MKTG203: Assignment 1

Thursday7.00_MR_17

New trends in consumer behaviour and brand personality have gained increased global attention, particularly in cosmetic products. This report will critically analyse the rapidly growing beauty and cosmetics market in China through the consumer behaviour concepts of consumer materialism and brand personality. Both of these aspects will be examined in relation to the similarities and differences present within the Australian and Chinese context. By exploring these two essential concepts of consumer behaviour, the report will highlight China’s growing interests and demands for imported skincare and beauty products, as well as a potential marketing opportunity for Australian cosmetic companies such as Aēsop.
Background
With an estimated worth of $19.49 billion, the cosmetic market is one of the largest industries stimulating the Chinese economy today (Datamonitor, 2013). A substantial growth of 18.7% in 2012 and a forecasted growth of 48.7% by 2017 (Euromonitor, 2013), has enabled the nation to become Australia’s largest trading partner including other Australian exports. Due to its dominant presence in the world economy, the general level of per capita income has increased progressively with minor improvements in chronic income inequalities between rural and urban populations in China. With higher disposable incomes and the endless choices in distinct cosmetics, many individuals are now seeking high-value skin regimes and specialty products. This process has allowed for the latest trends such as premiumisation, where consumers are upgrading to more luxury and green products for better quality and to be more environmentally-friendly. According to Austrade (2012), Australia is recognised by Chinese consumers as “having a clean and green environment with good quality products and brands (pg. 01)”. With the dramatic increase in safety and hygiene concerns of Chinese imports, Australian skincare and beauty products for both men and women are gaining greater interests amongst highly brand-oriented Chinese consumers.
China’s historical ‘one child policy’ along with the idea of Australia being a remote country rich in minerals and natural resources, has also created a new trend amongst Chinese parents. With the assurance of Australia’s strict and ethical hygiene regulations and laws, more parents are willing to purchase expensive baby care and children’s products for guaranteed quality and price (Austrade, 2012). Furthermore, China’s preference for foreign brands can be seen in France’s L’oreal holding the largest market share in China with 17% and Japan’s Shiseido with 12% (Euromonitor, 2013). With tariffs on Australian imported skin care and cosmetic products recently reducing to a lower 6.5%, imported cosmetics are estimated to increase by 57%; strengthening a potential marketing opportunity for Australian cosmetic and skincare companies including Aēsop (Austrade, 2012). Due to the products ethically formulated with both natural anti-oxidant properties and laboratory essences, Aēsop is a highly favoured and growing organisation with stores located globally. With China’s increasing per capita income and living standards, it is only a matter of time for China to embrace Australia’s premium high quality products.
Consumer Materialism in China
Consumer materialism is an essential aspect when exploring consumer behaviour. According to Richins (2013), “materialism is composed of three highly correlated components: centrality of acquisition and possessions in one’s life, the tendency to judge personal success on the basis of acquisitions, and the belief that one’s happiness depends on acquisition (pg. 2)”. Understanding the idea of materialism within distinct national contexts is pivotal when observing consumer behaviour and the potential consequences which may affect the global economy. In today’s society, materialism is profusely depicted through mass media often as a superficial value, luxury, or a form of ridicule. As Rindfleisch, A, Burroughs, J, & Wong, N (2009) claim, materialistic individuals are “strongly influenced by the perceptions of others when selecting products and prefer possessions that are publicly visible and highly prestigious (pg. 2)”.
Historically, China like many Asian countries was perceived through Confucian, religious, or philosophical beliefs and values. These beliefs centrally focused on the idea of perfecting one’s self, and achieving the highest quality of life was the ultimate goal (Choi, H, & An, D, 2013). As industrialisation occurred along with rapid economic growth, traditional Asian values progressed into materialism as a new value (Choi et al. 2013). According to Wei, Y, & Talpade, S (2006), materialism as a value impacts a customer’s ability to reason when evaluating their purchase, as well as the levels of post-purchase satisfaction. Nowhere is this more evident than China’s labour market and its diligent workers. In China, materialism is considered a new value due to the underlying objective of being better off or wealthier in the future (Choi et al, 2013). Past Confucian beliefs of academic prosperity and strong social relations with family and peers has resulted in the dominant presence of social hierarchy. This separation of classes has acted as a catalyst for comparing possessions as a way of determining one’s position in society. In China, consumer materialism is dominantly present among the higher ranks of corrupt government and Congress members. According to Rosen (2013), 20% of China’s ultra-wealthy include 90 members of the National People’s Congress with some acquiring a fortune of at least $289.4 million. The detrimental effects of materialism are also seen in the beliefs and values of China’s younger generation. With television reaching over 92% of China’s households and access to the internet, younger Chinese consumers are now more exposed than ever to both local and foreign cosmetic brands (Chan, K, & Zhang, C, 2007). According to Chan et al.’s study (2007), many of China’s younger generation value materialism by comparing themselves to both their peers and celebrities in attempt to imitate them through the brands and products endorsed. Through the study of consumer materialism in China, Australian marketers are able to comprehend the traditional context and the reasons for materialism as a value today. A strategy for which Aēsop may use in the advertising promotions in China, would be through the creation of a multi-dimensional approach incorporated with mass media including television, print and online mediums. Local celebrities with responsible and modest personas, who are also actively involved in eco-friendly projects, could be featured in television commercials. Print advertisements particularly magazines and newspapers will inform the audience of the healthier choices and benefits of using Australian cosmetic products. With the rise of YouTube bloggers, utilising a younger makeup guru between 20-30 years of age would directly target the younger population in China by introducing green and high quality cosmetics. By emphasising modest and healthier approaches to cosmetic uses and feminine beauty, China’s younger generation would be positively affected through the encouragement of using hygienic products rather than imitating the superficiality of typical celebrities.

Consumer Materialism in Australia
Similarly, consumer materialism in Australia has also progressed as a result of industrialisation and economic expansion during the 1950s and 1960s (Downie, C & Glazebrook, K, 2007). Like China, increasing standards of living through the acquirement of possessions is also seen as a primary goal for many in Australia. However, unlike China and the idea of perfecting one’s self for a better future, recent trends in Australia have seen Australians increasingly spending their disposable incomes on over-consumption (Choi et al. 2013).

Contrary to young adults in China who are exposed to consumer materialism, Australian ‘tweens’ are the latest to be at risk of the pressures relating to materialistic values. According to Downie et al., (2007), ‘tweens’, are young children aged between six to thirteen years of age, are continuing to feel the pressures of competitive consumption particularly in cosmetic products and fashion. It is claimed 61% of tweens, are actively consuming make-up products along with unhealthy pressures of body image (Downie et al., 2007). With both marketers and manufacturers creating shinier and more sexually appealing products such as lip colours and lengthening mascaras, young teens are becoming more exposed to self-esteem issues and financial conflicts. Furthermore, psychological claims arguably emphasise that commercialising the childhood of young children with both inappropriate and negative products will also deteriorate mental development, and potentially lead to financial difficulties as adults in the later future (Downie et al., 2007).

The norm of today’s modern society encourages young children to engross in the lifestyles typical of adults. Amongst young children and their peers it is considered ‘cool’ to possess the latest trends and technology. Children and young adults are increasingly growing up in a consumption-focused economy, where materialism is no longer a moral problem but a fundamental goal in life. With the readily availability of numerous brands, consumption has become a competition to measure one’s possession and ability to consume. This is also leading to deterioration in family and friend relations, segregating those who are able to over-consume to those who are struggling to meet basic needs.

Brand Personality in China
Brands have a personality and can develop distinctive personality traits to symbolically reflect a country’s traditions and values. According to Geuens, M, Weijters, B, & Wulf, K (2009), brand personality refers to “the set of human characteristics associated with a brand, or the set of human personality traits that are both applicable to and relevant for brands (pp. 97)”. Newer aspects of brand personality are also incorporating features of gender, male or female, as well as age, in the creation of a personality (Geuens et al., 2009). As Geuens et al (2009) state, the concept of brand personality now incorporates five dimensions which describe personality including; extraversion (talkative, assertive), agreeableness (good-natured, cooperative, trustful), conscientiousness (responsible, dependable), emotional stability versus neuroticism (calm, easily upset), and openness or intellect (intellectual, imaginative). Consumers are able to distinguish diverse brands from one another by recognising unique features or characteristics of a particular brand. Hence, it is crucial for marketers to develop a powerfully distinct identity for a brand by utilising a company’s key intentions and attributes.

In recent times, an increasing trend of preferring luxury brands has seen a rise in China’s consumption. Luxury or designer brands, particularly fashion and cosmetics, has seen a decline of 10% in the US, 8% in South Korea, in comparison to a strong incline of 12% in China (Datamonitor, 2013). Over-consuming foreign and international brands may be perceived as traditional China embracing the modern trends and values of Western culture. The preference for foreign cosmetic brands is reflected through the dominant market share of L’Oreal 17%, and Shiseido 12% in China (Euromonitor, 2013). L’Oreal’s dynamic presence in the market may have generated from the glamour and vibrant persona commonly highlighted by the shiny Caucasian models and celebrities embracing magazine covers and television commercials, almost promising boosted self-confidence and a more polished appearance. Similarly, Shiseido’s whitening skincare line showcases products which will whiten the skin and reduce finer wrinkles, all underlying the brand’s features of a more youthful and innocent identity. With such speciality products and direct representations, the ability to afford and consume these brands is often financially limited to the individuals belonging to higher society (Choi et al. 2013). Due to increased income inequality and a corrupt social class, the words ‘luxury’, ‘royal’, ‘supreme’, and ‘high class’, were recently banned from any form of advertising in Beijing (Choi et al. 2013).

An initial strategy Aēsop could use to promote its positive intentions would be through brand-positioning, by targeting consumers in China intellectually rather than emotionally. This would position Aēsop both in the high quality and affordable skincare and cosmetics category, differentiating itself from the luxury brands mainly targeted at higher social classes such as Chanel and SkII. Highlighting the personality traits of Aēsop including modest, sincere, down to earth, and charming, could be utilised with an Australian celebrity of positive images such as Miranda Kerr or Bindi Irwin. Miranda Kerr is an Australian model, participating in the global Victoria’s Secret campaign and David Jones. Evidently, Kerr is actively involved with both charitable and eco-friendly campaigns including helping the victims of the 2009 bushfires, Wildlife Warriors Worldwide, and Children International. Miranda Kerr’s healthy green identity and her active concerns for the better of society would strengthen the appeal of Aēsop’s personality in the Chinese market.

Brand Personality in Australia

Brand personality in Australia also plays a key role in providing consumers with an ethical and diverse brand, as well as maintaining customer loyalty. Recent economic interactions have created a world phenomenon of globalisation, where consumers are actively seeking both local and foreign products and services. The increased competition in modern times is further challenging companies and their marketing teams to sufficiently develop an, attractive, favourable, and individual personality. Brands with a strong personality are more capable of influencing brand attachment, willingness to purchase and re-purchase, as well as choosing the brand for related and non-related products (Geuens et al., 2009). By creating such a desired and reliable personality, the brand is able to meet the consumers’ requirements, as well as providing emotional fulfilment with increasing brand equity ( Geuens et al., 2009). Generally, the ultimate success and benefits a brand is able to provide in meeting consumers’ requirements, an efficient marketing team and an outline of the brand’s strengths is highly essential. According to Brown (2012), one of the key measures of a brand’s strength and persuasive ability is bonding. Brown states this attribute as the highest level of “attitudinal loyalty (pg. 2)”, where consumers are able to feel more closer and intimate through bonding with the brand (2012). In Australia, two of the twenty-four words that were used the most to incorporate personality traits with inanimate objects were ‘desirable’, and ‘trustworthy’ (Brown, 2012). The characteristic of being ‘desirable’ was found to be associated in the personality traits in many Australian brands including Napoleon Perdis and Sugarbaby. Both these cosmetic brands aimed to emphasise confident and attractive female personalities, by highlighting the “inner celebrity (pg. 4)” inside every woman (Brown, 2012). In particular with Sugarbaby’s cosmetic line, the ‘Aussie beach babe’ lifestyle is evidently portrayed through the modern niche of multi-purpose products, and a “2-in-1” concept (Brown, 2012, pg. 4). Double usage products including the gradual tan and body balm, along with diversely scented body butters and moisturisers are highly favoured in the laidback Australian way of life.

In comparison to China, other personality traits including ‘innocent’ and ‘feminine’ were not as highly associated with successful brands such as L’Oreal or Shiseido. According to Brown’s significant market research of consumer responses, other personality traits that were favoured immensely particularly in billboard signs included ‘straight-forward’ and ‘effortless’ (2012). This suggests that in Australia, the majority of consumers prefer marketing approaches that are simple and directly send a message; and are not particularly appreciative of cleverness or literate challenges.
In Australia, it is essential that the spokesperson or representative of a brand is socially acknowledged in order for the brand’s context and personality to be well respected and favoured (Brown, 2012). Hence, why Australian skincare and cosmetics brand Aēsop do not have a celebrity endorsement, and have no interests to in the future. Rather than utilising traditional marketing approaches to create opportunities in the global marketplace, Aēsop focus solely on improving and perfecting its products through constant regulation of its many formulations, trials, and the final manufacturing of the product.
References
Brown, M 2012, ‘Why brand personality matters: Aligning your brand to cultural drivers of success’, Point of View, 2, pp. 1-4.
Chan, K, & Zhang, C 2007, ‘Living in a celebrity-mediated social world: The Chinese experience’, Young Consumers, 8(2), 139-152.
China’s cosmetics market | HKTDC. 2013. China’s cosmetics market | HKTDC. [ONLINE] Available at: http://china-trade-research.hktdc.com/business-news/article/China-Consumer-Market/China-s-cosmetics-market/ccm/en/1/1X000000/1X002L09.htm. [Accessed 24 August 2013].
Consumer products - China - For Australian exporters - Austrade . 2013. Consumer products - China - For Australian exporters - Austrade . [ONLINE] Available at: http://www.austrade.gov.au/Export/Export-Markets/Countries/China/Industries/Consumer-products#.UhgcvM9-9jo. [Accessed 24 August 2013].
Downie, C, & Glazebrook, K 2007, ‘Mobile phones and the consumer kids’, Australia Institute Research Paper, 41, viewed 22 August 2013.
Geuens, M, Weijters, B, & Wulf, K 2009, ‘A new measure of brand personality’, International Journal of Research in Marketing, 26, pp. 97–107.
Richins, M 2013, 'When Wanting Is Better than Having: Materialism, Transformation Expectations, and Product-Evoked Emotions in the Purchase Process', Journal Of Consumer Research, 40, 1, pp. 1-18, Business Source Premier, EBSCOhost, viewed 24 August 2013.
Rindfleisch, A, Burroughs, J, & Wong, N 2009, 'The Safety of Objects: Materialism, Existential Insecurity, and Brand Connection', Journal Of Consumer Research, 36, 1, pp. 1-16, Business Source Premier, EBSCOhost, viewed 24 August 2013.
Rosen, S 2013, ‘Materialism, Middle Class Aspirations, New Youth Lifestyles and Behavior, and a Growing Self-Confidence: The Implications of a Rising China for American Business’, APBO Conference, University of Southern California.
Wei, Y, & Talpade, S 2006, ‘Materialism of Mature Consumers in China and USA: A Cross-Cultural Study’, Journal of Behavioral Studies in Business, 4, pp. 1-14.