Mukt Shabd Journal ISSN NO : 2347-3150
An Empirical study on Factors Influencing Purchase Decision of L'oreal Paris Cosmetic Products in Pune City
1Prof.Nanda Das, 2Dr.Vaibhav Patil, 3Dr.Ganesh Waghmare
1Assistant Professor, Sri Balaji University Pune‘s Balaji Institute of International Business, Pune, (Maharashtra), India
2Assistant Professor, Sri Balaji University Pune‘s Balaji Institute of Management and Human Resource Development, Pune, (Maharashtra), India
3Assistant Professor, Sri Balaji University Pune‘s Balaji Institute of Management and Human Resource Development, Pune, (Maharashtra), India
Abstract:
The market size of the cosmetics industry in India is estimated to be worth more than US$ 6 billion out of global market of USD 274 billion. Market is expected to register annual growth of 25 per cent touching USD 20 billion by 2025. The study is carried out to find out factor influencing Purchase Decision of customers of L'Oreal Paris cosmetic products. Research was exploratory in nature. Research was carried out in Pune city. Population was divided into representative areas, representative hundred sample size decided and responses were collected. simple percentage analysis, frequency, cross-tab graph, charts were used for simple data analysis & factor analysis, Chi square, & regression SPSS test were used for the hypothesis testing Brand image, Celebrity endorsement, Quality, Price, Professional Consultation, Discount have significant influence on the buying decision of customers of Loreal paris products. TV advertisement and social media were the major source of information. Makeup segment and skin care segment had major customers. Products related to face fairness and skin care air were in major demand. Customers are satisfied with the products and services of L'Oreal Paris. Majority of the customer has good experience with the quality of the L'Oreal Paris products and would like to recommend to others.
Keywords: L'Oreal Paris, cosmetics, Beauty products, Brand image, Price, Professional consultation, Skincare products, Purchase Decision.
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Introduction:-
In 1907, a young French chemist Eugéne Schueller developed an innovative colour formula which further became ingradients for Loreal paris products. In 1909, He registered his own company Loreal Paris. L'Oréal S.A. is a French Paris based personal care company. It has it’s headquarter in Clichy, Hauts-de-Seine. It has registered office in Paris. It is one of the world's largest cosmetics manufacturing company and has various product lines comprising concentrating on hair colour, skin care, sun protection, make-up, perfume, and hair care. Brands are diversified into targeted markets, such as the mass, professional, luxury, and active cosmetics markets. L'Oréal also owns interests in various activities such as fine chemicals, health, finance, design, advertising, and insurance. Loreal paris is selling their products in 130 countries. Loreal paris has 64,600 employees. L’Oreal set up its wholly-owned subsidiary for marketing its consumer products in India in 1994. L’Oreal has set up its own manufacturing plant in Pune.
Cosmetics industries in India:-
The market size of the cosmetics industry in India is estimated to be worth more than US$ 6 billion out of global market of USD 274 billion. Market is expected to register annual growth of 25 per cent touching USD 20 billion by 2025. The Indian cosmetic industry's growth is twice as fast as that of the United States or Europe. 65% teenagers in India, their expenditure on branded cosmetics have increased 75% in the past 10 years. India imports cosmetics, beauty products worth $400 US$ million per year
Major Driving Factors of Indian Cosmetic Industry:-
1) Increased Disposable income and purchasing power. 2) Increased rising fashion consciousness. 3) Increased levels of cosmetics brand advertising. 4) Increased imagination and awareness for Cosmetic products. 5) The better paying jobs of women have resulted in higher spending power of women. 6) Impressions created by Indian film industry on the youth 7) Importance of grooming and being fashionable 8) The changing aesthetical mindset towards luxurious approach to expenditure.
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Brand value of the leading personal care brands worldwide in 2019(in million U.S. dollars)
Source (Statista, Jul 3, 2019)
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Review Of Literature:-
Anjana S S (2018)
The purpose of this paper is to figure out the attributes that affect the consumer’s consumption for cosmetic products. Through this study, it was identified that the five factors, quality product, product price, brand name, product packaging and advertising have greater impact on customer buying decision. Consumers go through the rigorous thought processing making their buying decisions, since there are alternative products which compete in the areas close proximity, relatively cheaper price, quality, etc.
A,H.Hemanth Kumar et al. (2014)
After analysis we found that small differences exist in the income level that implies the different groups prefer or opinion differs on consumer buying behavior. It created a curiosity to us to find out which group really differing on the opinions. By the help of Post hoc we found out that the dependent differ the opinion among other class. It may be due to the decisions taken by youngsters. Every person plays multiple roles in their daily life, professional role or social role.
Research study of Guthriem et al. (2008) found that there is correlation between women's perception of brand personality and women's facial image and cosmetic uses. It was found that different brand personality characteristics influenced friend attitude for or different Cosmetic products
K. Rama Mohan Rao et al. (1991)
The study revealed that the impact of advertisements on consumer behavior as well as the purchase decision process is significant. The consumers are satisfied with the quality of advertisements also. The consumers expressed their serious concern on exploitation of women in advertisements.
Anand Deshmukh (2015)
Most of the people (65%) prefer to use domestic brand. Most of the people (60%) like to buy organic cosmetic product. Almost 50% people get to know cosmetic product through television Most of the people (65%) prefer to use domestic brand. Most of the people (60%) like to buy organic cosmetic product. Almost 50% people get to know cosmetic product through television Customers while making cosmetics purchase prefers to use domestic brand, like to buy organic cosmetic product & Customers get to know cosmetic product through television. It is also concluded that customers remain loyal to their cosmetic products, they don’t change their cosmetic brand.
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Objective
To study factor influencing Purchase Decision of customers of L'Oreal Paris cosmetic beauty products
Hypotheses
There is significant relationship between Brand image and Buying decision There is significant relationship between Celebrity Endorsement and Buying decision There is significant relationship between Quality and Buying decision There is significant relationship between Price and Buying decision There is significant relationship between Convenience and Buying decision There is significant relationship between Professional consultation and Buying decision There is significant relationship between Availability and Buying decision There is significant relationship between Discount and Buying decision
RESEARCH METHODOLOGY:-
The research is exploratory in nature
Sample size:-
Hundred samples has been taken from Pune city Sample is good representative of all age group, income groups, occupation groups, and Demographic characteristics.
Sampling method:-
Convenient sampling method was used to collect data Primary data collected from 100 respondents. Data Has been collected through structure Questionnaire with the help of multiple option close ended questions. Pune city was divided into east west and South North region and from each region 25 respondents were collected having good representation of population of Pune city
Data Analysis Tools
Two types of statistical tools used one is simple statistical tools and SPSS software. Simple Statistical tools: - Percentage, Frequency, Mean, etc. were used for the analysis. SPSS software tools: - Chi square, Regression and Factor Analysis
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Reliability Test:
Reliability Testing: Cronbach's Alpha is designed as a measure of internal consistency of items in the questionnaire. Reliability was tested using Cronbach's Alpha and it found excellent having .902.
Data Analysis and Interpretation:-
The above graph shows that majority of the respondents 33% belong to 25 to 31 age group followed by 18 to 24 age group 32%, followed by 32 to 38 age group 18%
From the above graph it can be seen that majority of the respondents are doing private job 34% followed by housewife 30% followed by government job 18% and business is the least observed occupation
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The above graph shows that TV Advertisement 26% was the major source of information for or L'Oreal Paris beauty products followed by social media 20% followed by friends and family 18% followed by word of mouth 16% followed by print advertisement 8%
In case of pattern of usage of products by the respondents, majority of respondents are using L'Oreal Paris products since last one year 29%, followed by in between 1 and 2 year 28%, followed by 2 year -3 year 18%, followed by more than three years 15%
The graph shows that makeup segment it was the major product segment used by respondents 36%, followed by skin care segment 31% followed by fragrance segment 16% followed by Hair Care segment 10%
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Above graph shows that L'Oreal Paris product related to face was majorly used by 27% of the respondent, followed by skin care 26%, eyes products 16%, followed by lips products 12% followed by nail enamel 9%
Above graph shows that frequency of buying products - majority of the respondents said that they are buying L'Oreal Paris products frequently 31%, followed by very frequently buying pattern 28%, followed by somewhat 20%, followed by rarelly 17%
The above graph shows that majority of the customers are bi products worth below 1000 rupees per month 31%, followed by 1000 to 1500 rupees group, 29%, 1500 to 2000 rupees group, 21%, and above 2000 rupees group ,19 %
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From the above graph it can be seen that majority of the customers has bought L'Oreal Paris beauty products from General Stores 31%, followed by malls 23%, followed by online shopping platforms 21% followed by Departmental Store 16%
Regarding satisfaction of the customers L'Oreal Paris beauty products majority of the customers are highly satisfied 42%, followed by satisfied customers 27%, followed by dissatisfied customer 14%, followed by neutral customer 9%
Regarding L'Oreal Paris beauty products recommendation by the customers to other people, majority of the customers will strongly agree 38%, followed by, 29% will recommend, followed by neutral 15%, followed by 12% which will not recommend
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Regarding the quality of the L'Oreal Paris beauty products 45 percent of the customer reported that the products are best, followed by 27% says it is better, followed by 15% sad it's good, Ud followed by 7% said bad quality
Reliability
Reliability Statistics
Cronbach's N of Alpha Items
.902 15
Item-Total Statistics
Corrected Item- Cronbach's Scale Mean if Scale Variance Total Alpha if Item Item Deleted if Item Deleted Correlation Deleted
Overall Experience 56.4200 131.741 .329 .904
Advertisement 56.4800 129.060 .401 .902
Price 55.9900 132.636 .696 .899
Offers 55.9900 136.212 .357 .904
Value for Money 56.1200 136.066 .229 .906
Warranty period 56.1300 135.225 .332 .904
Quality 57.1900 108.721 .863 .883
Discount 55.9900 132.010 .756 .898
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Convenience 57.3900 107.230 .826 .885
Availability 57.3900 107.412 .820 .886
Brand image 57.3900 103.695 .939 .879
Variety 55.9900 132.697 .690 .899
Brand Performance 56.2600 138.861 .031 .911
Celebrity Endorsements 57.4100 105.355 .894 .882
Professional Consultation 57.3800 109.127 .857 .884
Factor Analysis
KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .887
Bartlett's Test of Sphericity Approx. Chi-Square 1279.785
df 91
Sig. .000
Communalities
Initial Extraction
Advertisement 1.000 .649
Price 1.000 .813
Offers 1.000 .731
Value for Money 1.000 .486
Warranty period 1.000 .638
Quality 1.000 .848
discount 1.000 .751
Convenience 1.000 .811
availability 1.000 .787
Brand image 1.000 .910
Variety 1.000 .693
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Brand Performance 1.000 .425
Celebrity Endorsements 1.000 .860
Professional Consultation 1.000 .810
Total Variance Explained
Initial Eigenvalues Extraction Sums of Squared Loadings
Component Total % of Variance Cumulative % Total % of Variance Cumulative %
1 7.338 52.413 52.413 7.338 52.413 52.413
2 1.834 13.101 65.514 1.834 13.101 65.514
3 1.042 7.440 72.954 1.042 7.440 72.954
4 .918 6.557 79.511
5 .724 5.173 84.684
6 .532 3.803 88.488
7 .478 3.417 91.905
8 .331 2.362 94.268
9 .315 2.250 96.518
10 .163 1.161 97.679
11 .130 .927 98.606
12 .101 .721 99.327
13 .055 .393 99.720
14 .039 .280 100.000
Component Matrixa
Component
1 2 3
Advertisement .355 .130 .712
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Price .808 -.374 -.146
Offers .461 -.718 .057
Value for Money .239 .646 -.107
Warranty period .366 .566 -.429
Quality .914 -.108 -.014
Discount .847 -.182 -.041
Convenience .889 -.146 -.012
Availability .850 .244 .075
Brand image .954 -.008 .025
Variety .744 .350 -.133
Brand Performance .018 .395 .519
Celebrity Endorsements .906 .143 .136
Professional Consultation .898 .013 -.047
On the basis of factor analysis following variables those have high value in communalities table taken for the study further and applied chi-square crosstab to prove validity and reliability of the hypothesis the following hypothesis are proven
Factor Analysis :- Interpretation
Factor analysis was carried out for the following variables Brand image, Celebrity endorsement, Quality, Price, Convenience, Professional consultation, Availability and Discount. After factor analysis results those have high value in communalities table taken for the study further Chi square test is applied on these variables Following results were observed After applying chi-square test we observed following results P value for brand image is 0.01 which is less than 0.05, so we reject null hypothesis and accept alternate hypothesis P value for celebrity endorsement is 0.027 which is less than 0.05, so we reject null hypothesis and accept alternate hypothesis P value for quality is 0.026 which is less than 0.05, so we reject null hypothesis and accept alternate hypothesis P value for price is 0.026 which is less than 0.05, so we reject null hypothesis and accept alternate hypothesis P value for professional consultation 0.037 which is less than 0.05, so we reject null hypothesis and accept alternate hypothesis
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P value for professional availability 0.005 which is less than 0.05 so we reject null hypothesis and accept alternate hypothesis P value for professional discount 0.008 which is less than 0.05 so we reject null hypothesis and accept alternate hypothesis
Sr.No. Hypothesis Communalities Pearson Chi- Status extraction square value values 1 There is significant relationship between .910 .001 Alternate Brand image and Buying decision Accepted 2 There is significant relationship between .860 .027 Alternate Celebrity Endorsement and Buying Accepted decision 3 There is significant relationship between .848 .002 Alternate Quality and Buying decision Accepted 4 There is significant relationship between .813 .026 Alternate Price and Buying decision Accepted 5 There is significant relationship between .811 .026 Alternate Convenience and Buying decision Accepted 6 There is significant relationship between .810 .037 Alternate Professional consultation and Buying Accepted decision 7 There is significant relationship between .787 .005 Alternate Availability and Buying decision Accepted 8 There is significant relationship between .751 .008 Alternate Discount and Buying decision Accepted
Findings:-
1) Brand image, Celebrity endorsement, Quality, Price, Professional Consultation, Discount have p value 0.01, 0.027, 0.02, 0.026, 0.026, 0.037, 0.05, 0.008 respectively which are less than significant level 0.05 so these variables influence the buying decision of customers of Loreal paris products positively. 2) TV Advertisement 26% & social media 20% was the major source of information for or L'Oreal Paris beauty products 3) Majority of respondents 29%, are using L'Oreal Paris products since last one year 4) The makeup segment 36% & skin care segment 31% were the major product segment used by respondents 5) Product related to face 27% & skin care 26%, were majorly used by L'Oreal Paris customers 6) Majority of the respondents are buying L'Oreal Paris products frequently 59 % 7) Majority of the customers 50%, buy products worth below 1500 rupees. 8) Majority of the customers has bought L'Oreal Paris beauty products from General Stores 31% & malls 23%. 9) Majority 69% of the customers are satisfied 10) 67% of the customers will recommend L'Oreal Paris beauty products to other people.
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11) Overall quality of L'Oreal Paris beauty products is better as reported by the 72 percent of the customer.
Suggestions:-
1) Brand image, Celebrity endorsement, Quality, Price, Professional Consultation, Discount should be given preference while making marketing strategy of Loreal paris products 2) It is Suggested Loreal Paris Brand should prefer TV Advertisement social media for their promotions. 3) Brand should focus more on the makeup segment & skin care segment 4) Brand should focus more on Product related to face & skin care 5) Brand should make available at all the outlets General Stores & malls 6) Brand should develop maximum beauty product range below 1500 rupees per month usage. 7) Brand should use CRM to maintain satisfaction level high against competitors 8) Brand should use maintain overall Quality level high against competitors
Conclusion:-
Brand image, Celebrity endorsement, Quality, Price, Professional Consultation, Discount have significant influence on the buying decision of customers of Loreal paris products TV Advertisement social media were the major source of information. The makeup segment & skin care segment were the major product segment used by respondents Product related to face & skin care are in major demand frequency of buying in L'Oreal Paris products seen more than ordinary unbranded beauty products Mostly people purchase cosmetics below 1500 rupees. General Stores & malls are the preferred places to buy the loreal paris products Customers are satisfied with the brand Loreal Paris Customers will recommend the brand Loreal Paris to others. Overall quality of L'Oreal Paris beauty products is better than most of the competitors
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References:-
1. Anand Deshmukh et al. July 2015, "Consumer Buying Behavior towards Cosmetic Products", https://www.researchgate.net/, ISSN: 2321-1784 , Vol.03 Issue-07, (July, 2015) https://www.researchgate.net/publication/338421485_Consumer_Buying_Behavior_towards_Cosmetic_Produ cts
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