Brand Loyalty and Factors Affecting Cosmetics Buying Behavior of Saudi Female Consumers

Abstract

This paper provides an overview of the brand loyalty for cosmetic products in Saudi Arabia. More specifically, it examines the brand preferences of Saudi female consumers for different cosmetics and toiletries like skin care products, make up products, hair care products, perfumes, body care product, nail paints or similar products. This study also attempts to identify the factors affecting the purchase of cosmetics and the influence of brands on buying behavior. The results show that all of the factors listed above have significant impact on the purchasing decisions of the consumers. It was also observed that around 12% to 20% of consumers were "brand neutral" in their purchases for cosmetic products; whereas the other consumers demonstrated brand loyalty to one or more reputed brands.

Headnote

Abstract

This paper provides an overview of the brand loyalty for cosmetic products in Saudi Arabia. More specifically, it examines the brand preferences of Saudi female consumers for different cosmetics and toiletries like skin care products, make up products, hair care products, perfumes, body care product, nail paints or similar products. This study also attempts to identify the factors affecting the purchase of cosmetics and the influence of brands on buying behavior. The results show that all of the factors listed above have significant impact on the purchasing decisions of the consumers. It was also observed that around 12% to 20% of consumers were "brand neutral" in their purchases for cosmetic products; whereas the other consumers demonstrated brand loyalty to one or more reputed brands.

Keywords: Cosmetic industry, global market for cosmetics and toiletries products

Introduction

In 2012, the total global cosmetics market was estimated to be 180 billion Euros, and it has been steadily growing at a rate of 4% every year. Many players in this field are competing aggressively to capture more and more markets. The purpose of this article is to investigate the influence of brand loyalty of cosmetics on the buying behavior of female consumers in the Kingdom of Saudi Arabia. According to the BNET Business dictionary, brand loyalty is defined as, "The extent of the faithfulness of consumers to a particular brand, expressed through their repeat purchases, irrespective of the marketing pressure generated by the competing brands." The factors affecting brand loyalty are: brand name, product quality, price, design, promotion, service quality, and store environment. It is proposed to measure the influence of each of these factors on brand loyalty, by conducting a survey from a sample population of Saudi females in the age group of 15 to 50 years old. The results of this study indicate the relative strength of relationship of the seven factors on brand loyalty.

Saudi Arabia Profile

The modern story of Saudi Arabia began in 1901, when the famous leader, Abdul-Aziz ibn Abdul Rahman Al-Saud (ibn Saud), rode out of desert exile in Kuwait to capture the fortress of Riyadh. He gradually increased his hold on the Arabian Peninsula until he was able to unite all the major tribes and their territories to create the present state of the Kingdom of Saudi Arabia (KSA) in 1932 (Weatherby et al., 2009). The population of Saudi Arabia is approximately 27 million, the infant mortality rate per 1000 live births is nearly 13, the population under 15 years of age is just about 38%, life expectancy is roughly 76 years of age, the literacy rate is approximately 80%, and the per capita GDP is $12,800 (USD). Because of the linkage of the state with Islam, the Kingdom of Saudi Arabia does not have a constitution in the Western sense. The Qu'ran is the constitution of Saudi Arabia. However, the state does have a basic law that covers many items found in Western constitutions. Socially, women are segregated from men in schools and the workplace (Weatherby et al., 2009). Over the years, women's rights have gradually progressed. For example, in the 2015 elections, at least 15 women were elected to public office in Saudi Arabia. The election was the first in which women could vote and run as candidates. As such, women are becoming a dynamic force in all aspects of the Kingdom of Saudi Arabia.

Cosmetics Market in Saudi Arabia

The Saudi cosmetics market is the largest in the Middle East, estimated at over SR60 billion ($16 billion) annually, with a forecast of 11 percent annual growth rate, according to a report released by Euromonitor, a global market research firm (Trade News: Riyadh 2015). Saudi Arabia's many affluent and beauty-conscious women are spending on average SR14,256 ($3,800USD) a year on cosmetics. The Saudi Arabian market achieved exceptional growth in 2014, partly due to high disposable income in the country, in addition to the growth of the young population - the main consumer of cosmetics and personal care products (Trade News: Riyadh 2015). The sector is further supported by the variety of widely spread sale and distribution channels in the country, including standalone stores in malls, in addition to over-the-counter sales in salons, pharmacies, supermarkets and hypermarkets as well as bazaars and souks. Meanwhile, the cosmetic clinic sector has grown 10-fold in five years. Speaking on the sector's outlook for the current year, Mohammad Madi, president of Madi International, a leading distributor of Internationally renowned professional beauty brands in the Middle East, explained: "In light of the current regional situation, it is difficult to determine exact growth outlooks for 2015, considering the increase in real estate prices and school fees, which all affect consumer spending and reshapes priorities. Despite all the challenges, we are confident that sector growth will not go below 4.5 per cent in 2015" (Trade News: Riyadh 2015). He also mentioned, "The beauty and cosmetics sector in Saudi Arabia registered significant growth due to the strong purchasing power of the residents, and the availability of varied products that suit all budgets and tastes. Latest statistics suggest sales of skincare products in Saudi Arabia are expected to reach $502.9 million in 2015."

Brand Loyalty

The American Marketing Association defines brand loyalty as "the situation in which a consumer generally buys the same manufacturer-originated product or service repeatedly over time rather than buying from multiple suppliers within the category" or "the degree to which a consumer consistently purchases the same brand within a product class". A prime example of brand loyalty in the US is with cigarettes. Americans who smoke prefer to only smoke one brand of cigarettes. Brand loyalty represents the core of a brand's equity. Daryl Travis (2000) considers that brand loyalty is "the ultimate objective and meaning of brand equity", adding that "brand loyalty is brand equity". Moreover, brand loyalty can't be analyzed without considering its relationship to other descriptive dimensions of brand equity like awareness, perceived quality, or associations. First, all the other descriptive dimensions of brand equity can enhance brand loyalty, as perceived quality, associations and awareness provide reasons to buy and effect satisfaction. Loyalty could arise from a brand's perceived quality or associations, but could also occur independent of these dimensions (for example, a person can be loyal to a low perceived quality brand and dislike a brand with a high perceived quality due to subjective reasons). Yet, the nature of this relationship is unclear. On the other hand, loyalty can induce a higher perceived quality (e.g., a potential customer has a better evaluation of a brand if that brand is perceived as having a loyal customer base), stronger associations (the brand can be associated to elements characterizing its loyal customers), or increase awareness (loyal customers tend to provide brand exposure to new customers through "mouth to mouth" communication). There are seven factors that influenced consumers' brand loyalty towards certain brands. The factors are brand name, product quality, price, design, store environment, promotion and service quality (Khraim, 2011).

Brand Name

A brand name is something more than a label; a brand name may be a major product attribute and a part of what the consumer buys (Kenneth, 1981). It is a complex symbol that has the potential to represent many ideas and attributes associated with the product it represents. As such, it may be possible for consumers to form complex attitudes toward the brand name. These attitudes can be based on the literal meaning of the name, the way the name sounds, or some associations that the brand name accumulates over time due to company promotion or individual usage (Leone, 1981). A brand name lives and evolves in the minds and hearts of potential clients.

Product Quality

If a product fulfills the customer's expectations, the customer will be pleased and consider that the product is of acceptable or even high quality. If his or her expectations are not fulfilled, the customer will consider that the product is of low quality. This means that the quality of a product may be defined as "its ability to satisfy the customer's needs and expectations". Quality needs to be defined firstly in terms of parameters or characteristics, which vary from product to product. For example, in a mechanical or electronic product the characteristics are performance, reliability, safety and appearance. For pharmaceutical products, parameters such as physical and chemical characteristics, medicinal effect, toxicity, taste and shelf life may be important. For food products the parameters will include taste, nutritional properties, texture, shelf life and so on (United Nations, 2006).

Price

Pricing is determining what amount a customer is willing to pay in return for the product. One important factor that has been considered in many exchange relationships is price, which is the financial value that is given out in exchange for a product. Price satisfaction has a direct impact on consumer behavior and customer loyalty. This increased loyalty can reduce the marketing costs by preventing the customers from switching to other brands. Price satisfaction is an important factor which influences buyer seller relationships because price is one of the most flexible elements of the mixed marketing and it varies after changing the characteristics of products and services (Dovaliene & Virvilait, 2008).

Features or Design

Both product quality and process quality are very important when discussing brand loyalty. The designer should build the quality standard expected by the customer or marketplace in clear and precise terms. Every feature should meet the customer expectation performance requirements. For example, in the automobile industry certain cars are known for safety, gasefficiency, or reliability. The manufacturer should have precise limits of acceptability so that the production team manufactures the product strictly according to specifications. To achieve the above, those responsible for design, production, and quality should be involved from in all stages of marketing. The product design should conform to the requirement specifications created jointly by the marketing, design, manufacturing and quality management teams. Cosmetic products may have several characteristics like chemical composition, volume, weight, color, smell, taste, expiry period, etc. that need to be specified precisely. In addition to these features, almost all cosmetic products also need to adhere to health safety norms. Thus, they may be expected to conform to the quality standards such as OSHA (Occupational Safety and Health Administration). The design team must take into account all of these aspects when designing the cosmetic products.

Store Environment

Cosmetic products are usually sold at retail outlets or in pharmacies. Omar (1999) emphasized that the store environment was the single most important factor in retail marketing success and store longevity. Positive attributes of the store, which include store location, store layout, and in-store stimuli, affect brand loyalty to some extent. Store location and number of outlets are crucial in altering consumer shopping and purchasing patterns. If consumers find the store to be highly accessible during their shopping trip and are satisfied with the store's assortment and services, they may become loyal customers afterwards (Lovelock, 2010). Therefore, a store's atmosphere is one of the factors that could influence consumer's decisionmaking.

Promotion

Promotions refer to the entire set of activities, which communicate the product, brand or service to the user. Many psychologists help with promotion efforts of products. The idea is to make people aware, attract and induce to buy the product, in preference over others. According to Clow (2010), promotion is an important element of a firm's marketing strategy. Promotion is used to strategically communicate with customers with respect to product offerings, and it is a way to encourage purchase or sales of a product or service. Sales promotion tools are used by most organizations in support of advertising and public relations activities, and they are targeted toward consumers as final users. Celebrities, athletes, and actresses are known to promote products to attract more customers.

Service Quality

Service quality is defined as the degree of discrepancy between customers' normative expectation for service and their perceptions of service performance (Parasuraman et al., 1985). The definition of service quality was further developed as "the overall evaluation of a specific service firm that results from comparing that firm's performance with the customer' s general expectations of how firms in that industry should perform" (Parasuraman et al., 1988). In the context of cosmetics service quality relates to the enthusiasm and responsiveness of the sales personnel and handling of customer complaints in case of any issues with the product.

Research Objectives

There are three primary objectives of this study:

a) To provide an overview of cosmetics market in Saudi Arabia and its significance in the Saudi Economy.

b) To examine the influence of brand loyalty on female buying behavior of cosmetics.

c) To examine the influence of various factors on brand loyalty of cosmetic consumers.

Research Questions

1. What is the socio-economic profile of cosmetic consumers in KSA?

2. What are the popular brands of cosmetics currently being used in KSA?

3. What are the factors that affect the purchase of cosmetic products and how important they are in the purchasing decisions?

4. To what extent does the brand of the products influence buying behavior of female consumers in KSA?

Research Hypotheses

We shall examine the influence of each of the seven factors on brand loyalty. So there will be 7 hypotheses:

H1-0: There is no influence of product quality on purchase of cosmetic products

H2-0: There is no influence of design or features on purchase of cosmetic products

H3-0: There is no influence of brand name on purchase of cosmetic products

H4-0: There is no influence of store environment on purchase of cosmetic products

H5-0: There is no influence of service quality on purchase of cosmetic products

H6-0: There is no influence of promotion on purchase of cosmetic products

H7-0: There is no influence of price on purchase of cosmetic products

Distinctiveness and Motivation of the Study

To the best of the knowledge of the researchers, such a study has not been carried out so far in Saudi Arabia. As such, this study will add significant value to the understanding of consumer behavior in the cosmetic industry and more importantly, can serve as a foundational pilot study for other researchers who are interested in researching the same topic.

Research design and Methods

This study was focused on examining the influence of the seven factors stated above on buying behavior of cosmetics consumers, one of the factors being the brand of the product. Brand loyalty is defined as the preference of a certain product or brand over others. An electronic questionnaire was developed to assess the importance of each factor as perceived by the respondents. The respondents were asked to rate the importance of each factor on a 5 point Likert scale, which influences their choice of a particular product. The questionnaire also covered the frequency of repeat-purchase of a product, which is indicative of brand loyalty of the consumer.

Population and Study Sample

The study covered the female population in Saudi Arabia in the age group 15 to 50 years. The electronic questionnaire was distributed through email and social media such as Facebook and WhatsApp, which elicited responses from random participants throughout the kingdom. A total of 75 females belonging to different regions in KSA responded to the survey.

Sources and Collection of Data

The responses to the questionnaire were collected in an electronic spreadsheet, which was further exported to Microsoft Excel 2007, for analysis.

Ethics and Human Subjects Issues

The respondents were informed about the nature and purpose of study so that they have complete clarity about it.

Data Analysis

Out of the 75 respondents, 39 were married and 36 were single. Further demographic characteristics of the respondents are presented below.

It may be observed that 78.7% of the respondents from the sample belong to the age group 20 to 34 years. Around 12% respondents were below 20 years and 9.3% were 35 years and above.

It was observed that almost 72% respondents had completed a bachelor's degree, whereas 9.3% had completed their graduate studies.

It was seen that almost 55% of the respondents were having monthly income less than 10000 Saudi Riyals (Approx. 2500 USD).

The importance ratings factors affecting purchase of cosmetic products are presented below. The importance rating was measured using a five-point Likert scale, with the number 1 representing "Not at all important" and the number 5 representing "Most important". Thus, the higher the rating, the more important is the factor in deciding to purchase.

It was observed that product quality significantly influences purchasing decision. In particular, ease of use and durability are considered important quality characteristics by the consumers.

It was observed that design or features are significantly important for purchasing decision. In particular, consumers consider distinctive features of the product to be most important sub-factor that influences their buying behavior.

Though Brand name is a significant consideration by the consumers in their buying decisions, it appears to have a lower overall rating as compared to product quality and design/features.

Store environment is significantly important for the consumers, particularly the existence of sufficient number of outlets which has a score of 3.33/5.

Service quality has a significantly high importance rating in purchasing decisions. In particular, well-trained (3.48) and courteous (3.41) salesperson seem to be most important factors in service quality.

The respondents showed significant importance to advertising and promotion activities. In particular, attractive promotion schemes are an important factor influencing buying decision of cosmetics.

Though price is an important consideration for buying cosmetics, the respondents showed higher importance to price in the case of nail paint and similar products.

Brand Loyalty: Frequency of Repeat Purchase

The survey questionnaire contained questions that solicited response from the participants about the frequency of repeat-purchase of a particular branded product. The responses were categorized as "No repeat purchase or Don't remember", "Sometimes", "Most of the time" and "Always". The count of "most of the times" and "always" is an indicator of brand loyalty of consumers. The survey results are presented below:

It was observed that skin care products and make-up products showed a high level of brand loyalty (around 50% repeat-purchases) as compared to other products. In perfumes and nail paint consumers appear to be "trying out" different brands at different times.

The brand preferences of consumers for different types of products are presented below.

It was observed that 54.7% of the respondents used skin care products of multiple brands. Clinique and Olay appeared to be the most popular brands.

It was observed that 72% of the respondents used branded Makeup products. For example, M.A.C., Sephora, Benefit and MAX Factor were the most popular brands.

It was observed that 58.7% of the respondents used branded hair care products. Some examples are: Dove, Pantene, Sunsilk, and Lux were the most popular brands.

It was observed that 65.3% of the respondents used branded Perfumes and Body care products. Some examples are: Dove, Pantene, Sunsilk, and Lux were the most popular brands. Victoria's Secret, The Body Shop, and Chanel were the most popular brands.

It was observed that 46.7% of the respondents used branded nail paint and similar products. Revlon appeared to be the most popular brand in this category.

Hypothesis Testing

The hypotheses mentioned above were tested for statistical significance of the importance of the various factors namely product quality, design or features, brand name, store environment, service quality, advertising/promotion, and price on the purchasing decision of the consumers. As mentioned above, the responses were measured on a Likert scale from 1 to 5, 1 indicating "not at all important" and 5 indicating "highly important" factor affecting purchase. In order to test the hypotheses, the average rating for each factor was compared with the "least important" rating i.e. 1. Thus, the hypotheses were transformed as below:

H1-0: Average importance rating for product quality = 1

H2-0: Average importance rating for design or features = 1

H3-0: Average importance rating for brand name = 1

H4-0: Average importance rating for store environment = 1

H5-0: Average importance rating for service quality = 1

H6-0: Average importance rating for advertising & promotion = 1

H7-0: Average importance rating for price = 1

A T-Test was used for testing the Hypotheses. Since there were 75 observations, the degrees of freedom were 74, and critical value of t was 1.99. The results of hypotheses tests are presented below:

The results show that all the null hypotheses are rejected, which means that all of the factors listed above have significant impact on the buying decisions of respondents.

Discussion of Results

1. Majority of the respondents of the study belonged to the age group 20 to 34 years (79%), which gives an indication about the likely segment of consumers for cosmetic market.

2. It was observed that around 24% of respondents had family income below 5,000 SAR per month (approx. 1,250 USD), and 10.7% respondents had family income above 20,000 SAR per month (approx. 5,000 USD). This gives some idea about the economic status of Saudi households.

3. More than 80% of the respondents had degrees, which shows a high level of awareness towards formal education.

4. All the factors namely Product quality, Design or features, Brand name, Store location, Advertising & Promotion, Service quality and Product price significantly influence the buying decision of cosmetic consumers in Saudi Arabia. Out of these factors, Service Quality and Advertising & Promotion appear to be most important factors with an average rating of 3.35/5 and 3.34/5 respectively.

5. The results on frequency of repeat purchase indicate that in the case of skin care products, only 16% respondents were brand neutral, whereas others showed preference for one or more brands. Similarly, for makeup products (12%), hair care products (13.3%), perfumes & body care products (12%), and nail paint and other products (20%) respondents showed brand neutrality. These results are indicative of a fairly high level of brand loyalty among the respondents.

6. The survey results show that Clinique and Olay are the most popular skin care brands with 40.4% respondents showing preference for them. In the case of makeup products, M.A.C., Sephora, Benefit and MAX Factor together were preferred by 57% of the respondents. For hair care products around 70% respondents showed preference for Pantene, Dove, Lux, or Sunsilk brands. Around 57% consumers of perfumes and body care products have shown preference for Victoria Secret, The Body Shop and Chanel brands. In the case of nail paints and similar other products 20.7% respondents showed preference for Revlon brand, followed by OPI (9.8%), MAX Factor and Chanel (8.5% each) and Dior (6.1%).

7. The above results indicate that the Saudi female consumers of cosmetic products and toiletries have significant brand loyalty towards their choice of products and their behavior is influenced by the seven factors mentioned before.

Limitations of the Study

The study sample (N = 75 respondents) mostly comprised participants from Najd and Hejaj region of Saudi Arabia (90%). A larger and more diverse sample could help in further refining the study.

Conclusion

This study has been able to provide significant insight into the buying behavior of female consumers in Saudi Arabia for cosmetic products and toiletries categorized as skin care products, hair care products, make up products, perfumes and body care products, nail paints and other similar products. It is observed that the consumers have demonstrated a fairly high level of brand loyalty towards the cosmetic products and toiletries that they use. Approximately 12% to 20% of the respondents showed "brand neutrality", whereas the remaining respondents showed brand preference one or more products of their use. The study has also shown that factors such as product quality, design or features, brand name, store environment, advertising & promotion, and price have a significant impact on buying behavior of consumers. The study has also been able to identify the current "most popular" brands in different categories.

References

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