BRAC University || BRAC Business School Spring'14 Marketing 201 Case Analysis. >> Group 2 << Ashfaqur Rahman Shemanto Nabila Ishrat Tuba Rubaiyat Tabassum Anchol Maeesha Tasnem

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Summary:
Shiseido, Japan’s largest cosmetics manufacturer, targets to become number one in the
global cosmetics industry. But their perspective of being number one is to becoming
number one in quality, not in sales or profits and therefore aims to increase their sales
outside Japan. In this scenario, Shiseido sets its eye on the U.S market but since it is a
different demographic segment for their cosmetics, they set different marketing strategies
which will be viable with their organization’s principles at the same time will attract or
gain consumer satisfaction. Shiseido is relying on a scientific approach combined with a
focus on inner or spiritual well-being; in fact, they portray a corporate slogan of “the
science of beauty and well-being.”To create a unique brand identity in the market among
so many competitors they adopt product differentiation and service differentiation, even
in their promotions Shiseido asserts, “Products that make women feel beautiful inside and
look beautiful outside”.But Shiseido assumes that their scientific approach may fulfill
consumer’s want for information but the high price of their productmight repel them from
buying and Americans are also used to getting free samples of new products which
Shiseido wants to avoid. To deal with these problems, the company decides to go for
personal selling efforts. Shiseido also learns that an additional product, ‘perfume’ to be
more specific, will add to the benefits to their anchoring in the U.S market. Despite
knowing Shiseido lacks a well-known perfume brand, it assumes it may also be a bridge
to men’s cosmetics which will beget more future sales and growth.
Another problem arises with their company’s name which appears to be difficult to
remember for American consumers and to solve it they decide that ‘Shiseido’ will be the
corporate name but the cosmetics will have different brand name.
Shiseido’s Marketing Objectives
From the article we pick up the points such as- Shiseido is the largest cosmetics
manufacturer in Japan but wants its sales to grow from 9 percent to 25 percent. It holds a
tiny 1.3 percent share or 59.5 million in sales in the U.S cosmetics market but it targets to
be the number one there too.

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As a result, we can say that Shiseido belongs to the ‘Growth’ stage in the international
market and it aims to reach ‘Maturity’ stage. So its main objective will be-
• Expanding their business
Marketing Strategies
This objective will lead to the following marketing strategies.
1. Increase the sale while maintaining quality of the product.
2. Increase market share and profits.
3. Since most of their consumers will be early adopters, they must focus on
increasing their public relations and welcome opinions from consumers.
Such strategies involve choosing the appropriate marketing mix.
Marketing Mix
i. Product: Along with the core product (cosmetics), Shiseido must offer more
augmented products.
For example we can say, Shiseido is providing consumer’s skin care
consultancies to make them feel more reliable to their products. Adding to this
augmented benefits; Shiseido may add skin treatments to solve diseases related
skins.
ii. Price: Shiseido must charge lower for their products and services than those of
their competitors if they want to attract potential buyers while retaining their
existing consumers.
iii. Place: They must go for intensive selling. Distribute their products to as many
locations as possible and make them available to the consumers.
iv. Promotion: Promotion serves in educating the market for that company which
wants to reach ‘Maturity’ stage and also to draw the attention of the potential
consumers. Shiseido must advertise more and more to reach successfully to their
American buyers.

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Questions & Answers
Q1: How do Consumers’ culture, social, personal and psychological characteristics
affect their cosmetics shopping behavior? How do these factors affect the way
cosmetics executives view on consumers? How are these factors changing?
Ans: Consumer buying behavior is influenced by four key set of buyer characteristics:
cultural, social, personal, and psychological. Although many of these factors cannot be
influenced by the marketers, they can be useful in identifying interested buyers and in
shaping product and appeals to serve consumer needs better.
Cultural factors: is the most basic determinant of a person’s wants and behavior. It
includes the basic values, perceptions, preferences, and behaviors that a person learns
from family. But whereas Subculture is “culture within cultures” that has distinct values
and lifestyle and this can be based on anything from age to ethnicity. Culture is a
pervasive influence which underlies all facets of social behavior and interaction. It is
embodied in the objects used in everyday life and in modes of communication in society.
Cosmetics are ubiquitous elements of women’s consumer culture one of the imperatives
of contemporary life, and represent one of the most important ways women present and
transform their public persona. In today’s society, beauty and physical attractiveness are
constantly emphasized as desirable and admirable characteristics. This research focuses
on the influence of culture on consumers‟ cosmetics buying decision making process.
Social factors: also influences a buyer’s behaviors. A person’s references groups have
strongly effect product and brand choices. For cosmetics shopping, brands define social
status. The consumers do favor the known and expensive brands due to social factors.
Personal factors: characteristics influence the buying decision. The consumer lifestyle is
the whole pattern of acting and interacting in the world are also an important influences
on purchase decisions.

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Psychological factors: consumer buying behavior is influenced by motivation,
perceptions, learning and beliefs and attitudes. Each of these factors provides a different
perspective for understanding the working of the buyer. (Kotler, Armstrong, 2005).
Cosmetics have various forms and effect which has to be compatible with the consumers’
psychological resemblance.
The cosmetics executives are now more becoming consumer oriented and are
improvising their product according to the need and the four key set of buyers
characteristics. The amount of variations brought in the cosmetic products is one of the
main strategies the marketers are using to have control over the characteristics. As these
factors are very crucial for the executives, they take them into account and are coming up
with different, safe but innovative strategies.
In this world of globalization it is inevitable that the consumer’s behavior will change
along with the characteristics. The cultural diversity that follows in this era is one of the
most inducing factor which states that these factors are changing. The standard of living
has increased in all social classes. Even a female garments worker will save a little
portion of her wages to go to a parlor. Sociologically purchasing cosmetics is changing
into usual scenario. Now buying cosmetics is a must for all classes.
Q2. Who is involved in a consumer’s decision to purchase cosmetics and what role
does each participant plays?
Ans: The main buyers of cosmetics are women of all ages. They buy cosmetics in order
to look more beautiful in theirs and another’s eyes. While buying any cosmetics their
buying decision often gets influenced by the reference group, which is the group of
people who have direct (parents or friends) or indirect (celebrities or models) influence
on consumer’s purchase decision. This group of people could influence the consumer’s if
they have any past experience with the product. They also tend to be more influenced by
reference groups if the information perceived is as reliable and relevant to the problem at
hand and the information source is perceived to be trustworthy. The information given by

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the reference group always help consumers to decide whether to buy the product or not,
to gain useful knowledge, and to obtain rewards or avoid any kind of punishment. The
references groups which are highly credible are more likely to have informational
influence on consumers.
Cosmetic Products are mostly advertised by female celebrities or models. As a result, the
price of those cosmetics is high, and people have this intuition that the higher the price of
the product the better will be its quality. They also think that as a celebrity is using the
product then she also have to use the product no matter what. Thus high conspicuousness
also has high influence on consumer's purchase decision. So, in order to purchase
cosmetics the involvement of reference group is very high and the information that they
give to the consumer's greatly affect their decision to purchase cosmetics.
Since, cosmetics are bought mainly by women so they mostly turn to the others female
members of the family to help them in their purchase decision. But the purchase decision
can be influenced by any of member of the family. For instance in case of young girls
who want to buy cosmetics always seeks advice from the experienced members of the
family. But the behavior of each family member cannot be the same, different members
will have different behavior which depends on the roles played by each member of the
family.
People who provide information to the other family members in order to buy the product
are called influencers. People who try to control the flow of information into the family
are called gatekeepers. People who have the power to determine whether to purchase a
product or service are called deciders. People who actually purchase the product or
service are called buyers. People who consume or use the product or service are called
users. And people who dispose of a product or discontinue using a service are called
disposers. These roles show that different family members may be involved in different
aspects of the purchase decision process and in consumption of the product or service that
is bought. In case of purchasing cosmetics, female members of the family are the most
influential people. So the roles played by the family members and the information

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provided by them have immense influence on the consumer's decision to purchase
cosmetics.
Q3: What types of buying decision behaviors are involved in purchasing cosmetics?
Ans: As mentioned, women are the main consumer for cosmetics but male customers
also play a vital role here and they buy cosmetics to feel beautiful inside and look
beautiful outside. Another way the intension is to improve individual’s appearance
outwardly. Well there are some following behaviors a consumer face which indicates the
study how individual customers make decisions depending on their time, money and
effort on consumption related items. (Crezsolo, 2013) These behaviors are: Complex,
Dissonance-reducing, Variety-seeking and Habitual buying behavior.
For cosmetics purchase usually we consider complex behavior, where the consumer is
highly involved in identifying the products and then comparing it other products. The
consumer also visits various stores and then turns towards the sales person’s knowledge
about the product. After the purchase decision is done then the consumer will move to
habitual buying behavior, that is, the consumer will start buying the product, since it has
meet the consumer’s expectations. After being familiar with the product, the consumer
grows a sense of loyalty towards the product. Though being satisfied by the product the
consumer might turn to variety-seeking behavior. If the consumer hears about any new
product that recently came to that market and might want to try it. So, sales promotions
are made in such manner to encourage this type of consumer behavior.
Regarding Shiseido and its products, it portrays the ‘Dissonance-reducing buying
behavior’. This behavior refers to that consumer buying behavior where situations are
characterized by high involvement of consumers but few perceived differences among
brands. As skin is the most sensitive matter so consumers tries to get accurate
information, to compare the product with existing others brand products and then they
take the decision whether to buy the product or not. As a matter of fact this buying
decision behavior creates dilemma in the minds of the consumers that whether they are
purchasing the right product for them or not.

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After purchase consumer may face post purchase dissonance which may creates two
situations for the company. That are-
• When consumers are not satisfied regarding the product, and
• When consumer get positive information of other competitors products.
Putting focus on these issues regarding ‘Dissonance-reducing buying behavior’, Shiseido
needs to –
• Highlight the main products to the consumers,
• Highlight the main and unique features of their products with accurate
information,
• Focus on products for consumers not consumer for products,
• Justify consumers buying decision in order to reduce the dilemmas, and
• Share positive experiences of their existing consumers to the other consumers.
Consumers buying decision behavior is not only involved in emotional factors of the
customers but also in economic factors of the organization and the country. A marketer
must study a consumers needs, wants and demand as those study helps the certain
organization to develop their product quality, price and other marketing mix elements
which plays an important role in the growth of the organization.
Q4. Describe the buying decision process for cosmetics.
Ans:
Need recognition: The need for cosmetics is an external need as it is related with luxury.
A consumer first decides to buy cosmetics as per her need. For example, she wants to buy
a sunscreen lotion to protect her from sunburn. That mean she is recognizing her need.
Information Search: The next step of buying decision is related with collecting certain
information about the product. When a consumer wants to buy cosmetics, she collects
information to buy the best one. She has some sources to collect information. For
example, she can take some suggestions or recommendations from either family members
or friends. She can browse internet. She can also collect information from any of

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consumer organization like FACT (The Federation of American Consumers and
Travelers). She may also use the product to examine that the cosmetics really work or
not. But this experiential process is little bit risky as it is cosmetics and consumer has few
ideas about the product.
Evaluation of Alternatives: A consumer will always buys the same product unless there
are not any alternatives or any other competitor with the same product. In case of
Shiseido, it has many competitors who have high demand for their product. Evaluation of
products can be done on the basis of price, quality, brand, packaging, features, etc.
Products of companies like L’Oreal, Maybelline New York, Chanel, Allure, etc. have
high demand in the market. Consumers always want to try the products on a trial basis.
All the branded companies give samples of their products to their customers on a trial
basis which helps them to gain the consumer’s trust on the product and also raises the
willingness to buy the product. But Shiseido does not give any kind of free sample for
trial which is big drawback for them. Rather they should give away free samples for trial
to their customers to attract them more like the other brand companies do.
Purchase Decision: Consumer’s purchase decision is influenced by two factors: attitude
of others and unexpected situational factors. Suppose, when a consumer goes to buy any
product along with a friend, peer, family or anyone else the consumer’s purchase decision
can get influenced by that person’s comment or provided information. Also in some
unexpected situations like, lack of free samples, untrained sales person, or a very good
and trained sales person, free samples for trial, etc. can influence the consumer’s final
decision to purchase the product. So, in order to influence the final purchase decision of a
consumer the marketer should always think of different ways I to keep their customer
satisfied with their product. For that, they will have to give away free samples, also train
their sales person by spending lot of money.
Post Purchase Behavior: Finally, Post purchase behavior which refers to the stage
where the buyers take the decision of taking further action regarding the purchase based
on their satisfaction and dissatisfaction. If the product fulfills consumer’s expectation, it
creates consumer’s satisfaction and consumers will keep purchasing the product. She or
he will also recommend the same brand to others and also help the marketer to spread its

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advertisement slogans and offerings. On the other hand, if the product falls short of
expectation, the consumer will be disappointed.
Q5. What marketing recommendations would you make to Shiseido as it seeks to
increase its sales in the U.S. market?
Ans: Market strategy is a big factor to increase the sale of a product. Though Shiseido is
a renowned cosmetics company of Japan, but it has no brand image in U.S. market. As
they are following Marketing concept, so they have to think about their customers first.
Since they want to increase their sales in U.S. market, they need to follow some exclusive
marketing strategies:
• They have to find out the need of customers which is not fulfilled yet by other
cosmetics companies. For example they should introduce face cream and make up
only for teenagers. Because the skin type of teenagers is more sensitive than others.
Moreover, they go through lot of skin problems. For example, some people’s skin is
oily and some people’s skin is dry. Shiseido can grab this opportunity to increase
their sales as well as to create a new brand image in U.S. By doing this they can
easily make a superior position in market.
• Shiseido wants to avoid product sampling as the products are costly enough. So, for
increasing the sales they can make an advertisement which will be recommendations
of common people. Shiseido will spend money to give some quality products to some
women. After using them they will ask to say something good about the product.
Their recommendations will be telecast as an advertisement. This type advertisement
is more unique in U.S. The attention of consumers will easily be gripped by the
company.
• Shiseido should launch some season based new cosmetics. As we all know different
season needs different care for skin, so Shiseido can bring seasonal cosmetics. For
example, winter cream, which will remove the dryness of skin.

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• Another thing which can be really effective is to know the bad things about the
product. Company will call for some criticisms from the customers of the product.
They will collect that information to rectify the product into best one. These new
strategy will work a lot to establish a different brand image of Shiseido. Because this
type activity is rare in the history of marketing.
• Increasing activities on Corporate Social Responsibility (CSR) will create a positive
notion about the organization and will attract consumers who are conscious. For
example- Shiseido is currently using solar panels in their buildings to use renewable
energy.
References:
• Crezsolo. (2013). Consumer Buying Behavior of Cosmetics. StudyMode.
Retrieved from <http://www.studymode.com/essays/Consumer-Buying-Behavior-
Of-Cosmetics-1552375.html>
• http://wenku.baidu.com/view/11b3682add36a32d7375811d.html
• http://www.usa.gov/directory/consumerorgs/T.shtml
• Naidu, S. (2013). Study of Women’s Buying Behavior as Regards Cosmetics.
Academia.edu. Retrieved from
<http://www.academia.edu/5166120/Study_of_Womens_Buying_Behaviour_as_
Regards_Cosmetics_in_Surat_Region_India>
• Peter, J.P. & Olson, J.C. (2014). Reference Groups and Family. Mc Graw Hill
Answers. Retrieved from
<http://answers.mheducation.com/business/marketing/consumer-
behavior/reference-groups-and-family>