Cosmetic Product Attributes That Establish A Prestigious Brand Image In Chinese Cosmetic Market

The research aims to study and generate the recommendation or solution for the question of“Cosmetic product attributes that establish a prestigious brand image in Chinese cosmetic market?”A number of researchers pointed out the residing issue of foreign brands-dominating market structure.However,the solution is surprisingly neglected until recently.Thus,the aim of this research thesis is to generate feasible and workable solution that local cosmetic brands could take as advices in developing the business plan.It is because the author believes that practical approach is the modest way for reducing remaining issues in the current market.Chinese beauty market is experiencing fast growth with economic development and urbanization progress.China is the world's second biggest cosmetic market after U.S.Moreover,premium cosmetic market in China has a large contribution(about 12 percent,Whiteman&Krug,2008)~1 to world's luxury cosmetic market.Many foreign brands have entered into Chinese cosmetic markets for the business opportunities,more than 20,000 brands are registered in Chinese cosmetic marketplace.China Food and Drug Administration statistics has announced that local brands and foreign brands are serving low/mid-market segment and high market segment respectively(Ballantyne et al.,2006).~2.Chinese consumers in beauty market are classified based on the development of region and economies as consumer's purchasing power and product varies with the degree of development.Chinese beauty market is seen to have heterogeneous consumer segments(Fu,2013)~3.However,study finds that demand for the foreign brands from overall Chinese beauty market is continuously increasing(Garner,2005)~4.Moreover,there is a growth for the number of foreign brands entering Chinese market with varied business form such as acquisition and merger(National Bureau of Statistics of China,2014,as cited in Fung business Intelligence Centre,2014).~5 Thus,Significance of market segmentation and target that is often important for the business plan was unclear.Reasons for rising demand for the foreign cosmetic goods are found to be not a single factor's contribution.Consumer's perception for each product attributes play important role in purchasing process.Thus,in the thesis,importance of market segmentation,level of significance of intrinsic and extrinsic cosmetic product attributes,and moreover,image of authentic Chinese are developed as sub-questions after in-depth investigation for current Chinese cosmetic market.This study takes Keller's(1993)~6 and Aaker's(1991)~7 typologies for the brand images and product attributes as a conceptual framework.Keller has classified product attributes into intrinsic(product related)and extrinsic(non-product related)attributes.However,Keller's definition of extrinsic attributes including price,user imagery and usage imagery has its limitation for discussion of cosmetic products.Thus,further product attribution explanation of Aaker's are added.Additional detailed product attributes by Aaker are customer benefits,celebrity,lifestyle,country of origins.In the research,an author re-classified extrinsic product attributes to price,communication(promotion),user imagery,experiential benefits,distribution,and attitude of consumers,trends,emotional components,and brand identity.This classification is based on the findings of the research.Research finds that quality of intrinsic(product related)and extrinsic(non-product related)cosmetic product attributes play very important roles for cosmetic brand image(Hsieh,Pan&Setiono,2004).~8.Moreover,intrinsic and extrinsic attributes of cosmetics including both traditional and modernized approach stimulate consumer's better preference for a brand.The reason found is that Chinese consumer's aesthetic value is heavily shaped by traditional influences.However,at the same time,modernization developed with wider communication channels have altered consumer's wants and market trends.Chinese consumers are very sensitive with the safety and ingredient of the cosmetics.Unfortunately,Chinese consumers tend to have distrust to local ingredients and consider local brand to be inferior.Foreign cosmetic products are perceived to be advanced and safer by local consumers.Cosmetic is a self-expressible products.Study indicates that social function of representing a certain image of user or lifestyle(user imagery)has a higher importance than other extrinsic attributes such as price or usage imagery(Baek,Kim and Yu,2010)~9.Consumers are seeking for a feeling of belongingness by using a cosmetic product,and such social images are largely presented in the media channels.Interesting finding in the research is Chinese consumer's attachment and response to Chinese.In the discussion,the author names it to China nativeness,implying the importance of a link to traditional Chinese value.Consumers do not seek for an ingredient or manufacturing to be China-made.However,emotional attachment or approach that stimulates pride of China positively stimulate the consumers.Some researchers have described Chinese cosmetic as heterogeneous market.However,the study finds expansion of foreign brands through developed distribution channels and communication has lowered the boundaries between consumer segments.Clear classification of consumer segment is seen to be not necessary in Chinese cosmetic market.Taste of Chinese consumers are rather homogeneous in the preference of foreign brands.Information in the research are gained through arranged interviews and case studies.Targeted six correspondents of Interviews were local and foreign beauty and cosmetic industry related practitioners.Interviewees'valuable experiences and opinions are shared and it is studied together with findings in the case studies.Local cosmetic brands:Herborist,Yue Sai and CHANDO are taken for case studies in this thesis.Purpose of analyzing successful Chinese local brands is to investigate a contemporary phenomenon within its real-life context.This thesis suggests local beauty practitioners to establish trustworthiness and expertise by developing its strategies with significant cosmetic attributes found in this research.Research concludes that the communication and interaction with consumers with effective use of media channel as a way of establishing trustworthiness.Moreover,it suggests an overall Chinese beauty industry to put efforts in refurbishing its image with industrial collaboration.Chinese cosmetic manufacturers possesses advantages on understanding aesthetic value of Chinese consumers,moreover,have an advantages of local government protection.Moreover,cosmetic manufacturers must develop the products with unremitting researches to satisfy market trend and fast-changing wants of consumers.Study recommends a brand to develop creative extrinsic attributes.Since creativeness plays important role in attracting the consumers and influencing the trends in the market.Cosmetic has a small switching cost,and moreover,the trend could be viral via circulation of information on media channel.Study sees creativeness of cosmetic goods and creation of trend will lead the local brands to have better expertise.Moreover,emotional appeal or approach of Chinese nativeness is suggested for a local practitioners in establishing authentic Chinese brands.