Market Research - Assignment 3 PDF

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Assignment 3...

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Contents 1.

Executive Summary..............................................................................................................4

2.

Introduction and company background.................................................................................4

3. Background Research.............................................................................................................5 3.1. Consumer purchase behavior...........................................................................................5 3.2 Effectiveness of celebrity endorsers used in marketing......................................................5 3.3 Effectiveness of mediums used in marketing......................................................................5 3.4 Research Gap....................................................................................................................6 4. Problem Definition...................................................................................................................6 5. Methodology............................................................................................................................ 7 5.1 Research Design................................................................................................................7 5.2 Cost Effectiveness..............................................................................................................7 5.3 Time Efficiency...................................................................................................................7 5.4 Reduced Margin of Error....................................................................................................7 5.5 Primary and Secondary Research......................................................................................7 5.6 Instrument Development....................................................................................................7 5.7 Sampling Method.............................................................................................................10 5.8 Fieldwork.......................................................................................................................... 10 5.9 Data Analysis Method.......................................................................................................10 6. Results................................................................................................................................... 10 Question 1..........................................................................................................................11 Question 2..........................................................................................................................11 Question 4..........................................................................................................................12 Question 5..........................................................................................................................13 Question 6..........................................................................................................................14 Question 7..........................................................................................................................14 Question 8..........................................................................................................................15 Question 9..........................................................................................................................16 Question 10........................................................................................................................ 16 Question 14........................................................................................................................ 20 Question 15........................................................................................................................ 21

Question 16........................................................................................................................ 21 Question 17........................................................................................................................ 22 7. Discussion and Implications...................................................................................................23 8. Conclusion.............................................................................................................................24 9. Limitations.............................................................................................................................24 10. References..........................................................................................................................25 11. Appendices.......................................................................................................................... 27 Cross Tabulation 1..............................................................................................................27 Cross Tabulation 2..............................................................................................................27 Test of Differences: Independent Sample T-Test 1..............................................................29 Test of Differences: Independent Sample T-Test 2..............................................................29 Test of Association: Pearson's Correlation..........................................................................29 Measures of Central Tendency: Mean................................................................................31 Google Form Questionnaire...............................................................................................33

1. Executive Summary Our market research is conducted to find out why online purchases for cosmetics are at 3.5% compared to store purchases, which is 91% (Euromonitor International 2019). Conducting primary research helps to develop future marketing strategies that can reach out better to Millenials. Prior to primary research, secondary research on consumer purchase behaviours, effectiveness of mediums and celebrity endorsers used in advertising is conducted to find out the current market understanding, and to determine the areas of contemporary research that are deficient. Our devised research objectives explore how the features of celebrity endorses integrate with the usage of different channels to generate brand perceptions of Singaporean consumers towards cosmetic products. As our research is descriptive in nature, a quantitative approach is used to design questions. Google Forms was used to conduct our research as it is cost-efficient, time-efficient, and reduces the margin of error. The total number of respondents is 131. It was noted that celebrity endorsements have a positive differential effect on the endorsed products. Prior to celebrity collaboration, prospective celebrities should be evaluated on their credibility and trustworthiness as these traits will determine how successful our promotional efforts will be. Additionally, social media platforms such as Instagram are most frequented by Millennials. Hence, to achieve a higher market penetration, social media content marketing strategy should be implemented. Celebrity endorsements also facilitate better brand awareness, as 78% of our respondents stated they are able to recall products that have been celebrityendorsed. As such, they help the brand move up the brand awareness model, and consumers who are previously unaware or recognize the brand may recall it when discussions about cosmetics are brought up. 2. Introduction and company background Exclusive Inc is a multinational company which sells various products such as skincare, haircare and cosmetics products which play a vital role in the everyday life of the consumers in terms of hygiene, health and appearance under the beauty and personal care industry. Increasing beauty concerns are fuelling further growth in the cosmetics industry in Singapore. (Marketline 2019) E-commerce beauty and personal care is a US47.1 billion ($65b) industry and has achieved the fastest growth out of all channels worldwide (Euromonitor International 2020). Despite the rise of e-commerce in Singapore, Singaporeans’ attitude towards buying beauty and personal care products online remains poor with only a 3.5%

adoption rate as compared to 91% who buy from in-store (Euromonitor International 2019). Exclusive Inc intends to launch its business online and improve its marketing strategy to reach out to more consumers. This report aims to uncover the effectiveness of promotional strategies and makes use of the information collected for Exclusive Inc to increase market share. This research will help to achieve insights on the impact that celebrity endorsement has on the consumers buying behavior, which endorsers’ attributes and advertising platforms are the most effective to attract consumers. 3. Background Research 3.1. Consumer purchase behavior There are a series of steps a consumer goes through before purchasing a product. Consumer perceptions and behaviors seek to discuss feelings and beliefs regarding a certain product or brand, and how they influence buying and consumption (Perner 2018; Quester et al 2015). Hence, marketers engage renowned celebrities because they have the potential to have a bigger effect on the buying behavior of the consumers. The significance of understanding behavior is vital to the effectiveness of an organisation's marketing efforts. Celebrity endorsement is an efficient strategy used by advertisers to meet consumer needs from a psychological point of view. Consequently, it affects an individual's decision-making and attitude towards the promoted product or brand (Khatri 2006).

3.2 Effectiveness of celebrity endorsers used in marketing A celebrity may generally be defined as a well-known individual recognised by the public and perceived as a role model for society because of their professional skills or physical appearance (McCracken 1989). Renowned actors, models, athletes and musicians are such examples. Celebrity endorses have an impact on facilitating awareness and recalling of the advertisement (Zipporah 2014). The use of celebrity endorsement is useful in brand promotion depending on the image of the celebrity itself (Spears, Royne & Van 2013). Ohanian’s (1990) credibility model shows that perceived trustworthiness, attractiveness, and level of expertise affect the credibility of the endorser.

3.3 Effectiveness of mediums used in marketing Marketing can take place on different types of platforms as each one of them offers different benefits. The effective theory of Krugman states that customers should be

exposed at least 3 times to an advertisement, for it to become effective (mbaskool n.d). Traditional platforms include print, movies and television. Television broadcasts and printed newspapers continued to be the staple read for most Singapore adults. Online medium includes “social media”, referring to social networks like Twitter, Facebook, Youtube and Instagram. 86% of Singaporeans are now online, 76% are active on social media and mobile subscriptions-one of the highest in the world. (Hootsuite 2019) 3.4 Research Gap There is insufficient information on which is the most effective medium for advertisements and what is the most desired characteristic of the celebrity that consumers look out for which Exclusive Inc needs to carry out successful marketing. Additionally, whether celebrity endorsements encourage consumers to take any kind of action. Hence, further research is required to address these gaps.

4. Problem Definition Currently, the traditional marketing strategy adopted by Exclusive Inc is underachieving which might be hindering the company from achieving higher growth and profits. MDP

MRP

To identify the key advantages of celebrity To decide whether celebrity endorsements on social media is the best endorsements on social media marketing as compared to traditional marketing. marketing strategy to advertise their products. 3 research objectives has been defined to further explore the relevant information: Research Objective 1 (RO 1): To identify what celebrity endorser features are more or less likely to lead to positive brand perceptions. Research Objective 2 (RO 2): To identify the most effective medium used by influencers to use celebrity endorsement. Research Objective 2 (RO 3): To determine if and how following a celebrity on social media affects consumers’ attitude towards the product the celebrity endorses

5. Methodology 5.1 Research Design As the research objective is customer profiling which is descriptive in nature, a quantitative approach has been conducted. For a method of collecting primary data, online surveys have been used due to convenience, cost, design, and representativeness. Online surveys are comparably cheaper than face-to-face interviews (Heiervang & Goodman 2011). Furthermore, online surveys are accurate and efficient in reducing resource limitations and human errors which might occur in the process of conversion of data. 5.2 Cost Effectiveness The entire survey was conducted online. Hence, we did not have to spend on printing materials or engage surveyors to collect information from our respondents. 5.3 Time Efficiency Online surveys help immensely with time wastage and the hassle of team members out on the streets to look for a specific age group of respondents one by one who are willing to answer. Furthermore, responses collected through the use of online surveys are presented in a systematic and orderly fashion. This also minimises the time taken to read and combine the data if collected physically. 5.4 Reduced Margin of Error Online surveys tabulate the results for us automatically and that is evidently much more accurate than to tabulate physical copies of the results. Significantly, human error is reduced as the raw data acquired is immediately analysed. 5.5 Primary and Secondary Research With the aid of online surveys, our primary research was done via Google forms, acquiring a total of 131 respondents' answers based on the link that we have shared with the people around us. The secondary research information our group has amassed are primarily from sources like journal articles, books and social media whereby users contribute information and feedback online. 5.6 Instrument Development The method of data collection will influence the question format and question phrasing. For an online survey, complexity and ambiguity are to be avoided by using simple and

specific questions. Check box, radio button are examples of commonly used features in online surveys. The advantages of closed questions are that our team can analyse the results more easily and quickly. To measure and indicate the respondents’ attitude, the Likert scales are used. They are the most commonly used psychometric scales among the psychological measurements requiring self-reporting (Wakita, Ueshima & Noguchi 2012). Pre-tests of the survey were conducted through a number of respondents who are friends of our team members. We informed the respondents that the pre-tests are on practice run to find out and determine the strengths and the weaknesses of our survey regarding questionnaire format, wording and arrangement (refer to screenshot 1 and 2). An example was how we were able to specify what is a traditional/micro-celebrity as some did not have any knowledge about it.

Screenshot 1: Removal of q3 in #RO1 due to repetition

Screenshot 2: Weakness in #RO 1 leading to creation of Q5

5.7 Sampling Method Our main target population of research will be Millennials aged between 20 and 40 years old in Singapore. Our market research is mainly limited to our acquaintances, friends, and family in Singapore. However, this convenience sampling might have an error of non-probability sampling. Hence, we approached the public at MRTs, shopping centres and social media to get more variation. Our sampling method is also based on judgement sampling. The respondents are selectively chosen according to our beliefs that they meet the requirement of our research.

5.8 Fieldwork Our targeted sample size for the survey is ideally 120 respondents. As a result, 131 respondents participated in our online survey whereby they have to answer 17 questions. The survey was conducted from 6-20 March in 2 weeks. As the survey is conducted online on Google Form, it is user-friendly and easily accessible to encourage more respondents to complete it. Moreover, the data collection will also be conducted in face-to-face with approaches at MRTs and shopping centres getting more random results. All survey data collected are then to be exported as an Excel spreadsheet.

5.9 Data Analysis Method The results will be analysed through SPSS software for interpretation. It will be done in the forms of frequency, mean, standard deviation, cross tabulation, independent sample t-test, Pearson’s correlation tests. These inferential and descriptive statistical analysis will help us to provide a better understanding and more detailed interpretation.

6. Results Our survey is conducted on Google forms and respondents include peers, acquaintances, and the public. Results (Individual Questions) Question 1

Figure 1 In the group of 131 respondents, 48.9% of them are males and 51.1% of them are females.

Question 2

Figure 2 In the group of 131 respondents, there are 48.9% of people whose age ranges from 2030, 43.5% 31-40 years of age, 3.8% below 20 years of age and 3.8% above 40 years of age. Question 3

Figure 3 Most respondents are employed full-time (60.3%) followed by students (29%).

Question 4

Figure 4 Majority are within the income group of less than $2,000 (36.6%) succeeded by more than $4,000 (31.3%). Question 5

Figure 5

60% of the respondents react positively to celebrity endorsements, while only 16% reacted negatively to it. The results in Appendix 4 depicts that consumers are more likely to have more neutral to very positive feelings about brands that sponsor celebrities or influencers to promote their products. The mean value is 3.48 which is above the test value of 3.0 and our p value is 0.05, showcasing a greater positive brand perception over negative. People’s liking for celebrities/ influencers for endorsements on a 5-point scale was, on average, significantly higher than neutral (M = 3.48; t(100) = 6.008, p < 0.05). Question 6

Figure 6 78 out of 131 respondents prefer traditional celebrities while the rest prefer microcelebrities when it comes to endorsing products.

Question 7

Figure 7 Trustworthiness and credibility are most important as 64 (48.9%) and 65 (49.6%) of total respondents voted so, respectively. This is so as they chose number 5 within the 1 to 5 scale, with the latter being listed as the “most important” option.

Question 8

Figure 8 37.4% of respondents prefer actors or actresses as celebrity endorsers while athletes are favored by 22.9% of them, coming in a close second. Appendices 1 and 1.1 show that both genders prefer actors/actresses. Females also prefer social media influencers which came in at a close second, while males prefer athletes as they chose it as a second choice. Question 9

Figure 9 International celebrities are largely opted for compared to local ones, with the majority 77.1% of 131 subjects preferring the former and 22.9% preferring the latter.

Question 10

Figure 10 Majority of the respondents (38.9%) chose social media as most effective, while only 2 (1.5%) chose newspapers. Figure 10 also has balanced responses in the television platform. Question 11

Figure 11 Majority (53.4%) of the subjects chose social media as the platform where celebrity endorsements are encountered most often while only 4 (3.0%) chose newspapers. Television as a platform has balanced responses due to the even spread of data. A si...