Digital Marketing PDF

Preview

Summary

DIGITAL MARKETING (MKT558)ASSIGNMENT 1 (INDIVIDUAL)TITLE: ENVIRONMENTAL ANALYSISWEBSITE / SOCIAL MEDIA: HERMONAME : LYDIA ELDA NURDIANA BINTI MOHD RADZIID NUMBER : 2019654236CLASS : BA250 4BLECTURER : MADAM LAILATUL FAIZAH ABU HASSANSUBMISSION DATE : 9TH NOVEMBER 2020INTRODUCTIONHermo is the leading...

Description

DIGITAL MARKETING (MKT558) ASSIGNMENT 1 (INDIVIDUAL)

TITLE: ENVIRONMENTAL ANALYSIS WEBSITE / SOCIAL MEDIA: HERMO.MY

NAME

: LYDIA ELDA NURDIANA BINTI MOHD RADZI

ID NUMBER

: 2019654236

CLASS

: BA250 4B

LECTURER

: MADAM LAILATUL FAIZAH ABU HASSAN

SUBMISSION DATE : 9TH NOVEMBER 2020

INTRODUCTION

Hermo is the leading e-commerce store for beauty in Malaysia. The company provides an online marketplace for purchasing beauty and skincare products that enable online access to a variety of personal product. Founded in 2012, Hermo was formed by Ian Chua as Chief Executive Officer, Ian Mok as Chief Operating Officer, and P.S. Chong as the President's Vice. The founders were inspired by the rising online beauty market in China. Ecommerce will drive the future of retail in the region, according to them. Headquarters of Hermo is in Johor Bahru, Johor and it also has an office in Kuala Lumpur. Hermo has expended its business to Singapore and Indonesia. International brands such as Naruko, innisfree, Nature Republic, Dr. Morita, Laneige, Yadah, 3CE and Holika, NYX, L'Oreal and other affordable brands have collaborated with the business. Hermo provides a wide variety of beauty items from different nations, including Korea, Japan, France, U.S and many others. They involve hundreds of reputable brands promising high-quality products for beauty, fitness and wellness. Through its website as well as its mobile application, consumers can conveniently shop online from the comfort of their home. By using Hermo Promo Codes, they can also receive exclusive discounts. By offering their favourite beauty items from across the world, their mission is to bring gorgeousness straight to customers. They focus on making the shopping experience, with the finest variety of categories available, enjoyable and affordable. Hermo is the location where consumers discover items that are sold at shocking prices and exchange beauty tips with individuals. Hermo is a verified partner and distributor of the brands to get 100 % genuine goods shipped to customers. Since Hermo is an online beauty shop without physical stores, they often give their customers great discounts to guarantee that they only get full benefits in the comfort of their home.

RELEVANT ONLINE CONSUMER VARIABLES FOR HERMO Demographics: Age - People aged 18 until 35 often use Hermo website to shop for their personal care products. Gender – Targeted for both gender, woman and man. Occupation - Students, office workers such as banker, manager, and executive can shop online on Hermo since they have no time to go to the physical stores. The housewife can easily access Hermo website at home without wasting their time to go out. Location – Originally based in Malaysia but now Hermo has expended their business to Indonesia and Singapore. Education – People with higher levels of education are more knowledgeable about how to access internet and do online shopping compared to people with lower levels of education. Marital status - Single and married women and men mostly know about Hermo website since they recommend Hermo to their friends, family and colleagues.

Behavioural/Psychographics:

Personality traits – Hermo often has sales on their website to attract their customers to buy more from them and to increase their sales. Customer will usually plan and choose what kind of product they would like to purchase before the day of sale. Upon scrolling the website, customers might see products that look attractive to them. For instance, skincare that suits your skin type or lipstick that matches your shade. This will make the customer ‘add to cart’ the products without thinking much. This is what we called impulse buying when the customer buys the product on sale with affordable price without thinking.

Lifestyle – Many people these days have been following the current lifestyle, especially in cosmetics. To keep being up to date with the trend, the consumers put in the effort to upgrade their style as well as their personality. Cosmetics act the part of a crucial role in enhancing consumer’s intrinsic beauty and bodily attribute. Men are not being left out in using cosmetics in their daily life specifically varying kind of body care and perfumes. The increasing demand for cosmetics products has made way for the widening of the cosmetics market around the world.

Attitudes – Customer are loyal to the website and products if they are comfortable with it. The customer will choose Hermo instead of althea.kr since Hermo is cheaper and the website is convenient and familiar for them to use. Most of the consumers are familiarized with the products that they always purchased since in the beginning. Changing attitude is extremely hard especially when consumers are feeling doubtful toward the marketers to get the consumer to buy more or to switch brands. Study shows that nine in 10 consumers are comfortable with brands knowing more about them to get a better online shopping experience. According to the article, the consumers have more negative feelings because of the perceived lack of attention by the brands. A quarter of shoppers are most likely will consider buying from the same brand again. Personalized experiences make customers more loyal to the brand.

Value – These days, consumers contemplated the environment since it is a crucial part of us. It also shows the consumers behaviours because the world now has appreciated the environment to support and promote the products. Consumer behaviour determined by external factors like phase of life, career, education, remuneration and lifestyle. The contrary of ages and phase of life, each consumer have dissimilar demand, preference and values. Other than that, issues on which the consumer is focused in and the type of services and products they consume at this moment depends on education, career, economic situation, lifestyle, personality influence and environment. The economic situation of a country affects consumer behaviour especially in the purchasing power of the consumer. For example, the income of consumer in a developing country is not as high as the income of consumer in a developed country and this leads to different purchasing power.

Interest – Following the global trend of skincare products, consumers now are more interested in international brands especially Korean and Japanese such as Klairs, Nature’s Republic, Hada Labo, Innisfree, Naruko. According to the survey conducted by statista.com as of July 2019 with the number of respondents of 7,099, 39% of Malaysian use Korean beauty skincare products, following by 25% of Malaysians use Japanese skincare products, 15% of Malaysian use American skincare products, 15% of Malaysian use European skin products, 4% of Malaysian use Singaporean skincare products and 39% of Malaysian use others.

THE IMPACT OF MACRO-ENVIRONMENT TOWARDS HERMO.

Demographic forces Every business is influenced by demographics. This includes age, income level, education level, geographic. Hermo identifies its customers through various traits to understand product preferences and purchasing behaviour of the consumer. Then, Hermo will select consumer with similar characteristics in their marketing. This strategy helps to maximize sales and profit of Hermo.

Influence of income of consumer can affect Hermo sales. For example, lavish products usually appeal to people with higher income compared to people with lower income. People with lower income are selective with a price therefore, they prefer discounted products, or they choose to wait until Hermo have a sale on selected products to purchase them. Another type of variables is age. Hermo’s products are more likely to appeal to consumer aged 18 until 35. Younger people are likely to purchase cosmetics and skincare online. The increasing purchase power and blooming market share are caused by the Gen X, Millennials and Gen Z. Study show that 68.14% of Gen X, Millennials and Gen Z spend more shopping on social channels compared to Baby Boomers at 31.9%.

Consumer’s education levels can also affect the type of buy they choose. The higher the levels of education, the higher the household income. Higher income leads to higher purchasing power. For instance, the consumer with higher income would choose a higher quality of product with a higher price of cosmetics products on Hermo. People with higher income are not selective of price but they are selective of brand and quality, which contrary to people with lower income.

Collecting demographic data of consumers is one of the best methods of market research method. It can be conducted by phone, online, email, mail or in person. Hermo uses this method to collect information from a consumer as much as possible. At the end of the survey, Hermo will include demographic questions. Some company will use warranty cards as another way to collect consumer’s information.

Economic forces All companies are affected by the law of a country and economy of global. Economic factors include interest rate, taxation changes, economic growth, inflation and exchange rates. Higher interest rate may result in higher cost of a product which means the consumer has to pay more for the price of a product. Higher interest rate also affects the cost of capital for Hermo to invest in the expansion of their business.

Inflation can be both beneficial to economic recovery and in some cases, negative. Inflation can impact the cost of living, doing business, borrowing money, mortgages. One of the effects of inflation may cause employees to demand wages to increase. Inflation also can make the prices increase due to higher production cost like raw materials and wages. Other than that, inflation causes an increase in demand for goods because consumers are willing to bear the higher price of a product.

Since Hermo is a firm that import products from various countries, the exchange rate plays a crucial role in the business. If depreciation happens, it will make the export cheaper and Hermo will benefit from this since they will get higher revenue. However, the company that import raw materials will have to bear the high cost of imports. If appreciation happens, Hermo will have to pay more for exports and reduce the competitiveness of exporting firms. Nevertheless, the raw materials will be at a lower cost due to an appreciation. To summarize, Hermo will benefit the most in depreciation since Hermo is the exporters.

Furthermore, economic growth will benefit business and a country. More profit for Hermo means the firm will have more capital to invest and hire more employees. This result in more jobs will be created, and the income of employees will rise. The consumer will have higher purchasing power which will drive to the higher economic growth of a nation. Higher employees also will increase the productivity of a firm. Hermo’s business confidence will grow up to meet more challenges.

Technological forces Technological factors create an important influence in the Macro Environment since they connect to factors that produce new technologies hence new products and market opportunities are produced. Technological advances have made the communication of Hermo faster, easier and cheaper. It allows Hermo to switch over from the local market to the global market. Security, information availability, pricing is a part of the technological forces of Hermo.

Security is considered as a crucial part perceived seriously by online purchase customer. The consumer believes that Hermo’s website is able to protect the personal data of consumers during online or electronic transactions from an unofficial leak of information. Consumers are willing to visit online stores and purchase there because they are confident in providing personal information and credit card payment. Usually, the consumer will purchase from stores that they trust or a brand that they familiar with. Security is one of the reasons the consumer avoids purchase online as they are worried they will defraud by the seller who will use their personal information for wrong purposes, specifically credit card data. Study shows that 70% of online customers in the US are concerned about the abuse of their personal data and the security of transactions.

The consumer expects related and precise information about the product from the Hermo. Hermo provides accurate information regarding the products due to the consumer cannot touch and feel the products before purchasing them online. Providing information about the product can help consumer online shopping without doubt and fear of the product. For example, the consumer can see the review left by purchaser online. The consumer can see the quality of the products reviewed by the purchaser. Review from other purchaser is considered as important in obtaining information that will help the consumer in the decisionmaking process about buying product online which will make the more satisfied. Information about the product in terms of quality is considered as a component of e-satisfaction. In the decision-making process, the consumer always includes the price of the products. As an online store, Hermo offers the consumer a variety of products from different brands. The consumer expects to get a lower price of the product online compared to the physical stores.

The consumer is more satisfied to get discounts while purchasing online. The consumer can compare the prices of the product on a different website to get the lowest price of a product. For example, the consumer will compare the prices from Hermo with their competitor, Althea to get the best price of a product with the best quality. Eventually, pricing can be the main reason for customer satisfaction in online shopping.

CONCLUSION

To be the leading e-commerce store for beauty in Malaysia, Hermo provides an online store for purchasing products that enable online access to various kind of products. Hermo would not be able to thrive if the marketing plan relies on reaching the entire mass market. The benefit of market segmentation is that it enables Hermo to specifically target consumer with specific wants and needs. In the long run, this will help Hermo since it allows to use its organizational capital more efficiently and make better strategic marketing decisions.

REFERENCES

1) Gangai,

K., & Agrawal, R. (2016). The Influence of Personality Traits on Consumer

Impulsive

Buying

Behaviour. International

Journal

of

Marketing

and

Business

Communication, 5(1). https://doi.org/10.21863/ijmbc/2016.5.1.027

2) Perner,

L. Attitudes. Consumerpsychologist.com. Retrieved 4 November 2020, from

https://www.consumerpsychologist.com/cb_Attitudes.html.

3) STUDY: Nine in 10 Consumers are Comfortable with Brands Knowing More about Them to Get a Better Online Shopping Experience. Prnewswire.com. (2018). Retrieved 4 November

2020,

https://www.prnewswire.com/news-releases/study-nine-in-10-

from

consumers-are-comfortable-with-brands-knowing-more-about-them-to-get-a-better-onlineshopping-experience-300604759.html.

4) Suttle, R. (2020). The Demographic Variables That Affect a Business. Small Business Chron.com.

Retrieved

8

November

2020,

from

https://smallbusiness.chron.com/demographic-variables-affect-business-24344.html.

5) Understanding of Micro and Macro Factors That Affect Your Business. Mageplaza. (2020). Retrieved 8 November 2020, from https://www.mageplaza.com/blog/micro-and-macrofactors-affect-your-business.html#macro-environment-factors.

6) Vasić,

N., Kilibarda, M., & Kaurin, T. (2020). The Influence of Online Shopping

Determinants on Customer Satisfaction in the Serbian Market. Jtaer.com. Retrieved 8 November

2020,

from

http://www.jtaer.com/statistics/download/download.php?

co_id=JTA20190206.

7) Borad,

S.

(2020). Macro

eFinanceManagement.com.

Environment Retrieved

Factors 8

Affecting

November

Business.

2020,

from

https://efinancemanagement.com/financial-management/how-macro-environment-affectsfinancial-management-decision.

8) Shu, C. (2020). TechCrunch is now a part of Verizon Media. Techcrunch.com. Retrieved 8 November 2020, from https://techcrunch.com/2015/10/14/hermo/.

9) Generational Consumer Shopping Behavior Comes Into Focus. CMSC. (2020). Retrieved 8

November

2020,

from

https://www.cms-connected.com/News-Archive/October-

2018/Generational-Consumer-Shopping-Behavior-Comes-Into-Focus.

10)

Micro and Macro Environment Factors | Oxford College of Marketing Blog. Oxford

College

of

Marketing

Blog.

(2020).

Retrieved

8

November

2020,

from

https://blog.oxfordcollegeofmarketing.com/2014/11/04/the-impact-of-micro-and-macroenvironment-factors-on-marketing/....