high max lush facemask targets female individuals aged between 12 and 30. If the lush cosmetics Australia ensures that, its company is unique and of high quality, it will be in a position to maintain a competitive advantage over its rivals (Cadogan, 2009). Additionally, it will ensure the growth of the company and the product too. Price It has been proven by scholars that pricing is a vitally important element and it is responsible for swaying demand (Cadogan, 2009). Pricing comprises of the list price and discounts among others. Evidently, cosmetics prices are driven by the market. This therefore means that since the Lush Cosmetics Australia is introducing a top quality product it has to use the best marketing strategy that will enable it to reach out to its clientele within its chosen target market. From the interview, it is apparent that customers are willing to choose a product as long as it is of high quality without taking into consideration its price. This is an advantage to the company, as its high quality facemask will attract customers irrespective of it price (Lawrence and Carl, 2008). As a result, Lush cosmetics Australia will effectively compete with its competitors in the market. Nevertheless, Lush cosmetic Australia has to ensure that it prices its new product competitively for it to be marketable. This means that it has to ensure that it keeps such costs as manufacturing, packaging and distribution possibly low. This will enable them not to overprice or under price the product. Promotion According to studies, promotion has been termed as the most important marketing element in the modern market. Promotional strategies comprise of the means of communication used by the marketers to attract customers in the market (Cadogan, 2009). The examples of these strategies include personal selling, advertising, sales promotion and public relations among others. In this case, the Lush cosmetics Australia ought to use these promotional strategies in promoting its new product. In addition, with the recent technology transformation leaving most people easily accessing the internet, the company should also ensure to use the social media and the print press to advertise their product (Aaker et al, 2000). This way it will be in a position to reach a huge target market and create awareness of their new high max lush facemask, the price and where to find it. Place In marketing, place refers to any physical store or the virtual stores online. It is a representation of the distribution channel of a product. Lush cosmetics Australia distributes its cosmetics products through retail stores (Lawrence and Carl, 2008). This means that it directly sells its products to the consumers thus cutting on the distribution costs leading to huge profits for the company. Besides, the company has its stores strategically located meaning that it attracts a good number of customers to try out its new and existing products (Lawrence and Carl, 2008). Conclusion This paper has aimed at reporting on customer behaviour in adopting the new high max lush facemask for the Lush cosmetics Australia. Four issues, (two positive and two negative), have been identified as influencing factors to the adoption or non-adoption of a new product. In order to get what the consumers say about these issues, the researcher has interviewed four female individuals from its target market. From the study, it is apparent that independent decision-making causes a positive effect whereas culture has a negative influence. The Lush cosmetics Australia has been advised to review its marketing mix strategy for it to effectively reach out to its clientele within its chosen target market. In conclusion, the company should go ahead and introduce its new high max lush facemask and with the right marketing mix, the product will be a success. References Aaker, J., Brumbaugh, A., and Grier, S., 2000, Non-target Markets and Viewer Distinctiveness: The Impact of Target Marketing on Advertising. Journal of Consumer Psychology. Lawrence Erlbaum Associates, vol. 9, no. 3, p. 127. Brunso, K., Scholderer, J. and Grunert, K.G., 2004, Closing the gap between values and behavior: a means-end theory of lifestyle, Journal of Business Research, vol. 57, pp. 665-70. Burgess, S.M., 1992, Personal values and consumer research: an historical perspective, in Sheth, J.N. (Ed.), Research in Marketing, vol. 11, JAI Press, Greenwich, CT, pp. 35-79. Cadogan, J.W. 2009, Marketing Strategy: Marketing-mix strategies. London, SAGE Daghfous, N., Petrof, J.V. and Pons, F., 1999, Values and adoptions of innovations: a cross-cultural study, Journal of Consumer Marketing, vol. 16, pp. 314-31 David, R., 2010 Strategic management: concepts and cases, Upper Saddle River, Pearson Prentice-Hall. Frank, A., Hill, B., Lalloo, V., Possa, P., Ren, H., Tjoa, J., Brod, D.V., 2001, Experience Marketing: Lush Gets a Makeover, Rotterdam School of Management, Erasmus Graduate School of Business Hoeffler, S., 2003, Measuring Preferences for Really-New Products, Journal of Marketing Research, 40, 406-420 Im, S., Bayus, B.L. and Mason, C.H., 2003, An empirical study of innate consumer innovativeness, personal characteristics, and new-product adoption behaviour, Journal of the Academy of Marketing Science, Vol. 31, January, pp. 61-73 Lawrence, J. G, & Carl, M. 2008. The Future of Business: The Essentials (4th ed). London, Cengage Learning. Moreau, P., Lehmann, D. R. and Markman, A. B., 2001, Entrenched Knowledge Structures and Consumer Response to New Products, Journal of Marketing Research, vol. 38, pp. 14-29 Roehrich, G., 2004, Consumer innovativeness: concepts and measurements, Journal of Business Research, vol. 57, pp. 671-7. Appendix This questionnaire is designed for the purposes of conducting a study about the consumer responses on the issues affecting consumer new product adoption. Part 1: General information Gender: Male ------- Female ------ In which age bracket are you in? 12-18 19-25 25-30 Part 2: Research information 1. Do you use cosmetic products? Yes ------- No --------- 2. Which is your favourite brand of cosmetics? ----------------------------------------------------------------------------------------------------------------------------------- 3. What are your opinions about Lush cosmetics products? Very good ------ Good ------ Fair ------ Bad ------ Very bad ------ 4. In your own opinion, how does independent decision making influence consumer new product adoption? -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- 5.What is your opinion on attitude and consumer new product adoption?--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- 6. Based on you views, how is culture linked to consumer new product adoption? ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Read More